EXHIBIT 10.7
WATTS INDUSTRIES, INC.
PENSION PLAN
(As Amended and Restated Effective as of January 1, 1997)
TABLE OF CONTENTS
Page
INTRODUCTION......................................................................................................i
ARTICLE I - DEFINITIONS
1.01 Accumulated Contributions Account...............................................................1
1.02 Actuarial Equivalent............................................................................1
1.03 Actuary.........................................................................................2
1.04 Affiliated Employer.............................................................................2
1.05 Beneficiary.....................................................................................3
1.06 Board of Directors..............................................................................3
1.07 Code............................................................................................3
1.08 Committee.......................................................................................3
1.09 Compensation....................................................................................3
1.10 Contingent Annuitant............................................................................4
1.11 Covered Compensation............................................................................4
1.12 Effective Date..................................................................................4
1.13 Eligible Employee...............................................................................4
1.14 Employee........................................................................................5
1.15 Employer........................................................................................5
1.16 ERISA...........................................................................................5
1.17 Fiduciary.......................................................................................6
1.18 Final Average Compensation......................................................................6
1.19 Highly Compensated Employee.....................................................................6
1.20 Limitation Year.................................................................................7
1.21 Maximum Offset Allowance........................................................................7
1.22 Normal Retirement Age...........................................................................7
1.23 Participant.....................................................................................7
1.24 Plan............................................................................................8
1.25 Plan Administrator..............................................................................8
1.26 Plan Year.......................................................................................8
1.27 Prior Plan......................................................................................8
1.28 Retired Participant.............................................................................8
1.29 Social Security Benefit.........................................................................8
1.30 Social Security Compensation....................................................................9
1.31 Social Security Retirement Age..................................................................9
1.32 Social Security Taxable Wage Base...............................................................9
1.33 Sponsoring Employer.............................................................................9
1.34 Terminated Participant.........................................................................10
1.35 Trust..........................................................................................10
1.36 Trust Fund.....................................................................................10
1.37 Trustee........................................................................................10
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ARTICLE 2 - SERVICE
2.01 Service Prior to January 1, 1985...............................................................11
2.02 Crediting of Service On and After January 1, 1985..............................................11
2.021 Break in Service Defined On and After January 1, 1985..........................................11
2.022 Recrediting of Service Upon Reemployment.......................................................12
2.03 Hour of Service Defined........................................................................12
2.04 Benefit Service................................................................................14
2.05 Veterans' Rights...............................................................................15
ARTICLE 3 - PARTICIPATION
3.01 Participation Requirements.....................................................................16
3.02 Participation upon Re-employment...............................................................21
ARTICLE 4 - RETIREMENT DATES
4.01 Normal Retirement Date.........................................................................25
4.02 Early Retirement Date..........................................................................25
4.03 Deferred Retirement Date.......................................................................25
ARTICLE 5 - RETIREMENT BENEFITS
5.01 Form of Normal Retirement Benefit..............................................................26
5.02 Spouse Joint and Survivor Annuity..............................................................26
5.021 Amount of Spouse Joint and Survivor Annuity....................................................26
5.022 Election Out of Spouse Joint and Survivor Annuity..............................................26
5.023 Information Furnished to Participant...........................................................27
5.024 Spousal Consent Required.......................................................................28
5.03 Amount of Normal Retirement Benefit............................................................29
5.031 Minimum Benefit for Participants on January 1, 1979............................................34
5.032 Accrued Normal Retirement Benefit .............................................................34
5.04 Maximum Retirement Benefits....................................................................35
5.041 Limitation Applicable to Defined Contribution Plan Participants................................39
5.042 Affiliated Employees...........................................................................41
5.05 Early Retirement Benefit.......................................................................42
5.051 Social Security Option.........................................................................42
5.06 Deferred Retirement Benefit....................................................................43
5.07 Suspension of Benefit Distributions............................................................45
5.08 Non-Duplication of Benefits....................................................................46
5.09 Retirement Prior to January 1, 1985............................................................47
5.10 Participants who Attained Normal Retirement Age or Who Retired Prior to January 1, 1986........47
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ARTICLE 6 - TERMINATION OF SERVICE
6.01 Requirements for Vested Benefits...............................................................49
6.02 Vested Benefits................................................................................49
6.021 Computation of a Vested Benefit................................................................50
6.022 Early Commencement of a Vested Benefit.........................................................50
ARTICLE 7 - DEATH OF PARTICIPANT
7.01 Death Prior to Retirement......................................................................51
7.02 Surviving Spouse Benefit.......................................................................51
7.03 Amount of Surviving Spouse Benefit.............................................................51
7.04 Death After Commencement of Benefits or Normal Retirement Age..................................53
ARTICLE 8 - OPTIONAL FORMS OF BENEFIT
8.01 Time for Election..............................................................................54
8.02 Contingent Annuitant Option....................................................................54
8.03 Ten Year Certain Life Annuity Option...........................................................54
8.04 Five Year Certain Life Annuity Option..........................................................55
8.05 Refund of Accumulated Contribution Account.....................................................55
8.06 When Option Effective..........................................................................56
8.07 Beneficiary....................................................................................57
8.08 Limitation of Election of Option...............................................................57
8.09 Spousal Consent Requirement....................................................................57
ARTICLE 9 - CHANGE IN STATUS AND TRANSFER
9.01 Change in Status from Eligible Employee to Non-Eligible Employee...............................58
9.02 Change in Status from Non-Eligible Employee to Eligible Employee...............................58
9.021 Non-Duplication of Benefits....................................................................58
9.03 Transfer in Employment.........................................................................59
9.031 Employment with an Affiliated Employer.........................................................59
9.04 Employment with Watts Fluidair Co..............................................................60
9.05 Employment with Spence Engineering Company, Inc................................................60
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ARTICLE 10 - ADMINISTRATION
10.01 Allocation of Responsibility Among Fiduciaries for Plan and Trust Administration ..............61
10.02 Indemnification................................................................................61
10.03 Appointment of Committee.......................................................................62
10.04 Records and Reports............................................................................62
10.05 Other Committee Powers and Duties..............................................................63
10.06 Rules and Decisions............................................................................64
10.07 Committee Procedures...........................................................................65
10.08 Authorization of Benefit Payments..............................................................65
10.09 Application and Forms for Payment..............................................................65
10.10 Claims Procedure...............................................................................66
10.11 Appeal and Review Procedure....................................................................66
10.12 Evidence.......................................................................................67
ARTICLE 11 - FUNDING OF THE PLAN
11.01 Medium of Funding..............................................................................68
11.02 Contributions..................................................................................68
11.03 Fund to be for the Exclusive Benefit of Participants...........................................68
11.04 Forfeitures....................................................................................68
11.05 Interests of Participants in Trust Fund........................................................68
11.06 Payment of Expenses............................................................................69
ARTICLE 12 - PAYMENT OF RETIREMENT BENEFITS
12.01 Payment of Small Amounts.......................................................................70
12.02 Deemed Distribution............................................................................70
12.03 Payments for Incapacitated Persons ............................................................71
12.04 Spendthrift....................................................................................71
12.05 Payment Under Qualified Domestic Relations Orders..............................................71
12.06 Latest Commencement of Benefits................................................................71
12.07 Commencement of Benefits Prior to Normal Retirement Age........................................72
12.08 Distribution of Benefits Beginning Before Death an After Death.................................72
12.09 Direct Rollover Distributions..................................................................73
ARTICLE 13 - AMENDMENTS TO OR TERMINATION OF THE PLAN
13.01 Rights of the Employer to Amend or Terminate...................................................75
13.02 Termination of the Plan........................................................................75
13.03 Limitations on Benefits Upon Termination.......................................................76
13.04 Allocation of Assets...........................................................................76
13.05 Distribution Media.............................................................................78
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ARTICLE 14 - DISTRIBUTION LIMITATIONS AND EARLY TERMINATION PROVISIONS
14.01 Distribution Limitations...................................................................... 79
ARTICLE 15 - TOP-HEAVY PROVISIONS
15.01 Article Controls...............................................................................82
15.02 Definitions....................................................................................82
15.03 Top-Heavy Status...............................................................................86
15.04 Termination of Top-Heavy Status................................................................89
ARTICLE 16 - MISCELLANEOUS
16.01 Rights Against the Employer....................................................................90
16.02 Return of Contributions........................................................................90
16.03 Merger.........................................................................................91
16.04 Leased Employees...............................................................................91
16.05 Applicable Law.................................................................................92
16.06 Headings.......................................................................................92
16.07 Gender and Number..............................................................................92
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INTRODUCTION
The Watts Industries, Inc. Retirement Plan for Salaried Employees, previously
known as the Watts Regulator Co. Retirement Plan for Salaried Employees,
(hereinafter the "Plan") was established, effective January 1, 1985, as a
successor to and a continuation of the Retirement Plan for Salaried Employees of
the Watts Regulator Co. and the Retirement Plan for Employees of the Webster
Foundry Division (hereinafter "the Prior Plans").
Effective January 1, 1997, Consolidated Precision Corp. adopted the Plan for its
Eligible Employees who had been employees of Circle Seal Controls;
Effective January 1, 1998, Ames Company, Inc. adopted the Plan for its Eligible
Employees;
Effective March 17, 1998, Atkomatic Valve Company adopted the Plan for its
Eligible Employees;
Effective April 1, 1998, Aerodyne Controls Corporation adopted the Plan for its
Employees who became Eligible Employees of Circle Seal Corporation on January 5,
1998;
Effective October 18, 1999, the following Employers spun-off from the Plan into
the CIRCOR International, Inc. Retirement Plan for Salaried Employees: Circle
Seal Controls, Inc., (including Aerodyne Controls Corporation, Consolidated
Precision Corp., Keane Controls Corporation, Atkomatic Valve Company), KF
Industries, Inc. (including Eagle Value), Industrial Products Division, Leslie
Controls, Inc., Spence/Nicholson Engineering Company, Inc.;
Effective January 1, 2001, McCraney, Inc. (dba "Spacemaker") and Watts Heatway,
Inc. (now called Watts Radiant, Inc.) adopted the Plan for their Eligible
Employees; and
Effective January 1, 2002, Premier Manufactured Systems, Inc. adopted the Plan
for its Eligible Employees.
Watts Industries, Inc. (hereinafter the "Sponsoring Employer") is hereby
amending and restating the Plan, as hereinafter set forth, unless specifically
stated otherwise, effective January 1, 1997 and such later dates as may be
specified herein to comply with the General Agreement on Tariffs and Trade, the
Uniformed Services Employment and Reemployment Rights Act of 1994, the Small
(i)
Business Job Protection Act of 1996, the Taxpayer Relief Act of 1997, the
Internal Revenue Service Restructuring and Reform Act of 1998, and other
applicable laws.
Effective December 31, 2001, the Watts Industries, Inc. Hourly Pension Plan was
merged into the Plan and its terms and conditions were incorporated into the
Plan as Part A. Effective January 1, 2002, the Plan was renamed the Watts
Industries, Inc. Pension Plan.
It is the intention of the Employer that the Plan as herein amended and restated
shall continue to be recognized as a qualified pension plan under Sections
401(a) and 501(a) of the Internal Revenue Code. The provisions of the Plan as
set forth in this Plan document shall apply only to an Eligible Employee who
terminates employment on or after the effective date of a provision as set forth
herein. The rights and benefits, if any, of an Employee who terminated
employment prior to the effective date of a provision as set forth herein shall
be determined in accordance with the provisions of the Plan as in effect on the
date his employment terminated.
(ii)
ARTICLE I - DEFINITIONS
The following words and phrases shall be defined as stated unless a different
meaning is plainly required by the context:
1.01 "ACCUMULATED CONTRIBUTIONS ACCOUNT" means (i) the sum of the amounts, if
any, contributed prior to January 1, 1987 by the Participant to the
Pension Plan for Employees of Spence Engineering Company, plus (ii) 5%
interest per year through December 31, 1987 and at the rate(s) provided
under Section 411(c)(2)(C)(iii) of the Code from January 1, 1988 to the
first day of the calendar month coincident with or immediately following
the date of withdrawal or the date of benefit commencement.
1.02 "ACTUARIAL EQUIVALENT" or any term of similar import, wherever used in
the Plan, means a benefit of equivalent value determined as follows:
(a) For purposes of any determination requiring actuarial equivalence
under Article 15, the Actuarial Equivalent will be determined
using a 5% interest rate and the UP-1984 Mortality Table for
employees and the UP-1984 Mortality Table set back three years for
beneficiaries;
(b) The following provisions of this subsection (b) shall apply to
Limitation Years beginning on or after January 1, 1995. For
purposes of Section 5.04(e), the Actuarial Equivalent shall be
determined using either an interest rate of 7% and the UP-1984
Mortality Table or an interest rate of 5% and the mortality table
prescribed by the IRS Commissioner in Rev. Rul. 95-6, 1995-1 CB
80, whichever produces a larger reduction in the maximum annual
amount. For purposes of Section 5.04(f), the Actuarial Equivalent
shall be determined using either an interest rate of 7% and the
UP-1984 Mortality Table or an interest rate of 5% and the
mortality table prescribed by the IRS Commissioner in Rev. Rul.
95-6, 1995-1 CB 80, whichever produces the smaller increase in the
maximum annual amount. For purposes of Section 5.04(g), the
Actuarial Equivalent will be determined using either an interest
rate of 7% and the UP-1984 Mortality Table or an interest rate of
5% and the mortality table prescribed by the IRS Commissioner in
Rev. Rul. 95-6, 1995-1 CB 80, whichever produces the larger single
life annuity. In the event the benefit is payable in the form of a
lump sum payment, the 5% interest rate shall be replaced by the
rate on 30-year Treasury Constant Maturities for the month of
November prior to the Plan Year of the distribution date;
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(c) For purposes of Section 8.05, 12.01, and 12.02, Actuarial
Equivalent will be determined by using the mortality table
prescribed by the IRS Commissioner in Rev. Rul. 95-6, 1995-1 CB
80, and using an interest rate equal to the rate on 30-year
Treasury Constant Maturities for the month of November prior to
the Plan Year of the distribution date;
(d) For purposes of subsections (b) and (c) above, the term
"distribution date" means the date as of which an amount is paid,
except with respect to payments under Section 12.01, in which
case, it means the first day of the month following the month in
which the Participant terminates employment; and
(e) For purposes of Article 13, the Actuarial Equivalent will be
determined as specified in regulations promulgated by the Pension
Benefit Guaranty Corporation.
(f) For all other purposes, the Actuarial Equivalent will be
determined using a 7% interest rate and the UP-1984 Mortality
Table for employees and the UP-1984 Mortality Table set back three
years for beneficiaries;
1.03 "ACTUARY" means the actuarial consultant or actuarial consultants
designated from time to time to make actuarial computations in connection
with the Plan.
1.04 "AFFILIATED EMPLOYER" means any of the following (other than the
Employer):
(a) Any corporation which is a member of a controlled group of
corporations which includes the Employer, determined under the
provisions of Section 414(b) of the Code;
(b) Any trade or business which is under common control (as defined in
Section 414(c) of the Code) with the Employer;
(c) Any organization which is a member of an affiliated service group
(as defined in Section 414(m) of the Code) which includes the
Employer; and
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(d) Any other entity required to be aggregated with the Employer
pursuant to regulations under Section 414(o) of the Code.
A corporation, trade or business or member of an affiliated service group
shall be treated as an Affiliated Employer only while it is a member of
the controlled group.
1.05 "BENEFICIARY" means any person other than a Contingent Annuitant entitled
to receive any death benefits payable upon the death of the Participant.
1.06 "BOARD OF DIRECTORS" or "BOARD" means the Board of Directors of Watts
Industries, Inc. or any successor thereto.
1.07 "CODE" means the Internal Revenue Code of 1986, as amended from time to
time. Reference to a specific provision of the Code shall include such
provision, any valid regulation or ruling promulgated thereunder, and any
provision of future law that amends, supplements, or supersedes such
provision.
1.08 "COMMITTEE" means the Pension Plan Committee appointed to administer the
Plan as set forth in Article 10.
1.09 "COMPENSATION" shall mean the total compensation payable to an Employee
by the Employer and reportable to the Federal Government for income tax
purposes on Form W-2, or any form prescribed by the Internal Revenue
Service to take its place, including salary, bonuses, commissions and
overtime pay, but excluding stock option rights, any severance pay or
termination pay, moving expenses, tuition reimbursement and other forms
of extraordinary earnings or the value thereof.
Compensation includes contributions made on behalf of an Employee by the
Employer pursuant to a salary deferral agreement under Section 401(k) of
the Code and/or a salary reduction agreement pursuant to a cafeteria plan
established under Section 125 of the Code.
In no event shall a Participant's Compensation taken into account under
the Plan for any Plan Year exceed $150,000 or such other amount as the
Secretary of the Treasury may determine for such Plan Year in accordance
with Section 401(a)(17) of the Code. Any
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change in the dollar amount set forth above as adjusted by the Secretary
of the Treasury in accordance with Section 401(a)(17) of the Code shall
apply only to Compensation taken into account for Plan Years beginning
with the Plan Year in which such change is effective.
For purposes of Section 1.18, Compensation shall also mean compensation paid by
an Affiliated Employer prior to the effective date of its inclusion in
this Plan.
1.10 "CONTINGENT ANNUITANT" means the person designated by the Participant to
receive a benefit under the Contingent Annuitant Option following the
death of the Participant in accordance with Article 8.
1.11 "COVERED COMPENSATION" means, for any Plan Year, the average (without
indexing) of the Social Security Taxable Wage Bases in effect at the
beginning of the Plan Year under Section 230 of the Social Security Act
for each calendar year during the 35-year period ending with the last day
of the calendar year in which the Participant attains or will attain his
or her Social Security Retirement Age. In determining a Participant's
Covered Compensation for a Plan Year, the Social Security Taxable Wage
Base for the current Plan Year and any subsequent Plan Year shall be
assumed to be the same as those in effect for the Plan Year for which the
determination is being made. A Participant's Covered Compensation for any
Plan Year after the 35-year period is the Participant's Covered
Compensation for the Plan Year in which the Participant attained his or
her Social Security Retirement Age.
A Participant's Covered Compensation shall be automatically adjusted for
each Plan Year in accordance with these rules.
1.12 "EFFECTIVE DATE" means January 1, 1997 for this restated Plan. The
original Effective Date of the Plan is January 1, 1985.
1.13 "ELIGIBLE EMPLOYEE" means any person who is an Employee of the Employer
and who is paid on a salaried basis, including any officer or director
engaged in a capacity other than solely as a director. The term
"Employee" shall not include any person employed by the Employer who is
covered under a collective bargaining agreement which does not provide
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for this Plan, or any Employee who is a leased employee within the
meaning of Section 414(n)(2) of the Code.
1.14 "EMPLOYEE" means any person currently employed by the Employer or an
Affiliated Employer. The term Employee also includes any leased employees
of the Employer or an Affiliated Employer within the meaning of Section
414(n)(2) of the Code to the extent such employees are deemed to be
"Employees" in accordance with the provisions of Section 16.04.
1.15 "EMPLOYER" means Watts Industries, Inc., or any successor thereto, and
any other entity now or hereafter affiliated with Watts Industries, Inc.
which adopts this Plan by vote of its Board and with the consent of Watts
Industries, Inc. The term "Employer" also includes all of the foregoing
as the context may require. As of January 1, 1997, the following
Affiliated Employers have adopted the Plan and are therefore considered
to be an Employer: Watts Regulator Company, Spence Engineering Co., Inc.,
KF Industries, Inc., Leslie Controls, Inc., Rudolph Labranche, Inc.,
Watts Automatic Control Valve Company, Inc., Circle Seal Controls, Inc.,
Contromatics, Inc., Nicholson Steam Trap, Inc., KF Sales Corp.,
Anderson-Barrows Metal Corporation and Webster Valve, Inc. Effective
January 1, 1998, the term "Employer" includes Ames Company, Inc.
Effective October 18, 1999, Industrial Products Division, KF Industries,
Inc. (including Eagle Value), Circle Seal Controls, Inc., (including
Aerodyne Controls Corporation, Consolidated Precision Corp., Keane
Controls Corporation, Atkomatic Valve Company), Leslie Controls,
Contromatics, Inc. and Spence/Nicholson Engineering Company, Inc. are no
longer considered to be an Employer due to their spin-off to CIRCOR
International, Inc. Effective January 1, 2001, the term "Employer"
includes McCraney (dba "Spacemaker") and Watts Radiant, Inc. (formerly
called Watts Heatway, Inc.). Effective January 1, 2002, the term
"Employer" includes Premier Manufactured Systems, Inc.
1.16 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time. Reference to a specific provision of ERISA
shall include such provision, any valid regulation or filing promulgated
thereunder, and any provision of future law that amends, supplements, or
supersedes such provision.
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1.17 "FIDUCIARY" means the Employer, the Committee, the Trustee, and/or other
parties named as Fiduciaries pursuant to Section 10.1, but only with
respect to the specific responsibilities of each for Plan and Trust
administration, as described in Article 10.
1.18 "FINAL AVERAGE COMPENSATION" means the average of the Employee's
Compensation for the sixty (60) consecutive months during the last one
hundred and twenty (120) months of his Service prior to his Normal
Retirement Date (as defined in Section 4.01) for which he received the
highest total Compensation. If a Participant has not completed at least
sixty (60) months of Service with the Employer, his Final Average
Compensation shall be the average of his Compensation during his period
of Service with the Employer.
1.19 "HIGHLY COMPENSATED EMPLOYEE" means any active Employee who performed
services for the Employer or an Affiliated Employer during the
Determination Year and who:
(a) was a 5% owner (within the meaning of Section 416(i)(l)(B)(i) of
the Code at any time during the Determination Year or the
Look-Back Year; or
(b) received compensation from the Employer or an Affiliated Employer
in excess of $80,000 (as adjusted pursuant to 415(d) of the Code)
during the Look-Back Year, and was among the to 20% of Employees
when ranked on the basis of compensation paid during the Look-Back
Year.
The term Highly Compensated Employee shall also include any former Highly
Compensated Employee who terminated employment with the Employer or an
Affiliated Employer prior to the Determination Year, performs no services
for the Employer or an Affiliated Employer during the Determination Year,
and was a Highly Compensated Employee in either his or her year of
termination of employment or in any Determination Year ending on or after
his attainment of age 55.
For purposes of determining an Employee's compensation under this Section
1.20, compensation shall mean the "Employee's Section 415 compensation"
(as defined in Section 5.04(c)) reportable on Form W-2, plus all
contributions made on behalf of the Employee by the Employer or an
Affiliated Employer pursuant to a salary deferral agreement maintained by
the Employer or an Affiliated Employer under any cash or deferred
arrangement described in Section 401(k) of the Code or any salary
reduction
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agreement pursuant to a cafeteria plan established under Section 125 of
the Code by the Employer or Affiliated Employer, and effective January 1,
2001, any amounts deferred under Section 132(f)(4) of the Code.
For purposes of this Section, the "Look-Back Year" means the period of
the twelve consecutive months immediately preceding the Determination
Year. Also for purposes of this Section, "Determination Year" means the
Plan Year that is being tested for purposes of determining if an Employee
is a Highly Compensated Employee.
1.20 "LIMITATION YEAR" means the calendar year.
1.21 "MAXIMUM OFFSET ALLOWANCE" means at Social Security Retirement Age, (i),
(ii), or (iii) below, whichever is applicable, (i) if a Participant's
Social Security Retirement Age is 65, .0075 of his Social Security
Compensation; (ii) if a Participant's Social Security Retirement Age is
66, .0068 of his Social Security Compensation; or (iii) if a
Participant's Social Security Retirement Age is 67 or higher, .00625 of
his Social Security Compensation, multiplied by his years of Benefit
Service (up to a maximum of 25 years).
Notwithstanding the foregoing, the Maximum Offset Allowance shall not
exceed 1/2 of the benefit determined without regard to the offset, based
on the lessor of Social Security Compensation or Final Average
Compensation.
1.22 "NORMAL RETIREMENT AGE" means the Participant's age on the later of: (a)
the Participant's 65th birthday; or (b) the earlier of (i) five years of
Service, or (ii) the fifth anniversary of the date on which the
Participant began participation in the Plan, except with respect to a
Participant who on December 31, 1991 was participating in the Spence Plan
or who on October 1, 1993 was participating in the Henry Pratt Plan, the
term "Normal Retirement Age" means the Participant's 65th birthday.
1.23 "PARTICIPANT" means any Employee who has satisfied the eligibility
requirements for participation in the Plan as set forth in Article 3 and
is a Participant hereof.
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1.24 "PLAN" means the Watts Industries, Inc. Retirement Plan for Salaried
Employees as described in this instrument and as it may be amended
hereafter. Effective January 1, 2002, the name of the Plan was changed to
Watts Industries, Inc. Pension Plan.
1.25 "PLAN ADMINISTRATOR" means the Committee, notwithstanding the fact that
certain administrative functions under or with respect to this Plan may
have been delegated to any other person, persons, or entity.
1.26 "PLAN YEAR" means the twelve-month period beginning on January 1 and
ending on the following December 31.
1.27 "PRIOR PLAN" means each or both, as the context may require, of the
following: (a) the Retirement Plan for Salaried Employees of the Watts
Regulator Co., and (b) the Retirement Plan for Employees of the Webster
Foundry Division.
1.28 "RETIRED PARTICIPANT" means a former Participant who has retired under
the terms of the Plan and who has become eligible to receive benefits
under the Plan.
1.29 "SOCIAL SECURITY BENEFIT" means the primary insurance benefit payable
annually to an Employee under Title II of the Social Security Act as in
effect on the date he terminates his employment or on his Normal
Retirement Date (as defined in Section 4.01), if earlier, computed
without regard to any reduction or loss of benefits which may result due
to other income, delay in making application or any other reason;
provided, however, that in the case of an Employee who terminates his
employment prior to his attainment of age sixty-five, his Social Security
Benefit shall be computed in accordance with the following provisions:
(a) If such Employee has satisfied the eligibility requirements for
Early Retirement under Section 4.02 prior to his termination, his
Social Security Benefit will be based on the assumption that he
received no further compensation from his termination date until
he reached age sixty-five;
(b) If such Employee has not satisfied the requirements for Early
Retirement under Section 4.02 prior to his termination, his Social
Security Benefit will be based on the assumption that he remained
in the Service of the Employer until he reached age
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sixty-five and that he continued to receive the same rate of
compensation from the Employer as in effect on his termination
date until he reached age sixty-five.
The income used for purposes of computing a Participant's Social Security
Benefit will be the portion of his annual Compensation which is treated
as wages for purposes of the Social Security Act. The Participant's
income earned prior to his first full year of employment as an Employee
will be estimated by applying a 6% salary scale projected backwards from
his first full year of employment with the Employer.
In the event the Participant furnishes the Committee with documentation
from the Social Security Administration of his actual salary history on a
year-by-year basis, the Participant's Social Security Benefit will be
adjusted accordingly. The Participant must make application to the Social
Security Administration for such information during a reasonable period
of time, but not longer than six (6) months after the later of (i) the
date the Participant ceases working for the Company, and (ii) the date
the Participant is notified of his benefit under this Plan. If a
Participant's benefit is adjusted in accordance with this Section 1.30,
the adjusted benefit will commence after the date the Participant
furnishes to the Committee documentation of his actual salary history.
1.30 "SOCIAL SECURITY COMPENSATION" means the lesser of the Participant's
Covered Compensation or the average of the Participant's Compensation in
the three year period ending with the Plan Year of termination or
retirement. In determining a Participant's Compensation for any such
year, earnings in excess of the Social Security Taxable Wage Base in
effect for each year shall be disregarded.
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1.31 "SOCIAL SECURITY RETIREMENT AGE" means:
(a) for persons born prior to 1938, age 65;
(b) for persons born in 1938 or later but prior to 1955, age 66; and
(c) for persons born in 1955 or later, age 67.
1.32 "SOCIAL SECURITY TAXABLE WAGE BASE" means the contribution and benefit
limit in effect under Section 230 of the Social Security Act on the first
day of the Plan Year.
1.33 "SPONSORING EMPLOYER" means Watts Industries, Inc. or any successor
thereto.
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1.34 "TERMINATED PARTICIPANT" means a former Participant who has ceased to be
an Employee prior to his Normal Retirement Date (as defined in Section
4.01) for any reason other than death or retirement in accordance with
the terms of the Plan.
1.35 "TRUST" means the agreement between the Employer and the Trustee which
constitutes part of this Plan, or any other Trust created by agreement
between the Employer and a Trustee named therein which shall also
constitute a part of this Plan, as the same may be amended from time to
time.
1.36 "TRUST FUND" or "TRUST" means the Watts Industries, Inc. Master Trust,
maintained in accordance with the terms of the agreement under which the
Trust was established, as it may be amended from time to time.
1.37 "TRUSTEE" means the person, persons, or entity named as Trustee, or any
successor to that office.
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ARTICLE 2 - SERVICE
2.01 SERVICE PRIOR TO JANUARY 1, 1985
With respect to employment prior to January 1, 1985, Service shall mean
"Service" as defined under the Prior Plans.
2.02 CREDITING OF SERVICE ON OR AFTER JANUARY 1, 1985
An Employee must accumulate at least 1,000 Hours of Service during a
12-month computation period in order to be credited with a year of
Service. The 12-month computation period for purposes of determining a
year of Service for vesting under Section 6.02 is the Plan Year. The
12-month computation period for purposes of determining a Year of service
for eligibility under Section 3.01 is the 12-month period beginning when
the Employee first performs an Hour of Service and the subsequent
computation periods shall be the Plan Year beginning with the Plan Year
that includes the first anniversary of the date the Participant first
performs an Hour of Service. The 12-month computation period for purposes
of determining a year of Service for Benefit Service purposes as set
forth in Section 2.05 is the Plan Year. During any computation period
during which an Employee's Hours of Service cannot be determined, the
Employee shall be credited with 190 Hours of Service for each month
during such period in which he or she completes one Hour of Service.
Notwithstanding any other provision of this Section 2, Service with the
entities listed in Section 3.01(b) shall be taken into account for
eligibility and vesting purposes.
2.021 BREAK IN SERVICE DEFINED ON AND AFTER JANUARY 1, 1985
Service shall be considered broken by the following, provided that
Service will not be broken during any Plan Year in which an Employee
|
completes more than 500 Hours of Service:
(a) voluntary quit;
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(b) discharge;
(c) illness or injury in excess of one year;
(d) layoff in excess of one year;
(e) authorized leave of absence in excess of one year;
(f) failure to return to the Service of the Employer upon the
expiration of an authorized leave of absence; or within the period
of time entitling an Employee to reemployment rights after
discharge from the Armed Forces of the United States of America.
For purposes of the Plan, a one year Break in Service shall be deemed to
have occurred at the end of any Plan Year in which an Employee fails to
accumulate more than 500 Hours of Service.
2.022 RECREDITING OF SERVICE UPON REEMPLOYMENT
If a Participant incurs a Break-in-Service and is subsequently reemployed
and he thereafter meets the definition of Eligible Employee and completes
one year of Service, as provided in Section 3.03, his prior Service shall
be reinstated as of his date of reemployment.
2.03 HOUR OF SERVICE DEFINED
Hour of Service means:
(a) Each hour for which an Employee is directly or indirectly paid or
entitled to payment for the performance of duties for the Employer
or an Affiliated Employer, such hours to be credited to the
computation period in which the duties are performed;
(b) Each hour for which an Employee is directly or indirectly paid or
entitled to payment on account of a period of time during which no
duties are performed for the Employer or an Affiliated Employer
(irrespective of whether the employment
- 12 -
|
relationship has terminated) due to vacation, holiday, illness,
incapacity (including disability), lay-off, jury duty, military
duty or leave of absence (but excluding any payments made or due
under a plan maintained solely for the purpose of complying with
workmen's compensation, unemployment compensation, or disability
insurance laws); provided, however, that no more than 501 hours
shall be credited to an Employee under this paragraph (b) on
account of any single continuous period of absence;
(c) Each hour, not credited under (a) or (b) above during any absence
listed in Section 2.02, which does not break his Service, provided
that the Employee retires or returns to the employ of the Employer
or an Affiliated Employer upon the expiration of such absence;
(d) Each hour not counted under paragraphs (a), (b), or (c) above for
which back pay, irrespective of mitigation of damages, is awarded
or agreed to by the Employer or an Affiliated Employer; such hours
to be credited under the computation period to which the back pay
award or agreement is applicable;
(e) Hours credited under paragraphs (b) and (c) above shall be
computed on the basis of the number of hours for which the
Employee would have been compensated if he had continued to work
his regular work schedule during his period of absence; provided,
however, that in the case of hours credited under paragraph (b),
such number of hours shall not be less than the number of hours
the Employee would receive if such computation had been made in
accordance with the provisions of Section 2530.200b-2(b) and (c)
of the Labor Department Regulations which are incorporated herein
by reference.
(f) Solely for purposes of determining whether a Break-in-Service has
occurred with respect to Section 2.021, each non-compensated hour
during a period of absence from the Employer (i) by reason of the
Employee's pregnancy, (ii) by reason of the birth of the
Employee's child, (iii) by reason of the placement of a child with
the Employee in connection with the adoption of such child by the
Employee, or (iv) for purposes of caring for such child for a
period beginning immediately following such birth or placement
shall be credited to the Employee. For purposes of this subsection
|
(f) the following special rules will apply:
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(i) any Hour of Service credited hereunder with respect to an
absence shall be credited (A) only in the Plan Year in
which the absence begins, if the Employee would be
prevented from incurring a Break-in-Service in such year
solely because of Hours of Service credited hereunder for
such absence, or (B) in any other case in the immediately
following Plan Year;
(ii) no Hours of Service shall be credited hereunder unless the
Employee furnishes the Committee with such information as
the Committee may reasonably require (in such form and at
such time as the Committee may reasonably require)
establishing (A) that the absence from work is an absence
described hereunder, and (B) the number of days for which
the absence lasted;
(iii) in no event shall more than 501 Hours of Service be
credited to an Employee hereunder for any absence by
reason of any one pregnancy or the placement of any one
child.
Hours of Service to be credited to an individual during an absence
described in this Section 2.03(f) above will be determined by the
Committee with reference to the individual's most recent normal
work schedule; provided that if the Committee cannot so determine
the number of Hours to be credited, there shall instead be
credited eight (8) Hours of Service for each day of absence.
2.04 BENEFIT SERVICE
With respect to employment prior to January 1, 1985, Benefit Service
shall mean "Benefit Service" as defined in the Prior Plans.
With respect to employment on and after January 1, 1985, Benefit Service,
for purposes of determining a Participant's benefit under the Plan means
his years of Service earned as an Eligible Employee excluding any service
prior to such Eligible Employee's twenty first birthday. For purposes of
this Section 2.05, a year of Service is any Plan Year in which the
Participant is credited with 1000 Hours of Service. During any
computation period in which an Eligible Employee's Hours of Service
cannot be determined, the
- 14 -
|
Eligible Employee shall be credited with 190 Hours of Service for each
month during such period in which he or she completes one Hour of
Service.
However, if an Eligible Employee does not have 1,000 Hours of Service in
a Plan Year because he or she enters or, following a Break in Service,
re-enters employment with the Employer after the first day of a Plan Year
or terminates his or her employment or retires prior to the end of a Plan
Year, he or she shall be deemed to have accrued a partial year of service
for such Plan Year equal to the ratio that his or her credited Hours of
Service for such Plan Year bears to 1,000.
2.05 VETERAN'S BENEFITS
Notwithstanding any provision of this Plan to the contrary,
contributions, benefits and service credit with respect to qualified
military service will be provided in accordance with Section 414(u) of
the Internal Revenue Code.
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ARTICLE 3 - PARTICIPATION
3.01 PARTICIPATION REQUIREMENTS
(a) Subject to the provisions of paragraph (b) below:
Any Eligible Employee who was a Participant on December 31, 1996
shall continue to participate in the Plan as of January 1, 1997 in
accordance with the provisions of this restated Plan.
Any other Eligible Employee shall become a Participant on the
first day of the month coinciding with or next following the date
on which he has both attained age 21 and completed at least one
year of Service, provided he is then an Eligible Employee.
(b) Notwithstanding any provision in the Plan to the contrary, the
following provisions shall apply:
(i) Effective January 1, 1987, a nonunion employee of James
Jones Company on or after December 19, 1986 shall be
eligible to join the Plan on the first day of the month
coinciding with or next following the date on which he
attains age 21 and completes one year of Service. Subject
to the rules of the Plan, service with James Jones Company
from the later of December 31, 1969 or date of hire by
James Jones Company and prior to January 1, 1987 shall be
recognized for vesting and eligibility purposes. Service
for benefit accrual purposes shall begin on or after
January 1, 1987 and shall end on the earlier of September
4, 1996 or the date a Participant terminates his Service.
(ii) Effective January 1, 1989, an Eligible Employee of KF
Industries, Inc., Leslie Controls, Inc., Rudolph
LaBranche, Inc., or Watts Automatic Control Valve Company,
Inc. shall be eligible to join the Plan on the first day
of the month coinciding with or next following the date on
which he attains age 21 and completes one year of Service.
Subject to the rules of the Plan, service with KF
Industries, Inc., Leslie Controls, Inc., Rudolph
LaBranche, Inc., or
- 16 -
Watts Automatic Control Valve Company, Inc. prior to
January 1, 1989 shall be recognized for vesting and
eligibility purposes. Service for benefit accrual purposes
shall begin on or after January 1, 1989. Service with KF
Industries, Inc. and Leslie Controls, Inc. for all
purposes shall not be taken into account after October 18,
1999.
(iii) Effective July 19, 1990, an Eligible Employee of Nicholson
Steam Trap, Inc. shall be eligible to join the Plan on the
first day of the month coinciding with or next following
the date on which he attains age 21 and completes one year
of Service. Subject to the rules of Article II of the
Plan, service with Nicholson Steam Trap, Inc. prior to
July 19, 1990 shall be recognized for vesting and
eligibility purposes. Service for benefit accrual purposes
shall begin on or after July 19, 1990. Service with
Nicholson Steam Trap, Inc. for all purposes shall not be
taken into account after October 18, 1999.
(iv) Effective September 7, 1990, an Eligible Employee of
Circle Seal Controls, Inc. shall be eligible to join the
Plan on the first day of the month coinciding with or next
following the date on which he attains age 21 and
completes one year of Service. Subject to the rules of the
Plan, service with Circle Seal Controls, Inc. prior to
September 7, 1990 shall be recognized for vesting and
eligibility purposes. Service for benefit accrual purposes
shall begin on or after September 7, 1990. Service with
Circle Seals Controls, Inc. for all purposes shall not be
taken into account after October 18, 1999.
(v) Effective January 1, 1991, an Eligible Employee of
Industrial Products Division shall be eligible to join the
Plan on the first day of the month coinciding with or next
following the date on which he attains age 21 and
completes one year of Service. Subject to the rules of the
Plan, service with Industrial Products Division prior to
January 1, 1991 shall be recognized for all purposes.
Service with Industrial Products Division for all purposes
shall not be taken into account after October 18, 1999.
(vi) Effective January 1, 1991, an Eligible Employee of Eagle
Valve shall be eligible to join the Plan on the first day
of the month coinciding with or next following the date on
which he attains age 21 and completes one year of
- 17 -
Service. Subject to the rules of the Plan, service with
Eagle Valve prior to January 1, 1991 shall be recognized
for vesting and eligibility purposes. Service for benefit
accrual purposes shall begin on or after January 1, 1991.
Service with Eagle Valve for all purposes shall not be
taken into account after October 18, 1999.
(vii) Effective December 31, 1991, an Eligible Employee of
Spence Engineering Company, Inc. shall be eligible to join
the Plan on the first day of the month coinciding with or
next following the date on which he attains age 21 and
completes one year of Service. Subject to the rules of the
Plan, service with of Spence Engineering Company, Inc.
prior to January 1, 1992 shall be recognized for all
purposes. Service for benefit accrual purposes shall begin
on or after January 1, 1992. Service with of Spence
Engineering Company, Inc. for all purposes shall not be
taken into account after October 18, 1999.
(viii) Effective January 1, 1993, an Eligible Employee of
Contromatics, Inc. shall be eligible to join the Plan on
the first day of the month coinciding with or next
following the date on which he attains age 21 and
completes one year of Service. Subject to the rules of the
Plan, service with Contromatics, Inc. prior to January 1,
1993 shall be recognized for vesting and eligibility
purposes. Service for benefit accrual purposes shall begin
on or after January 1, 1993. Service with Contromatics,
Inc. for all purposes shall not be taken into account for
October 18, 1999.
(ix) Effective October 1, 1993 an Eligible Employee of Henry
Pratt Company shall be eligible to join the Plan on the
first day of the month coinciding with or next following
the date on which he attains age 21 and completes one year
of Service. Subject to the rules of the Plan, service with
Henry Pratt Company prior to October 1, 1993 shall be
recognized for vesting and eligibility purposes. Service
for benefit accrual purposes shall begin on or after
October 1, 1993 and shall end on the earlier of September
4, 1996 or the date a Participant terminates his Service.
(x) Effective August 31, 1995, a salaried employee of Keane
Controls Corporation who became an employee of Circle Seal
Controls, Inc. shall
- 18 -
become an Eligible Employee for purposes of the Plan and
shall become a Participant in the Plan as of the later of
August 31, 1995 or the date such Eligible Employee meets
the requirements of Section 3.01(a). An Eligible
Employee's service with Keane Controls Corporation, prior
to its acquisition by the Employer, shall be taken into
account for eligibility and vesting purposes. However,
such Eligible Employee's Benefit Service shall be taken
into account only with regard to service with the Employer
commencing August 31, 1995. Service with Keane Controls
Corporation for all purposes shall not be taken into
account after October 18, 1999.
(xi) Effective January 1, 1996 an Eligible Employee of
Anderson-Barrows Metal Corporation shall be eligible to
join the Plan on the first day of the month coinciding
with or next following the date on which he attains age 21
and completes one year of Service. Subject to the rules of
the Plan, service with Anderson-Barrows Metal Corporation
prior to January 1, 1996 shall be recognized for vesting
and eligibility purposes. Service for benefit accrual
purposes shall begin on or after January 1, 1996.
(xii) Effective January 1, 1997, an employee of Consolidated
Precision Corp. who became an employee of Circle Seals
Controls shall become an Eligible Employee for purposes of
the Plan and shall become a Participant in the Plan as of
the later of January 1, 1997 or the date the Eligible
Employee meets the requirements of Section 3.01(a). An
Eligible Employee's service with Consolidated Precision
Corp. prior to its acquisition by the Employer shall be
taken into account for eligibility and vesting purposes.
However, such Eligible Employee's Benefit Service shall be
taken into account only with regard to service with the
Employer commencing January 1, 1997. Service with
Consolidated Precision Corp. for all purposes shall not be
taken into account after October 18, 1999.
(xiii) Effective January 1, 1998, a salaried employee of Ames
Company, Inc. shall become an Eligible Employee under this
Plan and shall become a Participant in the Plan as of the
later of January 1, 1998 or the date the Eligible Employee
meets the requirements of Section 3.01(a). Such Eligible
Employee's service with Ames Company, Inc. prior to its
- 19 -
acquisition by the Employer shall be taken into account
for eligibility and vesting. However, such Eligible
Employee's Benefit Service shall be taken into account
only with regard to service with the Employer commencing
January 1, 1998.
(xiv) Effective March 17, 1998, a salaried employee of Atkomatic
Valve Company who became an employee of Circle Seal
Controls, Inc. shall become an Eligible Employee for
purposes of the Plan and shall become a Participant in the
Plan as of the later of March 17, 1998 or the date the
Eligible Employee meets the requirements of Section
3.01(a). An Eligible Employee's service with Atkomatic
Valve Company, prior to its acquisition by the Employer,
shall be taken into account for eligibility and vesting.
However, such Eligible Employee's .Benefit Service shall
be taken into account only with regard to service with the
Employer commencing March 17, 1998. Service with Atkomatic
Valve Company for all purposes shall not be taken into
account after October 18, 1999.
(xv) Effective April 1, 1998, a salaried employee of Aerodyne
Controls Corporation who became an Eligible Employee of
Circle Seal Corporation on January 5, 1998 shall be
eligible to participate in the Plan on the first day of
the month coinciding with or next following the date he
attains age 21 and completes one year of Service. Service
with Aerodyne Controls Corporation prior to January 5,
1998 shall be taken into account for eligibility and
vesting purposes. However, such Eligible Employee's
Benefit Service shall be taken into account only with
regard to service with the Employer commencing April 1,
1998. Service with Aerodyne Controls Corporation for all
purposes shall not be taken into account after October 18,
1999.
(xvi) Effective January 1, 2001, a salaried employee of
McCraney, Inc. (dba "Spacemaker") or Watts Heatway, Inc.
(now called Watts Radiant, Inc.) shall become an Eligible
Employee under this Plan and shall become a Participant in
the Plan as of the later of January 1, 2001 or the date
the Eligible Employee meets the requirements of Section
3.01(a). Such Eligible Employee's service with of
McCraney, Inc. (dba "Spacemaker")
- 20 -
or Watts Heatway, Inc. (now called Watts Radiant, Inc.)
prior to its acquisition by the Employer shall be taken
into account for eligibility and vesting. However, such
Eligible Employee's Benefit Service shall be taken into
account only with regard to service with the Employer
commencing January 1, 2001.
(xvii) Effective November 1, 2001, a salaried employee of Powers
Process Controls Division of Marks Controls Corporation
(PPC) shall become an Eligible Employee under this Plan
and shall become a Participant in the Plan as of the later
of November 1, 2001 or the date the Eligible Employee
meets the requirements of Section 3.01(a). Such Eligible
Employee's service with PPC prior to its acquisition by
the Employer shall be taken into account for eligibility
and vesting. However, such Eligible Employee's Benefit
Service shall be taken into account only with regard to
service with the Employer commencing November 1, 2001.
(xviii) Effective January 1, 2002, a salaried employee of Premier
Manufactured Systems, Inc. shall become an Eligible
Employee under this Plan and shall become a Participant in
the Plan as of the later of January 1, 2002 or the date
the Eligible Employee meets the requirements of Section
3.01(a). Such Eligible Employee's service with of Premier
Manufactured Systems, Inc. prior to its acquisition by the
Employer shall be taken into account for eligibility and
vesting. However, such Eligible Employee's Benefit Service
shall be taken into account only with regard to service
with the Employer commencing January 1, 2002.
3.02 PARTICIPATION UPON REEMPLOYMENT
(a) Subject to the provisions of paragraph (b) below, each Participant
who is reemployed following a Break in Service pursuant to Section
2.021 shall participate again as of his reemployment date provided
he has met the requirements of Section 2.022.
(b) For participants who participated in the Spence Plan on December
31, 1991
- 21 -
(i) Reemployment of Terminated Participant who is Vested in
Retirement Benefit.
a. In the event of the reemployment of a Terminated
Participant who has met the requirements for a
Vested Benefit under Section 6.02(a), such
Terminated Participant shall be entitled to
participate in the Plan immediately upon
reemployment.
b. If such Terminated Participant has not received a
refund of the balance in his Accumulated
Contributions Account, his Benefit Service before
his termination of employment will be fully restored
and combined with his subsequent Benefit Service to
calculate his benefit under the Plan upon his
subsequent retirement or other termination of
employment.
c. If such Terminated Participant has received a refund
of the balance in his Accumulated Contribution
Account, he may repay such amount to the Employer
pursuant to the requirements set forth in
subparagraph (iii) below. If he repays such amount,
his Benefit Service before his termination of
employment will be fully restored and combined with
his subsequent Benefit Service to calculate his
benefit under the Plan upon his subsequent
retirement or other termination of employment. If he
does not repay such amount, upon his subsequent
retirement or other termination of employment he
shall be entitled to receive a benefit equal to the
benefit provided in Section 5.03 as of his initial
termination date plus a benefit calculated using the
Benefit Service credited to him from the date of
reemployment to his subsequent retirement or other
termination of employment.
(ii) Reemployment of Terminated Participant who is Not Vested in
Retirement Benefit.
a. In the event of the reemployment of a Terminated
Participant who has not incurred a Break in Service,
but who has not met the
- 22 -
requirements for a Vested Benefit under Section
6.02(a), such Terminated Participant shall be
entitled to participate in the Plan immediately upon
his reemployment.
(1) If such Terminated Participant has not
received a refund of the balance in his
Accumulated Contribution Account, his Benefit
Service before his termination of employment
will be combined with his subsequent Benefit
Service to calculate his benefit under the
Plan upon his subsequent retirement or other
termination of employment.
(2) If such Terminated Participant has received a
refund of the balance in his Accumulated
Contribution Account, he may repay such
amount to the Employer pursuant to the
requirements set forth in subparagraph (iii)
below. If he repays such amount, his Benefit
Service before his termination of employment
will be combined with his subsequent Benefit
Service to calculate his benefit under the
Plan upon his subsequent retirement or other
termination of employment. If such Terminated
Participant does not repay such amount, upon
his subsequent retirement or other
termination of employment he shall be
entitled to a benefit calculated using the
Benefit Service credited to him from the date
of reemployment to his subsequent retirement
or other termination of employment. If such
Terminated Participant does not repay such
amount, upon his subsequent retirement or
other termination of employment his benefit
shall be calculated using Benefit Service as
defined in Section 2.05 provided, however,
that Benefit Service prior to January 1, 1987
shall not be included.
(iii) REPAYMENT - A Terminated Participant who has received a
refund of the balance in his Accumulated Contribution
Account and who has subsequently resumed employment prior
to incurring five consecutive one-year Breaks in Service
may repay to the Employer for credit to the Fund the
- 23 -
full amount of such cash settlement with interest
compounded annually at the rate of 5% per annum (or such
other rate as may be prescribed by the Secretary of the
Treasury) from the date as of which such cash settlement
was determined to the date of repayment. Repayment must be
made prior to the occurrence of the earlier of five
consecutive one-year Breaks in Service, or five years after
the date of reemployment.
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ARTICLE 4 - RETIREMENT DATES
4.01 NORMAL RETIREMENT DATE
The Normal Retirement Date of a Participant shall be the first day of the
month coinciding with or next following his Normal Retirement Age.
4.02 EARLY RETIREMENT DATE
Except as provided below, a Participant who has reached his fifth-fifth
birthday and who has completed at least ten years of Service may elect
upon written notice to the Committee on an Early Retirement Date which
may be the first day of any month subsequent to the date of such election
and prior to his Normal Retirement Date.
Notwithstanding the foregoing, in the case of a Participant who was hired
prior to January 1, 1992 (excluding a former participant of the Spence
Plan or the Henry Pratt Plan) who has reached his fifty-fifth birthday
and who has completed at least five years of Service may elect upon
written notice to the Committee an Early Retirement Date which may be the
first day of any month subsequent to the date of such election and prior
to his Normal Retirement Date.
4.03 DEFERRED RETIREMENT DATE
If a Participant remains in the Service of the Employer or an Affiliated
Employer after his Normal Retirement Date, his Deferred Retirement Date
shall be the first day of the month which coincides with or next follows
the date of his actual retirement.
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ARTICLE 5 - RETIREMENT BENEFITS
5.01 FORM OF NORMAL RETIREMENT BENEFIT
Except as provided in Section 5.02, a Participant's Normal Retirement
Benefit under the Plan shall be an annuity for life, payable monthly,
commencing on the Participant's Normal Retirement Date (as defined in
Section 4.01) and terminating with the monthly payment preceding his
death.
5.02 SPOUSE JOINT AND SURVIVOR ANNUITY
In lieu of the life annuity payable under Section 5.01, a Participant who
is married on his benefit commencement date shall receive his retirement
benefit in the form of a Spouse Joint and Survivor Annuity as described
in Section 5.021, provided he has not made an election under Section
5.022 to have his benefit paid under the life annuity form described in
Section 5.01 or under an optional form described in Section 5.051 or
Article 8.
5.021 AMOUNT OF SPOUSE JOINT AND SURVIVOR ANNUITY
The Spouse Joint and Survivor Annuity shall be a reduced amount payable
to a Participant for his lifetime with provision for continuation of 50%
of such reduced amount to the Participant's spouse for the duration of
the spouse's lifetime after the death of the Participant
All such amounts shall be the Actuarial Equivalent of the benefits set
forth hereafter in this Article 5 which are payable on a single life
basis.
5.022 ELECTION OUT OF SPOUSE JOINT AND SURVIVOR ANNUITY
A married Participant may elect, pursuant to Section 5.024, not to
receive his benefit in the form of the Spouse Joint and Survivor Annuity
by delivering to the Committee, during the election period described
below, his written election to have his benefits paid under the form
described in Section 5.01 or under an optional form described in Section
5.051 or Article 8. The election period with respect to the life annuity
form described in Section 5.01 and the Spouse Joint and Survivor Annuity
shall be a ninety (90) day period ending on the
- 26 -
|
Participant's benefit commencement date. The Participant may revoke such
election by filing a written revocation with the Committee at any time
during such election period. The election by a married Participant of an
optional form described under Section 5.051 or Article 8 shall be made in
accordance with the provisions of Section 5.024, and Section 5.051 or
Article 8, whichever is applicable.
5.023 INFORMATION FURNISHED TO PARTICIPANT
No fewer than 30 days and no more than 90 days before a Participant's
benefit commencement date, the Committee shall furnish each Participant
with general information on the Spouse Joint and Survivor Annuity. Such
|
general information shall be in writing and shall include:
(a) The terms and conditions of the Spouse Joint and Survivor Annuity:
(b) The Participant's right to elect, and the effect of electing, to
waive the Spouse Joint and Survivor Annuity;
(c) The rights of the spouse;
(d) The right to revoke, and the effect of revoking, an election to
waive the Spouse Joint and Survivor Annuity;
(e) The eligibility conditions and material features of the optional
forms of payment available under the Plan;
(f) The relative values of the optional forms of payment available
under the Plan; and
(g) Such other information as may be required under applicable
regulations.
The Committee shall also furnish the Participant, upon his written
request made within sixty (60) days following the date he is furnished
such general information, additional information explaining the financial
effect upon his pension (in terms of dollars per pension payment) of
making such election. Such additional information shall be furnished to
the
- 27 -
Participant within thirty (30) days following the date the Participant's
written request is received by the Committee.
The notice described above is not required if the Actuarial Equivalent
value of the Participant's nonforfeitable accrued benefit is less than or
equal to $3,500 ($5,000 commencing October 1, 2001) on the Participant's
benefit commencement date.
The benefit commencement date for a distribution in a form other than a
Spouse Joint and Survivor Annuity may be less than 30 days after receipt
of the written explanation described in the preceding paragraph provided:
(a) the Participant has been provided with information that clearly
indicates that the Participant has at least 30 days to consider whether
to waive the Spouse Joint and Survivor Annuity and elect (with spousal
consent) to a form of distribution other than a Spouse Joint and Survivor
Annuity; (b) the Participant is permitted to revoke any affirmative
distribution election at least until the benefit commencement date or, if
later, at any time prior to the expiration of the 7-day period that
begins the day after the explanation of the Spouse Joint and Survivor
Annuity is provided to the Participant' and (c) the benefit commencement
date is a date after the date the written explanation was provided to the
Participant.
5.024 SPOUSAL CONSENT REQUIRED
Notwithstanding anything herein to the contrary, the election by a
married Participant of an optional form described in Article 8 or Section
5.051 or the normal form described in Section 5.01 shall not take effect
unless:
(a) his surviving spouse consents in writing to such an election, such
election specifies the Beneficiary and the form of benefit payment
elected by the Participant in lieu of the Spouse Joint and
Survivor Annuity, and such consent acknowledges the effect of such
election and is witnessed by a Plan representative or a notary
public; or
(b) it is established to the satisfaction of the Committee that the
consent required under (a) above may not be obtained because there
is no spouse or the spouse cannot be located, or the Participant
can show by court order that he is legally separated from his
spouse or has been abandoned by the spouse within the meaning of
local law, or due to other circumstances as the Secretary of the
Treasury may prescribe.
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Any consent by a spouse under (a) above, or a determination by the
Committee with respect to such spouse under (b) above, shall be
effective only with respect to such spouse.
5.03 AMOUNT OF NORMAL RETIREMENT BENEFIT
(a) Subject to the provisions of Section 5.031 and 5.04, the annual
Normal Retirement Benefit payable to a Participant who retired
under the Plan on or after January 1, 1985 and on or after his
Normal Retirement Date but prior to January 1, 1986 shall be an
amount equal to forty percent (40%) of his Final Average
Compensation less fifty percent (50%) of his Social Security
Benefit, multiplied by a fraction (not to exceed one) the
numerator of which is his years (and fractions thereof) of his
Benefit Service and the denominator of which is 30.
(b) Subject to the provisions of Section 5.031 and 5.04, the annual
Normal Retirement Benefit payable to a Participant who retired
under the Plan on or after January 1, 1986 and on or after his
Normal Retirement Date but prior to January 1, 1989 shall be an
amount equal to forty-five percent (45%) of his Final Average
Compensation less fifty percent (50%) of his Social Security
Benefit, multiplied by a fraction not to exceed one) the numerator
of which is his years (and fractions thereof) of his Benefit
Service and the denominator of which is 25.
(c) Subject to the provisions of paragraphs (d) and (e) and Sections
5.031 and 5.04, the annual Normal Retirement Benefit payable to a
Participant who retires under the Plan on or after January 1, 1989
and on or after his Normal Retirement Date shall be an amount
equal to the greater of (i), (ii), (iii) or (iv) below:
(i) 1.67% times the Participant's Final Average Compensation
less the Maximum Offset Allowance, the result of which is
multiplied by his years of Benefit Service (maximum of 25
years);
(ii) 1.00% times the Participant's Final Average Compensation
multiplied by his years of Benefit Service (maximum of 25
years);
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|
(iii) the Participant's accrued benefit as of March 15, 1990 (or
December 31, 1988 if the Participant is a highly
compensated employee as defined in Section 414(q)(1)(A) or
(B) of the Code);
(iv) the Participant's accrued benefit under the Plan determined
as of the December 31 preceding the date of determination.
(d) For Participants Who Participated in the Spence Plan on December
31, 1991
(i) Notwithstanding the foregoing provisions of this Section,
with respect to a Participant who participated in the
Spence Plan on December 31, 1991 and who retires under this
Plan on or after January 1, 1994 and on or after his annual
Normal Retirement Date, his annual Normal Retirement
Benefit shall equal the sum of (A) and (B) but in no event
|
less than (C) where:
(A) is equal to the sum of (1), (2), (3), and (4) below:
(1) 5/8 of 1% of the Participant's Final Average
Compensation multiplied by his years of
benefit service earned prior to June 1, 1975
under the Spence Plan.
(2) 3/4 of 1% of the Participant's Final Average
Compensation multiplied by his years of
benefit service earned on and after June 1,
1975 through May 31, 1980 under the Spence
Plan.
(3) 7/8 of 1% of the Participant's Final Average
Compensation multiplied by his years of
benefit service earned on and after June 1,
1980 through May 31, 1985 under the Spence
Plan.
(4) 1% of the Participant's Final Average
Compensation multiplied by his years of
benefit service earned on and after June 1,
1985 through December 31, 1986 under the
Spence Plan.
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The amount of the benefit calculated in
accordance with this paragraph (d)(i)(A)
shall be actuarially increased to reflect the
change in the normal form of benefit payment
from a 5 year certain and continuous annuity
to a single life annuity.
(B) is equal to the greater of (1) or (2) below:
(1) 1.67% times the Participant's Final Average
Compensation less the Maximum Offset
Allowance, the result of which is multiplied
by his years of Benefit Service earned under
the Spence Plan on or after January 1, 1987
but prior to January 1, 1992, and Benefit
Service earned under the Plan on or after
January 1, 1992 (maximum of 25 years).
(2) 1.00% of the Participant's Final Average
Compensation multiplied by his years of
benefit service earned under the Spence Plan
on and after January 1, 1987 but prior to
January 1, 1992 and his years of Benefit
Service earned on and after January 1, 1992
under the Plan (up to a maximum of 25 years).
Notwithstanding the foregoing, a Participant who is
credited with a 1,000 Hours of Service under the Spence
Plan during the twelve-month period beginning on June 1,
1985 and ending on May 31, 1986 and during the twelve-month
period beginning on January 1, 1986 and ending on December
31, 1986 shall be credited with 2 years of Benefit Service
for purposes of Section 5.03(d)(i)(A)(4) to reflect the
change in the Spence Plan's plan year to a calendar year.
(C) is equal to the greater of (1) or (2) below:
(1) the Actuarial Equivalent of the Participant's
Accumulated Contributions Account.
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(2) the Participant's accrued benefit determined
under the Spence Plan as of December 31,
1991.
(e) For Participants Who Participated in the Henry Pratt Plan on
September 30, 1993
Notwithstanding the foregoing provisions of this Section, with
respect to a Participant who participated in the Henry Pratt Plan
on September 30, 1993 and who retires under this Plan on or after
September 30, 1993 and on or after his annual Normal Retirement
Date, his Normal Retirement Benefit shall be an amount based on a
maximum of 25 years of "Combined Total Benefit Service" (as
defined below) and equal to the sum of (i) and (ii), where:
(i) is the Participant's accrued benefit earned under the Henry
Pratt Plan as of September 30, 1993 multiplied by a
fraction, the numerator of which equals the Participant's
Final Average Compensation determined as of his retirement
date and the denominator of which equals the Participant's
Final Average Compensation determined as of December 31,
1993.
(ii) is the Participant's accrued benefit, if any, determined in
accordance with Section 5.03(c) for years of Benefit
Service earned on or after October 1, 1993 under the Plan.
For purposes of determining a Participant's accrued benefit under
paragraph (e)(i) above, the following shall apply:
(A) If the Participant was hired by the Henry Pratt Company on
or before September 7, 1988, he shall be credited with
service under the Henry Pratt Plan beginning on September
7, 1988 and ending on September 30, 1993 and such service
shall be counted in years and completed months;
(B) If the Participant was hired by the Henry Pratt Company
after September 7, 1988, he shall be credited with service
under the Henry Pratt Plan beginning on his date of
employment and ending on September 30, 1993 and such
service shall be counted in years and completed months.
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For purposes of this Section 5.03(e), "Combined Total Benefit
Service" means service earned under the Henry Pratt Plan and
Benefit Service earned under the Plan. In the event a
Participant's Combined Total Benefit Service exceeds twenty-five
(25) years on his date of retirement with the Employer, the
Participant's Normal Retirement Benefit shall be determined by
decreasing his years of service earned under the Henry Pratt Plan
by the number of years which exceeds twenty-five (25) and the
benefit calculated under paragraph (e)(i) above shall be
recalculated using the Participant's accrued benefit as of
September 30, 1993.
(f) This subsection (f) shall apply to any Participant who had his
retirement benefit determined under Part B of the Plan and who
after January 1, 1997, transferred to Regtrol Inc. (hereinafter
referred to as a "Transferred Jameco Participant").
A Transferred Jameco Participant's Normal Retirement Benefit shall
be an amount based on a maximum of 25 years of "Combined Total
Benefit Service" and equal to the sum of (i) and (ii) where:
(i) is the Transferred Jameco Participant's accrued benefit
based on the formula under Part B of the Plan in effect as
of the transfer date and determined based upon (1) his
years of Service under Part B of the Plan as of the
transfer date and (2) his Average Monthly Compensation
under Section 1.05 of Part B and his Covered Compensation
under Section 1.16 of Part B as of his retirement or
termination date.
(ii) is the Transferred Jameco Participant's accrued benefit, if
any, determined in accordance with Section 5.03(c) for
years of Benefit Service earned on or after transfer date.
For purposes of this Section 5.03(f), "Combined Total Benefit
Service" means benefit service earned under Part B of this Plan
and Benefit Service earned under subsection (ii) above. In the
event a Participant's Combined Total Benefit Service exceeds
twenty-five (25) on his date of retirement or termination of
employment with the Employer, the Transferred Jameco Participant's
retirement benefit shall be determined by decreasing his years of
service under subsection (i) by the
- 33 -
number of years of service which exceeds twenty-five and
substituting such benefit service with years of Benefit Service
under subsection (ii).
However, in no event shall a Transferred Jameco Participant's
accrued benefit be less than his accrued benefit based upon his
years of benefit Service as of his transfer date as calculated
under Part B.
5.031 MINIMUM BENEFIT FOR PARTICIPANTS ON JANUARY 1, 1979
The annual normal retirement benefit of a Participant who was an Employee
on January 1, 1979 shall in no event be less than an amount equal to the
sum of (a) and (b) below for each year of Benefit Service:
(a) 1% of that portion of his Compensation in each calendar year
subject to taxes under the Federal Insurance Contributions Act, as
adjusted by regulation each year, plus
(b) 2% of that portion of his Compensation in each calendar year in
excess of that amount subject to taxes under the Federal Insurance
Contributions Act, as adjusted by regulation each year.
5.032 ACCRUED BENEFIT
To determine a Participant's accrued benefit under Section 5.03(a) and
(b) at any time prior to his Normal Retirement Date, there shall first be
determined the amount of Normal Retirement Benefit that the Participant
would have received if he had remained in the employ of the Employer to
his Normal Retirement Date but based on his Final Average Compensation
and Social Security Benefit as of the date such benefit is being
determined. Such amount shall be multiplied by a fraction in which the
numerator is the number of years of Benefit Service (including fractions
thereof) that the Participant has completed and the denominator is the
number of years of Benefit Service (including fractions thereof) that the
Participant would have completed if he had remained in the employ of the
Employer to his Normal Retirement Date.
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A Participant's accrued benefit under Section 5.03(c), (d) and (e) is the
benefit as defined under Section 5.03(c), (d) or (e) based on Final
Average Compensation and Benefit Service as of the date the accrued
benefit is being determined.
Notwithstanding the above, in the case of a Participant whose
Compensation for a Plan Year beginning prior to January 1, 1994 exceeded
$150,000, such Participant's Accrued Benefit shall not be less than an
amount equal to the sum of his or her Accrued Benefit determined as of
December 31, 1993 plus an amount equal to the Participant's Accrued
Benefit determined in accordance with the provisions of this Section
5.032 based on Years of Benefit Service earned by the Participant after
December 31, 1993.
5.04 MAXIMUM RETIREMENT BENEFITS
(a) For Plan Years beginning after 1986, the actual or projected
annual amount of a Participant's benefit payable within a
|
Limitation Year shall not exceed the lesser of (i) and (ii) below:
(i) $90,000, or
(ii) 100% of the Participant's average annual Section 415
Compensation (as defined in paragraph (c) below) for the
three consecutive calendar years (or, if his period of
employment is less than three years, for his entire period
of employment) as a Participant during which he received
the greatest aggregate Section 415 Compensation;
(b) In no event shall the limitations in paragraph (a) above be less
than $10,000 if the Participant has not at any time participated
in a defined contribution plan maintained by the Employer or an
Affiliated Employer.
(c) The term "Section 415 Compensation" means wages, salaries, and
fees for professional services and other amounts received from the
Employer and all Affiliated Employers during the Limitation Year
(without regard to whether or not an amount is paid in cash) for
personal services actually rendered in the course of employment
with the Employer, to the extent such amounts are includable in
gross income, including, but not limited to, overtime pay, tips,
bonuses, commissions to
- 35 -
paid salesmen, compensation for services on the basis of a
percentage of profits, commissions on insurance premiums, fringe
benefits, reimbursements, and expense allowances, and excluding
the following:
(i) amounts contributed by the Employer or Affiliated Employer
on behalf of the Employee pursuant to a salary deferral
agreement under this Plan or any other cash or deferred
arrangement described in Section 401(k) of the Code, to any
salary reduction agreement pursuant to a cafeteria plan
established under Section 125 of the Code, or to any other
plan of deferred compensation, and which are not includable
in the Employee's gross income for the taxable year in
which contributed, or any distributions from a plan of
deferred compensation;
(ii) amounts realized from the exercise of a non-qualified stock
option, or when restricted stock (or property) held by the
Employee either becomes free transferable or is no longer
subject to a substantial risk of forfeiture;
(iii) amounts realized with respect to the sale, exchange, or
other disposition of stock acquired under a qualified stock
option; and
(iv) other amounts which receive special tax benefits, or
contributions made by the Employer (whether or not under a
salary reduction agreement) towards the purchase of an
annuity described in Section 403(b) of the Code (whether or
not the amounts are excludable from the Employee's gross
income).
For purposes of applying the limitations of this Section, the term
"Section 415 Compensation" means the compensation actually paid or
includable in the Employee's gross income for the Limitation Year.
Effective January 1, 1998, Section 415 Compensation earnings shall
include (i) any elective deferrals as defined in Code Section
402(g)(3), and (ii) any amount which is contributed or deferred by
the Employer at the election of the Employee and which is not
includable in the gross income of the Employee by reason of Code
Section 125 or 457. Effective January 1, 2001, Section 415
Compensation shall include any amounts deferred under Section
132(f)(4) of the Code.
- 36 -
(d) The dollar limitation described in paragraph (a)(i) above shall be
increased by the cost of living adjustment factor prescribed by
the Secretary of the Treasury under Section 415(d) of the Code.
Such adjustment factor shall be applied to all Participants,
including Participants and Beneficiaries receiving benefits from
the Plan and to such items as the Secretary shall prescribe.
(e) If the benefit payable to a Participant commences prior to the
Participant's Social Security Retirement Age, but on or after the
date he attains age 62, the maximum annual amount determined under
paragraph (a)(i) above shall be reduced as follows:
(i) if the Participant's Social Security Retirement age is 65,
by 5/9ths of 1% for each month by which the commencement of
payment of his benefits precedes the month in which he
attains age 65; or
(ii) if the Participant's Social Security Retirement age is 66
or 67, by 5/9ths of 1% for each of the first 36 months and
5/12ths of 1% for each additional month by which the
commencement of payment of his benefits precedes the month
in which he attains his Social Security Retirement Age.
If the benefit payable to a Participant commences before
age 62, the maximum annual amount determined under
paragraph (a)(i) above shall be reduced in accordance with
applicable regulations, so that it is the Actuarial
Equivalent of such amount as applied to a benefit beginning
at age 62. For purposes of this paragraph, the Actuarial
Equivalent shall be determined using the assumptions
specified in Section 1.02(b).
(f) If the payment of benefits to a Participant commences after his
Social Security Retirement Age, the maximum annual amount
determined under paragraph (a)(i) above shall be increased so that
it is the Actuarial Equivalent of a $90,000 benefit multiplied by
the adjustment factor specified in paragraph (e) above, and
payable in the normal form at the Participant's Social Security
Retirement Age. For purposes of this paragraph, the Actuarial
Equivalent shall be determined using the assumptions specified in
Section 1.02(b).
- 37 -
(g) The annual benefit is a retirement benefit under the Plan which is
payable annually in the form of a single life annuity. If the
benefit payable to a Participant is not in the form of a single
life annuity nor in the form of a Spouse Joint and Survivor
Annuity, then the maximum annual amount determined under paragraph
(a) above shall be reduced in accordance with the applicable
regulations so that it is the Actuarial Equivalent of such amount
as payable in the normal form. The interest rate and mortality
assumptions used to determine the Actuarial Equivalent will be the
rates specified in Section 1.02(b).
(h) If the Participant has completed less than 10 years of Plan
participation, the maximum annual amount determined under
paragraph (a)(i) above shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the Participant's
number of years of Plan participation (or parts thereof) and the
denominator of which is 10. To the extent provided in regulations
or in other guidance issued by the Internal Revenue Service, the
preceding sentence shall be applied separately with respect to
each change in the benefit structure of the Plan.
(i) If the Participant has completed less than 10 years of Service,
the maximum amount determined under Section paragraph (a)(ii)
above (without regard to paragraph (a)(i) above) shall be adjusted
by multiplying such amount by a fraction, the numerator of which
is the Participant's number of years of Service (or parts thereof)
and the denominator of which is 10. To the extent provided in
regulations or in other guidance issued by the Internal Revenue
Service, the preceding sentence shall be applied separately with
respect to each change in the benefit structure of the Plan.
(j) In no event shall the provisions of paragraph (h) or paragraph (i)
above reduce the limitations in paragraph (a) to an amount less
than one-tenth of such limitations, determined without regard to
the provisions of paragraph (h) and paragraph (i).
(k) If a Participant is, or has ever been, covered under more than one
defined benefit plan maintained by the Employer, the sum of the
Participant's annual benefits from all such plans may not exceed
the maximum permissible amount.
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(l) TRANSITIONAL RULE. Notwithstanding the foregoing provisions of
this Section 5.04, the maximum limitation on annual benefits with
respect to any person who was a Participant prior to January 1,
1983 and whose annual benefit (determined without regard to any
changes in the plan after July 1, 1982 and without regard to
cost-of-living adjustments, if any, occurring after July 1, 1982)
as of December 31, 1982, exceeds the limitations set forth in this
Section 5.04, shall be such Participant's annual benefit as of
December 31, 1982; provided that such Participant's annual benefit
did not exceed the maximum limitation thereon as of December 31,
1982.
5.041 LIMITATION APPLICABLE TO DEFINED CONTRIBUTION PLAN PARTICIPANTS
(a) If a Participant is also a participant in any defined contribution
plan maintained by the Employer or an Affiliated Employer, the sum
of the defined benefit plan fraction and the defined contribution
plan fraction for any year shall not exceed 1.0 as provided in
Section 415(e) of the Code and any regulations issued thereunder.
(b) The DEFINED BENEFIT FRACTION for any Limitation Year is a
fraction, the numerator of which is the sum of the Participant's
projected annual benefits under all defined benefit plans (whether
or not terminated) maintained by the Employer, and the denominator
of which is the lesser of 1.25 times the dollar limit determined
under Sections 415(b) and 415(d) of the Code and adjusted in
accordance with Section 5.04(h) and (i) for the Limitation Year,
or 1.4 times 100% of the Participant's highest average annual
Section 415 Compensation (including any adjustments under Section
415(b) of the Code) for any three consecutive years.
Notwithstanding the above, if the Participant was a participant as
of the first day of the first Limitation Year beginning after
December 31, 1986 in one or more defined benefit plans maintained
by the Employer which were in existence on May 6, 1986, the
denominator of this fraction will not be less than 1.25 times the
sum of the annual benefits under such plans which the Participant
had accrued as of the close of the last Limitation Year beginning
before January 1, 1987, disregarding any changes in the terms and
conditions of the Plan after May 5, 1986. The preceding sentence
applies only if the defined benefit plans individually and in the
aggregate
- 39 -
satisfied the requirements of Section 415 of the Code for all
Limitation Years beginning before January 1, 1987.
(c) The DEFINED CONTRIBUTION PLAN FRACTION for any Limitation Year is
a fraction, the numerator of which is the sum of the annual
additions to the Participant's accounts under all defined
contribution plans (whether or not terminated) maintained by the
Employer for the current and all prior Limitation Years (including
the annual additions attributable to the Participant's
nondeductible employee contributions to all defined benefit plans,
whether or not terminated, maintained by the Employer, and the
annual additions attributable to all welfare benefit funds, as
defined in Section 419(e) of the Code, and individual medical
accounts, as defined in Section 415(l)(2) of the Code, maintained
by the Employer), and the denominator of which is the sum of the
maximum aggregate amounts for the current and all prior Limitation
Years of service with the Employer (regardless of whether a
defined contribution plan was maintained by the Employer). The
maximum aggregate amount in any Limitation Year is the lesser of
1.25 times the dollar limitation determined under Sections 415(b)
and 415(d) of the Code in effect under Section 415(c)(1)(A) of the
Code, or 35% of the Participant's Section 415 Compensation (as
defined in Section 5.04(c)) for such Limitation Year.
For purposes of calculating the numerator in the defined
contribution plan fraction, a Participant's after-tax payroll
deduction contributions made before 1987, if any, shall be taken
into account to the extent such contributions exceed the lesser
of:
(i) 6% of the Participant's Section 415 Compensation (as
defined in Section 5.04(c)) for the Limitation Year, or
(ii) 50% of the amount of such payroll deduction contributions
for the Limitation Year.
If the Employee was a Participant as of the end of the first day
of the first Limitation Year beginning after December 31, 1986, in
one or more defined contribution plans maintained by the Employer
which were in existence on May 6, 1986, the numerator of this
fraction will be adjusted if the sum of this fraction and the
defined benefit fraction would otherwise exceed 1.0 under the
terms of this Plan. Under the
- 40 -
adjustment, an amount equal to the product of (1) the excess of
the sum of the fractions over 1.0 times (2) the denominator of
this fraction, will be permanently subtracted from the numerator
of this fraction. The adjustment is calculated using the fractions
as they would be computed as of the end of the last Limitation
Year beginning before January 1, 1987, and disregarding any
changes in the terms and conditions of the Plan made after May 5,
1986, but using the Section 415 limitation applicable to the first
Limitation Year beginning on or after January 1, 1987.
(d) For the purpose of determining the denominators in the preceding
two fractions, the maximum benefit allowable and the maximum
annual additions shall be deemed to be equal to the lesser of:
(i) 140% of the percentage limits, or
(ii) 125% of the dollar limits provided in Sections 415(b) and
415(c) of the Code for each such year.
(e) Any adjustment necessary to comply with the limitations of this
section shall be made in the Participant's benefit payable under
the relevant defined benefit plan; but under no circumstances may
the accrued benefit of a Participant in a defined benefit plan
decrease as a result of a Plan amendment to change the combined
plan limits.
(f) Effective January 1, 2000, the provisions of this Section 5.041
shall no longer be effective.
5.042 AFFILIATED EMPLOYERS
For purposes of Sections 5.04 and 5.041, the Employer and all Affiliated
Employers shall be considered one employer, and the limitations shall be
applicable to the total benefits received from the Employer and all
Affiliated Employers. Further, in determining what is an Affiliated
Employer for the purposes of these Sections, the phrase "more than 50%"
shall be substituted for "at least 80%" each place it appears in Section
1563(a)(1) of the Code.
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5.05 EARLY RETIREMENT BENEFIT
The Early Retirement Benefit of a Participant who elects to retire on an
Early Retirement Date (as defined in Section 4.02) on or after January 1,
1985 shall be the benefit computed in (a) or (b) below, as elected by the
Participant:
(a) a benefit commencing on his Normal Retirement Date (as defined in
Section 4.01) in an amount equal to his accrued Normal Retirement
Benefit determined in accordance with the provisions of Section
5.03 or 5.031, whichever is applicable, and Section 5.032;
(b) a reduced benefit commencing on his Early Retirement Date or the
first day of any month thereafter but prior to his Normal
Retirement Date, as elected by the Participant, which benefit
shall be computed as in (a) above, reduced by 5/9 of 1% for each
of the first sixty months by which commencement of benefits
precedes his Normal Retirement Date, and by 5/18 of 1% for each
month thereafter, if any, by which commencement of benefits
precedes his Normal Retirement Date.
Notwithstanding the foregoing provisions of this Section 5.05, with
respect to a Participant who on September 30, 1993 was participating in
the Henry Pratt Plan, his Early Retirement Benefit shall not be less than
the benefit he could have received if he retired under the early
retirement provisions of the Henry Pratt Plan on September 30, 1993.
5.051 SOCIAL SECURITY OPTION
A Participant who is entitled to receive an Early Retirement Benefit and
has elected to have such benefit commence prior to the date he is
entitled to receive benefits under Title II of the Social Security Act,
may elect to receive a Social Security Option under which he will receive
a larger monthly benefit prior to the date he is first entitled to
receive benefits under Title II of the Social Security Act and a smaller
benefit after he is first entitled to receive benefits under Title II of
the Social Security Act so that, to the extent possible, the Participant
will receive a level monthly income when his payments under the Plan and
his income under Title II of the Social Security Act are taken in to
account; provided, however, that his payments under the Social Security
Option will be the
- 42 -
|
Actuarial Equivalent of the Early Retirement Benefit he would have
received if he had not elected such an option.
If a Participant elects a benefit under this Section, no benefits will be
payable to anyone upon his death.
5.06 DEFERRED RETIREMENT BENEFIT
(a) RETIREMENT PRIOR TO AGE 70 1/2
Each Participant who continues in the employ of the Employer or an
Affiliated Employer after attaining his Normal Retirement Age and
retires prior to age 70 1/2 shall be entitled upon actual
retirement to receive a monthly Deferred Retirement Benefit. The
Deferred Retirement Benefit payable under this paragraph (a) shall
be determined in accordance with Section 5.03 or 5.031, whichever
is applicable, based on the Participant's years of Benefit Service
(including fractions thereof) as of his retirement date, and the
rate of benefit in effect under the Plan on his retirement date.
(b) COMMENCEMENT OF BENEFITS WHILE ACTIVELY EMPLOYED
(b) Prior to January 1, 1997, the Deferred Retirement Benefit payable
to a Participant who attains age 70 1/2 and who continues to be an
Employee shall be equal to the Participant's accrued benefit
determined as of the last day of the Plan Year in which the
Participant attains age 70 1/2. The Deferred Retirement Benefit
payable under this paragraph (b) shall be determined in accordance
with Section 5.03 or 5.031, whichever is applicable, and shall be
payable in the form of a single life annuity. The Deferred
Retirement Benefit shall commence no later than the January 1
immediately following the Plan Year in which the Participant
attains age 70 1/2.
The monthly benefit of a Participant who has begun receiving
benefits and who continues to be an Employee after his attainment
of age 70 1/2 shall be adjusted, effective on the January 1
following the Plan Year in which the Participant's benefit
commenced and on each succeeding January 1 prior to the
Participant's
- 43 -
|
Deferred Retirement Date, to reflect the effect of changes in the
Participant's accrued benefit since the previous January 1. The
final adjustment shall be made as of the Participant's Deferred
Retirement Date. Adjustments required by this paragraph shall
include a reduction equal to the Actuarial Equivalent of any
benefit payments already made with respect to the Participant. In
no event, however, will the benefit payable to the Participant be
reduced as a result of this paragraph. Furthermore, the operation
of this paragraph will not affect the form of benefit payment
previously elected by the Participant.
Any Participant, other than a 5% owner as defined in Code Section
416(i), who attains age 70 1/2 after December 31, 1996 but before
January 1, 2002 shall have the option to commence receiving
retirement benefits at any time commencing on or after the January
1 following the Plan Year in which such Participant attains age 70
1/2. Any Participant, other than a 5% owner as defined in Code
Section 416(i), who attains age 70 1/2 on or after January 1,
2002, shall commence receiving retirement benefits no later than
the January 1 of the calendar year following the calendar year in
which he attains age 70 1/2 or the calendar year in which he
retires, whichever is later. Participants who are 5% owners must
continue to commence receiving benefits on the January 1 following
the Plan Year in which they attained age 70 1/2.
Effective January 1, 1997, a Participant's Deferred Retirement
Benefit shall be equal to the greater of (i) the Actuarial
Equivalent of his or her Deferred Retirement Benefit determined as
of April 1 of the calendar year following the calendar year in
which the Participant attained age 70 1/2, or (ii) the
Participant's Deferred Retirement Benefit determined as of his or
her Deferred Retirement Date.
Upon such Participant's actual Deferred Retirement Date, he shall
then be eligible to make the election as described in Section
5.022.
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5.07 SUSPENSION OF BENEFIT DISTRIBUTIONS
(a) CONDITIONS FOR SUSPENSION
If any Participant is reemployed by the Employer or an Affiliated
Employer on or after his benefit commencement date and before age
70 1/2, or if any Participant continues in employment with the
Employer or an Affiliated Employer after his Normal Retirement
Date (as defined in Section 4.01), the benefit payable for a
calendar month will be permanently withheld if the Participant
completes 40 or more Hours of Service in the calendar month or in
the four or five week payroll period ending in the calendar month.
The benefit permanently withheld will be the actual amount
scheduled to be paid for the calendar month in which the
conditions for suspension are met.
(b) REDETERMINATION OF BENEFITS
Upon the subsequent termination of employment of a Participant who
was eligible to begin receiving payments under the Plan on his
prior termination of employment date (whether or not such benefit
payments had actually commenced), the Participant's retirement
benefit shall be redetermined in accordance with the provisions of
this Plan applicable to him as of his subsequent termination of
employment date, as if no prior benefit payments had been made.
His retirement benefit, as so redetermined, shall then be reduced
by (i) the Actuarial Equivalent of the benefit payments, if any,
previously made to such Participant prior to his Normal Retirement
Date or (ii) in the case of a lump sum payment, the Actuarial
Equivalent of the payment other than the portion of the payment
attributable to the period (if any) after the Participant's Normal
Retirement Date and before his reemployment commencement date. The
form of payment of any retirement benefit to which he may
thereafter become entitled shall be determined in accordance with
the provisions of Article 5 at the time he subsequently retires
without regard to the form in which his benefit had previously
been paid.
The Participant's retirement benefit as so redetermined shall not
be less than his retirement benefit prior to the suspension of
payments.
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(c) RESUMPTION OF BENEFITS
In the case of a Participant who was receiving benefit payments
prior to reemployment, payment of such benefits shall resume no
later than the first day of the third calendar month following the
month in which the Participant ceases to satisfy the conditions
for suspension described in paragraph (a) above.
If the period of suspension is less than three months, the
Participant's benefit shall continue to be paid in the same form
of payment as was in effect before the suspension.
The amount of the Participant's benefit shall be redetermined,
taking into account increased service and any benefits paid before
suspension, and shall not be less than the amount of benefit the
Participant was receiving prior to suspension.
(d) NOTICE OF SUSPENSION
If a Participant continues to be employed (or is reemployed) by
the Employer or an Affiliated Employer after his Normal Retirement
Date (as defined in Section 4.01) and the commencement of his
benefit payments is delayed (or, in the case of reemployment,
suspended) in accordance with the provisions of paragraph (a)
above, the Committee shall give written notice to such Participant
as required under Department of Labor Regulations 2530.203-3(b)(4)
no later than the end of the first calendar month or payroll
period in which the payment of benefits would have commenced if
the Participant had not remained in or returned to employment.
5.08 RETIREMENT PRIOR TO JANUARY 1, 1985
Except as specified otherwise here-in, the monthly retirement benefit of
a Participant who retired from the Service of the Employer prior to
January 1, 1985 shall be determined in accordance with the applicable
provisions of the Prior Plan as in effect on the date of his retirement.
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5.09 PARTICIPANTS WHO ATTAINED NORMAL RETIREMENT AGE OR WHO RETIRED PRIOR TO
JANUARY 1, 1986
Commencing January 1, 1986, the monthly retirement benefit of an active
Participant who attained Normal Retirement Age prior to January 1, 1986
or of a Retired Participant who retired prior to January 1, 1986 shall be
increased by 2.5% for each year between the date such active Participant
attained Normal Retirement Age or the date such Retired Participant
retired and the anniversary of such date which occurs in 1986; provided
that each such Participant or Retired Participant shall be entitled to a
monthly benefit increase of at least $10.00.
5.10 DISABILITY RETIREMENT BENEFITS
(a) In the event a Participant becomes disabled prior to October 1,
2001 while employed with the Employer so that he is receiving
disability benefits under the Employer's long term disability
program and is eligible for and is receiving disability benefits
under Title II of the Social Security Act or becomes disabled on
or after October 1, 2001 while employed with the Employer so that
he is eligible for and is receiving disability benefits under
Title II of the Social Security Act, such Participant shall
continue to be credited with years of Service for vesting and
years of Benefit Service for the period he remains disabled and
such crediting shall cease upon the earlier of the Participant's
recovery from disability, death, election of Early Retirement or
Normal Retirement Date. During the period of disability such
Participant shall be credited with Compensation equal to the
greater of his Compensation credited in the Plan Year he becomes
disabled or the Compensation credited for the immediately
preceding Plan Year. In addition, such disabled Participant's
Maximum Offset Allowance shall be determined as of the date he
becomes disabled. If a Participant's disability continues until
his Normal Retirement Date, his Normal Retirement Benefit shall
commence as of the date elected by the Participant in accordance
with the normal form of benefit described as Section 5.01 or 5.02,
whichever is applicable, or the optional retirement benefit, if
elected by the Participant, as set forth in Article 5.
(b) A Participant who on December 31, 1991 participated in the Pension
Plan for Salaried Employees of Spence Engineering Company, Inc.
and who met the
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requirements for a monthly disability benefit thereunder shall
continue to receive the disability benefit under this Plan.
The monthly disability benefit will terminate with the last payment due
preceding the earliest of the following to occur:
(i) the tenth day after the Trustee receives notice from the Employer
that the Participant has ceased to be entitled to disability
benefits under the Social Security Act;
(ii) the date of the Participant's death; or
(iii) the Participant's Normal Retirement Date or, if elected, the
Participant's Early Retirement Date.
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ARTICLE 6 - TERMINATION OF SERVICE
6.01 REQUIREMENTS FOR VESTED BENEFITS
There are no benefits payable under the Plan if a Participant's
employment terminated prior to the date he is entitled to retire and
receive a benefit under the Plan, except as provided in Section 7.03(d),
8.05, and this Article 6.
6.02 VESTED BENEFITS
(a) A Participant whose employment terminates on or after January 1,
1989 and who ceases to be an Employee prior to Normal Retirement
Age for any reason except death or retirement under the Plan shall
be entitled to a deferred vested benefit commencing on his Normal
Retirement Date (as defined in Section 4.01) equal to his accrued
Normal Retirement Benefit determined in accordance with the
provisions of Section 6.021 multiplied by his vesting percentage
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in accordance with the following schedule:
YEARS OF SERVICE VESTING PERCENTAGE
Less than 5 years 0%
5 years or more 100%
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(b) A Participant shall be fully vested in his Accumulated
Contribution Account, if any, at all times.
(c) Effective September 4, 1996, a Participant who is an Employee of
Henry Pratt Company or James Jones Company on September 4, 1996
shall be 100% vested and shall be entitled to a deferred vested
benefit commencing on his Normal Retirement Date equal to his
Accrued Normal Retirement Benefit determined in accordance with
the provisions of Section 6.021(c).
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6.021 COMPUTATION OF A VESTED BENEFIT
(a) The amount of a deferred vested benefit payable to a Terminated
Participant under Section 6.02(a) shall be equal to his accrued
benefit as determined under Section 5.032. Notwithstanding the
foregoing, the amount of deferred vested benefit payable to a
Terminated Participant who was an Employee on January 1, 1979
shall in no event be less than his accrued benefit determined in
accordance with the provisions of Section 5.031.
(b) The amount of a deferred vested benefit payable to a Terminated
Participant under Section 6.02(b) shall not be less than the
Actuarial Equivalent of the balance in his Accumulated
Contribution Account, if any.
6.022 EARLY COMMENCEMENT OF A VESTED BENEFIT
(a) A Terminated Participant entitled to a Vested Benefit under
Section 6.02 may elect to have such benefit commence at any time
after he is eligible to elect an Early Retirement Date pursuant to
Section 4.02. In such case and subject to the provisions of
paragraph (b) below, his benefit shall be computed as in Section
6.021, but shall be reduced by 5/9 of 1% for each of the first
sixty (60) months by which his benefit commencement date precedes
his Normal Retirement Date, and by 5/18 of 1% for each month
thereafter, if any, by which his benefit commencement date
precedes his Normal Retirement Date.
(b) The Vested Benefit of a Participant, who on September 30, 1993 was
participating in the Henry Pratt Plan and who elects early
commencement as described in paragraph (a) above, shall not be
less than the benefit he could have received if he elected early
commencement of his benefit under the vested retirement provisions
of the Henry Pratt Plan on September 30, 1993.
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ARTICLE 7 - DEATH OF PARTICIPANT
7.01 DEATH PRIOR TO RETIREMENT
There are no death benefits payable under the Plan in the event of the
death of a Participant, Retired Participant or Terminated Participant
prior to the commencement of his retirement benefits under the Plan,
except as may be provided under the Surviving Spouse Benefit described in
Section 7.02 or as may be provided under Section 7.04.
7.02 SURVIVING SPOUSE BENEFIT
Effective August 23, 1984, the spouse of a Participant or a Terminated
Participant shall be eligible to receive a Surviving Spouse Benefit after
the Participant's or Terminated Participant's death if the Participant or
Terminated Participant has fulfilled the following requirements at the
date of death:
(a) He has been legally married to such spouse throughout the
twelve-month period ending on the date of his death;
(b) He has met the requirements for a Vested Benefit under Section
6.02;
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(c) He has not attained Normal Retirement Age; and
(d) He has not commenced receiving benefits under the Plan.
7.03 AMOUNT OF SURVIVING SPOUSE BENEFIT
If a Participant or Terminated Participant dies after fulfilling all the
requirements of Section 7.02, his spouse shall be entitled to a lifetime
benefit under the Plan. If the surviving spouse of the Participant or
Terminated Participant consents, such benefit shall commence on the first
day of the month following the later of the Participant's or Terminated
Participant's death or the date the Participant or Terminated Participant
would have met the requirements for Early Retirement under Section 4.02.
If such surviving spouse does not consent to receive benefits as
described above, benefits shall commence on the first day of any month
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thereafter, as elected by the surviving spouse, but not later than the
date the Participant or Terminated Participant would have attained age
65.
The Surviving Spouse Benefit shall be equal to (a), (b), (c) or (d)
below:
(a) If the Participant or Terminated Participant dies after meeting
the requirements for Early Retirement as provided under Section
4.02, the Surviving Spouse Benefit shall be equal to the amount
which would have been payable to the spouse if the Participant or
Terminated Participant had retired on the date preceding his date
of death and he had been entitled to a Spouse Joint and Survivor
Annuity;
(b) If the Participant or Terminated Participant dies before meeting
the requirements for Early Retirement as provided under Section
4.02, but after meeting the requirements for a Vested Benefit
under Section 6.02(a), the Surviving Spouse Benefit shall be equal
to the amount which would have been payable to the spouse if the
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Participant or Terminated Participant had:
(i) terminated service on the date of his death;
(ii) survived to the earliest retirement age under Section 4.02;
(iii) retired at that time and was entitled to receive a Spouse
Joint and Survivor Annuity; and
(iv) died on the day following attainment of the earliest
retirement age; or
(c) If the Participant's or Terminated Participant's surviving spouse
elects a benefit commencement date other than the first day of the
month following the date of the Participant's or Terminated
Participant's death or the date the Participant or Terminated
Participant would have met the requirements for Early Retirement
under Section 4.02, the Surviving Spouse Benefit under (a) or (b)
above, whichever is applicable, shall be actuarially adjusted to
reflect the actual date of benefit commencement.
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(d) FOR PARTICIPANTS WHO PARTICIPATED IN THE SPENCE PLAN
If the Participant or Terminated Participant dies before meeting
the requirements for Early Retirement as provided under Section
4.02 and before meeting the requirements for a Vested Benefit
under Section 6.02(a), but after meeting the requirements for a
Vested Benefit under Section 6.02(b), the Surviving Spouse Benefit
shall be equal to the Actuarial Equivalent of the balance in the
Participant's or Terminated Participant's Accumulated Contribution
Account and shall be paid to the spouse as a life annuity.
7.04 DEATH AFTER COMMENCEMENT OF BENEFITS OR NORMAL RETIREMENT AGE
There are no death benefits payable under the Plan upon the death of a
Participant on or after his Normal Retirement Age or after a Participant
has commenced receiving benefits under the Plan, except as follows:
(a) If a Participant is receiving a Spouse Joint and Survivor Annuity
as described in Section 5.02, any benefits becoming due will be
paid in accordance with the terms of such Spouse Joint and
Survivor Annuity;
(b) If a Participant has elected an optional benefit under Article 8,
any benefits becoming due will be paid in accordance with the
terms of such option;
(c) If a Participant dies after attaining his Normal Retirement Age
but before his Deferred Retirement Date, the Spouse Joint and
Survivor Annuity as described in Section 5.02 shall be deemed to
be in effect on behalf of such Participant, provided he has not
made an election under Section 5.022 to receive his benefits under
another form of payment.
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ARTICLE 8 - OPTIONAL FORMS OF BENEFIT
8.01 TIME FOR ELECTION
Subject to the restrictions set forth in Section 8.08, in lieu of
receiving the life annuity referred to in Section 5.01 or the Spouse
Joint and Survivor Annuity referred to in Section 5.02, a Participant may
elect, by written application filed with the Committee, to have his
retirement benefit paid under one of the forms of benefit set forth in
this Article 8, provided that such election is made prior to actual
retirement under the Plan and in accordance with the procedures set forth
in Section 5.024 (if such Participant is married) and in this Article 8.
Neither Section 5.01 nor Section 5.02 shall apply if an effective
election is made under this Article; provided, however, that a married
Participant may, at any time during the election period established by
the Committee under Section 5.022, rescind his election of an option
under this Article 8 and receive his retirement benefit in the form of an
annuity for life under Section 5.01 or a Spouse Joint and Survivor
Annuity under Section 5.02 if he has met the requirements therefor.
8.02 CONTINGENT ANNUITANT OPTION
A Participant may elect an option in accordance with Section 5.02, under
which option he will receive an actuarially reduced benefit during his
lifetime after retirement and 100%, 66-2/3% or 50% of such reduced amount
will be continued to a person designated by the Participant at the time
of election of the option (and referred to as a Contingent Annuitant) for
the duration of the Contingent Annuitant's lifetime.
8.03 TEN YEAR CERTAIN LIFE ANNUITY OPTION
A Participant may elect an option in accordance with Section 502, under
which option he will receive an actuarially reduced benefit during his
lifetime after retirement with a provision that if he dies after his
Normal Retirement Age or after commencement of his benefit payments but
prior to receiving one hundred twenty (120) monthly retirement payments,
the balance of such one hundred twenty (120) monthly retirement payments
shall be paid to the Participant's Beneficiary.
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8.04 FIVE YEAR CERTAIN LIFE ANNUITY OPTION
A Participant who was a participant in the Spence Plan and who was
employed by Spence Engineering Company, Inc. prior to January 1, 1987 may
elect an option at least ninety days prior to his benefit commencement
date, under which option he will receive an Actuarially Equivalent
benefit during his lifetime after retirement with a provision that if he
dies after his Normal Retirement Age or after commencement of his benefit
payments but prior to receiving sixty (60) monthly retirement payments,
the balance of such sixty (60) monthly retirement payments shall be paid
to the Participant's Beneficiary.
8.05 REFUND OF ACCUMULATED CONTRIBUTION ACCOUNT
This Section shall apply only to a Participant who participated in the
Spence Plan on December 31, 1991 and who made employee contributions to
the Spence Plan prior to January 1, 1987.
(a) REFUND OF ACCUMULATED CONTRIBUTION ACCOUNT ON AND AFTER RETIREMENT
OR OTHER TERMINATION OF EMPLOYMENT.
A Participant may elect to receive on or after the date of his
retirement or other termination of employment and before his
benefit commencement date, a refund of the balance, if any, in his
Accumulated Contribution Account.
If a Participant elects a refund of his Accumulated Contribution
Account under this Section 8.05(a), his Normal Retirement Benefit
provided in Section 5.03 shall be reduced by the Actuarial
Equivalent of his Accumulated Contribution Account and his
Accumulated Contribution Account shall be reduced to zero.
Notwithstanding the foregoing provisions of this Section 8.05(a),
if the Actuarial Equivalent value of a Participant's entire
nonforfeitable benefit exceeds $3,500 ($5,000 commencing October
1, 2001), the Participant's spouse, if any, must consent to the
Participant's election to withdraw the balance in his Accumulated
Contribution Account. For this purpose, a spousal consent is valid
only if made no earlier than 90 days before the date of
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withdrawal, is effective when received by the Committee and must:
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(i) Be in writing on a form provided by the Committee;
(ii) Acknowledge the effect of the consent; and
(iii) Be witnessed by a notary public or Plan representative.
Any such consent will be valid only with respect of the spouse who
signs the consent. Spousal consent is not required, however, if
the Participant establishes to the satisfaction of the Committee
that there is no Spouse, the Spouse cannot be located, or the
Participant can show by court order that he is legally separated
or has been abandoned by the spouse within the meaning of local
law, or if otherwise permitted under applicable regulations.
If the spouse is legally incompetent to give consent, the spouse's
legal guardian, who may be the Participant, may consent to the
withdrawal.
(b) REFUND OF ACCUMULATED CONTRIBUTIONS UPON CESSATION OF BENEFIT
PAYMENTS OR UPON DEATH
Notwithstanding any contrary provisions of the Plan, upon
cessation of all benefit payments under the provisions of the Plan
in respect of a Participant who has not received a refund of the
balance of his Accumulated Contribution Account, if any, including
payments to a spouse, Contingent Annuitant or Beneficiary, or upon
the death of a Participant in respect of whom no benefits are
payable, the excess, if any, of the balance of the Participant's
Accumulated Contribution Account over the aggregate benefit
payments made hereunder in respect of such Participant shall be
paid to his Beneficiary in a single lump sum. A suspension of
benefits under Section 5.07 shall not be deemed to be a cessation
under this Section.
8.06 WHEN OPTION EFFECTIVE
If a Participant who elects an option under this Article 8 dies prior to
Normal Retirement Age or prior to the date his benefits commence, if
earlier, the election shall be void and no benefit will be paid under the
option. If the Participant's Contingent Annuitant, or Beneficiary if
applicable, dies prior to the commencement of retirement benefits to the
Participant and prior to the Participant's Normal Retirement Age, the
Participant may either (a) designate another Contingent Annuitant, or
Beneficiary, if applicable, prior to his Normal Retirement Age, (b)
receive the form of benefit at retirement which would have
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been payable to him had the option not been elected, or (c) elect another
optional form of benefit under Article 8. Notwithstanding the first
sentence of this Section 8.06, if the Participant has elected a Deferred
Retirement Date, and if the Participant dies after his Normal Retirement
Date but before his Deferred Retirement Date, the Contingent Annuitant or
Beneficiary, if applicable, shall receive the reduced amount of
retirement benefit payable under the option. If the Participant has
elected a Deferred Retirement Date, and if either the Contingent
Annuitant or Beneficiary, if applicable, dies after the Participant's
Normal Retirement Date but before his Deferred Retirement Date, the
election shall be void and the Participant will receive the benefit which
would have been payable to him had the option not been elected, unless
another option is elected.
8.07 BENEFICIARY
A Participant who elects an option under Section 8.03 or 8.04 shall
designate, on a form provided by the Committee, a Beneficiary to receive
any death benefit which may become payable under the designated option.
The Participant may change his designation of Beneficiary from time to
time by written notice filed with the Committee. If no designated
Beneficiary survives to receive all benefits which may become due under
the Plan, any such benefits becoming due shall be paid to any one or more
of the following classes of successive Beneficiaries surviving the
Participant: the Participant's (a) spouse, (b) issue, (c) parents, (d)
brothers and sisters, or (e) executors and administrators.
8.08 LIMITATION OF ELECTION OF OPTION
No option shall be effective under this Article if the anticipated effect
would be to extend the period of payments beyond the joint life
expectancy of the Participant and his Contingent Annuitant or
Beneficiary; or would violate the minimum distribution incidental benefit
requirement of Section 1.401(a)(9)-2 of the proposed regulations, or any
provision of future law that amends, supplements, or supersedes such
provision.
8.09 SPOUSAL CONSENT REQUIREMENT
Notwithstanding anything herein contained to the contrary, the election
by a married Participant of an optional form of benefit shall not take
effect unless the requirements set forth in Section 5.024 have been
satisfied.
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ARTICLE 9 - CHANGE IN STATUS AND TRANSFER
9.01 CHANGE IN STATUS FROM ELIGIBLE EMPLOYEE TO NON-ELIGIBLE EMPLOYEE
If a Participant is included in this Plan for a part of his period of
employment with the Employer or an Affiliated Employer and then loses his
status as an Eligible Employee, as defined in this Plan, he will not
accrue any further benefits under this Plan; however, all Service with
the Employer or an Affiliated Employer will be taken into account in
determining his eligibility rights to receive any benefits previously
accrued under this Plan.
In the event an Employee loses his status as an Eligible Employee, his
benefit shall be determined using his Final Average Compensation, Covered
Compensation, and years of Benefit Service on the date he ceases to be an
Eligible Employee. If the Employee's status again changes and he becomes
an Eligible Employee and resumes participation under the Plan, his years
of Benefit Service shall be aggregated and his benefit shall be
determined using his Final Average compensation and Covered Compensation
on the latest date he ceases to be an Eligible Employee.
9.02 CHANGE IN STATUS FROM NON-ELIGIBLE EMPLOYEE TO ELIGIBLE EMPLOYEE
If a Participant is included in this Plan after a period of Service with
the Employer when he was not an Eligible Employee, as defined in this
Plan, all his Service with the Employer or an Affiliated Employer will be
counted only for purposes of determining his eligibility to participate
in the Plan and his rights to receive benefits under this Plan.
9.021 NON-DUPLICATION OF BENEFITS
If benefits are payable on account of the same period of employment with
the Employer or an Affiliated Employer, under this Plan and another
qualified defined benefit plan toward which the Employer contributes (or
has contributed), the benefits payable under this Plan on account of such
period shall be reduced by the Actuarial Equivalent of any benefit
payable to him under such other plan calculated in the same form and
manner as is the benefit payable under this Plan on account of the same
period of Service. However, if such other
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Plan provides for a similar reduction of benefits, then this Section
shall be disregarded with respect to an Eligible Employee whose most
recent period of participation in this Plan is earlier than his most
recent period of participation in such other plan.
9.03 TRANSFER IN EMPLOYMENT
For purposes of determining vested benefits and eligibility, a direct
transfer in employment between the Employer and a wholly owned subsidiary
of the Employer, whether or not it adopts the Plan, shall not be deemed
to effect any break in Service as to the Eligible Employee or Participant
so transferring, as long as he retains his status as an Eligible Employee
with such subsidiary. His Benefit Service with such subsidiary prior to
the date of its adoption of the Plan shall be counted for purposes of the
Plan to the extent specified in the vote of the board of directors of
such subsidiary adopting the Plan. The Eligible Employee or Participant
shall not lose his right to any Benefit Service he had accrued with the
Employer prior to the date of his transfer in employment to the
subsidiary, provided that there shall be no duplication in benefits based
on such Benefit Service.
9.031 EMPLOYMENT WITH AN AFFILIATED EMPLOYER
For purposes of determining a Participant's eligibility to participate in
the Plan and his right to a Vested Benefit under Section 6.02, any
employment with an Affiliated Employer shall be treated as Service with
the Employer; such Service to be determined by the Committee in
accordance with the Service provisions of Article 2 applied in a uniform,
nondiscriminatory manner to all Participants and to be based on the
employment records of the Affiliated Employer. In no event shall a person
who has completed such Service enter the Plan prior to his employment
with the Employer or accrue any benefits under the Plan in respect of
such Service, except as provided in Section 9.03.
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9.04 EMPLOYMENT WITH WATTS FLUIDAIR CO.
If a Participant was included in one of the Prior Plans and ceased to be an
Employee, as defined in such Prior Plan, because prior to July 1, 1981 he
entered employment with and became included in a pension plan of Watts
Fluidair Co. (formerly known as Watts Fluid Power Co.), he will not
accrue any further benefits under this Plan; however, all service earned
with Watts Fluidair Co. will be taken into account in determining his
eligibility rights to receive any benefits previously accrued under the
Prior Plan. If a Participant who transferred from employment with Watts
Regulator Co. to Watts Fluidair Co. prior to July 1, 1981 is included in
this Plan after a period of employment with Watts Fluidair Co., all his
service with Watts Fluidair Co. will be counted for purposes of
determining his eligibility to participate in this Plan and his
eligibility rights to receive benefits under this Plan, and will be
counted for purposes of determining his Benefit Service hereunder. His
accrued benefit as determined under Section 5.032 shall be reduced by the
Actuarial Equivalent of the benefit payable to him under any Watts
Fluidair Co. plan calculated in the same form and manner as the benefit
payable under this Plan.
9.05 EMPLOYMENT WITH SPENCE ENGINEERING COMPANY, INC.
If an Employee transfers from Spence Engineering Company Inc. to Watts
Regulator Co. prior to December 31, 1987, his total service with Spence
Engineering Company, Inc. will be counted for purposes of determining his
eligibility to participate in this Plan and his eligibility to receive
benefits under this Plan, and will be counted for purposes of determining
his Benefit Service hereunder.
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ARTICLE 10 - ADMINISTRATION
10.01 ALLOCATION OF RESPONSIBILITY AMONG FIDUCIARIES FOR PLAN AND TRUST
ADMINISTRATION
The Fiduciaries shall have only those powers, duties, responsibilities
and obligations as are specifically given to them under this Plan or the
Trust. Any power, duty, responsibility or obligation relating to the
control, management, or administration of the Plan or Trust Fund which is
not specifically allocated to any Fiduciary, or with respect to which the
allocation is in doubt, shall be deemed allocated to the Employer. In
general, the Employer shall have the sole responsibility for making the
contributions, as specified in Article 11 and subject to the provisions
of Article 11, necessary to provide benefits under the Plan. The
Sponsoring Employer by action of its Board shall have the sole authority
to appoint and remove the Trustee and the members of the Committee and to
amend or terminate, in whole or in part, this Plan and the Trust. The
Committee shall have the sole responsibility for the administration of
this Plan, as specifically described in this Plan and the Trust. The
Trustee shall have the sole responsibility for the administration of the
Trust and the management of the Trust assets, except as otherwise
specifically provided in this Plan and the Trust.
The Sponsoring Employer, by written instrument filed with the records of
the Plan, may designate fiduciary capacities and/or Fiduciaries other
than those named herein. A Fiduciary may serve in more than one fiduciary
capacity in respect to the Plan. A Fiduciary shall have the authority to
delegate responsibilities, as provided above, and may employ one or more
parties to render advice with regard to any responsibility he has under
the Plan.
10.02 INDEMNIFICATION
The Employer shall indemnify each member (and former member) of the
Committee and any other employee, officer or director (and former
employee, officer or director) of the Employer against any claims, loss,
damage, expense and liability (other than amounts paid in settlement not
approved by the Employer) reasonably incurred by him in connection with
any action or failure to act to which he may be party by reason of his
membership on the Committee or performance of an authorized duty or
responsibility for or on behalf of the Employer pursuant to the Plan or
Trust unless the same is determined to be the result of the individual's
gross negligence or willful misconduct. Such indemnification by the
Employer
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shall be made only to the extent (i) such expense or liability is not
payable to or on behalf of such person under liability insurance
coverage; and (ii) the Trust is precluded from assuming such expense or
liability because of the operations of ERISA Section 410 or other
applicable law. The foregoing right to indemnification shall be in
addition to any other rights to which any such person may be entitled as
a matter of law.
10.03 APPOINTMENT OF COMMITTEE
The Plan shall be administered by a Committee consisting of at least
three (3) persons who shall be appointed by and serve at the pleasure of
the Board. A person who is selected as a member of the Committee also may
serve in one or more other fiduciary capacities with respect to the Plan
and may be a Participant. The Board shall have the right to remove any
member of the Committee at any time, and a member may resign at any time
by written resignation to the Board. The Board may fill by appointment
any vacancy in the membership of the Committee. All usual and reasonable
expenses of the Committee incurred by them in the administration of the
Plan and Trust, including but not limited to fees and expenses of
professional advisors referred to above, shall be paid by the Trust Fund
unless such expenses are paid by the Employer. All or part of such
expenses may be paid by the Employer, but the Employer shall be under no
obligation to pay any such expenses. Any members of the Committee who are
full-time employees of the Employer shall not receive compensation with
respect to their services as a member of the Committee.
10.04 RECORDS AND REPORTS
The Committee shall exercise such authority and responsibility as it
deems appropriate in order to comply with the Code, ERISA, and
governmental regulations issued thereunder relating to records of
Participants, Service and Benefit Service, benefits, notifications to
Participants, annual registration with the Internal Revenue Service, and
annual reports to the Department of Labor. The Employer and the Committee
shall each keep or cause to be kept such Employee and Participant data
and other records, and shall each reasonably give notice to the other of
such information, as shall be proper, necessary or desirable to
effectuate the purpose of the Plan. Neither the Employer nor the
Committee shall be required to duplicate any records kept by the other.
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10.05 OTHER COMMITTEE POWERS AND DUTIES
The Committee 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 construe and interpret the Plan, including the supplying of any
omissions in accordance with the intent of the Plan, decide all
questions of eligibility, determine the amount, manner and time of
payment of any benefits hereunder, and to authorize the payment of
benefits;
(b) To prescribe forms and procedures to be followed by the
Participants, spouses, and Beneficiaries filing applications for
benefits;
(c) To prepare and distribute, in such manner as the Committee
determines to be appropriate, information explaining the Plan;
(d) To receive from the Employer and from Participants such
information as shall be necessary for the proper administration of
the Plan;
(e) To furnish the Employer, upon request, such annual reports with
respect to the administration of the Plan as are reasonable and
appropriate;
(f) To receive, review and keep on file (as it may deem convenient or
proper) reports of the financial condition, and of the receipts
and disbursements, of the Trust Fund from the Trustee;
(g) To appoint, employ or designate individuals to assist in the
administration of the Plan and any other agents it deems
advisable, including legal and actuarial counsel;
(h) To make such equitable and practical adjustments as may be
necessary to correct mistakes of fact or other errors; and
(i) To authorize amendments of the Plan by a Company officer, provided
such amendments are of a non-substantive nature and do not
significantly increase the cost of the Plan; and
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(j) To exercise such other powers and duties as the Board may delegate
to it.
The Committee may retain auditors, accountants, physicians, actuaries,
legal counsel and other professional advisors selected by it. The opinion
of, or information and data contained in any certificate or report or
other material prepared by any such auditor, physician, actuary,
accountant, legal counsel, or other professional advisor, shall be full
and complete authority and protection in respect of any action taken,
suffered or omitted by the Committee or other Fiduciary in good faith and
in accordance with such opinion or information and no member of the
Committee or other Fiduciary shall be deemed imprudent by reason of any
such action.
10.06 RULES AND DECISIONS
The Committee may adopt such rules as it deems necessary, desirable or
appropriate for the proper and efficient administration of the Plan and
as are consistent with the provisions of the Plan. Rules and decisions of
the Committee shall not discriminate in favor of officers, directors, or
Highly Compensated Employees of the Employer. When making a determination
or calculation, the Committee shall be entitled to rely upon information
furnished by a Participant, spouse, Contingent Annuitant or Beneficiary,
the Employer, the legal counsel of the Employer, an Actuary, consultant,
or the Trustee. The Committee shall have and shall exercise complete
discretionary authority to construe, interpret and apply all of the terms
of the Plan, including all matters relating to eligibility for benefits,
amount, time or form of benefits, and any disputed or allegedly doubtful
Plan terms. Any such construction, administration, interpretation or
application shall be final, binding and conclusive upon all persons
including, but not by way of limitation, Employees, Participants,
spouses, Contingent Annuitants, Beneficiaries, and their heirs, and
personal representatives, and any other person claiming an interest under
the Plan and shall not be deemed imprudent. In exercising such
discretion, the Committee shall give controlling weight to the intent of
the Plan.
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10.07 COMMITTEE PROCEDURES
The Committee may act at a meeting or in writing without a meeting. All
decisions of the Committee shall be made by the vote of the majority
including actions in writing taken without a meeting. The Committee may
adopt such operating procedures and regulations as it deems desirable for
the conduct of its affairs and may authorize a member, or each member, of
the Committee to act on its behalf in certain administrative matters
deemed by them to be routine in nature, including the execution of
documents. No Committee member who is a Participant shall have any vote
in any decision of the Committee made uniquely with respect to such
Committee member or his benefits hereunder.
10.08 AUTHORIZATION OF BENEFIT PAYMENTS
The Committee shall issue directions to the Trustee concerning all
benefits which are to be paid from the Trust Fund pursuant to the
provisions of the Plan, and certify that all such directions are in
accordance with the Plan.
10.09 APPLICATION AND FORMS FOR PAYMENT
The Committee shall require a Participant to complete and file with the
Committee an application for distribution of benefits and all other forms
approved by the Committee for the purpose and to furnish all pertinent
information requested by the Committee. The Committee may rely upon all
such information furnished to it, including the Participants current
mailing address. To the extent that the Committee shall prescribe forms
for use by the Participants, former Participants, and their respective
spouses, Contingent Annuitants or Beneficiaries in communicating with the
Employer or the Committee, as the case may be, and shall establish
periods during which communications may be received, they and the
Employer shall respectively be protected in disregarding any notice or
communication for which a form shall so have been prescribed and which
shall not be made on such form and any notice or communication for the
receipt of which a period shall so have been established and which shall
not be received during such period, or in accepting any notice or
communication which shall not be made on the proper form and/or received
during the proper period. The Employer and the Committee shall
respectively also be protected in acting upon any notice or other
communication purporting to be signed by any person and reasonably
believed to be genuine and accurate, and shall not be deemed imprudent by
reason of so doing.
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10.10 CLAIMS PROCEDURE
The Committee shall notify each Participant of his entitlement to receive
benefits under this Plan, and shall provide appropriate forms on which
application for such benefits may be made.
Each Participant, spouse, Contingent Annuitant or Beneficiary claiming a
benefit under the Plan must complete and file such application forms with
the Committee. One Committee member (or his designee) shall be designated
to review all applications for benefits. He shall notify the claimant in
writing of his decision within ninety (90) days of his receipt of the
application. If special circumstances require any extension of time (not
to exceed ninety (90) days) for processing the claim, the claimant will
be notified in writing of the extension prior to the expiration of the
initial ninety (90) day period.
The reviewing member of the Committee shall make all determinations on
behalf of the Committee as to the right of any person to a benefit. Any
denial by the reviewing Committee member of a claim for benefits shall be
stated in writing and delivered or mailed to the claimant. The notice
shall be written to the best of the reviewing Committee member's ability
in a manner that may be understood without legal or actuarial counsel.
Such notice shall set forth specific reasons for the denial, specific
references to the pertinent Plan provisions on which the denial is based,
an explanation of the Plan's claim review procedures, and, if applicable,
a description of additional material or information necessary for the
claimant to perfect his claim. If the reviewing Committee member rejects
the application solely because the claimant failed to furnish certain
necessary material or information, the notice shall explain what
additional material is needed and why, and advise the claimant that he
may refile a proper application under the above claim procedure.
10.11 APPEAL AND REVIEW PROCEDURE
If a claim has been denied by the reviewing Committee member, the
claimant may appeal the denial within sixty (60) days after his receipt
of written notice thereof by submitting in writing to the Committee a
request for review of the denial of such claim. A claimant may also
submit a written statement of issues and comments concerning his claim,
and he may request an opportunity to review the Plan, the Trust and any
other pertinent documents
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(which shall be made available to him by the Committee within thirty (30)
days after its receipt of a copy of the request) at a convenient location
during regular business hours.
If an appeal is made, the Committee shall render its final decision with
the specific reasons therefor in writing and transmit it to the claimant
by certified mail within 60 days of its receipt of the request for review
(or within 120 days in the event a hearing is granted).
All interpretations, determinations, and decisions of the Committee or
its designated representative with respect to any issue herein will be
final, conclusive, and binding upon all interested parties.
10.12 EVIDENCE
Evidence required of anyone under the Plan may be given by certificate,
affidavit, document or in such other form as the person to whom such
evidence is given considers appropriate.
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ARTICLE 11 - FUNDING OF THE PLAN
11.01 MEDIUM OF FUNDING
The Plan will be funded through one or more Trust Funds established by
the Employer.
11.02 CONTRIBUTIONS
The Employer shall make such contributions to the Trust Fund from time to
time as may be necessary to maintain the Plan on a sound actuarial basis
and meet the funding requirements of ERISA. In determining such
contributions, the earnings of the Trust Fund and any amounts forfeited
by Terminated Participants shall be considered as a part of the Trust
Fund in establishing the cost of maintaining the Plan.
11.03 FUND TO BE FOR THE EXCLUSIVE BENEFIT OF PARTICIPANTS
The contributions made to the Trust Fund by the Employer under the Plan
shall be for the exclusive benefit of Participants, Retired Participants,
and Terminated Participants, and no part of the Trust Fund shall revert
to the Employer, except such amounts as may remain after the satisfaction
of all liabilities to Participants, Retired Participants, Terminated
Participants, surviving spouses, Contingent Annuitants, and Beneficiaries
upon termination of the Plan.
11.04 FORFEITURES
All amounts forfeited by Terminated Participants shall be used to reduce
the Employer's cost of the Plan, and shall not be used to increase the
benefits of other Participants under the Plan.
11.05 INTERESTS OF PARTICIPANTS IN TRUST FUND
No Participant shall have any right, title or interest in any part of the
assets of any Trust Fund except as and to the extent expressly provided
by the Plan.
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11.06 PAYMENT OF EXPENSES
It is intended that the administrative and all other expenses of the Plan
shall be paid by the Trust Fund, unless such expenses are paid by the
Employer. All or part of such expenses may be paid by the Employer, but
the Employer shall be under no obligation to pay any such expenses.
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ARTICLE 12 - PAYMENT OF RETIREMENT BENEFITS
12.01 PAYMENT OF SMALL AMOUNTS
benefit commencement date
In the event that the Actuarial Equivalent of the Participant's accrued
benefit is $3,500 ($5,000 commencing October 1, 2001) or less on the
determination date, the accrued benefit shall be automatically paid in a
lump sum. Notwithstanding this above, if the Actuarial Equivalent of the
Participant's accrued benefit derived from Employer contributions is
$3,500 ($5,000 commencing October 1, 2001) or less, after distribution of
the Participant's Accumulated Contribution Account, a Participant may
elect to receive distribution of his remaining Employer provided accrued
benefit provided the appropriate spousal consent as set forth in Section
5.024 is obtained.
No distribution may be made under this Section 12.01 after a
Participant's benefit commencement date, unless the Participant and the
Participant's spouse, or where the Participant has died, the surviving
spouse consents in writing to such distribution.
12.02 DEEMED DISTRIBUTION
If the Actuarial Equivalent of the vested portion of a Participant's
accrued benefit is zero, the Participant shall be deemed to have received
a single sum distribution of the vested portion of his accrued benefit on
his date of termination of employment and the nonvested portion of his
accrued benefit shall thereupon be forfeited. If such Participant resumes
employment covered under the Plan before the date he incurs a Break in
Service on or after January 1, 1985 which equals or exceeds the greater
of five years or the number of years of Service which the Employee
completed prior to the Break in Service, the nonvested portion of the
accrued benefit forfeited pursuant to this Section 12.02 shall be
restored on the Participant's date of reemployment.
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12.03 PAYMENTS FOR INCAPACITATED PERSONS
Whenever, in the Committee's opinion, a person entitled to receive any
payment of a benefit, or installment thereof, hereunder is under a legal
disability or is incapacitated in any way so as to be unable to manage
his financial affairs, the Committee may direct the Trustee to make
payments to the legal representative of such person. Any payment of a
benefit or installment thereof in accordance with the provisions of this
Section shall be a complete discharge of any liability for the making of
such payment under the provisions of the Plan.
If any Beneficiary of any Participant or former Participant shall be a
minor, the Trustee shall be fully protected in making any payment
required to be made to such minor to any person who shall be a custodian
or guardian for such minor.
12.04 SPENDTHRIFT
Except as provided in Section 12.05, no benefit payable at any time under
the Plan shall be subject in any manner to alienation, anticipation,
sale, transfer, assignment, pledge, attachment or encumbrance of any
kind. No benefit and no Trust Fund established in connection with the
Plan shall in any manner be subject to the debts or liabilities of any
person entitled to such benefit. Effective August 5, 1997, the Plan shall
recognize judgements or settlements described in Sections 401(a)(13)(C)
and (D).
12.05 PAYMENT UNDER QUALIFIED DOMESTIC RELATIONS ORDERS
Notwithstanding any provision of the Plan to the contrary, if there is
entered any qualified domestic relations order (within the meaning of
Section 414(p) of the Code and ERISA Section 206(d)(3)(B), as added by
the Retirement Equity Act of 1984) that affects the payment of benefits
hereunder, such benefits shall be paid in accordance with the applicable
requirements of such order.
12.06 LATEST COMMENCEMENT OF BENEFITS
In no case, unless the Participant otherwise elects in accordance with
Section 401(a)(14) of the Code and the Treasury Regulations promulgated
thereunder, will the payment of benefits to any Participant commence
later than the 60th day after the latest of the following: (i) the close
of the Plan Year of the Participant's Normal Retirement Date (as
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defined in Section 4.01); (ii) the close of the Plan Year in which occurs
the tenth anniversary of the year in which the Participant commenced
participation in the Plan; or (iii) the close of the Plan Year in which
the Participant terminates his service with the Employer and all
Affiliated Employers, subject to the requirements of Code Section
401(a)(9).
12.07 COMMENCEMENT OF BENEFITS PRIOR TO NORMAL RETIREMENT AGE
Notwithstanding anything herein to the contrary, except as provided in
Section 12.01, no benefit shall commence to the Participant or the
Participant's spouse prior to the date the Participant attains or would
have attained his Normal Retirement Age without the consent of the
Participant and the Participant's spouse, if required by applicable law.
Such consent must be obtained not more than 90 days prior to the benefit
commencement date.
12.08 DISTRIBUTION OF BENEFITS BEGINNING BEFORE DEATH AND AFTER DEATH
(a) DISTRIBUTION BEGINNING BEFORE DEATH. If distribution to the
Participant has begun and the Participant dies before his entire
Vested Benefit has been distributed, the remaining portion of such
Vested Benefit shall be distributed to his Beneficiary or
Contingent Annuitant, as least as rapidly as under the method of
payment in effect at the Participant's date of death.
(b) DISTRIBUTION BEGINNING AFTER DEATH. If the Participant dies before
commencement of his Vested Benefit, distribution of the
Participant's entire Vested Benefit shall be completed by December
31 of the calendar year containing the fifth anniversary of the
Participant's death, except that:
(i) if the Participant's designated Beneficiary is an
individual other than the Participant's spouse, the
Participant's interest may be distributed over the life
expectancy of his Beneficiary, beginning on or before
December 31 of the calendar year immediately following the
calendar year in which the Participant died; and
(ii) if the Participant's designated Beneficiary is his spouse,
the Participant's interest may be distributed over the life
expectancy of his spouse, beginning on or before the later
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of:
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(A) December 31 of the calendar year next following the
calendar year in which the Participant died; or
(B) December 31 of the calendar year in which the
Participant would have attained age 70 1/2.
12.09 DIRECT ROLLOVER DISTRIBUTIONS
Notwithstanding any provision of the Plan to the contrary, if any
distribution to a Distributee (i) is made on or after January 1, 1993,
(ii) totals $200 or more, and (iii) constitutes an Eligible Rollover
Distribution, the Distributee may elect on a form provided by the
Committee to have all or part of such Eligible Rollover Distribution paid
in a direct rollover to an Eligible Retirement Plan selected by the
Distributee. For this purpose, a Distributee, an Eligible Rollover
Distribution, and an Eligible Retirement Plan shall be defined as
follows:
(a) Distributee includes an Employee or former Employee. In addition,
the Employee's or former Employee's surviving spouse and the
Employee's or former Employee's spouse or former spouse who is the
alternate payee under a qualified domestic relations order, as
defined in Section 414(p) of the Code, are Distributees with
regard to the interest of the spouse or former spouse.
(b) Eligible Rollover Distribution means any distribution of all or
any portion of the balance to the credit of a 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
ten years or more; any distribution to the extent such
distribution is required under Section 401(a)(9) of the Code;
effective January 1, 1999, any hardship distribution as defined by
Code Section 401(k) (2)(B)(i)(IV); and the portion of any
distribution that is not includable in gross income (determined
without regard to the exclusion for net unrealized appreciation
with respect to employer securities).
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(c) Eligible Retirement Plan means a plan described below:
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(i) an individual retirement account described in Section
408(a) of the Code;
(ii) an individual retirement annuity (other than an endowment
contract) described in Section 408(b) of the Code;
(iii) with respect to Participants and Distributees who are
alternate payees only, a qualified defined contribution
plan and exempt trust described in Sections 401(a) and
501(a) of the Code respectively, the terms of which permit
the acceptance of rollover contributions; or
(iv) with respect to Participants and Distributees who are
alternate payees only, an annuity plan described in Section
403(a) of the Code.
If an election is made to have only a part of an eligible rollover
distribution paid in a direct rollover, the amount of the direct rollover
must total $500 or more.
Direct rollovers shall be accomplished in accordance with procedures
established by the Committee.
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ARTICLE 13 - AMENDMENTS TO OR TERMINATION OF THE PLAN
13.01 RIGHTS OF THE EMPLOYER TO AMEND OR TERMINATE
(a) While it is the intention of the Employer to continue the Plan
indefinitely, the Employer reserves the right to modify, amend or
terminate the Plan in whole or in part at any time by an
instrument in writing pursuant to authority of a vote of the Board
of Directors; provided, however, that the Plan shall not be
amended in such manner as would cause or permit any part of the
Trust to be diverted for purposes other than for the exclusive
benefit of Participants, Retired Participants, and Terminated
Participants; decrease a Participant's accrued benefit or
eliminate an optional form of payment with respect to benefits
accrued as of the later of the (a) the date such amendment is
adopted, or (b) the date the amendment becomes effective; or to
revert to or become the property of the Employer, prior to the
satisfaction of all liabilities under the Plan with respect to
Participants, Retired Participants, Terminated Participants,
surviving spouses, Contingent Annuitants, and Beneficiaries.
(b) If any Plan amendment changes the vesting schedule set forth in
Section 6.02, each Participant who has completed at least three
(3) years of Service on the effective date of the change in the
vesting schedule shall have his vesting percentage computed in
accordance with the vesting schedule which produces the highest
vested benefit.
13.02 TERMINATION OF THE PLAN
(a) Upon termination of the Plan due to any reason, or partial termination in
accordance with the regulations of the Treasury Department, the rights of
all non-vested Participants affected by such termination to benefits
accrued prior to the date of such termination shall be nonforfeitable.
The assets of the Plan shall thereupon be allocated in accordance with
the provisions of Sections 13.03 and 13.04. No Participant or any other
person shall have the right to seek payment of benefits directly from the
Employer and all persons shall look solely to the Trust Fund for payment
of benefits. Such payments shall be made only to the extent that the
funds held in the Trust are sufficient therefor, except as may be
otherwise guaranteed by the Pension Benefit Guaranty Corporation.
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(b) Upon termination of the Plan, benefits of missing Participants shall be
treated in accordance with Section 4050 of ERISA.
13.03 LIMITATIONS ON BENEFITS UPON TERMINATION
The allocation of the amounts in Section 13.04 shall be based on the
actuarial value of the benefit payable under the Plan at Normal
Retirement Age as a life annuity, without death benefit, not in excess of
the lesser of:
(a) 100% of the Participant's monthly compensation averaged over the
five consecutive years in which his compensation was the highest; or
(b) such amount as determined according to the regulations of the
Pension Benefit Guaranty Corporation. Such amount shall be subject to
adjustment each year to reflect changes in the Social Security
contribution and benefit base, any such adjustments shall be in
accordance with regulations issued by the Pension Benefit Guaranty
Corporation.
13.04 ALLOCATION OF ASSETS
After providing for the expenses incurred in terminating the Plan, the
assets shall be used and applied for the benefit of Retired Participants
(including surviving spouses, Contingent Annuitants, and Beneficiaries),
Participants, and Terminated Participants who at the date of retirement
or termination of employment may have been entitled to retirement
benefits, to be allocated in the following order:
(a) FIRST: the accrued benefit equal to 10% of the Participant's
Accumulated Contributions Account, plus 5% interest thereon from
the date of termination, accrued to age 65.
(b) SECOND: If any assets remain after allocation for the purposes of
paragraph (a), assets shall be allocated to provide pensions for
life, on the basis of the Plan provisions in effect at the
beginning of the five-year period ending on the date of Plan
termination, to Retired Participants (including surviving spouses,
Contingent Annuitants, and Beneficiaries receiving benefits) who
have been receiving benefits
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for three years prior to the date of termination and Participants
and Terminated Participants who have met the requirements for
normal or early retirement benefit at least three years prior to
the date of termination.
(c) THIRD: If any assets remain after allocation for the purposes of
paragraphs (a) and (b), they shall be allocated to provide a
benefit for life, on the basis of the Plan provisions in effect
five years prior to the date of Plan termination, to all other
Retired Participants (including surviving spouses, Contingent
Annuitants, and Beneficiaries receiving benefits) and all other
Participants and Terminated Participants who are not included in
paragraph (a) and who have met the requirements for Normal or
Early Retirement or for a Vested Benefit under Article 6 at the
date of termination.
(d) FOURTH: If any assets remain after allocation for the purposes of
paragraphs (a), (b), and (c), they shall be allocated to provide
the benefit, if any, in excess of the benefit provided by the
allocations under paragraphs (a), (b), and (c) necessary to bring
the benefits of Retired Participants (including surviving spouses,
Contingent Annuitants, and Beneficiaries) and all Participants and
Terminated Participants who have met the requirements for Normal
or Early Retirement or a Vested Benefit under Article 6 at the
date of Plan termination up to the full amount of the accrued
retirement benefit provided under the Plan as of the date of Plan
termination, such benefits to be determined without regard to the
maximum benefit stated in Section 13.03.
(e) FIFTH: If any assets remain after allocation for the purposes of
paragraphs (a), (b), (c), and (d), they shall be allocated to
provide benefits to all other Participants of the Plan on the date
of Plan termination, such benefits to be determined without regard
to the maximum benefit stated in Section 13.03.
(f) SIXTH: If any assets remain after the complete allocation for the
foregoing purposes of this Article 13, they shall be returned to
the Employer.
If the allocable assets are insufficient to provide in full for the
allocations under any of the foregoing paragraphs after the provision for
all allocations under previous paragraphs, each allocation under such
paragraph as to which assets are insufficient shall be reduced pro-rata.
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No allocations will be made under the foregoing Section with respect to
any benefits accrued under the Plan after the Secretary of the Treasury
has issued notice that the Plan does not meet the requirements of Section
401(a) of the Code.
13.05 DISTRIBUTION MEDIA
The allocations for which provision is made in this Article 13 may be
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accomplished through:
(a) group contracts or individual annuity contracts; or
(b) cash, or
(c) any combination of the foregoing.
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ARTICLE 14 - DISTRIBUTION LIMITATIONS AND EARLY TERMINATION PROVISIONS
14.01 DISTRIBUTION LIMITATIONS
(a) For purposes of this Section 14.01, the following terms shall have
the indicated meaning:
(i) "BENEFITS" means the sum of the Participant's accrued
benefit and all other benefits to which he is entitled
under the Plan, but excluding any death benefit provided
for by insurance on the Participant's life.
(ii) "Restricted Participant" means, with respect to a Plan
Year, a Highly Compensated Employee who is a Participant
and who, if there are more than 25 Highly Compensated
Employees, is one of the 25 Highly Compensated Employees
with the highest Total Annual Pay, as defined in
subparagraph (iii) below.
An individual who is a Restricted Participant in a Plan
Year shall be a Restricted Participant in a subsequent Plan
Year only if he satisfies the conditions of the previous
sentence in such subsequent Plan Year.
If more than one individual has the same Total Annual Pay,
the younger individual shall be deemed to have the higher
Total Annual Pay.
(iii) "TOTAL ANNUAL PAY" means, with respect to any Plan Year:
(A) In the case of a Highly Compensated Employee who is
not currently employed by the Employer or an
Affiliated Employer, the greater of his Section 415
Compensation (as defined in Section 5.04(c)) for the
Plan Year in which he ceased to be employed by the
Employer or an Affiliated Employer, or his Section
415 Compensation for the Plan Year immediately
preceding that Plan Year, and
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(B) In the case of a Highly Compensated Employee who is
currently employed by the Employer or an Affiliated
Employer, the greater of his Section 415
Compensation for the Plan Year in question or for
the prior Plan Year.
(b) Subject to paragraph (c) below, a Restricted Participant may not
receive his Benefits under this Plan in the form of a single lump
sum payment, or other benefit form under which payments during a
single year would exceed the annual payments that would be made on
behalf of such Participant under a single life annuity that is the
Actuarial Equivalent of his benefits (other than the benefits
described in paragraph (c)(iii) below).
(c) The limitation of paragraph (b) above shall not apply:
(i) to any payment, if the value of Plan assets after such
payment equals or exceeds 110% of the value of the Plan's
"CURRENT LIABILITIES" (within the meaning of Section
412(1)(7) of the Code); or
(ii) if the value of the Restricted Participant's Benefit is
less than 1% of the value of such current liabilities, or
(iii) to payment of benefits attributable to transferred balances
from defined contribution plans or to employee
contributions.
(d) In the event that Congress provides by statute, or the Internal
Revenue Service provides by regulation or ruling, that the
limitations set forth in this Section 14.01 are not necessary for
the Plan to meet the requirements of Section 401(a) or other
applicable provisions of the Code then in effect, such limitations
shall become void and shall no longer apply without the necessity
of further amendment to the Plan.
(e) Notwithstanding the foregoing, the limitations of paragraph (b)
above shall not apply to any Restricted Participant otherwise
subject thereto who enters into a prior written agreement with the
Committee to the effect that if the Plan is terminated and
distribution of benefits has been or will be made to such
Participant regardless of the limitation of paragraph (b) above,
such Participant (or, in the case of his death,
- 80 -
his estate or representatives) shall repay to the Trustee a sum
equal to the total amounts by which his benefits under the Plan
shall exceed benefits determined under the preceding limitation
("Restricted Benefits").
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ARTICLE 15 - TOP-HEAVY PROVISIONS
15.01 ARTICLE CONTROLS
Any Plan provisions to the contrary notwithstanding, the provisions of
this Article 15 shall control to the extent required to cause the Plan to
comply with the requirements imposed by Section 416 of the Internal
Revenue Code.
15.02 DEFINITIONS
Where the following words and phrases appear in this Article 15, they
shall have the respective meanings set forth below, unless their context
clearly indicates to the contrary:
(a) ACCOUNT BALANCE
As of any Valuation Date, the aggregate amount credited to an
individual's account or accounts under a qualified defined
contribution plan (excluding the employee contributions which were
deductible within the meaning of Section 219 of the Code and
rollover or transfer contributions made by or on behalf of such
individual to such plan from another qualified plan, sponsored by
an entity other than the Employer or an Affiliated Company)
increased by (i) the aggregate distributions made to such
individual from such plan during a five-year period ending on the
Determination Date and (ii) the amount of any contributions due as
of the Determination Date immediately following such Valuation
Date;
(b) ACCRUED BENEFIT
As of any Valuation Date, the present value (computed on the basis
of the Assumptions) of the cumulative accrued benefit (excluding
the portion thereof which is attributable to employee
contributions which were deductible pursuant to Section 219 of the
Code, to rollover or transfer contributions made by or on behalf
of such individual to such plan from another qualified plan
sponsored by an entity other than the Employer or an Affiliated
Company, to proportional subsidies or to ancillary benefits) of an
individual under a qualified defined benefit plan increased
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|
by the aggregate distributions made to such individual from such
plan during a five-year period ending on the Determination Date;
(c) AFFILIATED COMPANY
Any corporation or other business entity which is required to be
aggregated with the Employer by reason of Section 414(b), 414(c)
or 414(m) of the Code;
(d) AGGREGATION GROUP
The group of qualified plans (including terminated plans
maintained within the five-year period ending on the Determination
Date) maintained by the Employer and each Affiliated Company
consisting of (i) each plan in which a Key Employee participates
and each other plan which enables a plan in which a Key Employee
participates to meet the requirements of Section 401(a)(4) or 410
of the Code, or (ii) each plan in which a Key Employee
participates, each other plan which enables a plan in which a Key
Employee participates to meet the requirements of Sections
401(a)(4) and 410 of the Code and any other plan which the
Employer elects to include as part of such group; provided,
however, that the Employer may not elect to include a plan in such
group if its inclusion would cause the group to fail to meet the
requirements of Sections 401(a)(4) and 410 of the Code;
(e) ASSUMPTIONS
For purposes of this Article 15, the interest rate and mortality
assumptions specified in Section 1.02(a) of the Plan;
(f) DETERMINATION DATE
For the first Plan Year of any plan, the last day of such Plan
Year, and for each subsequent Plan Year of such plan, the last day
of the preceding Plan Year;
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(g) FORMER KEY EMPLOYEE
With respect to any Plan Year, any individual who was a Key
Employee in a previous Plan Year but who is not a Key Employee
with respect to such Plan Year. For purposes of this definition, a
beneficiary (who would not otherwise be a Key Employee) of a
deceased Former Key Employee shall be deemed to be a Former Key
Employee in substitution for such deceased Former Key Employee;
(h) HIGHEST AVERAGE COMPENSATION
The highest annual average of the taxable compensation paid by the
Employer to an Employee during any five (5) consecutive Plan Years
(excluding Plan Years prior to the first Plan Year the Plan was
top-heavy and excluding Plan Years subsequent to the last Plan
Year the Plan was top-heavy), or during all of such Plan Years
during which the Employee received taxable compensation from the
Employer, if less than five (5);
(i) KEY EMPLOYEE
With respect to any Plan Year, any individual who at any time
during such Plan Year or during any of the four (4) Plan Years
immediately preceding such Plan Year was (i) an officer of the
Employer or an Affiliated Company having an annual compensation
greater than 50% of the dollar limitation specified in Section
415(b)(l)(A) of the Code for any such Plan Year, (ii) one of the
ten employees having an annual compensation greater than the
dollar limitation specified in Section 415(c)(l)(A) of the Code
for any such Plan Year, and owning the largest interests in the
Employer or an Affiliated Company and owning greater than a 1/2
percent interest in the Employer or an Affiliated Company, (iii),
an owner of five percent (5%) or more of the outstanding stock of
the Employer or an Affiliated Company or of stock possessing five
percent or more of the total combined voting power of all of the
stock of the Employer or an Affiliated Company, or (iv) an
employee whose Remuneration (during the Plan Year including the
Determination Date) exceeded $150,000 and who was an owner of one
percent or more of the outstanding stock of the Employer or an
Affiliated Company or of stock possessing one percent or more of
the total combined voting power of all of the stock of the
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Employer or an Affiliated Company. For 7purposes of this
definition, (i) an individual shall be deemed to own stock owned
by other individuals as provided in Section 318 of the Code, but
substituting 5% for 50% in subparagraph (C) of Section 318(a)(2)
of the Code, (ii) a beneficiary (who would not otherwise be a Key
Employee) of a deceased Key Employee shall be deemed to be a Key
Employee in substitution for such deceased Key Employee, and (iii)
the total number of Key Employees who are officers of the Employer
and the Affiliated Companies shall be limited to: if there is a
total of less than thirty (30) employees of the Employer and the
Affiliated Companies, three (3); if there is a total of more than
thirty (30) but less than five hundred (500) employees of the
Employer and the Affiliated Companies, ten percent (10%) of such
total; and, if there is a total of more than five hundred (500)
employees of the Employer and the Affiliated Companies, fifty
(50);
(j) NON-KEY EMPLOYEE
An individual who is not a Key Employee;
(k) PLAN YEAR
With respect to any plan, the annual accounting period used by
such plan for annual reporting purposes;
(l) REMUNERATION
An individual's earned income, wages, salaries and other amounts
actually paid or made available by the Employer or an Affiliated
Company to such an individual during a Plan Year for personal
services actually rendered in the course of employment with the
Employer or an Affiliated Company (subject to exclusion of amounts
specified by regulations promulgated under Section 415 of the
Code);
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(m) TOP-HEAVY SERVICE
Each year of Service, excluding all years of Service credited
prior to January 1, 1984 and all years of Service with respect to
Plan Years for which the Plan was not top-heavy;
(n) VALUATION DATE
With respect to any Plan Year of any defined contribution plan,
the most recent date within the twelve (12) month period prior to
a Determination Date as of which the trust fund established under
such plan was valued and the net income (or loss) thereof
allocated to Participants' accounts. With respect to any Plan Year
of a defined benefit plan, the most recent date within a
twelve-month period prior to a Determination Date as of which the
plan assets were valued for purposes of computing plan costs for
purposes of the requirements imposed under Section 412 of the
Code.
15.03 TOP-HEAVY STATUS
(a) The Plan shall be deemed a top heavy plan for a Plan Year if, as
of the Valuation Date preceding the applicable Determination Date,
the sum of (1) the present value of accrued benefits of Key
Employees under this Plan and all other defined benefit plans in
the Aggregation Group, and (2) the account balances of Key
Employees under all defined contribution plans in the Aggregation
Group exceeds 60% of the sum of (3) the present value of accrued
benefits of all Participants under this Plan and all other defined
benefit plans in the Aggregation Group (but excluding Participants
who are former Key Employees); and (4) the account balances of all
Participants under all defined contribution plans in the
Aggregation Group.
For purposes of this test, the following rules shall apply:
(i) Subject to subparagraph (ii) below, any distributions from
this Plan or any other plan in the Aggregation Group, and
any accrued benefit distributed from any other plan in the
Aggregation Group during the five Plan Years ending on the
Determination Date shall be taken into consideration.
- 86 -
(ii) The benefits of and distributions to all former employees
who have not been credited with at least one Hour of
Service during the period of five years ending on the
Determination Date shall be disregarded, provided, however,
that if such former Employee again completes an Hour of
Service with the Employer after such five year period, such
former Employee's accounts shall be taken into
consideration.
Notwithstanding any provision of this paragraph (ii) to the
contrary, in any Plan Year in which this Plan is a top
heavy Plan, each Non-Key Employee who is also covered under
a defined contribution plan of the Employer, shall accrue a
Minimum Benefit as provided by this Plan.
(iii) If an Employee is not a Key Employee for the Plan Year
containing the Determination Date, but such individual was
a Key Employee during any previous Plan Year, the value of
his or her benefits and distributions shall not be taken
into consideration.
(iv) Solely for purposes of determining if the Plan or any other
plan in the Required Aggregation Group is a top heavy plan
for a Plan Year, the accrued benefits under any defined
benefit plans of Employees who are not Key Employees shall
be determined for Plan Years beginning after 1986 under the
method, if any, which is uniformly applied for accrual
purposes under all defined benefit plans maintained by the
Employer or an Affiliated Employer or, if there is no such
method, as if such benefit accrued not more rapidly than
under the slowest accrual rate permitted under Section
411(b)(1)(C) of the Code.
(v) The determination of account balances under all defined
contribution plans in the Aggregation Group shall be
increased for contributions due as of the Determination
Date to the extent required under Section 416 of the Code.
(vi) The determination of the present value of accrued benefits
under all defined benefit plans in the Aggregation Group
shall be based on the interest rate and mortality table
specified in Section 1.02(a).
- 87 -
(vii) Distributions, rollovers and trust to trust transfers shall
be taken into consideration to the extent required under
Section 416 of the Code.
The calculation of the top heavy ratio shall be made in accordance
with the provisions of Section 416 of the Code.
(b) If the Plan is determined to be top-heavy for a Plan Year, the
annual retirement benefit of each Participant who is a Non-Key
Employee shall not be less than the lesser of (i) or (ii), where
(i) is two percent (2%) of the Participant's Highest Average
Compensation multiplied by the Participant's Years of
Top-Heavy Service; and
(ii) is twenty percent (20%) of the Participant's Highest
Average Compensation.
The minimum annual retirement benefit provided by the preceding
sentence means the retirement benefit payable annually under the
Plan in the form of a single life annuity with no ancillary
benefits and beginning on the date the Participant attains Normal
Retirement Age. If a Participant actually receives his benefit
under the Plan in a different form or commencing at a different
time, his benefit shall not be less than the Actuarial Equivalent
(using the factors set forth in Section 1.02(c) of the foregoing
minimum benefit;
(c) If the Plan is determined to be top-heavy for a Plan Year, the
Vested Benefit of any Participant who completes an Hour of Service
during such Plan Year or who terminates his service with the
Employer during such Plan Year shall be determined in accordance
with Section 6.02, but using the following vesting schedule:
YEARS OF VESTED
SERVICE PERCENTAGE
Less than 3 years 0%
3 years or more 100%
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- 88 -
If the vesting schedule under the Plan for any Plan Year shifts
into or out of the above schedule because of the Plan's top heavy
status, such shift shall be regarded as an amendment to the Plan's
vesting schedule and the provisions of Section 13.01(b) shall be
applied.
The provisions of this paragraph (c) shall not be applied to
reduce the Participant's vested percentage computed in accordance
with the provisions of Section 6.02.
(d) In any Plan Year in which the Plan is top heavy but not super top
heavy (substituting 90% for 60% in subparagraph(a) above), Section
5.041(d)(ii) shall be applied by substituting "100%" for "125%"
unless the Sponsoring Employer amends subparagraph (b)(i) above by
substituting "3%" for "2%" therein. Effective January 1, 2000,
this paragraph (d) shall no longer be applicable.
(e) In any Plan Year in which the Plan is super top heavy, the factor
of "125%" shall be changed to "100%" in Section 5.041(d)(ii).
Effective January 1, 2000, this paragraph (e) shall no longer be
applicable.
15.04 TERMINATION OF TOP-HEAVY STATUS
Except as specifically provided in Section 15.03(c), if the Plan has been
deemed to be top-heavy for one or more Plan Years and thereafter ceases
to be top-heavy, the provisions of this Article 15 shall cease to apply
to the Plan effective as of the day following the Determination Date on
which it is determined to no longer be top-heavy, provided, however, that
the accrued benefit of any Participant under the Plan shall not be less
than the minimum benefit which such Participant had accrued under Section
15.03(b) as of the last day of the last Plan Year for which the Plan was
top-heavy.
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ARTICLE 16 - MISCELLANEOUS
16.01 RIGHTS AGAINST THE EMPLOYER
Neither the establishment of the Plan, nor the Trust Fund, nor any
modification thereof, nor the payment of benefits hereunder shall be
construed as giving any Employee or Participant the right to be retained
in the service of the Employer or as interfering with the right of the
Employer to discharge any Employee at any time.
16.02 RETURN OF CONTRIBUTIONS
(a) In the event that the Commissioner of Internal Revenue (or his or
her delegate) determines that the Plan is not initially qualified
under the Code, any Employer contributions made to the Plan shall
be returned to the Employer within one year after the date the
initial qualification is denied, provided application for
qualification is made by the time prescribed by law for filing the
Employer's return for the fiscal year in which the Plan is
adopted, or such later date as the Secretary of the Treasury may
prescribe.
(b) Nothing herein shall prohibit a return to the Employer, within one
year after payment, of excess sums contributed to the Trust Fund
as a result of a mistake of fact.
(c) Each employer contribution is specifically conditioned on the
deductibility of the contribution under Section 404 of the Code,
and to the extent such contribution, or any part thereof, is
disallowed, the contribution, or any part thereof that is
disallowed, shall be returned to the Employer within one year
after the date of disallowance.
(d) The return of a contribution to the Employer pursuant to paragraph
(b) or (c) above shall be permitted hereunder only if the amount
so returned (i) is the excess of the amount actually contributed
over the amount which would have otherwise been contributed, (ii)
does not include the earnings attributable to such contribution
and (iii) is reduced by any losses attributable to such
contribution.
- 90 -
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16.03 MERGER
Unless otherwise permitted by law or regulations, the Plan shall not be
merged into, or consolidated with, nor shall any assets or liabilities be
transferred to, any other pension or retirement plan under circumstances
resulting in a transfer of assets or liabilities from the Plan to such
other plan unless immediately after any such merger, consolidation or
transfer each Employee would if such other plan then terminated, receive
a benefit which is equal to or greater than the benefit he would have
been entitled to receive immediately before the merger, consolidation or
transfer, if the Plan had then terminated.
16.04 LEASED EMPLOYEES
For purposes of the Plan, the term "leased employee" means any person who
would not otherwise be considered an Employee but who, pursuant to an
agreement between the Employer or an Affiliated Employer and a leasing
organization (within the meaning of Section 414(n)(2) of the Code) has
performed services for the Employer or Affiliated Employer on a
substantially full time basis for a period of at least one year, and such
services are performed under the primary direction or control of the
Employer or Affiliated Employer. Contributions or benefits provided a
leased employee by the leasing organization which are attributable to
services performed for the Employer or Affiliated Employer shall be
treated as provided by the Employer or Affiliated Employer.
A leased employee shall not be considered an Employee if:
(a) Such individual is covered by a money purchase pension plan
providing (i) a nonintegrated employer contribution rate of at
least ten percent of his "Section 415 Compensation" (as defined in
Section 5.04(c)), but including amounts contributed pursuant to a
salary reduction agreement which are not includable in gross
income under Section 125, 402(a)(8), 402(h), or 403(b) of the
Code, (ii) immediate participation, and (iii) full and immediate
vesting; and
(b) leased employees constitute twenty percent or less of the
Employer's or Affiliated Employer's nonhighly compensated
workforce (within the meaning of Section 414(n)(5)(C)(ii) of the
Code).
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16.05 APPLICABLE LAW
The provisions of this Plan shall be governed and construed in accordance
with the laws of the Commonwealth of Massachusetts.
16.06 HEADINGS
The headings of the Plan are inserted for convenience of reference only,
and shall have no effect upon the meaning of the provisions hereof.
16.07 GENDER AND NUMBER
Wherever used in this instrument, a masculine person shall be deemed to
include the masculine and feminine gender, and a singular word shall be
deemed to include the singular and plural, in all cases where the context
requires.
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IN WITNESS WHEREOF, Watts Industries, Inc. has caused this instrument to be
executed by its authorized officer and its seal affixed hereto this 28 day of
January, 2003
WATTS INDUSTRIES, INC.
(Seal)
By /s/ William C. McCartney
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- 92 -
PART A
WATTS INDUSTRIES, INC.
PENSION PLAN
WATTS INDUSTRIES, INC.
HOURLY PENSION PLAN
(Amended and Restated Effective as of January 1, 1997)
TABLE OF CONTENTS
PAGE
INTRODUCTION.................................................................................................... i
ARTICLE I - DEFINITIONS
1.01 Actuarial Equivalent............................................................................1
1.02 Actuary.........................................................................................2
1.03 Affiliated Employer.............................................................................2
1.04 Beneficiary.....................................................................................2
1.05 Benefit Commencement Date.......................................................................3
1.06 Board of Directors or Board.....................................................................3
1.07 Code............................................................................................3
1.08 Committee.......................................................................................3
1.09 Contingent Annuitant............................................................................3
1.10 Effective Date..................................................................................3
1.11 Eligible Employee...............................................................................3
1.12 Employee........................................................................................3
1.13 Employer........................................................................................4
1.14 ERISA...........................................................................................4
1.15 Fiduciary.......................................................................................4
1.16 Highly Compensated Employee.....................................................................4
1.17 Limitation Year.................................................................................5
1.18 Normal Retirement Age...........................................................................5
1.19 Participant.....................................................................................5
1.20 Plan............................................................................................5
1.21 Plan Administrator..............................................................................6
1.22 Plan Year.......................................................................................6
1.23 Prior Plan......................................................................................6
1.24 Retired Participant.............................................................................6
1.25 Social Security Retirement Age..................................................................6
1.26 Sponsoring Employer.............................................................................6
1.27 Terminated Participant..........................................................................6
1.28 Trust...........................................................................................6
1.29 Trust Fund or Trust.............................................................................6
1.30 Trustee.........................................................................................6
ARTICLE 2 - SERVICE
2.01 Service Prior to January 1, 1985................................................................7
2.02 Service On and After January 1, 1985............................................................7
2.021 Break in Service Defined On and After January 1, 1985...........................................8
2.022 Break In Service Rules Applicable to Years of Service On and After January 1, 1985..............8
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ARTICLE 2 - SERVICE (CON'T)
2.03 Hours of Service Defined........................................................................9
2.04 Benefit Service Prior to January 1, 1985.......................................................11
2.05 Benefit Service On and After January 1, 1985...................................................11
2.06 Veteran's Benefits.............................................................................12
ARTICLE 3 - PARTICIPATION
3.01 Participation Requirements.....................................................................13
3.02 Participation Upon Employment..................................................................16
ARTICLE 4 - RETIREMENT DATES
4.01 Normal Retirement Date........................................................................ 17
4.02 Early Retirement Date..........................................................................17
4.03 Deferred Retirement Date.......................................................................17
ARTICLE 5 - RETIREMENT BENEFITS
5.01 Form of Normal Retirement Benefit............................................................. 18
5.02 Spouse Joint and Survivor Annuity..............................................................18
5.021 Amount of Spouse Joint and Survivor Annuity....................................................18
5.022 Election out of Spouse Joint and Survivor Annuity..............................................18
5.023 Information Furnished to Participant...........................................................19
5.024 Spousal Consent Required.......................................................................20
5.03 Amount of Normal Retirement Benefit for Regtrol, Inc. Employees................................21
5.0301 Amount of Normal Retirement Benefit for Webster Valve Division Employees.......................22
5.0302 Amount of Normal Retirement Benefit for Webster Foundry Division Employees.....................22
5.0303 Amount of Normal Retirement Benefit for KF Industries, Inc. Employees..........................23
5.0304 Amount of Normal Retirement Benefit for Leslie Controls, Inc. Employees........................23
5.0305 Amount of Normal Retirement Benefit for Rudolph LaBranche, Inc. Employees......................24
5.0306 Amount of Normal Retirement Benefit for Watts Automatic Control Valve Company Employees........24
5.0307 Amount of Normal Retirement Benefit for Circle Seal Controls Employees.........................25
5.0308 Amount of Normal Retirement Benefit for Eagle Valve Company, Inc. Employees....................25
5.0309 Amount of Normal Retirement Benefit for Contromatics, Inc. Employees.......................... 26
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ARTICLE 5 - RETIREMENT BENEFITS (CON'T)
5.0310 Amount of Normal Retirement Benefit for Anderson-Barrows Employees............................ 26
5.0311 Amount of Normal Retirement Benefit for Ames Company Employees................................ 26
5.0312 Amount of Normal Retirement Benefit for Aerodyne Controls Corporation Employees................27
5.0313 Amount of Normal Retirement Benefit for McCraney, Inc. (DBA "Spacemaker") or
Watts Radiant, Inc. Employees..................................................................27
5.0314 Amount of Normal Retirement Benefit for Premier Manufactured Systems Inc. Employees............28
5.04 Maximum Annual Benefit.........................................................................28
5.041 Limitation Applicable to Defined Contribution Plan Participants................................32
5.042 Affiliated Employers...........................................................................34
5.05 Early Retirement Benefit.......................................................................34
5.051 Social Security Option.........................................................................35
5.06 Deferred Retirement Benefit....................................................................35
5.07 Suspension of Benefit Distributions............................................................37
5.08 Retirement Prior to January 1, 1985............................................................39
5.09 Participants Who Attained Normal Retirement Age or Who Retired Prior to January 1, 1986........39
5.10 Transfer Adjustment to Normal Retirement Benefit...............................................39
5.11 Disability Retirement Benefits.................................................................40
ARTICLE 6 - TERMINATION OF SERVICE
6.01 Requirements for Vested Benefits...............................................................41
6.02 Vested Benefits................................................................................41
6.021 Computation of a Vested Benefit................................................................41
6.022 Early Commencement of a Vested Benefit.........................................................41
ARTICLE 7 - DEATH OF PARTICIPANT
7.01 Death Prior to Retirement......................................................................43
7.02 Surviving Spouse Benefit.......................................................................43
7.03 Amount of Surviving Spouse Benefit.............................................................43
7.04 Death After Commencement of Benefits or Normal Retirement Age..................................44
ARTICLE 8 - OPTIONAL FORMS OF BENEFIT
8.01 Time for Election..............................................................................46
8.02 Contingent Annuitant Option....................................................................46
8.03 Ten Year Certain Life Annuity Option...........................................................46
8.04 When Option Effective..........................................................................47
8.05 Beneficiary....................................................................................47
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ARTICLE 8 - OPTIONAL FORMS OF BENEFIT (CON'T)
8.06 Limitation of Election of Option...............................................................47
8.07 Spousal Consent Requirement....................................................................48
ARTICLE 9 - CHANGE IN STATUS AND TRANSFER
9.01 Change in Status from Eligible Employee to Non-Eligible Employee...............................49
9.02 Change in Status from Non-Eligible Employee to Eligible Employee...............................49
9.021 Non-Duplication of Benefits....................................................................49
9.03 Transfer in Employment.........................................................................50
9.031 Employment with an Affiliated Employer.........................................................50
ARTICLE 10 - ADMINISTRATION
10.01 Allocation of Responsibility Among Fiduciaries for Plan and Trust Administration...............51
10.02 Indemnification................................................................................51
10.03 Appointment of Committee.......................................................................52
10.04 Records and Reports............................................................................52
10.05 Other Committee Powers and Duties..............................................................53
10.06 Rules and Decisions............................................................................54
10.07 Committee Procedures...........................................................................54
10.08 Authorization of Benefit Payments..............................................................55
10.09 Application and Forms for Payment..............................................................55
10.10 Claims Procedure...............................................................................55
10.11 Appeal and Review Procedure....................................................................56
10.12 Evidence.......................................................................................57
ARTICLE 11 - FUNDING OF THE PLAN
11.01 Medium of Funding..............................................................................58
11.02 Contributions..................................................................................58
11.03 Fund to be for the Exclusive Benefit of Participants...........................................58
11.04 Forfeitures....................................................................................58
11.05 Interests of Participants in Trust Fund........................................................58
11.06 Payment of Expenses............................................................................59
ARTICLE 12 - PAYMENT OF RETIREMENT BENEFITS
12.01 Payment of Small Amounts.......................................................................60
12.02 Deemed Distribution............................................................................60
12.03 Payments for Incapacitated Persons.............................................................60
12.04 Spendthrift....................................................................................61
12.05 Payment Under Qualified Domestic Relations Orders..............................................61
12.06 Latest Commencement of Benefits................................................................61
12.07 Commencement of Benefits Prior to Normal Retirement Age........................................61
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ARTICLE 12 - PAYMENT OF RETIREMENT BENEFITS (CON'T)
12.08 Distribution of Benefits Beginning Before Death and After Death................................62
12.09 Distribution Limitations.......................................................................63
12.10 Direct Rollover Distributions..................................................................65
ARTICLE 13 - AMENDMENTS TO OR TERMINATION OF THE PLAN
13.01 Rights of the Employer to Amend or Terminate...................................................67
13.02 Termination of the Plan........................................................................67
13.03 Limitations on Benefits Upon Termination.......................................................68
13.04 Allocation of Assets...........................................................................68
13.05 Distribution Media.............................................................................70
ARTICLE 14 - TOP-HEAVY PROVISIONS
14.01 Article Controls...............................................................................71
14.02 Definitions....................................................................................71
14.03 Top-Heavy Status...............................................................................75
14.04 Termination of Top-Heavy Status................................................................78
ARTICLE 15 - MISCELLANEOUS
15.01 Rights Against the Employer....................................................................79
15.02 Return of Contributions........................................................................79
15.03 Merger.........................................................................................80
15.04 Leased Employers...............................................................................80
15.05 Applicable Law.................................................................................81
15.06 Headings.......................................................................................81
15.07 Gender and Number..............................................................................81
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INTRODUCTION
The Watts Industries, Inc. Hourly Pension Plan, previously known as the Watts
Regulator Co. Hourly Pension Plan, (hereinafter the "Plan") was established,
effective January 1, 1985, as a successor to and a continuation of (i) the
Webster Foundry Division Hourly Pension Plan, (ii) the Webster Valve Division
Hourly Pension Plan, and (iii) the Regtrol, Inc. Hourly Pension Plan
(hereinafter the "Prior Plans").
Effective October 18, 1999, all liabilities determined as of October 18, 1999
attributable to active Participants who become Employees of CIRCOR
International, Inc. ("CIRCOR") as a result of the corporate spin-off and all
allocable assets associated with such liabilities as determined pursuant to
Section 4044 of ERISA using the "safe harbor" assumptions used by the Pension
Benefit Guaranty Corporation, as required by Treasury Regulation Section
1.414(l)-1(b)(5)(ii), shall be transferred to the CIRCOR International, Inc.
Retirement Plan for Hourly Employees (CIRCOR Hourly Plan).
The physical transfer of assets shall be completed as soon as practicable
following receipt by CIRCOR of a favorable determination letter from the
Internal Revenue Service to the effect that the CIRCOR Hourly Plan meets the
qualification requirements of Code Section 401(a) or an opinion from CIRCOR's
legal counsel reasonably satisfactory to Watts Industries, Inc. to the effect
that the CIRCOR Hourly Plan meets the qualification requirements of Code Section
401(a).
The amount of assets to be transferred to the CIRCOR Hourly Plan will be equal
to the October 18, 1999 allocated amount, which shall be based on the fair
market value of Plan assets as of October 18, 1999 plus any portion of the
minimum required contribution for the 1999 Plan year not contributed by October
18, 1999, plus investment return as earned by the trust from October 18, 1999 to
the most recent trust statement date prior to the transfer date, plus interest
based upon the average of the three-month Treasury bill rates as published by
the Wall Street Journal from the most recent monthly trust statement date to the
transfer, date, less allocated benefit payments and expenses from October 18,
1999 to the transfer date.
The Plan was last restated by Watts Industries, Inc. (hereinafter the
"Sponsoring Employer") effective January 1, 1994 to comply with the Tax Reform
Act of 1986, the Omnibus Budget Reconciliation Acts of 1986, 1987, 1989 and
1993, the Technical and Miscellaneous Revenue Act of 1988, and the Unemployment
Compensation Amendments of 1992. The Sponsoring Employer is hereby amending and
restating the Plan, unless specifically stated otherwise, effective January 1,
1997 to comply with the General Agreement on Tariffs and Trade, the Uniformed
Services Employment and Reemployment Rights Act, Small Business Job Protection
Act of 1996, the Tax Reform act of 1997, and the Internal Revenue Service
Restructuring and Reform Act of 1998.
(i)
Effective December 31, 2001, the Plan shall be merged into the Watts Industries,
Inc. Retirement Plan for Salaried Employees, which effective January 1, 2002
shall be renamed the Watts Industries, Inc. Pension Plan and its terms and
conditions shall be incorporated into and made a part thereof as Part A.
It is the intention of the Sponsoring Employer that the Plan as herein amended
and restated shall continue to be recognized as a qualified pension plan under
Sections 401(a) and 501(a) of the Internal Revenue Code. The provisions of the
Plan as set forth in this Plan document shall apply only to an Eligible Employee
who terminates employment on or after the effective date of a provision as set
forth herein. The rights and benefits, if any, of an Employee who terminated
employment prior to the effective date of a provision as set forth herein shall
be determined in accordance with the provisions of the Plan as in effect on the
date his employment terminated.
(ii)
ARTICLE I - DEFINITIONS
The following words and phrases shall be defined as stated unless a different
meaning is plainly required by the context:
1.01 "ACTUARIAL EQUIVALENT" or any term of similar import, wherever used in
the Plan, means a benefit of equivalent value determined as follows:
(a) For purposes of Section 14.02(e), Actuarial Equivalents will be
determined using a 5% interest rate and the UP-1984 Mortality
Table for Employees and the UP-1984 Mortality Table set back 3
years for Beneficiaries;
(b) The following provisions of this subsection (b) shall apply to
Limitation Years beginning on or after January 1, 1995. For
purposes of Section 5.04(e), the Actuarial Equivalent shall be
determined using either the arithmetical factors specified in
Section 5.05(b) or an interest rate of 5% and the mortality table
prescribed by the IRS Commissioner in Rev. Rul. 95-6, 1995-1 CB
80, whichever produces a larger reduction in the maximum annual
amount. For purposes of Section 5.04(f), the Actuarial Equivalent
shall be determined using either an interest rate of 7% and the
UP-1984 Mortality Table or an interest rate of 5% and the
mortality table prescribed by the IRS Commissioner in Rev. Rul.
95-6, 1995-1 CB 80, whichever produces the smaller increase in the
maximum annual amount. For purposes of Section 5.04(g), Actuarial
Equivalent will be determined using either an interest rate of 7%
and the UP-1984 Mortality Table or an interest rate of 5% and the
mortality table prescribed by the IRS Commission in Rev. Rul.
95-6, 1995-1 CB 80, whichever produces the smaller single life
annuity. If the benefit is payable in the form of a lump sum
payment, the 5% interest rate shall be replaced by the rate on
30-year Treasury Constant Maturities for the month of November
prior to the Plan Year of the distribution date;
(c) For purposes of Section 5.021, 5.051, 6.022, 8.02, 8.03 and
14.03(b), Actuarial Equivalents will be determined using a 7%
interest rate and the UP-1984 Mortality Table for Employees and
the UP-1984 Mortality Table set back 3 years for Beneficiaries;
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(d) For purposes of Section 12.01, Actuarial Equivalents will be
determined as follows: (i) prior to October 1, 1995, by using the
rates and mortality table described in (c) above, except that the
interest rate for immediate annuities set by the Pension Benefit
Guaranty Corporation for the month of payment for lump sum
payments will be used, and (ii) on or after October 1, 1995, by
using an interest rate equal to the interest rate on 30-year
Treasury Constant Maturities for (A) January, 1995 for
distributions made during the period commencing October 1, 1995
and ending December 31, 1995 or (B) October of the Plan Year prior
to the Plan Year of distribution for distributions made on or
after January 1, 1996;
(e) For purposes of Article 13, Actuarial Equivalents shall be
determined as specified in regulations promulgated by the Pension
Benefit Guaranty Corporation.
1.02 "ACTUARY" means the actuarial consultant or actuarial consultants
designated from time to time to make actuarial computations in connection
with the Plan.
1.03 "AFFILIATED EMPLOYER" means any of the following (other than the
Employer):
(a) Any corporation which is a member of a controlled group of
corporations which includes the Employer, determined under the
provisions of Section 414(b) of the Code;
(b) Any trade or business which is under common control (as defined in
Section 414(c) of the Code) with the Employer;
(c) Any organization which is a member of an affiliated service group
(as defined in Section 414(m) of the Code) which includes the
Employer; and
(d) Any other entity required to be aggregated with the Employer
pursuant to regulations under Section 414(o) of the Code.
A corporation, trade or business or member of an affiliated service group
shall be treated as an Affiliated Employer only while it is a member of
the controlled group.
1.04 "BENEFICIARY" means any person other than a Contingent Annuitant entitled
to receive any death benefits payable upon the death of the Participant.
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1.05 "BENEFIT COMMENCEMENT DATE" means the first day of the month on which an
amount is paid in accordance with the provisions of the Plan. If benefit
payments are suspended pursuant to Section 5.07 for a Participant who has
not terminated employment and who does not receive a benefit payment, the
recommencement of benefit payments shall be treated as a new Benefit
Commencement Date.
1.06 "BOARD OF DIRECTORS" or "BOARD" means the Board of Directors of the
Sponsoring Employer.
1.07 "CODE" means the Internal Revenue Code of 1986, as amended from time to
time. Reference to a specific provision of the Code shall include such
provision, any valid regulation or ruling promulgated thereunder, and any
provision of future law that amends, supplements, or supersedes such
provision.
1.08 "COMMITTEE" means the Pension Committee appointed to administer the Plan
as set forth in Article 10.
1.09 "CONTINGENT ANNUITANT" means the person designated by the Participant to
receive a benefit under the Contingent Annuitant Option following the
death of the Participant in accordance with Article 8.
1.10 "EFFECTIVE DATE" means January 1, 1997 for this restated Plan. The
original Effective Date of the Plan is January 1, 1985.
1.11 "ELIGIBLE EMPLOYEE" means any person who is an Employee of the Employer
and whose remuneration is regularly computed on an hourly, daily,
piecework, or other comparable basis, thereby excluding any person whose
remuneration is regularly computed on an annual, monthly, semi-monthly,
weekly, commission or other comparable basis. The term "Employee" shall
not include any person employed by the Employer who is covered under a
collective bargaining agreement which does not provide for participation
in this Plan, or any Employee who is a leased employee within the meaning
of Section 414(n)(2) of the Code.
1.12 "EMPLOYEE" means any person currently employed by the Employer or an
Affiliated Employer. The term "Employee" also includes any leased
employees of the Employer or an Affiliated Employer within the meaning of
Section 414(n)(2) of the Code to the extent such employees are deemed to
be "Employees" in accordance with the provisions of Section 15.04.
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1.13 "EMPLOYER" means Watts Industries, Inc., or any successor thereto, and
any other entity now or hereafter affiliated with Watts Industries, Inc.
which adopts this Plan by vote of its board of directors and with the
consent of Watts Industries, Inc. As of January 1, 1997, the following
entities affiliated with Watts Industries, Inc. have adopted the Plan and
are therefore considered to be an Employer: Watts Regulator Co., KF
Industries, Inc., Leslie Controls, Inc., Rudolph Labranche, Inc., Watts
Automatic Control Valve Co., Inc., Circle Seal Controls, Inc.,
Anderson-Barrows Metal Corporation and Webster Valve, Inc. Effective
January 1, 2001, the term "Employer" also includes McCraney, Inc. (dba
"Spacemaker") and "Watts Heatway, Inc." (now called Watts Radiant, Inc.)
Effective October 18, 1999, Industrial Products Division, KF Industries,
Inc., Circle Seal Controls, Inc. and Leslie Controls are no longer
considered to be an Employer due to their spinoff to CIRCOR
International, Inc.
The term "Employer" also includes all of the foregoing as the context may
require.
1.14 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time. Reference to a specific provision of ERISA
shall include such provision, any valid regulation or filing promulgated
thereunder, and any provision of future law that amends, supplements, or
supersedes such provision.
1.15 "FIDUCIARY" means the Employer, the Committee, the Trustee, and/or other
parties named as Fiduciaries pursuant to Section 10.1, but only with
respect to the specific responsibilities of each for Plan and Trust
administration, as described in Article 10.
1.16 "HIGHLY COMPENSATED EMPLOYEE" means, with respect to a Plan Year, any
Employee who performs services for the Employer or an Affiliated Employer
during the Determination Year and who:
(a) Was a 5% owner (within the meaning of Section 416(i)(l)(B)(i) of
the Code) at any time during the Determination Year or Look Back
Year; or
(b) Received compensation from the Employer or an Affiliated Employer
in excess of $80,000 (as adjusted pursuant to Section 415(d) of
the Code) during the Look Back Year; and was among the top 20% of
Employees when ranked on the basis of compensation paid during the
Look Back Year.
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The term Highly Compensated Employee shall also include any former Highly
Compensated Employee who terminated employment with the Employer or an
Affiliated Employer prior to the Determination Year, performs no services
for the Employer or an Affiliated Employer during the Determination Year,
and was a Highly Compensated Employee in either his or her year of
termination of employment or in any Determination Year ending on or after
his attainment of age 55.
For purposes of determining an Employee's compensation under this
Section, compensation shall mean the Employee's Section 415 Compensation
(as defined in Section 5.04(c)), but including any amounts contributed on
behalf of the Employee by an Employer or Affiliated Employer pursuant to
a salary deferral agreement under this Plan (or any other cash or
deferred arrangement described in Section 401(k) of the Code), to any
salary reduction agreement pursuant to a cafeteria plan established under
Section 125 of the Code, or effective January 1, 2001 any amounts
deferred under Section 132(f)(4) of the Code.
For purposes of this Section, "Look Back Year" means the period of twelve
consecutive months immediately preceding the Determination Year. Also for
purposes of this Section, "Determination Year" means the Plan Year that
is being tested for purposes of determining if an Employee is a Highly
Compensated Employee.
1.17 "LIMITATION YEAR" means the calendar year.
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1.18 "NORMAL RETIREMENT AGE" means the Participant's age on the later of:
(a) the Participant's 65th birthday; or
(b) the fifth anniversary of the date on which the Participant began
participation in the Plan.
1.19 "PARTICIPANT" means any Employee who has satisfied the eligibility
requirements for participation in the Plan as set forth in Article 3 and
is a Participant hereof.
1.20 "PLAN" means the Watts Industries, Inc. Hourly Pension Plan as described
in this instrument and as it may be amended hereafter.
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1.21 "PLAN ADMINISTRATOR" means the Committee, notwithstanding the fact that
certain administrative functions under or with respect to this Plan may
have been delegated to any other person, persons, or entity.
1.22 "PLAN YEAR" means the twelve-month period beginning on January 1 and
ending on the following December 31.
1.23 "PRIOR PLAN" means each or all, as the context may require, of the
following: (a) the Webster Foundry Division Hourly Pension Plan, (b) the
Webster Valve Division Hourly Pension Plan, and (c) the Regtrol, Inc.
Hourly Pension Plan.
1.24 "RETIRED PARTICIPANT" means a former Participant who has retired under
the terms of the Plan and who has become eligible to receive benefits
under the Plan.
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1.25 "SOCIAL SECURITY RETIREMENT AGE" means:
(a) for persons born prior to 1938, age 65;
(b) for persons born in 1938 or later but prior to 1955, age 66; and
(c) for persons born in 1955 or later, age 67.
1.26 "SPONSORING EMPLOYER" means Watts Industries, Inc. or any successor
thereto.
1.27 "TERMINATED PARTICIPANT" means a former Participant who has ceased to be
an Employee prior to his Normal Retirement Date (as defined in Section
4.01) for any reason other than death or retirement in accordance with
the terms of the Plan.
1.28 "TRUST" means the agreement between the Employer and the Trustee which
constitutes part of this Plan, or any other trust created by agreement
between the Employee and a Trustee named therein which shall also
constitute a part of this Plan, as the same may be amended from time to
time.
1.29 "TRUST FUND" or "TRUST" means the Watts Industries, Inc. Master Trust,
maintained in accordance with the terms of the agreement under which the
Trust was established, as it may be amended from time to time.
1.30 "TRUSTEE" means the person, persons, or entity named as Trustee, or any
successor to that office.
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ARTICLE 2 - SERVICE
2.01 SERVICE PRIOR TO JANUARY 1, 1985
With respect to employment prior to January 1, 1985, Service shall mean
"Service" as defined under the Prior Plans.
2.02 VESTING AND ELIGIBILITY SERVICE ON OR AFTER JANUARY 1, 1985
An Employee must accumulate at least 1,000 Hours of Service during a
12-month computation period in order to be credited with a year of
Service for vesting and eligibility purposes. The 12-month computation
period for purposes of determining a year of Service for vesting under
Section 6.02 is the Plan Year. The 12-month computation period for
purposes of determining a Year of Service for eligibility under Section
3.01 is the 12-month period beginning when the Employee first performs an
Hour of Service and the subsequent computation periods shall be the Plan
Year beginning with the Plan Year that includes the first anniversary of
the date the Participant first performs an Hour of Service.
If an Employee, who has not incurred a Break in Service, fails to
complete at least 1,000 Hours of Service during such Plan Year, he shall
be credited with a portion of a year of Service as provided in the
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following:
Hours of Service Service (1.0 = 1 year)
1,000 or more 1.0
936-999 .5
728-935 .4
501-727 .3
less than 501 0
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During any computation period in which an Employee's Hours of Service
cannot be determined, the Employee shall be credited with 190 Hours of
Service for each month during such period in which he or she completes
one Hours of Service.
Notwithstanding any other provision of this Section 2, Service with the
entities listed in Section 3.01(b) shall be taken into account for
vesting and eligibility purposes.
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2.021 BREAK IN SERVICE DEFINED ON AND AFTER JANUARY 1, 1985
Service shall be considered broken by the following, provided that
Service will not be broken during any Plan Year in which an Employee
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completes more than 500 Hours of Service:
(a) voluntary quit;
(b) discharge;
(c) illness or injury in excess of one year;
(d) layoff in excess of one year;
(e) authorized leave of absence in excess of one year; or
(f) failure to return to the Service of the Employer upon the
expiration of an authorized leave of absence; or within the period
of time entitling an Employee to reemployment rights after
discharge from the Armed Forces of the United States of America.
For purposes of the Plan, a one-year Break in Service shall be deemed to
have occurred at the end of any Plan Year in which an Employee fails to
accumulate more than 500 Hours of Service.
2.022 BREAK IN SERVICE RULES APPLICABLE TO YEARS OF SERVICE ON AND AFTER
JANUARY 1, 1985
If an Employee whose service is broken is subsequently reemployed by the
Employer or an Affiliated Employer and completes one year of Service, as
provided in Section 3.03, his prior Service shall be reinstated as of his
reemployment date, provided the conditions of (a) or (b) below have been
met:
(a) if he had met the requirements for a Vested Benefit under Article
6 at the time his prior Service was broken; or
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(b) if he has not met the requirements for a Vested Benefit, and the
date of reemployment is on or after January 1, 1985, and upon his
reemployment, the number of consecutive one-year Breaks in Service
between the date his prior Service is deemed broken and his date
of reemployment does not equal or exceed the greater of five (5)
years or the aggregate number of his years of Service prior to his
most recent Break in Service.
(c) Effective October 1, 2001, if a Participant incurs a
Break-in-Service and is subsequently reemployed and he thereafter
meets the definition of Eligible Employee and completes one year
of Service, as provided in Section 3.03, his prior Service shall
be reinstated as of his date of reemployment.
2.03 HOUR OF SERVICE DEFINED
Hour of Service means:
(a) Each hour for which an Employee is directly or indirectly paid or
entitled to payment for the performance of duties for the Employer
or an Affiliated Employer; such hours to be credited to the
computation period in which the duties are performed;
(b) Each hour for which an Employee is directly or indirectly paid or
entitled to payment on account of a period of time during which no
duties are performed for the Employer or an Affiliated Employer
(irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity
(including disability), lay-off, jury duty, military duty or leave
of absence (but excluding any payments made or due under a plan
maintained solely for the purpose of complying with workmen's
compensation, unemployment compensation, or disability insurance
laws); provided, however, that no more than 501 hours shall be
credited to an Employee under this paragraph (b) on account of any
single continuous period of absence;
(c) Each hour, not credited under (a) or (b) above during any absence
listed in Section 2.02, which does not break his Service, provided
that the Employee retires or returns to the employ of the Employer
or an Affiliated Employer upon the expiration of such absence;
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(d) Each hour not counted under paragraphs (a), (b), or (c) above for
which back pay, irrespective of mitigation of damages, is awarded
or agreed to by the Employer or an Affiliated Employer; such hours
to be credited under the computation period to which the back pay
award or agreement is applicable;
(e) Hours credited under paragraphs (b) and (c) above shall be
computed on the basis of the number of hours for which the
Employee would have been compensated if he had continued to work
his regular work schedule during his period of absence; provided,
however, that in the case of hours credited under paragraph (b),
such number of hours shall not be less than the number of hours
the Employee would receive if such computation had been made in
accordance with the provisions of Section 2530.200b-2(b) and (c)
of the Labor Department Regulations which are incorporated herein
by reference;
(f) Solely for purposes of determining whether a Break-in-Service has
occurred with respect to Section 2.021, each non-compensated hour
during a period of absence from the Employer (i) by reason of the
Employee's pregnancy, (ii) by reason of the birth of the
Employee's child, (iii) by reason of the placement of a child with
the Employee in connection with the adoption of such child by the
Employee, or (iv) for purposes of caring for such child for a
period beginning immediately following such birth or placement
shall be credited to the Employee. For purposes of this subsection
(f) the following special rules will apply:
(i) any Hour of Service credited hereunder with respect to an
absence shall be credited (A) only in the Plan Year in
which the absence begins, if the Employee would be
prevented from incurring a Break-in-Service in such year
solely because of Hours of Service credited hereunder for
such absence, or (B) in any other case in the immediately
following Plan Year;
(ii) no Hours of Service shall be credited hereunder unless the
Employee furnishes the Committee with such information as
the Committee may reasonably require (in such form and at
such time as the Committee may reasonably require)
establishing (A) that the absence from work is an absence
described hereunder, and (B) the number of days for which
the absence lasted;
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(iii) in no event shall more than 501 Hours of Service be
credited to an Employee hereunder for any absence by reason
of any one pregnancy or the placement of any one child.
Hours of Service to be credited to an individual during an absence
described in this Section 2.03(f) above will be determined by the
Committee with reference to the individual's most recent normal
work schedule; provided that if the Committee cannot so determine
the number of Hours to be credited, there shall instead be
credited eight (8) Hours of Service for each day of absence.
2.04 BENEFIT SERVICE PRIOR TO JANUARY 1, 1985
With respect to employment prior to January 1, 1985, Benefit Service
shall mean "Benefit Service" as defined in the Prior Plan.
2.05 BENEFIT SERVICE ON AND AFTER JANUARY 1, 1985
With respect to employment on and after January 1, 1985, Benefit Service,
for purposes of determining an Eligible Employee's benefit under the
Plan, means his years of Service earned as an Eligible Employee. Each
Plan Year an Eligible Employee shall be credited with a year of Benefit
Service provided he is credited with 2080 Hours of Service in such Plan
Year. In the event an Eligible Employee does not complete 2080 Hours of
Service during the Plan Year a partial year of Benefit Service (computed
to the nearest 1/10th year) shall be credited by dividing his total
number of Hours of Service earned as an Eligible Employee in such Plan
Year by 2,080. However, an Eligible Employee shall not be credited with
any Benefit Service based upon Hours of Service earned prior to his
twenty-first birthday, nor shall he be credited with more than one full
year of Benefit Service for any one Plan Year.
During any computation period in which an Eligible Employee's Hours of
Service can not be determined, the Eligible Employee shall be credited
with 190 Hours of Service for each month during such period in which he
or she completes one Hours of Service.
Notwithstanding any other provisions to the contrary, Benefit Service
shall be measured commencing with the date set forth in Section 3.01(b).
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2.06 VETERAN'S BENEFITS
Notwithstanding any provision of this Plan to the contrary,
contributions, benefits and service credit with respect to qualified
military service will be provided in accordance with Section 414(u) of
the Internal Revenue Code.
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ARTICLE 3 - PARTICIPATION
3.01 PARTICIPATION REQUIREMENTS
(a) Subject to the provisions of paragraph (b) below:
(i) Any Eligible Employee who was a Participant on December 31,
1996 shall continue to participate in the Plan as of
January 1, 1997 in accordance with the provisions of this
restated Plan.
(ii) Any eligible employee who has both attained age 21 and
completed at least one year of Service as of the Effective
Date shall become a Participant on the Effective Date.
(iii) Any other Eligible Employee shall become a Participant on
the first day of the month coinciding with or next
following the date on which he has both attained age 21 and
completed at least one year of Service, provided he is then
an Eligible employee.
(b) Notwithstanding any provision in the Plan to the contrary, Service
with the entities listed below shall be taken into account in
accordance with the following provisions:
(i) Effective January 1, 1989, an Eligible Employee of KF
Industries, Inc., Leslie Controls, Inc., Rudolph LaBranche,
Inc., or Watts Automatic Control Valve Company shall be
eligible to join the Plan on the first day of the month
coinciding with or next following the date on which he
attains age 21 and completes one year of Service. An
Eligible Employee's service with KF Industries, Inc.,
Leslie Controls, Inc., Rudolph LaBranche, Inc., or Watts
Automatic Control Valve Company prior to January 1, 1989
shall count in determining whether such Employee has
satisfied the one year of Service requirement.
(ii) Effective September 7, 1990, an Eligible Employee of Circle
Seal Controls, Inc. shall be eligible to join the Plan on
the first day of the month coinciding with or next
following the date on which he attains age 21 and completes
one year of Service. An Eligible Employee's service with
Circle Seal Controls, Inc. prior to September 7, 1990 shall
count in determining whether such Employee has satisfied
the one year of Service requirement.
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(iii) Effective January 1, 1991, an Eligible Employee of Eagle
Valve Company, Inc. shall be eligible to join the Plan on
the first day of the month coinciding with or next
following the date on which he attains age 21 and completes
one year of Service. An Eligible Employee's service with
Eagle Valve Company, Inc. prior to January 1, 1991 shall
count in determining whether such Employee has satisfied
the one year of Service requirement.
(iv) Effective January 1, 1993, an Eligible Employee of
Contromatics, Inc. shall be eligible to join the Plan on
the first day of the month coinciding with or next
following the date on which he attains age 21 and completes
one year of Service. An Eligible Employee's service with
Contromatics, Inc. prior to January 1, 1993 shall count in
determining whether such Employee has satisfied the one
year of Service requirement.
(v) Effective April 1, 1998, an Employee of Aerodyne Controls
Corporation who became an Eligible Employee of Circle Seal
Corporation on January 5, 1998 shall be eligible to
participate in the Plan on the first day of the month next
following the date on which he attains age 21 and completes
one year of Service.
An Eligible Employee's service with Aerodyne Controls
Corporation prior to January 5, 1998 shall be taken into
account for eligibility and vesting purposes. However, such
Eligible Employee's Benefit Service shall be taken into
account only with regard to service with the Employer
commencing April 1, 1998."
(vi) Effective January 1, 1997, an employee of Consolidated
Precision Corp. who became an employee of Circle Seal
Controls, Inc. shall become an Eligible Employee for
purposes of the Plan and shall become a Participant in the
Plan as of the later of January 1, 1997 or the date such
Eligible Employee meets the requirements of Section
3.01(a). An Eligible Employee's service with Consolidated
Precision Corp., prior to its acquisition by the Employer,
shall be taken into account for eligibility and vesting
purposes. However, such Eligible Employee's Benefit Service
shall be taken into account only with regard to service
with the Employer commencing January 1, 1997.
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(vii) Effective January 1, 1997, an hourly employee of Anderson
Barrows Metals Corporation shall become an Eligible
Employee under this Plan and shall become a Participant in
the Plan as of the later of January 1, 1997 or the date
such Eligible Employee meets the requirements of Section
3.01(a). Such Eligible Employee's service with Anderson
Barrows Metals Corporation prior to its acquisition by the
Employer, shall be taken into account for eligibility and
vesting. However, such Eligible Employee's Benefit Service
shall be taken into account only with regard to service
with the Employer commencing January 1, 1997.
(viii) Effective January 1, 1998, an hourly employee of Ames
Company, Inc. shall become an Eligible Employee under this
Plan and shall become a Participant in the Plan as of the
later of January 1, 1998 or the date such Eligible Employee
meets the requirements of Section 3.01(a). Such Eligible
Employee's service with Ames Company, Inc. prior to its
acquisition by the Employer, shall be taken into account
for eligibility and vesting. However, such Eligible
Employee's Benefit Service shall be taken into account only
with regard to service with the Employer commencing January
1, 1998.
(ix) An hourly employee of Keane Controls Corporation who became
an employee of Circle Seal Controls, Inc. shall become an
Eligible Employee for purposes of the Plan and shall become
a Participant in the Plan as of the later of August 31,
1995 or the date such Eligible Employee meets the
requirements of Section 3.01(a). An Eligible Employee's
service with Keane Controls Corporation, prior to its
acquisition by the Employer, shall be taken into account
for eligibility and vesting purposes. However, such
Eligible Employee's Benefit Service shall be taken into
account only with regard to service with the Employer
commencing August 31, 1995
(x) Notwithstanding the above, effective October 18, 1999,
service with KF Industries, Inc., Circle Seal Controls,
Inc., Aerodyne Controls Corporation, Leslie Controls, Inc.
Consolidated Precision Corporation and the Industrial
Products Division shall not be taken into account for any
reason due to the spin-off of those entities to CIRCOR
International, Inc.
- 15 -
(xi) Effective January 1, 2001, an hourly employee of McCraney,
Inc. (dba "Spacemaker") or Watts Heatway, Inc. (now called
Watts Radiant, Inc.) shall be come an Eligible Employee
under this Plan and shall become a Participant in the Plan
as of the later of January 1, 2001 or the date such
Eligible Employee meets the requirements of Section
3.01(a). Such Eligible Employee's service with of McCraney,
Inc. (dba "Spacemaker") or Watts Heatway, Inc. (now called
Watts Radiant, Inc.) prior to its acquisition by the
Employer shall be taken into account for eligibility and
vesting. However, such Eligible Employee's Benefit Service
shall be taken into account only with regard to service
with the Employer commencing January 1, 2001.
(xii) Effective November 1, 2001, an hourly employee of Power
Process Controls Division of Marks Controls Corporation
("PPC"). shall be come an Eligible Employee under this Plan
and shall become a Participant in the Plan as of the later
of November 1, 2001 or the date such Eligible Employee
meets the requirements of Section 3.01(a). Such Eligible
Employee's service with PPC prior to its acquisition by the
Employer shall be taken into account for eligibility and
vesting. However, such Eligible Employee's Benefit Service
shall be taken into account only with regard to service
with the Employer commencing November 1, 2001.
(xiii) Effective January 1, 2002, an hourly employee of Premier
Manufactured Systems, Inc. shall become an Eligible
Employee under this Plan and shall become a Participant in
the Plan as of the later of January 1, 2002 or the date
such Eligible Employee meets the requirements of Section
3.01(a). Such Eligible Employee's service with Premier
Manufactured Systems, Inc. prior to its acquisition by the
Employer, shall be taken into account for eligibility and
vesting. However, such Eligible Employee's Benefit Service
shall be taken into account only with regard to service
with the Employer commencing January 1, 2002.
3.02 PARTICIPATION UPON REEMPLOYMENT
Each Participant who is reemployed following a Break in Service pursuant
to Section 2.021 shall participate as of his reemployment date provided
he has met the requirements of Section 2.022.
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- 16 -
ARTICLE 4 - RETIREMENT DATES
4.01 NORMAL RETIREMENT DATE
The Normal Retirement Date of a Participant shall be the first day of the
month coinciding with or next following a Participant's attainment of
Normal Retirement Age.
4.02 EARLY RETIREMENT DATE
A Participant who was hired prior to January 1, 1992 (excluding a former
Participant of the Spence Plan or the Henry Pratt Plan) and who has
reached his fifty-fifth birthday and has also completed at least five
years of Service may elect upon written notice to the Committee an Early
Retirement Date which may be the first day of any month subsequent to the
date of such election and prior to his Normal Retirement Date.
Effective January 1, 1992, a Participant who was hired on or after
January 1, 1992 and who has reached his fifty-fifth birthday and has also
completed at least ten years of Service may elect upon written notice to
the Committee an Early Retirement Date which may be the first day of any
month subsequent to the date of such election and prior to his Normal
Retirement Date.
4.03 DEFERRED RETIREMENT DATE
If a Participant remains in the Service of the Employer or an Affiliated
Employer after his Normal Retirement Date, his Deferred Retirement Date
shall be the first day of the month which coincides with or next follows
the date of his actual retirement.
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- 17 -
ARTICLE 5 - RETIREMENT BENEFITS
5.01 FORM OF NORMAL RETIREMENT BENEFIT
Except as provided in Section 5.02, a Participant's Normal Retirement
Benefit under the Plan shall be an annuity for life, payable monthly,
commencing on the Participants' Normal Retirement Date (as defined in
Section 4.01) and terminating with the monthly payment preceding his
death.
5.02 SPOUSE JOINT AND SURVIVOR ANNUITY
In lieu of the life annuity payable under Section 5.01, a Participant who
is married on his Benefit Commencement Date shall receive his retirement
benefit in the form of a Spouse Joint and Survivor Annuity as described
in Section 5.021, provided he has not made an election under Section
5.022 to have his benefit paid under the life annuity form described in
Section 5.01 or under an optional form described in Section 5.051 or
Article 8.
5.021 AMOUNT OF SPOUSE JOINT AND SURVIVOR ANNUITY
The Spouse Joint and Survivor Annuity shall be a reduced amount payable
to a Participant for his lifetime with provision for continuation of 50%
of such reduced amount to the Participant's spouse for the duration of
the spouse's lifetime after the death of the Participant. All such
amounts shall be the Actuarial Equivalent of the benefits set forth
hereafter in this Article 5 which are payable on a single life basis.
5.022 ELECTION OUT OF SPOUSE JOINT AND SURVIVOR ANNUITY
A married Participant may elect, pursuant to Section 5.024, not to
receive his benefit in the form of the Spouse Joint and Survivor Annuity
by delivering to the Committee, during the election period described
below, his written election to have his benefits paid under the form
described in Section 5.01 or under an optional form described in Section
5.051 or Article 8. The election period with respect to the life annuity
form described in Section 5.01 and the Spouse Joint and Survivor Annuity
shall be a ninety (90) day period ending on the Participant's Benefit
Commencement Date. The Participant may revoke such election by filing a
written revocation with the Committee at any time during such election
period. The election by a married Participant of an optional form
described under Section 5.051 or Article 8 shall be made in accordance
with the provisions of Section 5.024, and Section 5.051 or Article 8,
whichever is applicable.
- 18 -
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5.023 INFORMATION FURNISHED TO PARTICIPANT
No fewer than 30 days and no more than 90 days before a Participant's
Benefit Commencement Date, the Pension Committee shall furnish each
Participant with general information on the Spouse Joint and Survivor
|
Annuity. Such general information shall be in writing and shall include:
(a) The terms and conditions of the Spouse Joint and Survivor Annuity:
(b) The Participant's right to elect, and the effect of electing, to
waive the Spouse Joint and Survivor Annuity;
(c) The rights of the Spouse;
(d) The right to revoke, and the effect of revoking, an election to
waive the Spouse Joint and Survivor Annuity;
(e) The eligibility conditions and material features of the optional
forms of payment available under the Plan;
(f) The relative values of the optional forms of payment available
under the Plan; and
(g) Such other information as may be required under applicable
regulations.
The Committee shall also furnish the Participant, upon his written
request made within sixty (60) days following the date he is furnished
such general information, additional information explaining the financial
effect upon his pension (in terms of dollars per pension payment) of
making such election. Such additional information shall be furnished to
the Participant within thirty (30) days following the date the
Participant's written request is received by the Committee.
The notice described above is not required if the Actuarial Equivalent
value of the Participant's nonforfeitable Accrued Benefit is less than or
equal to $3,500 ($5,000 effective October 1, 2001) on the Participant's
Benefit Commencement Date.
- 19 -
The Benefit Commencement Date for a distribution in a form other than a
Qualified Joint and Survivor Annuity may be less than 30 days after
receipt of the written explanation described in the preceding paragraph
provided: (a) the Participant has been provided with information that
clearly indicates that the Participant has at least 30 days to consider
whether to waive the Qualified Joint and Survivor Annuity and elect (with
spousal consent) to a form of distribution other than a Qualified Joint
and Survivor Annuity; (b) the Participant is permitted to revoke any
affirmative distribution election at least until the Benefit Commencement
Date or, if later, at any time prior to the expiration of the 7-day
period that begins the day after the explanation of the Qualified Joint
and Survivor Annuity is provided to the Participant' and (c) the Benefit
Commencement Date is a date after the date the written explanation was
provided to the Participant.
5.024 SPOUSAL CONSENT REQUIRED
Notwithstanding anything herein to the contrary, the election by a
married Participant of an optional form described in Article 8 or Section
5.051 or the normal form described in Section 5.01 shall not take effect
unless:
(a) his surviving spouse consents in writing to such an election, such
election specifies the Beneficiary and the form of benefit payment
elected by the Participant in lieu of the Spouse Joint and
Survivor Annuity, and such consent acknowledges the effect of such
election and is witnessed by a Plan representative or a notary
public; or
(b) it is established to the satisfaction of the Committee that the
consent required under (a) above may not be obtained because there
is no spouse or the spouse cannot be located, or the Participant
can show by court order that he is legally separated from his
spouse or has been abandoned by the spouse with the meaning of
local law, or because of other circumstances as the Secretary of
the Treasury may prescribe.
Any consent by a spouse under (a) above, or a determination by the
Committee with respect to such spouse under (b) above, shall be effective
only with respect to such spouse.
- 20 -
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5.03 AMOUNT OF NORMAL RETIREMENT BENEFIT FOR REGTROL, INC. EMPLOYEES
Subject to the provisions of Section 5.04, the monthly Normal Retirement
Benefit payable to a Participant who is an Eligible Employee of Regtrol,
Inc. and who retires under the Plan shall be equal to the number of his
years of Benefit Service (including fractions thereof) multiplied by the
benefit rate in effect on the date the Participant last performed an Hour
of Service as an Eligible Employee determined in accordance with the
|
following schedule:
DATE OF LAST HOUR OF SERVICE
ON OR AFTER BUT BEFORE BENEFIT RATE
January 1, 1997 October 1, 2001 $ 13.00
October 1, 2001 --------- $ 15.00
|
See Appendix A for Benefit Rates in effect prior to January 1, 1997.
With regard to an hourly employee of the Jameco Industries, Inc. who was
a participant in the Local 888 Pension Fund Plan and who on or after
January 1, 1997 transferred to Regtrol, Inc. (Transferred Jameco
Participants), the following provisions shall apply:
(a) The benefit formula set forth in the preceding paragraph shall
apply to Transferred Jameco Participants who are vested under the
Local 888 Pension Fund Plan at the time of transfer with regard to
Benefit Service commencing on the transfer date.
(b) With regard to Transferred Jameco Participants who are not vested
under the collectively bargained multi-employer plan at the time
of transfer, such Participants will be credited with benefit
service with Jameco Industries, Inc. while a participant in the
Local 888 Pension Fund Plan prior to the transfer date based upon
the definition of Benefit Service set forth in Section 2.05. The
benefit formula set forth in the preceding paragraphs shall apply
with regard to such Benefit Service earned prior to the transfer
and Benefit Service with the Employer commencing on the transfer
date.
- 21 -
5.0301 AMOUNT OF NORMAL RETIREMENT BENEFIT FOR WEBSTER VALVE DIVISION EMPLOYEES
Subject to the provisions of Section 5.04, the monthly Normal Retirement
Benefit payable to a Participant who is an Eligible Employee in the
Webster Valve Division and who retires under the Plan shall be equal to
the number of his years of Benefit Service (including fractions thereof)
multiplied by the benefit rate in effect on the Participant's Normal
Retirement Date determined in accordance with the following schedule:
DATE OF LAST HOUR OF SERVICE
ON OR AFTER BUT BEFORE BENEFIT RATE
January 1, 1997 October 1, 2001 $ 13.50
October 1, 2001 --------- $ 15.00
|
See Appendix A for Benefit Rates in effect prior to January 1, 1997.
5.0302 AMOUNT OF NORMAL RETIREMENT BENEFIT FOR WEBSTER FOUNDRY DIVISION
EMPLOYEES
Subject to the provisions of Section 5.04, the monthly Normal Retirement
Benefit payable to a Participant who is an Eligible Employee in the
Webster Foundry Division and who retires under the Plan shall be equal to
the number of his years of Benefit Service (including fractions thereof)
multiplied by the benefit rate in effect on the date the Participant last
performed an Hour of Service determined in accordance with the following
schedule:
DATE OF LAST HOUR OF SERVICE
ON OR AFTER BUT BEFORE BENEFIT RATE
January 1, 1997 October 1, 2001 $ 13.50
October 1, 2001 --------- $ 15.00
|
See Appendix A for Benefit Rates in effect prior to January 1, 1997.
- 22 -
5.0303 AMOUNT OF NORMAL RETIREMENT BENEFIT FOR KF INDUSTRIES, INC. EMPLOYEES
Subject to the provisions of Section 5.04, the monthly Normal Retirement
Benefit payable to a Participant who is an Eligible Employee in KF
Industries, Inc. and who retires under the Plan shall be equal to the
number of his years of Benefit Service (including fractions thereof)
multiplied by the benefit rate in effect on the date the Participant last
performed an Hour of Service as an Eligible Employee determined in
accordance with the following schedule:
DATE OF LAST HOUR OF SERVICE
ON OR AFTER BUT BEFORE BENEFIT RATE
January 1, 1997 October 18, 1999 $ 13.00
|
See Appendix A for Benefit Rates in effect prior to January 1, 1997.
Effective October 18, 1999, the assets and liabilities attributable to
Participants actively employed by KF Industries, Inc. were transferred to
and assumed by CIRCOR International Inc.
5.0304 AMOUNT OF NORMAL RETIREMENT BENEFIT FOR LESLIE CONTROLS, INC. EMPLOYEES
Subject to the provisions of Section 5.04, the monthly Normal Retirement
Benefit payable to a Participant who is an Eligible Employee of Leslie
Controls, Inc. and who retires under the Plan shall be equal to the
number of his years of Benefit Service (including fractions thereof)
multiplied by the benefit rate in effect on the date the Participant last
performed an Hour of Service as an Eligible Employee determined in
accordance with the following schedule:
DATE OF LAST HOUR OF SERVICE
ON OR AFTER BUT BEFORE BENEFIT RATE
January 1, 1997 October 18, 1999 $ 13.00
|
See Appendix A for Benefit Rates in effect prior to January 1, 1997.
Effective October 18, 1999, the assets and liabilities attributable to
Participants actively employed by Leslie Controls, Inc. were transferred
and assumed by CIRCOR International Inc.
- 23 -
5.0305 AMOUNT OF NORMAL RETIREMENT BENEFIT FOR RUDOLPH LABRANCHE, INC. EMPLOYEES
Subject to the provisions of Section 5.04, the monthly Normal Retirement
Benefit payable to a Participant who is an Eligible Employee of Rudolph
LaBranche, Inc. and who retires under the Plan shall be equal to the
number of his years of Benefit Service (including fractions thereof)
multiplied by the benefit rate in effect on the date the Participant last
performed an Hour of Service as an Eligible Employee determined in
accordance with the following schedule:
DATE OF LAST HOUR OF SERVICE
On or After But Before Benefit Rate
January 1, 1997 October 1, 2001 $ 13.50
October 1, 2001 ------------- $ 15.00
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See Appendix A for Benefit Rates in effect prior to January 1, 1997.
5.0306 AMOUNT OF NORMAL RETIREMENT BENEFIT FOR WATTS AUTOMATIC CONTROL VALVE,
INC. EMPLOYEES
Subject to the provisions of Section 5.04, the monthly Normal Retirement
Benefit payable to a Participant who is an Eligible Employee of Watts
Automatic Control Valve, Inc. and who retires under the Plan shall be
equal to the number of his years of Benefit Service (including fractions
thereof) multiplied by the benefit rate in effect on the date the
Participant last performed an Hour of Service as an Eligible Employee
determined in accordance with the following schedule:
DATE OF LAST HOUR OF SERVICE
ON OR AFTER BUT BEFORE BENEFIT RATE
January 1, 1997 October 1, 2001 $ 13.00
October 1, 2001 --------- $ 15.00
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See Appendix A for Benefit Rates in effect prior to January 1, 1997.
- 24 -
5.0307 AMOUNT OF NORMAL RETIREMENT BENEFIT FOR CIRCLE SEAL CONTROLS, INC.
EMPLOYEES
Subject to the provisions of Section 5.04, the monthly Normal Retirement
Benefit payable to a Participant who is an Eligible Employee of Circle
Seal Controls, Inc. and who retires under the Plan shall be equal to the
number of his years of Benefit Service (including fractions thereof)
multiplied by the benefit rate in effect on the date the Participant last
performed an Hour of Service as an Eligible Employee determined in
accordance with the following schedule:
DATE OF LAST HOUR OF SERVICE
ON OR AFTER BUT BEFORE BENEFIT RATE
January 1, 1997 October 18, 1999 $ 15.00
|
Effective October 18, 1999, the assets and liabilities attributable to
Participants actively employed by Circle Seal Controls, Inc. were
transferred and assumed by CIRCOR International Inc.
5.0308 AMOUNT OF NORMAL RETIREMENT BENEFIT FOR EAGLE VALVE COMPANY, INC.
EMPLOYEES
Subject to the provisions of Section 5.04, the monthly Normal Retirement
Benefit payable to a Participant who was an Eligible Employee of Eagle
Valve Company, Inc. and who retires under the Plan shall be equal to the
number of his years of Benefit Service (including fractions thereof)
multiplied by the benefit rate in effect on the date the Participant last
performed an Hour of Service as an Eligible Employee determined in
accordance with the following schedule:
DATE OF LAST HOUR OF SERVICE
ON OR AFTER BUT BEFORE BENEFIT RATE
January 1, 1997 October 18, 1999 $ 13.00
|
See Appendix A for Benefit Rates in effect prior to January 1, 1997.
Effective October 18, 1999, the assets and liabilities attributable to
Participants actively employed by Eagle Value Company, Inc. were
transferred and assumed by CIRCOR International Inc.
- 25 -
5.0309 AMOUNT OF NORMAL RETIREMENT BENEFIT FOR CONTROMATICS, INC. EMPLOYEES
Subject to the provisions of Section 5.04, the monthly Normal Retirement
Benefit payable to a Participant who was an Eligible Employee of
Contromatics, Inc. and who retires under the Plan shall be equal to the
number of his years of Benefit Service (including fractions thereof)
multiplied by the benefit rate in effect on the date the Participant last
performed an Hour of Service as an Eligible Employee determined in
accordance with the following schedule:
DATE OF LAST HOUR OF SERVICE
ON OR AFTER BUT BEFORE BENEFIT RATE
January 1, 1997 October 18, 1999 $ 13.50
|
Effective October 18, 1999, the assets and liabilities attributable to
Participants actively employed by Contromatics, Inc. were transferred and
assumed by CIRCOR International Inc.
5.0310 AMOUNT OF NORMAL RETIREMENT BENEFIT FOR ANDERSON-BARROWS EMPLOYEES
Subject to the provisions of 5.04, the monthly Normal Retirement Benefit
payable to a Participant who is an Eligible Employee of Anderson-Barrows
Metals Corporation and who retires under the Plan shall be equal to the
number of his years of Benefit Service (including fractions thereof)
multiplied by the benefit rate in effect on the date the Participant last
performed an Hour of Service as an Eligible Employee determined in
accordance with the following schedule:
DATE OF LAST HOUR OF SERVICE
ON OR AFTER BUT BEFORE BENEFIT RATE
January 1, 1997 October 1, 2001 $ 13.00
October 1, 2001 --------- $ 15.00
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5.0311 AMOUNT OF NORMAL RETIREMENT BENEFIT FOR AMES COMPANY EMPLOYEES
Subject to the provisions of 5.04, the monthly Normal Retirement Benefit
payable to a Participant who is an Eligible Employee of Ames Company,
Inc. who became an Eligible Employee under this Plan and who retires
under this Plan shall be equal to the number of
- 26 -
years of Benefit Service (including fractions thereof) multiplied by the
benefit rate in effect on the date the Participant last performed an Hour
of Service as an Eligible Employee determined in accordance with the
following schedule:
DATE OF LAST HOUR OF SERVICE
ON OR AFTER BUT BEFORE BENEFIT RATE
January 1, 1998 October 1, 2001 $ 13.00
October 1, 2001 --------- $ 15.00
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5.0312 AMOUNT OF NORMAL RETIREMENT BENEFIT FOR AERODYNE CONTROLS CORPORATION
EMPLOYEES
Subject to the provisions of 5.04, the monthly Normal Retirement Benefit
payable to a Participant who is an Eligible Employee of Aerodyne Controls
Corporation, Inc. who became an Eligible Employee under this Plan and who
retires under this Plan shall be equal to the number of years of Benefit
Service (including fractions thereof) multiplied by the benefit rate in
effect on the date the Participant last performed an Hour of Service as
an Eligible Employee determined in accordance with the following
schedule:
DATE OF LAST HOUR OF SERVICE
ON OR AFTER BUT BEFORE BENEFIT RATE
April 1, 1998 October 18, 1999 $ 13.00
|
Effective October 18, 1999, the assets and liabilities attributable to
Participants actively employed by Aerodyne Controls Corporation, Inc.
were transferred and assumed by CIRCOR International Inc.
5.0313 AMOUNT OF NORMAL RETIREMENT BENEFIT FOR MCCRANEY, INC. (DBA "SPACEMAKER")
OR WATTS RADIANT, INC. EMPLOYEES
Subject to the provisions of Section 5.04, the monthly Normal Retirement
Benefit payable to a Participant who is an Eligible Employee of McCraney,
Inc. (dba "Spacemaker") or Watts Radiant, Inc. (formerly called Watts
Heatway, Inc.) and who retires under the Plan shall be equal to the
number of his years of Benefit Service (including fractions thereof)
multiplied by the benefit rate in effect on the date the Participant last
performed an Hour of Service as an Eligible Employee determined in
accordance with the following schedule:
- 27 -
DATE OF LAST HOUR OF SERVICE
ON OR AFTER BUT BEFORE BENEFIT RATE
January 1, 2001 October 1, 2001 $ 13.00 - McCraney.
$ 13.50 - Watts Radiant
October 1, 2001 --------- $ 15.00
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5.0314 AMOUNT OF NORMAL RETIREMENT BENEFIT FOR PREMIER MANUFACTURED SYSTEMS INC.
EMPLOYEES
Subject to the provisions of Section 5.04, the monthly Normal Retirement
Benefit payable to a Participant who is an Eligible Employee of Premier
Manufactured Systems Inc. and who retires under the Plan shall be equal
to the number of his years of Benefit Service (including fractions
thereof) multiplied by the benefit rate in effect on the date the
Participant last performed an Hour of Service as an Eligible Employee
determined in accordance with the following schedule:
DATE OF LAST HOUR OF SERVICE
ON OR AFTER BUT BEFORE BENEFIT RATE
January 1, 2002 -------- $ 15.00
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5.04 MAXIMUM ANNUAL BENEFIT
(a) For Plan Years beginning after 1986, the actual or projected
annual amount of a Participant's benefit payable within a
Limitation Year shall not exceed the lesser of (i) and (ii) below:
(i) $90,000, or
(ii) 100% of the Participant's average annual Section 415
Compensation (as defined in paragraph (c) below) for the
three consecutive calendar years (or, if his period of
employment is less than three years, for his entire period
of employment) as a Participant during which he received
the greatest aggregate Section 415 Compensation;
- 28 -
(b) In no event shall the limitations in paragraph (a) above be less
than $10,000 if the Participant has not at any time participated
in a defined contribution plan maintained by the Employer or an
Affiliated Employer.
(c) The term "Section 415 Compensation" means wages, salaries, and
fees for professional services and other amounts received from the
Employer and all Affiliated Employers during the Limitation Year
(without regard to whether or not an amount is paid in cash) for
personal services actually rendered in the course of employment
with the Employer, to the extent such amounts are includable in
gross income, including, but not limited to, overtime pay, tips,
bonuses, commissions to paid salesmen, compensation for services
on the basis of a percentage of profits, commissions on insurance
premiums, fringe benefits, reimbursements, and expense allowances,
and excluding the following:
(i) amounts contributed by the Employer or Affiliated Employer
on behalf of the Employee pursuant to a salary deferral
agreement under this Plan or any other cash or deferred
arrangement described in Section 401(k) of the Code, to any
salary reduction agreement pursuant to a cafeteria plan
established under Section 125 of the Code, or to any other
plan of deferred compensation, and which are not includable
in the Employee's gross income for the taxable year in
which contributed, or any distributions from a plan of
deferred compensation;
(ii) amounts realized from the exercise of a non-qualified stock
option, or when restricted stock (or property) held by the
Employee either becomes free transferable or is no longer
subject to a substantial risk of forfeiture;
(iii) amounts realized with respect to the sale, exchange, or
other disposition of stock acquired under a qualified stock
option; and
(iv) other amounts which receive special tax benefits, or
contributions made by the Employer (whether or not under a
salary reduction agreement) towards the purchase of an
annuity described in Section 403(b) of the Code (whether or
not the amounts are excludable from the Employee's gross
income).
- 29 -
For purposes of applying the limitations of this Section, the term
"Section 415 Compensation" means the compensation actually paid or
includable in the Employee's gross income for the Limitation Year.
Effective January 1, 1998, "Section 415 Compensation" shall
include (i) any elective deferral as defined in Code Section
402(g)(3), and (ii) any amount which is contributed or deferred by
the Employer at the election of the Employee and which is not
includable in the gross income of the employee by reason of Code
Section 125 or 457.
Effective January 1, 2001, "Section 415 Compensation" shall
include any amounts deferred under Section 132(f)(4) of the Code.
(d) The dollar limitation described in paragraph (a)(i) above shall be
increased by the cost of living adjustment factor prescribed by
the Secretary of the Treasury under Section 415(d) of the Code.
Such adjustment factor shall be applied to all Participants,
including Participants and Beneficiaries receiving benefits from
the Plan and to such items as the Secretary shall prescribe.
(e) If the benefit payable to a Participant commences prior to the
Participant's Social Security Retirement Age, but on or after the
date he attains age 62, the maximum annual amount determined under
paragraph (a)(i) above shall be reduced as follows:
(i) if the Participant's Social Security Retirement Age is 65,
by 5/9ths of 1% for each month by which the commencement of
payment of his benefits precedes the month in which he
attains age 65; or
(ii) if the Participant's Social Security Retirement Age is 66
or 67, by 5/9ths of 1% for each of the first 36 months and
5/12ths of 1% for each additional month by which the
commencement of payment of his benefits precedes the month
in which he attains his Social Security Retirement Age.
If the benefit payable to a Participant commences before age 62,
the maximum annual amount determined under paragraph (a)(i) above
shall be reduced in accordance with applicable regulations, so
that it is the Actuarial Equivalent of such amount as applied to a
benefit beginning at age 62. For purposes of this paragraph,
Actuarial Equivalent shall be determined using the assumptions
specified in Section 1.01(b).
- 30 -
For purposes of this paragraph (e), if the benefit is paid in a
contingent annuity form (with the Participant's spouse as
beneficiary) or in the Spouse Joint and Survivor Annuity form of
payment, the benefit shall be treated as if it were paid in the
normal form of payment and no adjustment in the maximum benefit
need be made.
(f) If the payment of benefits to a Participant commences after his
Social Security Retirement Age, the maximum annual amount
determined under paragraph (a)(i) above shall be increased so that
it is the Actuarial Equivalent of a $90,000 benefit multiplied by
the adjustment factor specified in paragraph (e) above, and
payable in the normal form at the Participant's Social Security
Retirement Age. For purposes of this paragraph, Actuarial
Equivalent shall be determined using the assumptions specified in
Section 1.01(b).
(g) The annual benefit is a retirement benefit under the Plan which is
payable annually in the form of a single life annuity. If the
benefit payable to a Participant is not in the form of a single
life annuity nor in the form of a Spouse Joint and Survivor
Annuity, then the maximum annual amount determined under paragraph
(a) above shall be reduced in accordance with the applicable
regulations so that it is the Actuarial Equivalent of such amount
as payable in the normal form. For purposes of this paragraph,
Actuarial Equivalent shall be determined using the assumptions
specified in Section 1.01(b).
(h) If the Participant has completed less than 10 years of Plan
participation, the maximum annual amount determined under
paragraph (a)(i) above shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the Participant's
number of years of Plan participation (or parts thereof) and the
denominator of which is 10. To the extent provided in regulations
or in other guidance issued by the Internal Revenue Service, the
preceding sentence shall be applied separately with respect to
each change in the benefit structure of the Plan.
(i) If the Participant has completed less than 10 years of Service,
the maximum amount determined under Section paragraph (a)(ii)
above (without regard to paragraph (a)(i) above) shall be adjusted
by multiplying such amount by a fraction, the numerator of which
is the Participant's number of years of Service (or parts thereof)
and the denominator of which is 10. To the extent provided in
regulations or in other guidance issued by the Internal Revenue
Service, the preceding sentence shall be applied separately with
respect to each change in the benefit structure of the Plan.
- 31 -
(j) In no event shall the provisions of paragraph (h) or paragraph (i)
above reduce the limitations in paragraph (a) to an amount less
than one-tenth of such limitations, determined without regard to
the provisions of paragraph (h) and paragraph (i).
(k) If a Participant is, or has ever been, covered under more than one
defined benefit plan maintained by the Employer, the sum of the
Participant's annual benefits from all such plans may not exceed
the maximum permissible amount.
5.041 LIMITATION APPLICABLE TO DEFINED CONTRIBUTION PLAN PARTICIPANTS
(a) If a Participant is also a participant in any defined contribution
plan maintained by the Employer or an Affiliated Employer, the sum
of the defined benefit plan fraction and the defined contribution
plan fraction for any year shall not exceed 1.0 as provided in
Section 415(e) of the Code and any regulations issued thereunder.
(b) The DEFINED BENEFIT FRACTION for any Limitation Year is a
fraction, the numerator of which is the sum of the Participant's
projected annual benefits under all defined benefit plans (whether
or not terminated) maintained by the Employer, and the denominator
of which is the lesser of 1.25 times the dollar limit determined
under Sections 415(b) and 415(d) of the Code and adjusted in
accordance with Section 5.04(h) and (i) for the Limitation Year,
or 1.4 times 100% of the Participant's highest average annual
Section 415 Compensation (including any adjustments under Section
415(b) of the Code) for any three consecutive years.
Notwithstanding the above, if the Participant was a participant as
of the first day of the first Limitation Year beginning after
December 31, 1986 in one or more defined benefit plans maintained
by the Employer which were in existence on May 6, 1986, the
denominator of this fraction will not be less than 1.25 times the
sum of the annual benefits under such plans which the Participant
had accrued as of the close of the last Limitation Year beginning
before January 1, 1987, disregarding any changes in the terms and
conditions of the Plan after May 5, 1986. The preceding sentence
applies only if the defined benefit plans individually and in the
aggregate satisfied the requirements of Section 415 of the Code
for all Limitation Years beginning before January 1, 1987.
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(c) The DEFINED CONTRIBUTION PLAN FRACTION for any Limitation Year is
a fraction, the numerator of which is the sum of the annual
additions to the Participant's accounts under all defined
contribution plans (whether or not terminated) maintained by the
Employer for the current and all prior Limitation Years (including
the annual additions attributable to the Participant's
nondeductible employee contributions to all defined benefit plans,
whether or not terminated, maintained by the Employer, and the
annual additions attributable to all welfare benefit funds, as
defined in Section 419(e) of the Code, and individual medical
accounts, as defined in Section 415(l)(2) of the Code, maintained
by the Employer), and the denominator of which is the sum of the
maximum aggregate amounts for the current and all prior Limitation
Years of service with the Employer (regardless of whether a
defined contribution plan was maintained by the Employer). The
maximum aggregate amount in any Limitation Year is the lesser of
1.25 times the dollar limitation determined under Sections 415(b)
and 415(d) of the Code in effect under Section 415(c)(1)(A) of the
Code, or 35% of the Participant's Section 415 Compensation (as
defined in Section 5.04(c)) for such Limitation Year.
For purposes of calculating the numerator in the defined
contribution plan fraction, a Participant's after-tax payroll
deduction contributions made before 1987, if any, shall be taken
into account to the extent such contributions exceed the lesser
of:
(i) 6% of the Participant's Section 415 Compensation (as
defined in Section 5.04(c)) for the Limitation Year, or
(ii) 50% of the amount of such payroll deduction contributions
for the Limitation Year.
If the Employee was a Participant as of the end of the first day
of the first Limitation Year beginning after December 31, 1986, in
one or more defined contribution plans maintained by the Employer
which were in existence on May 6, 1986, the numerator of this
fraction will be adjusted if the sum of this fraction and the
defined benefit fraction would otherwise exceed 1.0 under the
terms of this Plan. Under the adjustment, an amount equal to the
product of (1) the excess of the sum of the fractions over 1.0
times (2) the denominator of this fraction, will be permanently
subtracted from the numerator of this fraction. The adjustment is
calculated using the
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fractions as they would be computed as of the end of the last
Limitation Year beginning before January 1, 1987, and disregarding
any changes in the terms and conditions of the Plan made after May
5, 1986, but using the Section 415 limitation applicable to the
first Limitation Year beginning on or after January 1, 1987.
(d) For the purpose of determining the denominators in the preceding
two fractions, the maximum benefit allowable and the maximum
annual additions shall be deemed to be equal to the lesser of:
(i) 140% of the percentage limits, or
(ii) 125% of the dollar limits provided in Sections 415(b) and
415(c) of the Code for each such year.
(e) Any adjustment necessary to comply with the limitations of this
section shall be made in the Participant's benefit payable under
the relevant defined benefit plan; but under no circumstances may
the accrued benefit of a Participant in a defined benefit plan
decrease as a result of a Plan amendment to change the combined
plan limits.
(f) Effective January 1, 2001, the provisions of this Section 5.041
shall no longer be effective.
5.042 AFFILIATED EMPLOYERS
For purposes of Sections 5.04 and 5.041, the Employer and all Affiliated
Employers shall be considered one employer, and the limitations shall be
applicable to the total benefits received from the Employer and all
Affiliated Employers. Further, in determining what is an Affiliated
Employer for the purposes of these Sections, the phrase "more than 50%"
shall be substituted for "at least 80%" each place it appears in Section
1563(a)(1) of the Code.
5.05 EARLY RETIREMENT BENEFIT
The Early Retirement Benefit of a Participant who elects to retire on an
Early Retirement Date (as defined in Section 4.02) on or after January 1,
1985 shall be the benefit computed in (a) or (b) below, as elected by the
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Participant:
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(a) a benefit commencing on his Normal Retirement Date (as defined in
Section 4.01) in an amount equal to his accrued Normal Retirement
Benefit determined in accordance with the provisions of Section
5.03, 5.031, 5.032, 5.033, 5.034, 5.035, 5.036, 5.037, 5.038, or
5,039, whichever is applicable, based on his years of Benefit
Service (including fractions thereof) and the rate of benefit in
effect as of his Early Retirement Date;
(b) a reduced benefit commencing on his Early Retirement Date or the
first day of any month thereafter but prior to his Normal
Retirement Date, as elected by the Participant, which benefit
shall be computed as in (a) above, reduced by 5/9 of 1% for each
of the first sixty months by which commencement of benefits
precedes his Normal Retirement Date, and by 5/18 of 1% for each
month thereafter, if any, by which commencement of benefits
precedes his Normal Retirement Date.
5.051 SOCIAL SECURITY OPTION
A Participant who is entitled to receive an Early Retirement Benefit and
has elected to have such benefit commence prior to the date he is
entitled to receive benefits under Title II of the Social Security Act,
may elect to receive a Social Security Option under which he will receive
a larger monthly benefit prior to the date he is first entitled to
receive benefits under Title II of the Social Security Act and a smaller
benefit after he is first entitled to receive benefits under Title II of
the Social Security Act so that, to the extent possible, the Participant
will receive a level monthly income when his payments under the Plan and
his income under Title II of the Social Security Act are taken into
account; provided, however, that his payments under the Social Security
Option will be the Actuarial Equivalent of the Early Retirement Benefit
he would have received if he had not elected such an option.
If a Participant elects a benefit under this Section, no benefits will be
payable to anyone upon his death.
5.06 DEFERRED RETIREMENT BENEFIT
(a) RETIREMENT PRIOR TO AGE 70 1/2
Each Participant who continues in the employ of the Employer or an
Affiliated Employer after attaining his Normal Retirement Age and
retires prior to age 70 1/2
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shall be entitled upon actual retirement to receive a monthly
Deferred Retirement Benefit. The Deferred Retirement Benefit
payable under this paragraph (a) shall be determined in accordance
with Section 5.03, 5.031, 5.032, 5.033, 5.034, 5.035, 5.036,
5.037, 5.038,5.039, 5.040 or 5.041, whichever is applicable, based
on the Participant's years of Benefit Service (including fractions
thereof) as of his retirement date, and the rate of benefit in
effect under the Plan on his retirement date.
(b) COMMENCEMENT OF BENEFITS WHILE ACTIVELY EMPLOYED
Prior to January 1, 1997, the Deferred Retirement Benefit payable
to a Participant who attains age 70 1/2 and who continues to be an
Employee shall be equal to the Participant's accrued benefit
determined as of the last day of the Plan Year in which the
Participant attains age 70 1/2. The Deferred Retirement Benefit
payable under this paragraph (b) shall be determined in accordance
with Section 5.03 or 5.031, 5.032, 5.033, 5.034, 5.035, 5.036,
5.037, 5.038,5.039, 5.040 or 5.041 whichever is applicable, and
shall be payable in the form of a single life annuity. The
Deferred Retirement Benefit shall commence no later than the
January 1 immediately following the Plan Year in which the
Participant attains age 70 1/2.
The monthly benefit of a Participant who has begun receiving
benefits and who continues to be an Employee after his attainment
of age 70 1/2 shall be adjusted, effective on the January 1
following the Plan Year in which the Participant's benefit
commenced and on each succeeding January 1 prior to the
Participant's Deferred Retirement Date, to reflect the effect of
changes in the Participant's accrued benefit since the previous
January 1. The final adjustment shall be made as of the
Participant's Deferred Retirement Date. Adjustments required by
this paragraph shall include a reduction equal to the Actuarial
Equivalent of any payments already made with respect to the
Participant. In no event, however, will the benefit payable to the
Participant be reduced as a result of this paragraph. Furthermore,
the operation of this paragraph will not affect the form of
benefit payment previously elected by the Participant.
Any Participant, other than a 5% owner as defined in Code Section
416(i), who attains age 70 1/2 after December 31, 1996 but before
January 1, 2002 shall have the option to commence receiving
retirement benefits at any time commencing on or after
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the January 1 following the Plan Year in which such Participant
attains age 70 1/2. Any Participant, other than a 5% owner as
defined in Code Section 416(i), who attains age 70 1/2 on or after
January 1, 2002, shall commence receiving retirement benefits no
later than the January 1, of the calendar year following the
calendar year in which he attains age 70 1/2 or the calendar year
in which he retires, whichever is later. Participants who are 5%
owners must continue to commence receiving benefits on the January
1 following the Plan Year in which they attained age 70 1/2.
Effective January 1, 1997, a Participant's deferred Retirement
Benefit shall be equal to the greater of (i) the Actuarial
Equivalent of his or her Deferred Retirement Benefit determined as
of April 1, of the calendar year following the calendar in which
the Participant attains age 70 1/2, or (ii) the Participant's
Deferred Retirement Benefit determined as of his or her Deferred
Retirement Date.
Upon such Participant's actual Deferred Retirement Date, he shall
then be eligible to make the election as described in Section
5.022.
5.07 SUSPENSION OF BENEFIT DISTRIBUTIONS
(a) CONDITIONS FOR SUSPENSION
If any Participant is reemployed by the Employer or an Affiliated
Employer on or after his Benefit Commencement Date and before age
70 1/2, or if any Participant continues in employment with the
Employer or an Affiliated Employer after his Normal Retirement
Date (as defined in Section 4.01), the benefit payable for a
calendar month will be permanently withheld if the Participant
completes 40 or more Hours of Service in the calendar month or in
the four or five week payroll period ending in the calendar month.
The benefit permanently withheld will be the actual amount
scheduled to be paid for the calendar month in which the
conditions for suspension are met.
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(b) REDETERMINATION OF BENEFITS
Upon the subsequent termination of employment of a Participant who
was eligible to begin receiving payments under the Plan on his
prior termination of employment date (whether or not such benefit
payments had actually commenced), the Participant's retirement
benefit shall be redetermined in accordance with the provisions of
this Plan applicable to him as of his subsequent termination of
employment date, as if no prior benefit payments had been made.
His retirement benefit, as so redetermined, shall then be reduced
by (i) the Actuarial Equivalent of the benefit payments, if any,
previously made to such Participant prior to his Normal Retirement
Date or (ii) in the case of a lump sum payment, the Actuarial
Equivalent of the payment other than the portion of the payment
attributable to the period (if any) after the Participant's Normal
Retirement Date and before his reemployment commencement date. The
form of payment of any retirement benefit to which he may
thereafter become entitled shall be determined in accordance with
the provisions of Article 5 at the time he subsequently retires
without regard to the form in which his benefit had previously
been paid.
The Participant's retirement benefit as so redetermined shall not
be less than his retirement benefit prior to the suspension of
payments.
(c) RESUMPTION OF BENEFITS
In the case of a Participant who was receiving benefit payments
prior to reemployment, payment of such benefits shall resume no
later than the first day of the third calendar month following the
month in which the Participant ceases to satisfy the conditions
for suspension described in paragraph (a) above.
If the period of suspension is less than three months, the
Participant's benefit shall continue to be paid in the same form
of payment as was in effect before the suspension.
The amount of the Participant's benefit shall be redetermined,
taking into account increased service and any benefits paid before
suspension, and shall not be less than the amount of benefit the
Participant was receiving prior to suspension.
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(d) NOTICE OF SUSPENSION
If a Participant continues to be employed by the Employer or an
Affiliated Employer after his Normal Retirement Date (as defined
in Section 4.01) and the commencement of his benefit payments is
delayed (or, in the case of reemployment, suspended) in accordance
with the provisions of paragraph (a) above, the Committee shall
give written notice to such Participant as required under
Department of Labor Regulations 2530.203-3(b)(4) no later than the
end of the first calendar month or payroll period in which the
payment of benefits would have commenced if the Participant had
not remained in or returned to employment.
5.08 RETIREMENT PRIOR TO JANUARY 1, 1985
Except as specified otherwise herein, the monthly retirement benefit of a
Participant who retired from the Service of the Employer prior to January
1, 1985 shall be determined in accordance with the applicable provisions
of the Prior Plan as in effect on the date of his retirement.
5.09 PARTICIPANTS WHO ATTAINED NORMAL RETIREMENT AGE OR WHO RETIRED PRIOR TO
JANUARY 1, 1986
Commencing January 1, 1986, the monthly retirement benefit of an active
Participant who attained Normal Retirement Age prior to January 1, 1986
or of a Retired Participant who retired prior to January 1, 1986 shall be
increased by 2.5% for each year between the date such active Participant
attained Normal Retirement Age or the date such Retired Participant
retired and the anniversary of such date which occurs in 1986; provided
that such increase in the monthly benefit shall not be less than $10.00.
5.10 TRANSFER ADJUSTMENT TO NORMAL RETIREMENT BENEFIT
Notwithstanding the provisions under Section 5.03, in the event a
Participant transfers to another subsidiary or division which provides a
different benefit rate under this Plan than provided under the transferor
subsidiary or division and such Participant is credited with more than
2080 Hours of Service during the Plan Year of the transfer, such
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Participant's Normal Retirement Benefit will be adjusted as follows:
- 39 -
(a) the Participant's fractional year of Benefit Service under each
benefit rate will be determined based on total Hours of Service
credited for each subsidiary or division;
(b) the fraction calculated in (a) associated with the subsidiary or
division with the smaller benefit rate shall be adjusted to be
equal to one minus the fraction in (a) associated with the
subsidiary or division with the larger benefit rate; and
(c) the fractions calculated in (b) will be multiplied by the
applicable benefit rate to provide the total benefit earned in the
Plan Year of the transfer.
5.11 DISABILITY RETIREMENT BENEFITS
Effective October 1, 2001, in the event a Participant becomes disabled
while employed with the Employer, so that he is receiving disability
benefits under Title II of the Social Security Act, such Participant
shall continue to be credited with years of Service for vesting and years
of Benefit Service for the period he remains disabled and such crediting
shall cease upon the earlier of the Participant's recovery from
disability, death, election of Early Retirement or Normal Retirement
Date. If a Participant's disability continues until his Normal retirement
Date, his Normal Retirement Benefit shall commence as of the date elected
by the Participant in accordance with the normal form of benefit
described as Section 5.01 or 5.02, whichever is applicable, or the
optional retirement benefit, if elected by the Participant as set forth
in Article 5.
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ARTICLE 6 - TERMINATION OF SERVICE
6.01 REQUIREMENTS FOR VESTED BENEFITS
There are no benefits payable under the Plan if a Participant's
employment terminated prior to the date he is entitled to retire and
receive a benefit under the Plan, except as provided in this Article 6.
6.02 VESTED BENEFITS
A Participant who completes an Hour of Service on or after January 1,
1989 and who ceases to be an Employee prior to Normal Retirement Age for
any reason except death or retirement under the Plan shall be entitled to
a deferred vested benefit commencing on his Normal Retirement Date (as
defined in Section 4.01) equal to his accrued Normal Retirement Benefit
determined in accordance with the provisions of Section 6.021 multiplied
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by his vesting percentage in accordance with the following schedule:
YEARS OF SERVICE VESTING PERCENTAGE
Less than 5 years 0%
5 years or more 100%
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6.021 COMPUTATION OF A VESTED BENEFIT
The amount of deferred vested benefit payable to a Terminated Participant
under Section 6.02 shall be equal to the Normal Retirement Benefit he
would be entitled to under Section 5.03, 5.031, 5.032, 5.033, 5.034,
5.035, 5.036, 5.037, 5.038,5.039, 5.040 or 5.041, whichever is
applicable, based on his years of Benefit Service (including fractions
thereof) and the rate of benefit in effect as of the date he last
performs an Hour of Service, as an Eligible Employee
6.022 EARLY COMMENCEMENT OF A VESTED BENEFIT
A Terminated Vested Participant entitled to a Vested Benefit under
Section 6.02 may elect to have such benefit commence at any time after he
is eligible to elect an Early Retirement Date pursuant to Section 4.02.
In such case, his benefit shall be the Actuarial Equivalent of the
benefit determined under Section 6.021.
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Effective January 1, 1999 a Terminated Participant entitled to a Vested
Benefit under Section 6.02 may elect to have such benefit commence at any
time after he reaches his fifty-fifth birthday provided he has completed
at least 10 years of Service. Effective with respect to benefits
commencing on or after January 1, 1999, such Participant shall be
entitled to his benefit payable on his Normal Retirement reduced by 5/9
of 1% for each of the first sixty months by which commencement of
benefits precedes his Normal Retirement Date, and by 5/18 of 1% for each
month thereafter, if any, by which commencement of benefits precedes his
Normal Retirement Date.
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ARTICLE 7 - DEATH OF PARTICIPANT
7.01 DEATH PRIOR TO RETIREMENT
There are no death benefits payable under the Plan in the event of the
death of a Participant, Retired Participant, or Terminated Participant
prior to the commencement of his retirement benefits under the Plan,
except as may be provided under the Surviving Spouse Benefit described in
Section 7.02 or as may be provided under Section 7.04.
7.02 SURVIVING SPOUSE BENEFIT
The spouse of a Participant or a Terminated Participant shall be eligible
to receive a Surviving Spouse Benefit after the Participant's or
Terminated Participant's death if the Participant or Terminated
Participant has fulfilled the following requirements at the date of
death:
(a) He has been legally married to such spouse throughout the
twelve-month period ending on the date of his death;
(b) He has met the requirements for a Vested Benefit under Section
6.02;
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(c) He has not attained Normal Retirement Age; and
(d) He has not commenced receiving benefits under the Plan.
7.03 AMOUNT OF SURVIVING SPOUSE BENEFIT
If a Participant or Terminated Participant dies after fulfilling all the
requirements of Section 7.02, his spouse shall be entitled to a lifetime
benefit under the Plan. If the surviving spouse of the Participant or
Terminated Participant consents, such benefit shall commence on the first
day of the month following the later of the Participant's or Terminated
Participant's death or the date the Participant or Terminated Participant
would have met the requirements for Early Retirement under Section 4.02.
If such surviving spouse does not consent to receive benefits as
described above, benefits shall commence on the first day of any month
thereafter, as elected by the surviving spouse, but not later than the
date the Participant or Terminated Participant would have attained age
65.
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The Surviving Spouse Benefit shall be equal to (a), (b) or (c) below:
(a) If the Participant or Terminated Participant dies after meeting
the requirements for Early Retirement as provided under Section
4.02, the Surviving Spouse Benefit shall be equal to the amount
which would have been payable to the spouse if the Participant or
Terminated Participant had retired on the date preceding his date
of death and he had been entitled to a Spouse Joint and Survivor
Annuity;
(b) If the Participant or Terminated Participant dies on or before
meeting the requirements for Early Retirement as provided under
Section 4.02, the Surviving Spouse Benefit shall be equal to the
amount which would have been payable to the spouse if the
Participant or Terminated Participant had:
(i) terminated service on the date of his death;
(ii) survived to the earliest retirement age under Section 4.02;
(iii) retired at that time and was entitled to receive a Spouse
Joint and Survivor Annuity; and
(iv) died on the day following attainment of the earliest
retirement age; or
(c) If the Participant's or Terminated Participant's surviving spouse
elects a benefit commencement date other than the first day of the
month following the date of the Participant's or Terminated
Participant's death or the date the Participant or Terminated
Participant would have met the requirements for Early Retirement
under Section 4.02, the Surviving Spouse Benefit under (a) or (b)
above, whichever is applicable, shall be actuarially adjusted to
reflect the actual date of benefit commencement.
7.04 DEATH AFTER COMMENCEMENT OF BENEFITS OR NORMAL RETIREMENT AGE
There are no death benefits payable under the Plan upon the death of a
Participant on or after his Normal Retirement Age or after a Participant
has commenced receiving retirement benefits under the Plan, except as
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follows:
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(a) If a Participant is receiving a Spouse Joint and Survivor Annuity
as described in Section 5.02, any benefits becoming due will be
paid in accordance with the terms of such Spouse Joint and
Survivor Annuity;
(b) If a Participant has elected an optional benefit under Article 8,
any benefits becoming due will be paid in accordance with the
terms of such option;
(c) If a Participant dies after attaining his Normal Retirement Age
but before his Deferred Retirement Date, the Spouse Joint and
Survivor Annuity as described in Section 5.02 shall be deemed to
be in effect on behalf of such Participant, provided he has not
made an election under Section 5.022 to receive his benefits under
another form of payment.
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ARTICLE 8 - OPTIONAL FORMS OF BENEFIT
8.01 TIME FOR ELECTION
Subject to the restrictions set forth in Section 8.06, in lieu of
receiving the life annuity referred to in Section 5.01 or the Spouse
Joint and Survivor Annuity referred to in Section 5.02, a Participant may
elect, by written application filed with the Committee, to have his
retirement benefit paid under one of the forms of benefit set forth in
this Article 8, provided that such election is made prior to the earlier
of: the Participant's actual retirement under the Plan or the
Participant's required beginning date under Section 5.06 and in
accordance with the procedures set forth in Section 5.024 (if such
Participant is married) and in this Article 8. Neither Section 5.01 nor
Section 5.02 shall apply if an effective election is made under this
Article; provided, however, that a married Participant may, at any time
during the election period established by the Committee under Section
5.022, rescind his election of an option under this Article 8 and receive
his retirement benefit in the form of an annuity for life under Section
5.01 or a Spouse Joint and Survivor Annuity under Section 5.02 if he has
met the requirements therefor.
8.02 CONTINGENT ANNUITANT OPTION
A Participant may elect an option in accordance with Section 5.02, under
which option he will receive an actuarially reduced benefit during his
lifetime after retirement and 100%, 66-2/3% or 50% of such reduced amount
will be continued to a person designated by the Participant at the time
of election of the option (and referred to as a Contingent Annuitant) for
the duration of the Contingent Annuitant's lifetime.
8.03 TEN YEAR CERTAIN LIFE ANNUITY OPTION
A Participant may elect an option in accordance with Section 5.02, under
which option he will receive an actuarially reduced benefit during his
lifetime after retirement with a provision that if he dies after his
Normal Retirement Age or after his Benefit Commencement Date but prior to
receiving one hundred twenty monthly retirement payments, the balance of
such one hundred twenty monthly retirement payments shall be paid to the
Participant's Beneficiary.
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8.04 WHEN OPTION EFFECTIVE
If a Participant who elects an option under this Article 8 dies prior to
Normal Retirement Age or prior to his Benefit Commencement Date, if
earlier, the election shall be void and no benefit will be paid under the
option. If the Participants Contingent Annuitant, or Beneficiary if
applicable, dies prior to the commencement of retirement benefits to the
Participant and prior to the Participant's Normal Retirement Age, the
Participant may either (a) designate another Contingent Annuitant, or
Beneficiary, if applicable, prior to his Normal Retirement Age, (b)
receive the form of benefit at retirement which would have been payable
to him had the option not been elected, or (c) elect another optional
form of benefit under Article 8. Notwithstanding the first sentence of
this Section 8.04, if the Participant has elected a Deferred Retirement
Date (as defined in Section 4.03), and if the Participant dies after his
Normal Retirement Date (as defined in Section 4.01) but before his
Deferred Retirement Date, the Contingent Annuitant shall receive the
reduced amount of retirement benefit payable under the option. If the
Participant has elected a Deferred Retirement Date, and if either the
Contingent Annuitant or Beneficiary, if applicable, dies after the
Participants Normal Retirement Date but before his Deferred Retirement
Date, the election shall be void and the Participant will receive the
benefit which would have been payable to him had the option not been
elected, unless another option is elected.
8.05 BENEFICIARY
A Participant who elects an option under Section 8.03 shall designate, on
a form provided by the Committee, a Beneficiary or Beneficiaries to
receive any death benefit which may become payable under the designated
option. The Participant may change his designation of Beneficiary from
time to time by written notice filed with the Committee. If no designated
Beneficiary survives to receive all benefits which may become due under
the Plan, any such benefits becoming due shall be paid to any one or more
of the following classes of successive Beneficiaries surviving the
Participant: the Participant's (a) spouse, (b) issue, (c) parents, (d)
brothers and sisters, or (e) executors and administrators.
8.06 LIMITATION OF ELECTION OF OPTION
No option shall be effective under this Article if the anticipated effect
would be to extend the period of payments beyond the joint life
expectancy of the Participant and his Contingent Annuitant or
Beneficiary; or would violate the minimum distribution incidental benefit
requirement of Section 1.401(a)(9)-2 of the proposed regulations, or any
provision of future law that amends, supplements, or supersedes such
provision.
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8.07 SPOUSAL CONSENT REQUIREMENT
Notwithstanding anything herein contained to the contrary, the election
by a married Participant of an optional form of benefit shall not take
effect unless the requirements set forth in Section 5.024 have been
satisfied.
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ARTICLE 9 - CHANGE IN STATUS AND TRANSFER
9.01 CHANGE IN STATUS FROM ELIGIBLE EMPLOYEE TO NON-ELIGIBLE EMPLOYEE
If a Participant is included in this Plan for a part of his period of
employment with the Employer or an Affiliated Employer and then loses his
status as an Eligible Employee, as defined in this Plan, he will not
accrue any further benefits under this Plan; however, all Service with
the Employer or an Affiliated Employer will be taken into account in
determining his eligibility rights to receive any benefits previously
accrued under this Plan.
In the event an Employee loses his status as an Eligible Employee, his
benefit shall be determined using the benefit rate in effect on the date
he ceases to be an Eligible Employee. If the Employee's status again
changes and he becomes an Eligible Employee and a Participant under the
Plan, his years of Benefit Service as an Eligible Employee shall be
aggregated and his benefit shall be determined using the benefit rate in
effect on the latest date on which he ceases to be an Eligible Employee.
9.02 CHANGE IN STATUS FROM NON-ELIGIBLE EMPLOYEE TO ELIGIBLE EMPLOYEE
If a Participant is included in this Plan after a period of Service with
the Employer when he was not an Eligible Employee, as defined in this
Plan, all his Service with the Employer or an Affiliated Employer will be
counted only for purposes of determining his eligibility to participate
in the Plan and his rights to receive benefits under this Plan.
9.021 NON-DUPLICATION OF BENEFITS
If benefits are payable on account of the same period of employment with
the Employer or an Affiliated Employer, under this Plan and another
qualified defined benefit plan toward which the Employer contributes (or
has contributed), the benefits payable under this Plan on account of such
period shall be reduced by the Actuarial Equivalent of any benefit
payable to him under such other plan calculated in the same form and
manner as is the benefit payable under this Plan on account of the same
period of Service. However, if such other Plan provides for a similar
reduction of benefits, then this Section shall be disregarded with
respect to an Eligible Employee whose most recent period of participation
in this Plan is earlier than his most recent period of participation in
such other plan.
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9.03 TRANSFER IN EMPLOYMENT
For purposes of determining vested benefits and eligibility, a direct
transfer in employment between the Employer and a wholly owned subsidiary
of the Employer, whether or not it adopts the Plan, shall not be deemed
to effect any break in Service as to the Eligible Employee or Participant
so transferring, as long as he retains his status as an Eligible Employee
with such subsidiary. His Benefit Service with such subsidiary prior to
the date of its adoption of the Plan shall be counted for purposes of the
Plan to the extent specified in the vote of the board of directors of
such subsidiary adopting the Plan. The Eligible Employee or Participant
shall not lose his right to any Benefit Service he had accrued with the
Employer prior to the date of his transfer in employment to the
subsidiary, provided that there shall be no duplication in benefits based
on such Benefit Service.
9.031 EMPLOYMENT WITH AN AFFILIATED EMPLOYER
For purposes of determining a Participant's eligibility to participate in
the Plan and his right to a Vested Benefit under Section 6.02, any
employment with an Affiliated Employer shall be treated as Service with
the Employer; such Service to be determined by the Committee in
accordance with the Service provisions of Article 2 applied in a uniform,
nondiscriminatory manner to all Participants and to be based on the
employment records of the Affiliated Employer. In no event shall a person
who has completed such Service enter the Plan prior to his employment
with the Employer or accrue any benefits under the Plan in respect of
such Service, except as provided in Section 9.03.
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ARTICLE 10 - ADMINISTRATION
10.01 ALLOCATION OF RESPONSIBILITY AMONG FIDUCIARIES FOR PLAN AND TRUST
ADMINISTRATION
The Fiduciaries shall have only those powers, duties, responsibilities
and obligations as are specifically given to them under this Plan or the
Trust. Any power, duty, responsibility or obligation relating to the
control, management, or administration of the Plan or Trust Fund which is
not specifically allocated to any Fiduciary, or with respect to which the
allocation is in doubt, shall be deemed allocated to the Employer. In
general, the Employer shall have the sole responsibility for making the
contributions, as specified in Article 11 and subject to the provisions
of Article 11, necessary to provide benefits under the Plan. The
Sponsoring Employer by action of its Board shall have the sole authority
to appoint and remove the Trustee and the members of the Committee and to
amend or terminate, in whole or in part, this Plan and the Trust. The
Committee shall have the sole responsibility for the administration of
this Plan, as specifically described in this Plan and the Trust. The
Trustee shall have the sole responsibility for the administration of the
Trust and the management of the Trust assets, except as otherwise
specifically provided in this Plan and the Trust.
The Sponsoring Employer, by written instrument filed with the records of
the Plan, may designate fiduciary capacities and/or Fiduciaries other
than those named herein. A Fiduciary may serve in more than one fiduciary
capacity in respect to the Plan. A Fiduciary shall have the authority to
delegate responsibilities, as provided above, and may employ one or more
parties to render advice with regard to any responsibility he has under
the Plan.
10.02 INDEMNIFICATION
The Employer shall indemnify each member (and former member) of the
Committee and any other employee, officer or director (and former
employee, officer or director) of the Employer against any claims, loss,
damage, expense and liability (other than amounts paid in settlement not
approved by the Employer) reasonably incurred by him in connection with
any action or failure to act to which he may be party by reason of his
membership on the Committee or performance of an authorized duty or
responsibility for or on behalf of the Employer pursuant to the Plan or
Trust unless the same is determined to be the result of the individual's
gross negligence or willful misconduct. Such indemnification by the
Employer shall be made only to the extent (a) such expense or liability
is not payable to or on behalf of
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such person under liability insurance coverage; and (b) the Trust is
precluded from assuming such expense or liability because of the
operations of ERISA Section 410 or other applicable law. The foregoing
right to indemnification shall be in addition to any other rights to
which any such person may be entitled as a matter of law.
10.03 APPOINTMENT OF COMMITTEE
The Plan shall be administered by a Committee consisting of at least
three (3) persons who shall be appointed by and serve at the pleasure of
the Board. A person who is selected as a member of the Committee also may
serve in one or more other fiduciary capacities with respect to the Plan
and may be a Participant. The Board shall have the right to remove any
member of the Committee at any time, and a member may resign at any time
by written resignation to the Board. The Board may fill by appointment
any vacancy in the membership of the Committee. All usual and reasonable
expenses of the Committee incurred by them in the administration of the
Plan and Trust, including but not limited to fees and expenses of
professional advisors referred to above, shall be paid by the Trust Fund
unless such expenses are paid by the Employer. All or part of such
expenses may be paid by the Employer, but the Employer shall be under no
obligation to pay any such expenses. Any members of the Committee who are
full-time employees of the Employer shall not receive compensation with
respect to their services as a member of the Committee.
10.04 RECORDS AND REPORTS
The Committee shall exercise such authority and responsibility as it
deems appropriate in order to comply with the Code, ERISA, and
governmental regulations issued thereunder relating to records of
Participants, Service and Benefit Service, benefits, notifications to
Participants, annual registration with the Internal Revenue Service, and
annual reports to the Department of Labor. The Employer and the Committee
shall each keep or cause to be kept such Employee and Participant data
and other records, and shall each reasonably give notice to the other of
such information, as shall be proper, necessary or desirable to
effectuate the purpose of the Plan. Neither the Employer nor the
Committee shall be required to duplicate any records kept by the other.
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10.05 OTHER COMMITTEE POWERS AND DUTIES
The Committee 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 construe and interpret the Plan, including the supplying of any
omissions in accordance with the intent of the Plan, decide all
questions of eligibility, determine the amount, manner and time of
payment of any benefits hereunder, and to authorize the payment of
benefits;
(b) To prescribe forms and procedures to be followed by the
Participants, spouses, and Beneficiaries filing applications for
benefits;
(c) To prepare and distribute, in such manner as the Committee
determines to be appropriate, information explaining the Plan;
(d) To receive from the Employer and from Participants such
information as shall be necessary for the proper administration of
the Plan;
(e) To furnish the Employer, upon request, such annual reports with
respect to the administration of the Plan as are reasonable and
appropriate;
(f) To receive, review and keep on file (as it may deem convenient or
proper) reports of the financial condition, and of the receipts
and disbursements, of the Trust Fund from the Trustee;
(g) To appoint, employ or designate individuals to assist in the
administration of the Plan and any other agents it deems
advisable, including legal and actuarial counsel;
(h) To make such equitable and practical adjustments as may be
necessary to correct mistakes of fact or other errors; and
(i) To authorize amendments of the Plan by a Company officer, provided
such amendments are of a non-substantive nature and do not
significantly increase the cost of the Plan; and
(j) To exercise such other powers and duties as the Board may delegate
to it.
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The Committee may retain auditors, accountants, physicians, actuaries,
legal counsel and other professional advisors selected by it. The opinion
of, or information and data contained in any certificate or report or
other material prepared by any such auditor, physician, actuary,
accountant, legal counsel, or other professional advisors shall be full
and complete authority and protection in respect of any action taken,
suffered or omitted by the Committee or other Fiduciary in good faith and
in accordance with such opinion or information and no member of the
Committee or other Fiduciary shall be deemed imprudent by reason of any
such action.
10.06 RULES AND DECISIONS
The Committee may adopt such rules as it deems necessary, desirable or
appropriate for the proper and efficient administration of the Plan and
as are consistent with the provisions of the Plan. Rules and decisions of
the Committee shall not discriminate in favor of officers, directors, or
Highly Compensated Employees of the Employer. When making a determination
or calculation, the Committee shall be entitled to rely upon information
furnished by a Participant, spouse, Contingent Annuitant or Beneficiary,
the Employer, the legal counsel of the Employer, an Actuary, consultant,
or the Trustee. The Committee shall have and shall exercise complete
discretionary authority to construe, interpret and apply all of the terms
of the Plan, including all matters relating to eligibility for benefits,
amount, time or form of benefits, and any disputed or allegedly doubtful
Plan terms. Any such construction, administration, interpretation or
application shall be final, binding and conclusive upon all persons
including, but not by way of limitation, Employees, Participants,
spouses, Contingent Annuitants, Beneficiaries, and their heirs, and
personal representatives, and any other person claiming an interest under
the Plan and shall not be deemed imprudent. In exercising such
discretion, the Committee shall give controlling weight to the intent of
the Plan.
10.07 COMMITTEE PROCEDURES
The Committee may act at a meeting or in writing without a meeting. All
decisions of the Committee shall be made by the vote of the majority
including actions in writing taken without a meeting. The Committee may
adopt such operating procedures and regulations as it deems desirable for
the conduct of its affairs and may authorize a member, or each member, of
the Committee to act on its behalf in certain administrative matters
deemed by them to be routine in nature, including the execution of
documents. No Committee member
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who is a Participant shall have any vote in any decision of the Committee
made uniquely with respect to such Committee member or his benefits
hereunder.
10.08 AUTHORIZATION OF BENEFIT PAYMENTS
The Committee shall issue directions to the Trustee concerning all
benefits which are to be paid from the Trust Fund pursuant to the
provisions of the Plan, and certify that all such directions are in
accordance with the Plan.
10.09 APPLICATION AND FORMS FOR PAYMENT
The Committee shall require a Participant to complete and file with the
Committee an application for distribution of benefits and all other forms
approved by the Committee for the purpose and to furnish all pertinent
information requested by the Committee. The Committee may rely upon all
such information furnished to it, including the Participant's current
mailing address. To the extent that the Committee shall prescribe forms
for use by the Participants, former Participants, and their respective
spouses, Contingent Annuitants, or Beneficiaries in communicating with
the Employer or the Committee, as the case may be, and shall establish
periods during which communications may be received, they and the
Employer shall respectively be protected in disregarding any notice or
communication for which a form shall so have been prescribed and which
shall not be made on such form and any notice or communication for the
receipt of which a period shall so have been established and which shall
not be received during such period, or in accepting any notice or
communication which shall not be made on the proper form and/or received
during the proper period. The Employer and the Committee shall
respectively also be protected in acting upon any notice or other
communication purporting to be signed by any person and reasonably
believed to be genuine and accurate, and shall not be deemed imprudent by
reason of so doing.
10.10 CLAIMS PROCEDURE
The Committee shall notify each Participant of his entitlement to receive
benefits under this Plan, and shall provide appropriate forms on which
application for such benefits may be made.
Each Participant, spouse, Contingent Annuitant, or Beneficiary claiming a
benefit under the Plan must complete and file such application forms with
the Committee. One Committee
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member (or his designee) shall be designated to review all applications
for benefits. He shall notify the claimant in writing of his decision
within ninety (90) days of his receipt of the application. If special
circumstances require any extension of time (not to exceed ninety (90)
days) for processing the claim, the claimant will be notified in writing
of the extension prior to the expiration of the initial ninety (90) day
period.
The reviewing member of the Committee shall make all determinations on
behalf of the Committee as to the right of any person to a benefit. Any
denial by the reviewing Committee member of a claim for benefits shall be
stated in writing and delivered or mailed to the claimant. The notice
shall be written to the best of the reviewing Committee member's ability
in a manner that may be understood without legal or actuarial counsel.
Such notice shall set forth specific reasons for the denial, specific
references to the pertinent Plan provisions on which the denial is based,
an explanation of the Plan's claim review procedure, and, if applicable,
a description of additional material or information necessary for the
claimant to perfect his claim. If the reviewing Committee member rejects
the application solely because the claimant failed to furnish certain
necessary material or information, the notice shall explain what
additional material is needed and why, and advise the claimant that he
may refile a proper application under the above claim procedure.
10.11 APPEAL AND REVIEW PROCEDURE
If a claim has been denied by the reviewing Committee member, the
claimant may appeal the denial within sixty (60) days after his receipt
of written notice thereof by submitting in writing to the Committee a
request for review of the denial of such claim. A claimant may also
submit a written statement of issues and comments concerning his claim,
and he may request an opportunity to review the Plan, the Trust and any
other pertinent documents (which shall be made available to him by the
Committee within thirty (30) days after its receipt of a copy of the
request) at a convenient location during regular business hours.
If an appeal is made, the Committee shall render its final decision with
the specific reasons therefor in writing and transmit it to the claimant
by certified mail within 60 days of its receipt of the request for review
(or within 120 days in the event a hearing is granted).
All interpretations, determinations, and decisions of the Committee or
its designated representative with respect to any matter herein will be
final, conclusive, and binding upon all interested parties.
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10.12 EVIDENCE
Evidence required of anyone under the Plan may be given by certificate,
affidavit, document or in such other form as the person to whom such
evidence is given considers appropriate.
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ARTICLE 11 - FUNDING OF THE PLAN
11.01 MEDIUM OF FUNDING
The Plan will be funded through one or more Trust Funds established by
the Employer.
11.02 CONTRIBUTIONS
The Employer shall make such contributions to the Trust Fund from time to
time as may be necessary to maintain the Plan on a sound actuarial basis
and meet the funding requirements of the ERISA. In determining such
contributions, the earnings of the Trust Fund and any amounts forfeited
by Terminated Participants shall be considered as a part of the Trust
Fund in establishing the cost of maintaining the Plan.
11.03 FUND TO BE FOR THE EXCLUSIVE BENEFIT OF PARTICIPANTS
The contributions made to the Trust Fund by the Employer under the Plan
shall be for the exclusive benefit of Participants, Retired Participants,
and Terminated Participants, and no part of the Trust Fund shall revert
to the Employer, except such amounts as may remain after the satisfaction
of all liabilities to Participants, Retired Participants, Terminated
Participants, surviving spouses, Contingent Annuitants, and Beneficiaries
upon termination of the Plan.
11.04 FORFEITURES
All amounts forfeited by Terminated Participants shall be used to reduce
the Employer's cost of the Plan, and shall not be used to increase the
benefits of other Participants under the Plan.
11.05 INTERESTS OF PARTICIPANTS IN TRUST FUND
No Participant shall have any right, title or interest in any part of the
assets of any Trust Fund except as and to the extent expressly provided
by the Plan.
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11.06 PAYMENT OF EXPENSES
It is intended that the administrative and all other expenses of the Plan
shall be paid by the Trust Fund, unless such expenses are paid by the
Employer. All or part of such expenses may be paid by the Employer, but
the Employer shall be under no obligation to pay any such expenses.
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ARTICLE 12 - PAYMENT OF RETIREMENT BENEFITS
12.01 PAYMENT OF SMALL AMOUNTS
In the event that the Actuarial Equivalent value of any benefits under
the Plan would be $3,500 ($5,000 effective October 1, 2001) or less (or
such other amount as provided by applicable law or regulation) on the
date of distribution, the Committee shall authorize the payment of such
Actuarially Equivalent amount in a lump sum.
12.02 DEEMED DISTRIBUTION
If the Actuarial Equivalent of the vested portion of a Participant's
accrued benefit is zero, the Participant shall be deemed to have received
a single sum distribution of the vested portion of his accrued benefit on
his date of termination of employment and the nonvested portion of his
accrued benefit shall thereupon be forfeited. If such Participant resumes
employment covered under the Plan before the date he incurs a break in
Service on or after January 1, 1985 which equals or exceeds the greater
of five years or the number of years of Service which the Employee
completed prior to the break in Service, the nonvested portion of the
accrued benefit forfeited pursuant to this Section 12.02 shall be
restored on the Participant's date of employment.
12.03 PAYMENTS FOR INCAPACITATED PERSONS
Whenever, in the Committee's opinion, a person entitled to receive any
payment of a benefit, or installment thereof, hereunder is under a legal
disability or is incapacitated in any way so as to be unable to manage
his financial affairs, the Committee may direct the Trustee to make
payments to the legal representative of such person. Any payment of a
benefit or installment thereof in accordance with the provisions of this
Section shall be a complete discharge of any liability for the making of
such payment under the provisions of the Plan.
If any Beneficiary of any Participant or former Participant shall be a
minor, the Trustee shall be fully protected in making any payment
required to be made to such minor to any person who shall be a custodian
or guardian for such minor.
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12.04 SPENDTHRIFT
Except as provided in Section 12.05, no benefit payable at any time under
the Plan shall be subject in any manner to alienation, anticipation,
sale, transfer, assignment, pledge, attachment or encumbrance of any
kind. No benefit and no Trust Fund established in connection with the
Plan shall in any manner be subject to the debts or liabilities of any
person entitled to such benefit. Effective August 5, 1997, the Plan shall
recognize judgements or settlements described in Sections 401(a)(13)(C)
and (D) of the Code.
12.05 PAYMENT UNDER QUALIFIED DOMESTIC RELATIONS ORDERS
Notwithstanding any provision of the Plan to the contrary, if there is
entered any qualified domestic relations order (within the meaning of
Section 414(p) of the Code and ERISA Section 206(d)(3)(B), as added by
the Retirement Equity Act of 1984) that affects the payment of benefits
hereunder, such benefits shall be paid in accordance with the applicable
requirements of such order.
12.06 LATEST COMMENCEMENT OF BENEFITS
(a) In no case, unless the Participant otherwise elects in accordance
with Section 401(a)(14) of the Code and the Treasury Regulations
promulgated thereunder, will the payment of benefits to any
Participant commence later than the 60th day after the latest of
the following: (i) the close of the Plan Year of the Participant's
Normal Retirement Date (as defined in Section 4.01); (ii) the
close of the Plan Year in which occurs the tenth anniversary of
the year in which the Participant commenced participation in the
Plan; or (iii) the close of the Plan Year in which the Participant
terminates his service with the Employer and all Affiliated
Employers.
(b) Notwithstanding the foregoing, benefits from the Plan shall begin
no later than the required beginning dates described in Section
5.06.
12.07 COMMENCEMENT OF BENEFITS PRIOR TO NORMAL RETIREMENT AGE
Notwithstanding anything herein to the contrary, except as provided in
Section 12.01, no benefit shall commence to the Participant or the
Participant's spouse prior to the date the Participant attains or would
have attained his Normal Retirement Age without the consent of
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the Participant and the Participant's spouse, if required by applicable
law. Such consent must be obtained not more than 90 days prior to the
Benefit Commencement Date.
12.08 DISTRIBUTION OF BENEFITS BEGINNING BEFORE DEATH AND AFTER DEATH
(a) DISTRIBUTION BEGINNING BEFORE DEATH. If distribution to the
Participant has begun and the Participant dies before his entire
Vested Benefit has been distributed, the remaining portion of such
Vested Benefit shall be distributed to his Beneficiary or
Contingent Annuitant, as least as rapidly as under the method of
payment in effect at the Participant's date of death.
(b) DISTRIBUTION BEGINNING AFTER DEATH. If the Participant dies before
commencement of his Vested Benefit, distribution of the
Participant's entire Vested Benefit shall be completed by December
31 of the calendar year containing the fifth anniversary of the
Participant's death, except that:
(i) if the Participant's designated Beneficiary is an
individual other than the Participant's spouse, the
Participant's interest may be distributed over the life
expectancy of his Beneficiary, beginning on or before
December 31 of the calendar year immediately following the
calendar year in which the Participant died; and
(ii) if the Participant's designated Beneficiary is his spouse,
the Participant's interest may be distributed over the life
expectancy of his spouse, beginning on or before the later
of:
(A) December 31 of the calendar year next following the
calendar year in which the Participant died; or
(B) December 31 of the calendar year in which the
Participant would have attained age 70 1/2.
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12.09 DISTRIBUTION LIMITATIONS
(a) For purposes of this Section 12.09, the following terms shall have
the indicated meaning:
(i) "BENEFITS" means the sum of the Participant's accrued
benefit and all other benefits to which he is entitled
under the Plan, but excluding any death benefit provided
for by insurance on the Participant's life.
(ii) "RESTRICTED PARTICIPANT" means, with respect to a Plan
Year, a Highly Compensated Employee who is a Participant
and who, if there are more than 25 Highly Compensated
Employees, is one of the 25 Highly Compensated Employees
with the highest Total Annual Pay, as defined in
subparagraph (iii) below.
An individual who is a Restricted Participant in a Plan
Year shall be a Restricted Participant in a subsequent Plan
Year only if he satisfies the conditions of the previous
sentence in such subsequent Plan Year.
If more than one individual has the same Total Annual Pay,
the younger individual shall be deemed to have the higher
Total Annual Pay.
(iii) "TOTAL ANNUAL PAY" means, with respect to any Plan Year:
(A) In the case of a Highly Compensated Employee who is
not currently employed by the Employer or an
Affiliated Employer, the greater of his Section 415
Compensation (as defined in Section 5.04(c)) for the
Plan Year in which he ceased to be employed by the
Employer or an Affiliated Employer, or his Section
415 Compensation for the Plan Year immediately
preceding that Plan Year, and
(B) In the case of a Highly Compensated Employee who is
currently employed by the Employer or an Affiliated
Employer, the greater of his Section 415
Compensation for the Plan Year in question or for
the prior Plan Year.
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(b) Subject to paragraph (c) below, a Restricted Participant may not
receive his Benefits under this Plan in the form of a single lump
sum payment, or other benefit form under which payments during a
single year would exceed the annual payments that would be made on
behalf of such Participant under a single life annuity that is the
Actuarial Equivalent of his benefits (other than the benefits
described in paragraph (c)(iii) below).
(c) The limitation of paragraph (b) above shall not apply:
(i) to any payment, if the value of Plan assets after such
payment equals or exceeds 110% of the value of the Plan's
"CURRENT LIABILITIES" (within the meaning of Section
412(1)(7) of the Code); or
(ii) if the value of the Restricted Participant's Benefit is
less than 1% of the value of such current liabilities, or
(iii) to payment of benefits attributable to transferred balances
from defined contribution plans or to employee
contributions.
(d) In the event that Congress provides by statute, or the Internal
Revenue Service provides by regulation or ruling, that the
limitations set forth in this Section 12.09 are not necessary for
the Plan to meet the requirements of Section 401(a) or other
applicable provisions of the Code then in effect, such limitations
shall become void and shall no longer apply without the necessity
of further amendment to the Plan.
(e) Notwithstanding the foregoing, the limitations of paragraph (b)
above shall not apply to any Restricted Participant otherwise
subject thereto who enters into a prior written agreement with the
Committee to the effect that if the Plan is terminated and
distribution of benefits has been or will be made to such
Participant regardless of the limitation of paragraph (b) above,
such Participant (or, in the case of his death, his estate or
representatives) shall repay to the Trustee a sum equal to the
total amounts by which his benefits under the Plan shall exceed
benefits determined under the preceding limitation ("Restricted
Benefits").
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12.10 DIRECT ROLLOVER DISTRIBUTIONS
Notwithstanding any provision of the Plan to the contrary, if any
distribution to a Distributee (i) is made on or after January 1, 1993,
(ii) totals $200 or more, and (iii) constitutes an Eligible Rollover
Distribution, the Distributee may elect on a form provided by the
Committee to have all or part of such Eligible Rollover Distribution paid
in a direct rollover to an Eligible Retirement Plan selected by the
Distributee. For this purpose, a Distributee, an Eligible Rollover
Distribution, and an Eligible Retirement Plan shall be defined as
follows:
(a) Distributee includes an Employee or former Employee. In addition,
the Employee's or former Employee's surviving spouse and the
Employee's or former Employee's spouse or former spouse who is the
alternate payee under a qualified domestic relations order, as
defined in Section 414(p) of the Code, are Distributees with
regard to the interest of the spouse or former spouse.
(b) Eligible Rollover Distribution means any distribution of all or
any portion of the balance to the credit of a 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
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 includable in gross
income (determined without regard to the exclusion for net
unrealized appreciation with respect to employer securities).
(c) Eligible Retirement Plan means a plan described below:
(i) an individual retirement account described in Section
408(a) of the Code;
(ii) an individual retirement annuity (other than an endowment
contract) described in Section 408(b) of the Code;
(iii) with respect to Participants and Distributees who are
alternate payees only, a qualified defined contribution
plan and exempt trust described in Sections 401(a) and
501(a) of the Code respectively, the terms of which permit
the acceptance of rollover contributions; or
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(iv) with respect to Participants and Distributees who are
alternate payees only, an annuity plan described in Section
403(a) of the Code.
If an election is made to have only a part of an eligible rollover
distribution paid in a direct rollover, the amount of the direct rollover
must total $500 or more.
Direct rollovers shall be accomplished in accordance with procedures
established by the Committee.
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ARTICLE 13 - AMENDMENTS TO OR TERMINATION OF THE PLAN
13.01 RIGHTS OF THE EMPLOYER TO AMEND OR TERMINATE
(a) While it is the intention of the Sponsoring Employer to continue
the Plan indefinitely, the Sponsoring Employer reserves the right
to modify, amend or terminate the Plan in whole or in part at any
time by an instrument in writing pursuant to authority of a vote
of the Board of Directors; provided, however, that the Plan shall
not be amended in such manner as would cause or permit any part of
the Trust to be diverted for purposes other than for the exclusive
benefit of Participants, Retired Participants, and Terminated
Participants; decrease a Participant's accrued benefit or
eliminate an optional form of payment with respect to benefits
accrued as of the later of the (a) the date such amendment is
adopted, or (b) the date the amendment becomes effective; or to
revert to or become the property of the Employer, prior to the
satisfaction of all liabilities under the Plan with respect to
Participants, Retired Participants, Terminated Participants,
surviving spouses, Contingent Annuitants, and Beneficiaries.
(b) If any Plan amendment changes the vesting schedule set forth in
Section 6.02, each Participant who has completed at least three
(3) years of Service on the effective date of the change in the
vesting schedule shall have his vesting percentage computed in
accordance with the vesting schedule which produces the highest
vested benefit.
13.02 TERMINATION OF THE PLAN
Upon termination of the Plan due to any reason, or partial termination in
accordance with the regulations of the Treasury Department, the rights of
all non-vested Participants affected by such termination to benefits
accrued prior to the date of such termination shall be nonforfeitable.
The assets of the Plan shall thereupon be allocated in accordance with
the provisions of Sections 13.03 and 13.04. No Participant or any other
person shall have the right to seek payment of benefits directly from the
Sponsoring Employer or Employer and all persons shall look solely to the
Trust Fund for payment of benefits. Such payments shall be made only to
the extent that the funds held in the Trust are sufficient therefor,
except as may be otherwise guaranteed by the Pension Benefit Guaranty
Corporation.
Upon termination of the Plan, benefits of missing participants shall be
treated in accordance with Section 4050 of ERISA.
- 67 -
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13.03 LIMITATIONS ON BENEFITS UPON TERMINATION
The allocation of the amounts in Section 13.04 shall be based on the
actuarial value of the benefit payable under the Plan at Normal
Retirement Age as a life annuity, without death benefit, not in excess of
the lesser of:
(a) 100% of the Participant's monthly compensation averaged over the
five consecutive years in which his compensation was the highest;
or
(b) such amount as determined according to the regulations of the
Pension Benefit Guaranty Corporation. Such amount shall be subject
to adjustment each year to reflect changes in the Social Security
contribution and benefit base, any such adjustments shall be in
accordance with regulations issued by the Pension Benefit Guaranty
Corporation.
13.04 ALLOCATION OF ASSETS
After providing for the expenses incurred in terminating the Plan, the
assets shall be used and applied for the benefit of Retired Participants
(including surviving spouses, Contingent Annuitants, and Beneficiaries),
Participants, and Terminated Participants who at the date of retirement
or termination of employment may have been entitled to retirement
benefits, to be allocated in the following order:
(a) FIRST: Assets shall be allocated to provide pensions for life, on
the basis of the Plan provisions in effect at the beginning of the
five-year period ending on the date of Plan termination, to
Retired Participants (including surviving spouses, Contingent
Annuitants, and Beneficiaries receiving benefits) who have been
receiving benefits for three years prior to the date of
termination and Participants and Terminated Participants who have
met the requirements for normal or early retirement benefit at
least three years prior to the date of termination.
(b) SECOND: If any assets remain after allocation for the purposes of
paragraph (a), they shall be allocated to provide a benefit for
life, on the basis of the Plan provisions in effect five years
prior to the date of Plan termination, to all other Retired
Participants (including surviving spouses, Contingent Annuitants,
and Beneficiaries receiving benefits) and all other Participants
and Terminated Participants who are not included in paragraph (a)
and who have met the requirements for Normal or Early Retirement
or for a Vested Benefit under Article 6 at the date of
termination.
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- 68 -
(c) THIRD: If any assets remain after allocation for the purposes of
paragraphs (a), and (b), they shall be allocated to provide the
benefit, if any, in excess of the benefit provided by the
allocations under paragraphs (a), and (b) necessary to bring the
benefits of Retired Participants (including surviving spouses,
Contingent Annuitants, and Beneficiaries) and all Participants and
Terminated Participants who have met the requirements for Normal
or Early Retirement or a Vested Benefit under Article 6 at the
date of Plan termination up to the full amount of the accrued
retirement benefit provided under the Plan as of the date of Plan
termination, such benefits to be determined without regard to the
maximum benefit stated in Section 13.03.
(d) FOURTH: If any assets remain after allocation for the purposes of
paragraphs (a), (b), and (c), they shall be allocated to provide
benefits to all other Participants of the Plan on the date of Plan
termination, such benefits to be determined without regard to the
maximum benefit stated in Section 13.03.
(e) FIFTH: If any assets remain after the complete allocation for the
foregoing purposes of this Article 13, they shall be returned to
the Employer.
If the allocable assets are insufficient to provide in full for the
allocations under any of the foregoing paragraphs after the provision for
all allocations under previous paragraphs, each allocation under such
paragraph as to which assets are insufficient shall be reduced pro-rata.
No allocations will be made under the foregoing Section with respect to
any benefits accrued under the Plan after the Secretary of the Treasury
has issued notice that the Plan does not meet the requirements of Section
401(a) of the Code.
- 69 -
13.05 DISTRIBUTION MEDIA
The allocations for which provision is made in this Article 13 may be
accomplished through:
(a) group contracts or individual annuity contracts; or
(b) cash; or
(c) any combination of the foregoing.
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ARTICLE 14 - TOP-HEAVY PROVISIONS
14.01 ARTICLE CONTROLS
Any Plan provisions to the contrary notwithstanding, the provisions of
this Article 14 shall control to the extent required to cause the Plan to
comply with the requirements imposed by Section 416 of the Code.
14.02 DEFINITIONS
Where the following words and phrases appear in this Article 14, they
shall have the respective meanings set forth below, unless their context
clearly indicates to the contrary:
(a) ACCOUNT BALANCE
As of any Valuation Date, the aggregate amount credited to an
individual's account or accounts under a qualified defined
contribution plan (excluding the employee contributions which were
deductible within the meaning of Section 219 of the Code and
rollover or transfer contributions made by or on behalf of such
individual to such plan from another qualified plan, sponsored by
an entity other than the Employer or an Affiliated Company)
increased by (i) the aggregate distributions made to such
individual from such plan during a five-year period ending on the
Determination Date and (ii) the amount of any contributions due as
of the Determination Date immediately following such Valuation
Date;
(b) ACCRUED BENEFIT
As of any Valuation Date, the present value (computed on the basis
of the Assumptions) of the cumulative accrued benefit (excluding
the portion thereof which is attributable to employee
contributions which were deductible pursuant to Section 219 of the
Code, to rollover or transfer contributions made by or on behalf
of such individual to such plan from another qualified plan
sponsored by an entity other than the Employer or an Affiliated
Company, to proportional subsidies or to ancillary benefits) of an
individual under a qualified defined benefit plan increased by the
aggregate distributions made to such individual from such plan
during a five-year period ending on the Determination Date;
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- 71 -
(c) AFFILIATED COMPANY
Any corporation or other business entity which is required to be
aggregated with the Employer by reason of Section 414(b), 414(c)
or 414(m) of the Code;
(d) AGGREGATION GROUP
The group of qualified plans (including terminated plans
maintained within the five-year period ending on the Determination
Date) maintained by the Employer and each Affiliated Company
consisting of (i) each plan in which a Key Employee participates
and each other plan which enables a plan in which a Key Employee
participates to meet the requirements of Section 401(a)(4) or 410
of the Code, or (ii) each plan in which a Key Employee
participates, each other plan which enables a plan in which a Key
Employee participates to meet the requirements of Sections
401(a)(4) and 410 of the Code and any other plan which the
Employer elects to include as part of such group; provided,
however, that the Employer may not elect to include a plan in such
group if its inclusion would cause the group to fail to meet the
requirements of Sections 401(a)(4) and 410 of the Code;
(e) ASSUMPTIONS
For purposes of this Article 14, the interest rate and mortality
assumptions specified in Section 1.01(a) of the Plan;
(f) DETERMINATION DATE
For the first Plan Year of any plan, the last day of such Plan
Year, and for each subsequent Plan Year of such plan, the last day
of the preceding Plan Year;
(g) FORMER KEY EMPLOYEE
With respect to any Plan Year, any individual who was a Key
Employee in a previous Plan Year but who is not a Key Employee
with respect to such Plan Year. For purposes of this definition, a
Beneficiary (who would not otherwise be a Key Employee) of a
deceased Former Key Employee shall be deemed to be a Former Key
Employee in substitution for such deceased Former Key Employee;
- 72 -
(h) HIGHEST AVERAGE COMPENSATION
The highest annual average of the taxable compensation paid by the
Employer to an Employee during any five (5) consecutive Plan Years
(excluding Plan Years prior to the first Plan Year the Plan was
top-heavy and excluding Plan Years subsequent to the last Plan
Year the Plan was top-heavy), or during all of such Plan Years
during which the Employee received taxable compensation from the
Employer, if less than five (5);
(i) KEY EMPLOYEE
With respect to any Plan Year, any individual who at any time
during such Plan Year or during any of the four (4) Plan Years
immediately preceding such Plan Year was (i) an officer of the
Employer or an Affiliated Company having an annual compensation
greater than 50% of the dollar limitation specified in Section
415(b)(1)(A) of the Code for any such Plan Year, (ii) one of the
ten employees having an annual compensation greater than the
dollar limitation specified in Section 415(c)(l)(A) of the Code
for any such Plan Year and owning the largest interests in the
Employer or an Affiliated Company and owning greater than a 1/2
percent interest in the Employer or an Affiliated Company, (iii),
an owner of five percent (5%) or more of the outstanding stock of
the Employer or an Affiliated Company or of stock possessing five
percent or more of the total combined voting power of all of the
stock of the Employer or an Affiliated Company, or (iv) an
employee whose Remuneration (during the Plan Year including the
Determination Date) exceeded $150,000 and who was an owner of one
percent or more of the outstanding stock of the Employer or an
Affiliated Company or of stock possessing one percent or more of
the total combined voting power of all of the stock of the
Employer or an Affiliated Company. For purposes of this
definition, (i) an individual shall be deemed to own stock owned
by other individuals as provided in Section 318 of the Code, but
substituting 5% for 50% in subparagraph (C) of Section 318(a)(2)
of the Code, (ii) a beneficiary (who would not otherwise be a Key
Employee) of a deceased Key Employee shall be deemed to be a Key
Employee in substitution for such deceased Key Employee, and (iii)
the total number of Key Employees who are officers of the Employer
and the Affiliated Companies shall be limited to: if there is a
total of less than thirty (30) employees of the Employer and the
Affiliated Companies, three (3); if there is a total of more than
thirty (30) but less than five hundred (500) employees of the
Employer and the Affiliated Companies, ten percent (10%) of such
total; and, if there is a total of more than five hundred (500)
employees of the Employer and the Affiliated Companies,
fifty (50);
- 73 -
(j) NON-KEY EMPLOYEE
An individual who is not a Key Employee.
(k) PLAN YEAR
With respect to any plan, the annual accounting period used by
such plan for annual reporting purposes;
(l) REMUNERATION
An individual's earned income, wages, salaries and other amounts
actually paid or made available by the Employer or an Affiliated
Company to such an individual during a Plan Year for personal
services actually rendered in the course of employment with the
Employer or an Affiliated Company (subject to exclusion of amounts
specified by regulations promulgated under Section 415 of the
Code);
(m) TOP-HEAVY SERVICE
Each year of Service, excluding all years of Service credited
prior to January 1, 1984 and all years of Service with respect to
Plan Years for which the Plan was not top-heavy;
- 74 -
(n) VALUATION DATE
With respect to any Plan Year of any defined contribution plan,
the most recent date within the twelve (12) month period prior to
a Determination Date as of which the trust fund established under
such plan was valued and the net income (or loss) thereof
allocated to Participants' accounts. With respect to any Plan Year
of a defined benefit plan, the most recent date within a
twelve-month period prior to a Determination Date as of which the
plan assets were valued for purposes of computing plan costs for
purposes of the requirements imposed under Section 412 of the
Code.
14.03 TOP-HEAVY STATUS
(a) The Plan shall be deemed a top heavy plan for a Plan Year if, as
of the Valuation Date preceding the applicable Determination Date,
the sum of (1) the present value of accrued benefits of Key
Employees under this Plan and all other defined benefit plans in
the Aggregation Group, and (2) the account balances of Key
Employees under all defined contribution plans in the Aggregation
Group exceeds 60% of the sum of (3) the present value of accrued
benefits of all Participants under this Plan and all other defined
benefit plans in the Aggregation Group (but excluding Participants
who are former Key Employees); and (4) the account balances of all
Participants under all defined contribution plans in the
Aggregation Group.
For purposes of this test, the following rules shall apply:
(i) Subject to subparagraph (ii) below, any distributions from
this Plan or any other plan in the Aggregation Group, and
any accrued benefit distributed from any other plan in the
Aggregation Group during the five Plan Years ending on the
Determination Date shall be taken into consideration.
(ii) The benefits of and distributions to all former employees
who have not been credited with at least one Hour of
Service during the period of five years ending on the
Determination Date shall be disregarded, provided, however,
that if such former Employee again completes an Hour of
Service with the Employer after such five year period, such
former Employee's accounts shall be taken into
consideration.
Notwithstanding any provision of this paragraph (ii) to the
contrary, in any Plan Year in which this Plan is a top
heavy Plan, each Non-Key Employee
- 75 -
who is also covered under a defined contribution plan of
the Employer, shall accrue a Minimum Benefit as provided by
this Plan.
(iii) If an Employee is not a Key Employee for the Plan Year
containing the Determination Date, but such individual was
a Key Employee during any previous Plan Year, the value of
his or her benefits and distributions shall not be taken
into consideration.
(iv) Solely for purposes of determining if the Plan or any other
plan in the Required Aggregation Group is a top heavy plan
for a Plan Year, the accrued benefits under any defined
benefit plans of Employees who are not Key Employees shall
be determined for Plan Years beginning after 1986 under the
method, if any, which is uniformly applied for accrual
purposes under all defined benefit plans maintained by the
Employer or an Affiliated Employer or, if there is no such
method, as if such benefit accrued not more rapidly than
under the slowest accrual rate permitted under Section
411(b)(1)(C) of the Code.
(v) The determination of account balances under all defined
contribution plans in the Aggregation Group shall be
increased for contributions due as of the Determination
Date to the extent required under Section 416 of the Code.
(vi) The determination of the present value of accrued benefits
under all defined benefit plans in the Aggregation Group
shall be based on the interest rate and mortality table
specified in Section 1.01(a).
(vii) Distributions, rollovers and trust to trust transfers shall
be taken into consideration to the extent required under
Section 416 of the Code.
The calculation of the top heavy ratio shall be made in accordance
with the provisions of Section 416 of the Code.
(b) If the Plan is determined to be top-heavy for a Plan Year, the
annual retirement benefit of each Participant who is a Non-Key
Employee shall not be less than the lesser of (i) or (ii), where
(i) is two percent (2%) of the Participant's Highest Average
Compensation multiplied by the Participant's Years of
Top-Heavy Service; and
- 76 -
(ii) is twenty percent (20%) of the Participant's Highest
Average Compensation.
The minimum annual retirement benefit provided by the preceding
sentence means the retirement benefit payable annually under the
Plan in the form of a single life annuity with no ancillary
benefits and beginning on the date the Participant attains Normal
Retirement Age. If a Participant actually receives his benefit
under the Plan in a different form or commencing at a different
time, his benefit shall not be less than the Actuarial Equivalent
(using the factors set forth in Section 1.01(c)) of the foregoing
minimum benefit;
(c) If the Plan is determined to be top-heavy for a Plan Year, the
Vested Benefit of any Participant who completes an Hour of Service
during such Plan Year or who terminates his service with the
Employer during such Plan Year shall be determined in accordance
with Section 6.02, but using the following vesting schedule:
YEARS OF VESTED
SERVICE PERCENTAGE
Less than 3 years 0%
3 years or more 100%
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If the vesting schedule under the Plan for any Plan Year shifts
into or out of the above schedule because of the Plan's top heavy
status, such shift shall be regarded as an amendment to the Plan's
vesting schedule and the provisions of Section 13.01(b) shall be
applied.
The provisions of this paragraph (c) shall not be applied to
reduce the Participant's vested percentage computed in accordance
with the provisions of Section 6.02.
(d) In any Plan Year in which the Plan is top heavy but not super top
heavy (substituting 90% for 60% in subparagraph (a) above),
Section 5.041(d)(ii) shall be applied by substituting "100%" for
"125%" unless the Sponsoring Employer amends subparagraph (b)(i)
above by substituting "3%" for "2%" therein. Effective January 1,
2000, this paragraph (d) shall no longer be applicable.
(e) In any Plan Year in which the Plan is super top heavy, the factor
of "125%" shall be changed to "100%" in Section 5.041(d)(ii).
Effective January 1, 2000, this paragraph (e) shall no longer be
applicable.
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14.04 TERMINATION OF TOP-HEAVY STATUS
Except as specifically provided in Section 14.03(c), if the Plan has been
deemed to be top-heavy for one or more Plan Years and thereafter ceases
to be top-heavy, the provisions of this Article 14 shall cease to apply
to the Plan effective as of the day following the Determination Date on
which it is determined to no longer be top-heavy, provided, however, that
the accrued benefit of any Participant under the Plan shall not be less
than the minimum benefit which such Participant had accrued under Section
14.03(b) as of the last day of the last Plan Year for which the Plan was
top-heavy.
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ARTICLE 15 - MISCELLANEOUS
15.01 RIGHTS AGAINST THE EMPLOYER
Neither the establishment of the Plan, nor the Trust Fund, nor any
modification thereof, nor the payment of benefits hereunder shall be
construed as giving any Employee or Participant the right to be retained
in the service of the Employer or as interfering with the right of the
Employer to discharge any Employee at any time.
15.02 RETURN OF CONTRIBUTIONS
(a) In the event that the Commissioner of Internal Revenue (or his or
her delegate) determines that the Plan is not initially qualified
under the Code, any Employer contributions made to the Plan shall
be returned to the Employer within one year after the date the
initial qualification is denied, provided application for
qualification is made by the time prescribed by law for filing the
Employer's return for the fiscal year in which the Plan is
adopted, or such later date as the Secretary of the Treasury may
prescribe.
(b) Nothing herein shall prohibit a return to the Employer, within one
year after payment, of excess sums contributed to the Trust Fund
as a result of a mistake of fact.
(c) Each Employer contribution is specifically conditioned on the
deductibility of the contribution under Section 404 of the Code,
and to the extent such contribution, or any part thereof, is
disallowed, the contribution, or any part thereof that is
disallowed, shall be returned to the Employer within one year
after the date of disallowance.
(d) The return of a contribution to the Employer pursuant to paragraph
(b) or (c) above shall be permitted hereunder only if the amount
so returned (i) is the excess of the amount actually contributed
over the amount which would have otherwise been contributed, (ii)
does not include the earnings attributable to such contribution
and (iii) is reduced by any losses attributable to such
contribution.
- 79 -
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15.03 MERGER
Unless otherwise permitted by law or regulations, the Plan shall not be
merged into, or consolidated with, nor shall any assets or liabilities be
transferred to, any other pension or retirement plan under circumstances
resulting in a transfer of assets or liabilities from the Plan to such
other plan unless immediately after any such merger, consolidation or
transfer each Employee would if such other plan then terminated, receive
a benefit which is equal to or greater than the benefit he would have
been entitled to receive immediately before the merger, consolidation or
transfer, if the Plan had then terminated.
15.04 LEASED EMPLOYEES
For purposes of the Plan, the term "leased employee" means any person who
would not otherwise be considered an Employee but who, pursuant to an
agreement between the Employer or an Affiliated Employer and a leasing
organization (within the meaning of Section 414(n)(2) of the Code) has
performed services for the Employer or Affiliated Employer on a
substantially full time basis for a period of at least one year, and such
services are performed under the primary direction and control of the
Employer or Affiliated Employer. Contributions or benefits provided a
leased employee by the leasing organization which are attributable to
services performed for the Employer or Affiliated Employer shall be
treated as provided by the Employer or Affiliated Employer.
A leased employee shall not be considered an Employee if:
(a) Such individual is covered by a money purchase pension plan
providing (i) a nonintegrated employer contribution rate of at
least ten percent of his "Section 415 Compensation" (as defined in
Section 5.04(c)), but including amounts contributed pursuant to a
salary reduction agreement which are not includable in gross
income under Section 125, 402(a)(8), 402(h), or 403(b) of the
Code, (ii) immediate participation, and (iii) full and immediate
vesting; and
(b) leased employees constitute twenty percent or less of the
Employer's or Affiliated Employer's nonhighly compensated
workforce (within the meaning of Section 414(n)(5)(C)(ii) of the
Code).
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15.05 APPLICABLE LAW
The provisions of this Plan shall be governed and construed in accordance
with the laws of the Commonwealth of Massachusetts.
15.06 HEADINGS
The headings of the Plan are inserted for convenience of reference only,
and shall have no effect upon the meaning of the provisions hereof.
15.07 GENDER AND NUMBER
Wherever used in this instrument, a masculine person shall be deemed to
include the masculine and feminine gender, and a singular word shall be
deemed to include the singular and plural, in all cases where the context
requires.
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APPENDIX A
PRIOR BENEFIT RATES
The following is a listing of the Benefit Rates in effect under the Watts
Industries, Inc. Hourly Pension Plan prior to January 1, 1997
LAST HOUR OF SERVICE
-----------------------------------------------------------------------------------------------------------------
ENTITY ON OR AFTER BUT BEFORE BENEFIT RATE
-----------------------------------------------------------------------------------------------------------------
Circle Seal Controls, Inc. 9/7/1990 1/1/1997 $ 15.00
Regtrol, Inc. 1/1/1985 7/1/1988 $ 5.50
7/1/1988 1/1/1989 $ 7.00
1/1/1989 1/1/1991 $ 8.00
1/1/1991 1/1/1997 $ 11.00
Webster Valve Division 1/1/1985 1/1/1988 $ 6.50
1/1/1988 7/1/1988 $ 8.50
7/1/1988 1/1/1989 $ 10.00
1/1/1989 1/1/1991 $ 11.00
1/1/1991 1/1/1997 $ 12.50
Leslie Controls, Inc. 1/1/1989 1/1/1997 $ 13.00
Webster Foundry Division 1/1/1985 1/1/1988 $ 6.50
1/1/1988 7/1/1988 $ 8.50
7/1/1988 1/1/1989 $ 10.00
1/1/1989 1/1/1991 $ 11.00
1/1/1991 1/1/1997 $ 12.50
KF Industries, Inc. 1/1/1989 1/1/1991 $ 8.00
1/1/1991 1/1/1993 $ 10.00
1/1/1993 1/1/1997 $ 12.00
Rudolph LaBranche, Inc. 1/1/1989 1/1/1991 $ 11.00
1/1/1991 1/1/1997 $ 12.50
Watts Automatic Control Valve, Inc. 1/1/1989 1/1/1991 $ 8.00
1/1/1991 1/1/1997 $ 10.00
Eagle Valve Company, Inc. 1/1/1991 1/1/1997 $ 10.00
Contromatics, Inc. 1/1/1993 1/1/1997 $ 12.50
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PART B
WATTS INDUSTRIES, INC.
PENSION PLAN
JAMECO INDUSTRIES, INC. PENSION PLAN
STATEMENT OF PURPOSE
Jameco Industries, Inc. has had in effect since December 1, 1963 the Jamaica
Manufacturing Co., Inc. Employees Pension Plan, to which it made contributions
for providing benefits for its eligible employees and their beneficiaries, in
the manner and to the extent set forth in such plan.
The Jamaica Manufacturing Co., Inc. Pension Plan (As Amended 1969) and its
related amended trust agreement constituted an amendment in its entirety to the
Jamaica Manufacturing Co., Inc. Employees Pension Plan.
Effective October 1, 1969, the name of the Jamaica Manufacturing Co., Inc.
Pension Plan (As Amended 1969) was changed to Jameco Industries, Inc. Pension
Plan (As Amended 1969).
The plan was amended in its entirety again in 1976, 1982, 1984, and 1989.
Effective October 1, 1995, the Plan was merged into the Watts Industries, Inc.
Retirement Plan for Salaried Employees, now called the Watts Industries, Inc.
Pension Plan (Watts Pension Plan) and the Plan's terms were incorporated and
made a part of the Watts Pension Plan as this Part B.
The Plan is hereby restated effective January 1, 1997 and such later dates as
may be specified herein to comply with the General Agreement on Tariffs and
Trade, the Uniformed Services Employment and Reemployment Rights Act of 1994,
the Small Business Job Protection Act of 1996, the Taxpayer Relief Act of 1997,
the Internal Revenue Service Restructuring and Reform Act of 1998, and other
applicable laws.
TABLE OF CONTENTS
Page
ARTICLE I - DEFINITIONS
1.01 Accrued Benefit..........................................................................................1
1.02 Actuarial Equivalent.....................................................................................1
1.03 Affiliated Employer......................................................................................2
1.04 Annuity Starting Date....................................................................................2
1.05 Average Monthly Compensation.............................................................................2
1.06 Beneficiary..............................................................................................2
1.07 Board....................................................................................................3
1.08 Break in Service.........................................................................................3
Authorized leave of absence..............................................................................3
Maternity or paternity leave of absence..................................................................3
1.09 Break-in-Service Year....................................................................................3
1.10 Code.....................................................................................................3
1.11 Committee................................................................................................3
1.12 Compensation.............................................................................................3
1.13 Computation Period.......................................................................................4
1.14 Contingent Annuitant.....................................................................................4
1.15 Contributions............................................................................................4
1.16 Covered Compensation.....................................................................................4
1.17 Credited Service.........................................................................................5
1.18 Delayed Retirement Date..................................................................................5
1.19 Disability...............................................................................................5
1.20 Disability Retirement Date...............................................................................5
1.21 Early Retirement Date....................................................................................5
1.22 Effective Date...........................................................................................5
1.23 Eligible Employee........................................................................................5
1.24 Employee.................................................................................................5
1.25 Employer.................................................................................................6
1.26 Employment Commencement Date.............................................................................6
1.27 Entry Date...............................................................................................6
1.28 Fiduciary................................................................................................6
1.29 Fund.....................................................................................................6
1.30 Highly Compensated Employee..............................................................................6
1.31 Hour of Service..........................................................................................7
1.32 Insurer..................................................................................................8
1.33 Key Employee.............................................................................................8
1.34 Month of Service.........................................................................................9
1.35 Non-Highly Compensated Employee..........................................................................9
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(ii)
ARTICLE I - DEFINITIONS (CONT'D)
1.36 Non-Key Employees........................................................................................9
1.37 Normal Form of Retirement Benefit........................................................................9
1.38 Normal Retirement Age....................................................................................9
1.39 Normal Retirement Date...................................................................................9
1.40 Participant..............................................................................................9
1.41 Period of Service........................................................................................9
1.42 Period of Severance.....................................................................................10
1.43 Plan....................................................................................................10
1.44 Plan Sponsor............................................................................................10
1.45 Plan Year...............................................................................................10
1.46 Qualified Domestic Relations Order......................................................................10
1.47 Reemployment Commencement Date..........................................................................10
1.48 Service.................................................................................................10
1.49 Severance From Service Date.............................................................................10
1.50 Spouse..................................................................................................10
1.51 Trust...................................................................................................10
1.52 Trust Agreement.........................................................................................10
1.53 Trustee.................................................................................................10
1.54 Year of Service.........................................................................................11
ARTICLE II - ELIGIBILITY
2.01 Conditions Of Eligibility...............................................................................12
2.02 Eligible Employee.......................................................................................12
2.03 Determination Of Eligibility............................................................................12
2.04 Termination Of Eligibility..............................................................................13
2.05 Determination Of Service And Break In Service For Eligibility...........................................13
ARTICLE III - SERVICE, CREDITED SERVICE AND BREAKS IN SERVICE FOR VESTING AND BENEFIT ACCRUAL
3.01 Service For Eligibility.................................................................................15
3.02 Vesting Service.........................................................................................15
3.03 Severance From Service Date.............................................................................15
3.04 Additional Service Allowance............................................................................15
3.05 Credited Service........................................................................................15
3.06 Service In The Armed Forces.............................................................................16
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(iii)
ARTICLE III - SERVICE, CREDITED SERVICE AND BREAKS IN SERVICE FOR VESTING AND BENEFIT ACCRUAL (CONT'D)
3.07 Military Service........................................................................................16
3.08 Pre-ERISA Service.......................................................................................16
ARTICLE IV - RETIREMENT CONDITIONS
4.01 Normal Retirement.......................................................................................17
4.02 Delayed Retirement......................................................................................17
4.03 Early Retirement........................................................................................17
4.04 Disability Retirement...................................................................................17
4.05 Special Rules Upon Disability Retirement................................................................18
4.06 Continuation Of Benefits Upon Reemployment..............................................................18
4.07 Commencement Of Benefits................................................................................19
ARTICLE V - RETIREMENT BENEFITS
5.01 Normal Retirement Benefit...............................................................................20
5.02 Delayed Retirement Benefit..............................................................................20
5.03 Early Retirement Benefit................................................................................22
5.04 Maximum Retirement Benefit..............................................................................22
5.05 Required Benefit Commencement...........................................................................30
ARTICLE VI - JOINT AND SURVIVOR AND PRERETIREMENT DEATH BENEFITS
6.01 Automatic Joint And Survivor Annuity....................................................................31
6.02 Qualified Election......................................................................................31
6.03 Qualified Preretirement Survivor Annuity................................................................33
6.04 Qualified Election......................................................................................34
6.05 Notice Requirements.....................................................................................35
ARTICLE VII - OPTIONAL METHODS OF RETIREMENT PAYMENTS
7.01 Optional Elections......................................................................................37
7.02 Limitation On Optional Elections........................................................................38
7.03 Deferred Annuity Purchase...............................................................................38
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(iv)
ARTICLE VIII - REQUIRED COMMENCEMENT OF BENEFITS
8.01 General Rules...........................................................................................40
ARTICLE IX - BENEFITS ON TERMINATION OF EMPLOYMENT AND RETIREMENT UPON DISABILITY
9.01 Termination Generally...................................................................................41
9.02 Conditions For Vested Retirement Benefits...............................................................41
9.03 Amount Of Vested Retirement Benefit.....................................................................41
9.04 Single Sum Payment Of Value Of Vested Retirement Benefits...............................................42
9.05 Participant And Spousal Consent For Immediately Distributable Benefits..................................42
9.06 Disability Termination..................................................................................43
ARTICLE X - FUNDING
10.01 Contributions By Participants...........................................................................45
10.02 Contributions By Employer...............................................................................45
10.03 Fund....................................................................................................45
ARTICLE XI - ADMINISTRATION
11.01 Assignment Of Administrative Authority..................................................................47
11.02 Organization And Operation Of Committee.................................................................47
11.03 Powers And Duties.......................................................................................47
11.04 Records And Reports Of Committee........................................................................48
11.05 Payment Of Expenses.....................................................................................48
11.06 Determination Of Benefits...............................................................................48
11.07 Additional Committee Duties.............................................................................49
11.08 Reliance On Reports.....................................................................................49
11.09 Liability And Indemnification...........................................................................49
11.10 Limitation Of Powers Of Committee.......................................................................50
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(v)
ARTICLE XI - ADMINISTRATION (CONT'D)
11.11 Claim Procedure For Benefits............................................................................50
ARTICLE XII - AMENDMENT AND TERMINATION OF THE PLAN
12.01 Amendment Of Plan.......................................................................................51
12.02 Termination Of Plan.....................................................................................52
12.03 Limit For 25 Highest Paid Employees.....................................................................54
ARTICLE XIII - PARTICIPATING COMPANIES
13.01 Adoption By Other Entities..............................................................................55
13.02 Actuarial Valuation.....................................................................................55
13.03 Right To Withdraw (Plan Spinoff)........................................................................55
ARTICLE XIV - MISCELLANEOUS
14.01 Headings And Subheadings................................................................................56
14.02 Gender And Number.......................................................................................56
14.03 Participants' Rights: Acquittance.......................................................................56
14.04 Receipt Or Release......................................................................................56
14.05 Spendthrift Clause......................................................................................56
14.06 Payments To Legally Incompetent.........................................................................57
14.07 Delegation Of Authority By The Board....................................................................57
14.08 Distribution Of Benefits Under Plan.....................................................................57
14.09 Divestment Of Benefits..................................................................................57
14.10 Construction Of Plan....................................................................................58
14.11 Execution Of Plan.......................................................................................58
14.12 Deductibility Of Contributions..........................................................................58
14.13 Lost Beneficiary Or Participant.........................................................................58
14.14 Duplication Of Benefits.................................................................................59
14.15 Merger Or Consolidation.................................................................................59
14.16 Return Of Contributions As A Result Of Mistake Of Fact..................................................59
14.17 Direct Rollover Of Eligible Rollover Distributions......................................................59
14.18 Qualified Domestic Relations Orders.....................................................................61
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(vi)
ARTICLE XV - TOP-HEAVY PROVISIONS
15.01 General Provisions......................................................................................65
15.02 Minimum Vesting.........................................................................................65
15.03 Minimum Benefits........................................................................................65
15.04 Limits On Compensation..................................................................................66
15.05 Transitional Rule.......................................................................................66
15.06 Aggregation Of Plans....................................................................................67
15.07 Top-Heavy Definitions...................................................................................68
15.08 Excluded Participants...................................................................................70
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(vii)
ARTICLE I
DEFINITIONS
1.01 "Accrued Benefit" on behalf of any Participant shall be equal to the
benefit calculated at any point in time and payable at Normal Retirement
Date determined pursuant to Section 5.01.
1.02 "Actuarial Equivalent" means an equivalency in value, at a given point in
time, between different forms of benefits, payable commencing at a date
other than Normal Retirement Date. Unless the Plan is amended to change
the actuarial assumptions on which calculation of equivalence is based,
optional forms of benefits for all Participants shall be determined on
the basis of the following conversion factors:
(a) For purposes of determining the lump-sum value of any benefit
payable or the amount of income equivalent to a Participant's
account in accordance with Section 5.01, the rates under
Metropolitan Life Insurance Company Group Annuity Contract No. 956
on the day before the Anniversary Date preceding or coincident
with the date selected for the payment of the benefit shall be
used. Such rates, without load and irrespective of the
Participant's sex shall reflect the insurance company's Group
66-population 78A male mortality table and the interest rates
under the contract.
(b) For purposes of determining the amount of any optional form of
retirement income payable other than a lump-sum distribution, an
interest rate of eight percent (8%) per year, compounded annually,
and mortality rates in accordance with Unisex Pension 1984 (UP84)
Mortality Table shall be used.
(c) If any benefit, other than the Disability benefit calculated in
accordance with Section 9.06(b), is payable to a Participant
eligible for Disability Retirement or Early Retirement before such
Participant's Normal Retirement Date, the Participant's Accrued
Benefit will be reduced by five-ninths percent (5/9%) for each of
the first sixty (60) months and five-eighteenths percent (5/18%)
for each of the next sixty (60) months by which the commencement
of benefits precedes the Participant's Normal Retirement Date. If
any Disability benefit calculated in accordance with Section
9.06(b) is to commence before age 55, the Accrued Benefit will be
additionally reduced by a five percent (5%) annual discount
factor, charged monthly.
(d) If any benefit determined as of or after a Participant's Normal
Retirement Date is payable at a later date, it shall be increased
at the rate of eight percent (8%) per
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year, compounded annually, with respect to the period commencement
is deferred.
(e) Notwithstanding the foregoing, for purposes of determining the
amount of any optional form of retirement income, death benefit,
lump-sum value and early or late commencement adjustments
available under a deferred annuity purchased or a Participant or a
Participant's surviving Spouse in accordance with Section 6.01 or
Actuarial Equivalence will be based on the assumptions specified
by the insurance company which issues such annuity.
The Actuarial Equivalent of a benefit payable in a lump sum will be
determined by using the mortality table prescribed in Section 417(e)(e)
of the Code, and using an interest rate equal to the rate on 30-year
Treasury Constant Maturities for the month of November prior to the Plan
Year of the distribution date.
1.03 "Affiliated Employer" means 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; any other entity required to
be aggregated with the Employer pursuant to Regulations under Code
Section 414(o).
1.04 "Annuity Starting Date" means the first day of the first period for which
an amount is payable as an annuity or 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 to such benefit.
1.05 "Average Monthly Compensation" means 1/12th of the annual Compensation of
a Participant averaged over the five (5) consecutive completed calendar
years, including periods prior to the Effective Date of the Plan, which
produce the highest monthly average within the last ten (10) completed
years of participation. If a Participant has less than five (5)
consecutive completed calendar years from his date of participation to
his date of termination, his Average Monthly Compensation will be based
on his Compensation from his date of employment to his date of
termination or during the actual period of his service if less.
Compensation before the calendar year preceding the date on which a
Participant first satisfies the Plan's age, Service and/or Hours of
Service requirements in accordance with Section 2.01, in effect as of his
date of participation, shall not be included in determining Average
Monthly Compensation.
1.06 "Beneficiary" means the person designated to receive benefits which are
payable under the Plan upon or after the death of a Participant.
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1.07 "Board" means the Board of Directors of Jameco Industries, Inc. as from
time to time constituted.
1.08 (a) "Break in Service" means the applicable Computation Period of
twelve (12) consecutive months during which an Employee fails to
accrue a Month of Service. Further, solely for the purpose of
determining whether a Participant has incurred a 1-Year Break in
Service, Hours of Service shall be recognized for "authorized
leaves of absence" and "maternity and paternity leaves of
absence." Years of Service and 1-Year Breaks in Service shall be
measured on the same Computation Period. An Employee shall not be
deemed to have incurred a 1-Year Break in Service if he completes
an Hour of Service within twelve (12) months following the last
day of the month during which his employment terminated.
(b) "Authorized Leave of Absence" means an unpaid, temporary cessation
from active employment with the Employer pursuant to an
established nondiscriminatory policy, whether occasioned by
illness, or any other reason.
(c) "Maternity or Paternity Leave of Absence" means, for Plan Years
beginning after December 31, 1984, an absence from work for any
period by reason of the Employee's pregnancy, birth of the
Employee's child, placement of a child with the Employee in
connection with the adoption of such child, or any absence for the
purpose of caring for such child for a period immediately
following such birth or placement. For this purpose, Hours of
Service shall be credited for the twelve (12) month period of
absence from work, only if credit therefore is necessary to
prevent the Employee from incurring a 1-Year Break in Service.
1.09 "Break-in-Service Year" means a year which interrupts the continuous
accrual of Service or Credited Service.
1.10 "Code" means Internal Revenue Code of 1986, as amended.
1.11 "Committee" means the Administrative Committee appointed to administer
the Plan in accordance with Article XI hereof.
1.12 "Compensation" means a Participant's wages paid for the calendar year, as
defined in Code Section 3401(a) for purposes of income tax withholding at
the source, but determined without regard to any rules limiting the
remuneration included in wages based on the nature or location of the
employment or the services performed (such as the exception for
agricultural labor in Code Section 3401(a)(2)).
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For purposes of this Section, the determination of Compensation shall be
made by including salary reduction contributions made on behalf of an
Employee to a plan maintained under Code Section 125 or Section
401(k)(2). Compensation shall be limited by the dollar amount set forth
in Section 401(a)(17) of the Code as adjusted by the Commissioner for
increases in the cost of living in accordance with Section 401(a)(17)(B)
of the Internal Revenue Code. The cost-of living adjustment in effect for
a calendar year applies to any period, not exceeding 12 months, over
which Compensation is determined (determination period) beginning in such
calendar year. If a determination period consists of fewer than 12
months, Compensation limit will be multiplied by a fraction, the
numerator of which is the number of months in the determination period
and the denominator of which is 12.
Solely for purposes of determining if this Plan complies with the
nondiscrimination and coverage requirements of Code Sections 401(a)(4)
and 410(b), Compensation shall include all amounts imputed during a
period of absence from Service on account of disability or leave of
absence. Such imputed Compensation shall be credited for either six
months or the duration of the absence, whichever is shorter; except, if
the absence is for military duty or jury duty, Compensation will be
credited for the entire period of absence. Determination of the amount of
imputed Compensation will be based on Compensation reasonably
representative of what that Participant would have received during the
period if the Participant had continued to perform services.
1.13. "Computation Period" means, for eligibility purposes, the period
described in Section 2.05. For all other purposes, "Computation Period"
means the twelve (12) month period beginning as of the first day of the
month of employment and each anniversary thereof.
1.14 "Contingent Annuitant" means a person designated under an option of
Article VI or Article VII hereof to receive a retirement allowance during
his or her lifetime after the death of an Employee.
1.15 "Contributions" means the payments to the Fund by the Employer which are
provided for herein.
1.16 "Covered Compensation" for a Participant means the average (without
indexing) of the taxable wage bases in effect for each calendar year
during the 35-year period ending with the last day of the calendar year
in which the Participant attains (or will attain) social security
retirement age. No increase in Covered Compensation shall decrease a
Participant's Accrued Benefit under the Plan. In determining a
Participant's Covered Compensation for a Plan Year, the taxable wage base
for all calendar years beginning after the first day of the Plan Year is
assumed to be the same as the taxable wage base in effect as of the
beginning of the Plan Year. A Participant's Covered Compensation for a
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Plan Year before the 35-year period ending with the last day of the
calendar year in which the Participant attains social security retirement
age is the taxable wage base in effect as of the beginning of the Plan
Year. A Participant's Covered Compensation for a Plan Year after such
35-year period is the Participant's. Covered Compensation for the Plan
Year during which the 35-year period ends. For purposes of determining
benefits under the Plan, Covered Compensation will be determined using
the Covered Compensation table as in effect for the Plan Year in which
such determination is being made.
1.17 "Credited Service" means the period of employment of the Participant used
to accumulate benefits under the Plan as set forth in Article III hereof.
Credited Service will be determined on the basis of elapsed time.
1.18 "Delayed Retirement Date" means the date set forth in Article IV.
1.19 "Disability" means a physical or mental condition of a Participant
resulting from bodily injury, disease, or mental disorder which renders
him incapable of continuing any gainful occupation and which condition
constitutes total disability under the federal Social Security Act.
The Employer shall have the right to require the Participant to submit
reasonable proof of such Disability. Such proof may include a requirement
that the Participant submit to. a medical examination from time to time
by a qualified physician or physicians selected by the Employer. Medical
examinations shall not be required more frequently than semiannually.
1.20 "Disability Retirement Date" means the date set forth in Article IV.
1.21 "Early Retirement Date" means the date set forth in Article IV.
1.22 "Effective Date" means December 1, 1963. The provisions of this amended
and restated Plan shall be effective as of October 1, 1989.
1.23 "Eligible Employee" means an Employee described in Section 2.02.
1.24 "Employee" means any person employed by the Employer. The term "Employee"
shall also include any leased employee deemed to be an Employee of the
Employer, as provided in Code Sections 414(n) or (o), unless:
(a) such individual is covered by a money purchase pension plan
providing (A) a nonintegrated employer contribution rate of at
least ten percent (10%) of
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compensation, as defined in Section 415(c)(3) of the Code, but
including amounts contributed by the employer pursuant to a salary
reduction agreement which are excludable from the Leased
Employee's gross income under Section 125, 401 (a)(8), 402(h) or
403(b) of the Code; (B) immediate participation; and (C) full and
immediate vesting and
(b) leased employees do not constitute more than twenty percent (20%)
of the Employer's Nonhighly Compensated Employee workforce.
1.25 "Employer" means Jameco Industries, Inc. (Watts Industries, Inc.
effective October 1, 1995) and any successor which shall maintain this
Plan; and any other business entity which duly adopts the Plan with the
approval of the Board of Directors.
1.26 "Employment Commencement Date" means the date on which an Employee first
is credited with an Hour of Service.
1.27 "Entry Date" means the date defined in Section 2.01 of the Plan.
1.28 "Fiduciary" means any Trustee, Plan Administrator and any other person
who:
(a) Exercises any discretionary authority or discretionary control
respecting management of the Plan or exercises any authority or
control respecting management or disposition of its assets;
(b) Has any discretionary authority or discretionary responsibility in
the administration of the Plan; or
(c) Is described as a "fiduciary" in Section 3(14) or (21) of ERISA or
is designated to carry out fiduciary responsibilities pursuant to
this Agreement to the extent permitted by Section 405(c)(1)(B) of
ERISA.
1.29 "Fund" means the funds and other assets held and administered by the
Trustee in accordance with the terms of the Trust Agreement.
1.30 "Highly Compensated Employee" means any active Employee who performed
services for the Employer or an Affiliated Employer during the
Determination Year and who:
(a) was a 5% owner (within the meaning of Section 416(i)(l)(B)(i) of
the Code at any time during the Determination Year or the
Look-Back Year; or
|
-6-
(b) received compensation from the Employer or an Affiliated Employer
in excess of $80,000 (as adjusted pursuant to 415(d) of the Code)
during the Look-Back Year, and was among the to 20% of Employees
when ranked on the basis of compensation paid during the Look-Back
Year.
The term Highly Compensated Employee shall also include any former Highly
Compensated Employee who terminated employment with the Employer or an
Affiliated Employer prior to the Determination Year, performs no services
for the Employer or an Affiliated Employer during the Determination Year,
and was a Highly Compensated Employee in either his or her year of
termination of employment or in any Determination Year ending on or after
his attainment of age 55.
For purposes of determining an Employee's compensation under this Section
1.30, compensation shall mean the "Employee's Compensation" (as defined
in Section 5.04(d)) reportable on Form W-2, plus all contributions made
on behalf of the Employee by the Employer or an Affiliated Employer
pursuant to a salary deferral agreement maintained by the Employer or an
Affiliated Employer under any cash or deferred arrangement described in
Section 401(k) of the Code or any salary reduction agreement pursuant to
a cafeteria plan established under Section 125 of the Code by the
Employer or Affiliated Employer, effective January 1, 2001, any amounts
deferred under Section 132(f)(4) of the Code.
For purposes of this Section, the "Look-Back Year" means the period of
the twelve consecutive months immediately preceding the Determination
Year. Also for purposes of this Section, "Determination Year" means the
Plan Year that is being tested for purposes of determining if an Employee
is a Highly Compensated Employee.
1.31 (a) "Hour of Service" means:
(i) Each hour for which an Employee is paid, or entitled to
payment, for the performance of duties for the Employer.
These hours will be credited to the Employee for the
Computation Period in which the duties are performed; and
-7-
(ii) Each hour for which an Employee is paid, or entitled to
payment, by the Employer on account of a period of time
during which no duties are performed (irrespective of
whether the employment relationship has terminated) due to
vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty or leave of
absence. Hours under this paragraph will be calculated and
credited pursuant to Section 2530.200b-2 of the Department
of Labor Regulations which is incorporated herein by this
reference; and
(iii) Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer.
The same Hours of Service will not be credited both under
paragraph (a) or paragraph (b) as the case may be, and
under this paragraph (c). These hours will be credited to
the Employee for the Computation Period or Periods to which
the award or agreement pertains rather than the Computation
Period in which the award, agreement or payment is made.
(b) Solely for purposes of determining whether a Break in Service, for
eligibility and vesting purposes has occurred in a Computation
Period, an individual who is absent from work for an authorized
leave of absence or for a maternity or paternity leave of absence
shall receive credit for the Hours of Service which would
otherwise have been credited to such individual but for such
absence. For purposes of this paragraph, an absence from work for
maternity or paternity leave of absence means an absence (1) by
reason of the pregnancy of the individual, (2) by reason of a
birth of a child of the individual, (3) by reason of the placement
of a child with the individual in connection with the adoption of
such child by such individual, or (4) for purposes of caring for
such child for a period beginning immediately following such birth
or placement. The Hours of Service credited under this paragraph
shall be credited (1) in the Computation Period in which the
absence begins if the crediting is necessary to prevent a Break in
Service in that period, or (2) in all other cases, in the
following Computation Period.
1.32 "Insurer" means any legal reserve life insurance company as elected by
the Committee which shall issue one or more insurance contracts under the
Plan.
1.33 "Key Employee" means any Employee or former Employee (and the
Beneficiaries of such Employee) who at any time during the determination
period was an officer of the employer if such individual's annual
Compensation exceeds fifty percent (50%) of the dollar limitation under
Section 415(b)(1)(A) of the Code, an owner (or considered an owner under
Section 318 of the Code) of one of the ten largest interests in the
Employer if such individual's Compensation exceeds one hundred percent
(100%) of the dollar
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limitation under Section 415(c)(1)(A) of the Code, a 5-percent owner of
the Employer, or a 1-percent owner of the Employer who has an annual
Compensation of more than $150,000. Annual Compensation means
Compensation as defined in Section 415(c)(3) of the Code, but including
amounts contributed by the Employer pursuant to a salary reduction
agreement which are excludable from the Employee's gross income under
Section 125, Section 402(a)(8), Section 402(h) or Section 403(b) of the
Code. The determination period is the Plan Year containing the
determination date and the four (4) preceding Plan Years. The
determination of who is a Key Employee will be made in accordance with
Section 416(i)(1) of the Code and the regulations thereunder.
1.34 "Month of Service" for purposes of eligibility, vesting and benefit
accrual means a calendar month any part of which is in a period of
employment or credited absence.
1.35 "Non-Highly Compensated Employees" means all Employees who are not Highly
Compensated Employees and shall be construed in accordance with the
provisions of Code Section 414(q) and the regulations thereunder.
1.36 "Non-Key Employees" means any Employee or former Employee (and any
Beneficiary of an Employee or former Employee) who is not a Key Employee.
1.37 "Normal Form of Retirement Benefits" means a pension payable for life
beginning as of the Participant's retirement date or, if later, the
income commencement date, but in the event of the Participant's death,
before receiving one hundred twenty (120) monthly payments, his pension
continues to his Beneficiary until the balance of the one hundred twenty
(120) monthly payments has been paid.
1.38 "Normal Retirement Age" means the date on which a Participant attains age
sixty-five (65), or, if later, the fifth anniversary of the date the
Employee became a Participant.
1.39 "Normal Retirement Date" is the date described in Plan Section 4.01.
1.40 "Participant" means any Eligible Employee who participates in the Plan as
provided in Article II and any other Employee or former Employee having a
right or contingent right to benefits hereunder. "Active Participant"
means an Eligible Employee who participates in the Plan and has not for
any reason become ineligible to participate further in the Plan.
1.41 "Period of Service" means a period of service of an Employee commencing
on his Employment Commencement Date or Reemployment Commencement Date,
whichever is applicable, and ending on his Severance From Service Date.
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1.42 "Period of Severance" means the period of time commencing on the
Severance From Service Date of an Employee and ending on the Reemployment
Commencement Date.
1.43 "Plan" means the Jameco Industries, Inc. Pension Plan established by the
Employer as contained herein and wherever necessary or appropriate,
includes the Plan as it was previously constituted prior to this
amendment.
1.44 "Plan Sponsor" prior to October 1, 1995 means Jameco Industries, Inc.
1.45 "Plan Year" means each twelve (12) consecutive month period commencing
with each October 1 and each anniversary thereafter.
1.46 "Qualified Domestic Relations Order" means a domestic relations order as
defined in Section 14.18 in accordance with Section 414(p) of the Code.
1.47 "Reemployment Commencement Date" means the first date, following a Period
of Severance on which the Employee performs an Hour of Service.
1.48 "Service" means the period of employment required for eligibility and
vesting under the Plan, determined as set forth in Articles II and III
hereof. Service will be determined on the basis of elapsed time.
1.49 "Severance From Service Date" means the date on which the continuous
accrual of Service and Credited Service is interrupted, as set forth in
Article III hereof.
1.50 "Spouse" means the person to whom the Participant has been legally
married as of the Participant's death or Annuity Starting Date, whichever
is earlier. The term "spouse" will also include a surviving spouse of the
Participant, provided that a former spouse will be treated as the spouse
or surviving spouse and a current spouse will not be treated as the
spouse or surviving spouse to the extent provided under a qualified
domestic relations order as described in Section 4.14(p) of the Code.
1.51 "Trust" means a trust established by the Employer in accordance with
Article X hereof.
1.52 "Trust Agreement" means an agreement made between the Employer and the
Trustee in Accordance with Article X hereof.
1.53 "Trustee" means a trustee or trustees of the Fund selected as provided in
Article X hereof, including any successor trustee or trustees.
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1.54 "Year of Service" for purposes of vesting and Credited Service means
twelve (12) Months of Service. For this purpose, if an Employee works one
(1) Hour of Service during a day, he will be credited with one (1) day of
Service.
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-11-
ARTICLE II
ELIGIBILITY
2.01 CONDITIONS OF ELIGIBILITY
(a) Prior to October 1, 1995, any Employee who was a Participant in
the Plan prior to the effective date of this amendment and
restatement shall continue to participate in the Plan. Any other
Eligible Employee shall participate in the Plan as of the Entry
Date next succeeding completion of six (6) Months of Service and
the attainment of age twenty and one-half (20 1/2), provided such
Employee completes one thousand (1,000) Hours of Service with the
Employer during any applicable Computation Period. If an Employee
has not satisfied the one thousand (1,000) Hours of Service
eligibility requirement when otherwise eligible, he shall become a
Participant as of the Entry Date next following the applicable
Computation Period during which he first completes one thousand
(1,000) Hours of Service with the Employer.
(b) Entry Date means the April 1 or October 1 next following the date
an Eligible Employee satisfies the eligibility requirements of
Section 2.01(a) of the Plan.
(c) Effective October 1, 1995, no new Participants shall be admitted
to participation under this Part B.
2.02 ELIGIBLE EMPLOYEE
"Eligible Employee" means any Employee except Employees whose employment
is governed by the terms of a collective bargaining agreement between
Employee representatives (within the meaning of Code Section 7701(1)(46))
and the Employer under which retirement benefits were the subject of good
faith bargaining between the parties, unless such agreement expressly
provides for such coverage in this Plan, will not be eligible to
participate in this Plan.
Employees of Affiliated Employers shall not be eligible to participate in
this Plan unless such Affiliated Employers have specifically adopted this
Plan in writing.
2.03 DETERMINATION OF ELIGIBILITY
The Committee shall determine the eligibility of each Employee for
participation in the Plan based upon information furnished by the
Employer. Such determination shall be
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conclusive and binding upon all persons, as long as the same is made
pursuant to this Article II.
2.04 TERMINATION OF ELIGIBILITY
(a) In the event a Participant shall go from a classification of an
Eligible Employee to an ineligible Employee, such Participant
shall continue to vest in his Accrued Benefit under the Plan for
each Year of Service completed while a noneligible Employee, until
such time as his Accrued Benefit shall be forfeited or distributed
pursuant to the terms of the Plan.
(b) In the event a Participant is no longer a member of an eligible
class of Employees and becomes ineligible to participate but has
not incurred a 1-Year Break in Service, such Employee will
participate again immediately upon returning to an eligible class
of Employees. If such Participant incurs a 1-Year Break in
Service, eligibility will be determined under the break in service
rules of this Article II.
(c) In the event an Employee who is not a member of an eligible class
of Employees becomes a member of an eligible class, such Employee
will participate immediately if such Employee has satisfied the
minimum age and service requirements and would have otherwise
previously become a Participant.
2.05 DETERMINATION OF SERVICE AND BREAK IN SERVICE FOR ELIGIBILITY
(a) Years of Service for eligibility shall be determined based on the
eligibility Computation Period. The initial eligibility
Computation Period shall be the 12-month period beginning on the
participant's date of hire. The succeeding 12-consecutive month
periods commence with the first Plan Year which commences prior to
the first anniversary of the Employee's employment commencement
date. Employment with an Affiliated Employer shall be recognized
as employment with the Employer for purposes of determining
Service for eligibility under the Plan.
(b) All Years of Service with the Employer and Affiliated Employers
shall be recognized for purposes of determining eligibility
hereunder except the following:
In the case of a Participant who does not have any nonforfeitable
right to his Accrued Benefit, Years of Service before a period of
consecutive 1-year Breaks in Service will not be taken into
account in computing eligibility service if the number of
consecutive 1-year Breaks in Service in such period equals or
exceeds the greater of five (5) or the aggregate number of Years
of Service. Such
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aggregate number of Years of Service will not include any Years of
Service disregarded under the preceding sentence by reason of
prior Breaks in Service.
If a Participant's Years of Service are disregarded pursuant to
the preceding paragraph, such Participant will be treated as a new
Employee for eligibility purposes. If a Participant's Years of
Service may not be disregarded pursuant to the preceding
paragraph, such Participant shall continue to participate in the
Plan, or, if terminated, shall participate immediately upon
reemployment.
Such Year of Service will be measured by the 12-month period
beginning on an Employee's reemployment commencement date and, if
necessary, Plan Years beginning with the Plan Year which includes
the first anniversary of the reemployment commencement date. The
reemployment commencement date is the first day on which the
Employee is credited with an Hour of Service for the performance
of duties after the first eligibility Computation Period in which
the Employee incurs a 1-year Break in Service.
(c) A Participant who terminates service and subsequently returns to
service as an Eligible Employee shall participate immediately upon
reemployment or again becoming an Eligible Employee.
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ARTICLE III
SERVICE, CREDITED SERVICE AND BREAKS IN SERVICE
FOR VESTING AND BENEFIT ACCRUAL
3.01 SERVICE FOR ELIGIBILITY
Service for purposes of eligibility to participate is described in
Article II of the Plan.
3.02 VESTING SERVICE
The Service of an Employee shall be the aggregate of his Periods of
Service, as of the date benefits are to be determined under any of the
provisions of the Plan. Periods of Service shall be expressed in terms of
years and months and, in determining the total aggregate years, any
fraction in excess of complete years shall be determined on the basis of
the number of remaining Months of Service. Employment with an Affiliated
Employer shall be recognized as employment with the Employer for purposes
of determining Service for vesting and eligibility under the Plan.
3.03 SEVERANCE FROM SERVICE DATE
A Severance From Service Date shall be deemed to occur on the earlier of:
(a) the date on which the Employee quits, retires, is discharged or dies;
or (b) the first anniversary of the first date of a period in which the
Employee remains absent from service (with or without pay) with the
Employer for any reason other than quit, retirement, discharge or death.
3.04 ADDITIONAL SERVICE ALLOWANCE
If an Employee performs an Hour of Service within twelve (12) months of
the Severance From Service Date, the Period of Severance shall be
included as a Period of Service for purposes of determining years of
Service under any of the provisions of the Plan.
3.05 CREDITED SERVICE
"Credited Service" of a Participant, as of the date the benefits are to
be determined under the Plan, shall include all Periods of Service with
the Employer. Service performed for Continental Brass Products, Corp.,
Universal Plumbing Sales Corp., Jamaica Manufacturing Co., Inc., Lipmans
Imports, Inc. or Jamaica International, Inc. shall be counted as Credited
Service for purposes of the Plan.
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3.06 SERVICE IN THE ARMED FORCES
Any Employee who left active employment of the Employer to enter the
Armed Forces of the United States, and whose reemployment rights are
protected by Federal law, shall receive the Service and Credited Service
for the period of his Military Service, that he would have earned had he
instead continued his prior employment with the Employer, provided that
the Employee returns to work in compliance with any requirements of such
law.
3.07 MILITARY SERVICE
Notwithstanding any provision of this Plan to the contrary,
contributions, benefits and service credit with respect to military
service will be provided in accordance with Section 414(u) of the Code.
3.08 PRE-ERISA SERVICE
Prior to October 1, 1976, the uninterrupted period of employment with the
Employer and with Continental Brass Products, Corp., Universal Plumbing
Sales Corp., Jamaica Manufacturing Co., Inc., Lipmans Imports, Inc. or
Jamaica International, Inc. as determined under the provisions of the
Plan in effect before such date shall be counted for Service and Credited
Service under the Plan.
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ARTICLE IV
RETIREMENT CONDITIONS
4.01 NORMAL RETIREMENT
The Normal Retirement Date of a Participant shall be the first day of the
month coinciding with or next following the date he attains Normal
Retirement Age.
4.02 DELAYED RETIREMENT
If a Participant shall remain in employment beyond his Normal Retirement
Date, his Delayed Retirement Date shall be the first day of the month
coinciding with or next following the date such Participant notifies the
Employer that his retirement is to be effective. A Participant who
remains in employment beyond his Normal Retirement Date shall be deemed
to have retired on the first day of the first month in which he completes
less than forty (40) Hours of Service.
4.03 EARLY RETIREMENT
(a) A Participant may retire from the employment of the Employer prior
to his Normal Retirement Date on his Early Retirement Date, which
is the first day of any month coinciding with or following the
date he both attains the age of sixty (60) and completes
twenty-five (25) Years of Service and elects to retire. A
Participant may further elect to have his retirement benefit
commence on his Early Retirement Date or may irrevocably elect to
defer commencement of his benefit to his Normal Retirement Date.
(b) If a Participant separates from service before satisfying the age
requirement for early retirement, but has satisfied the service
requirement, the Participant will be entitled to elect
commencement of his retirement benefit upon satisfaction of such
age requirement.
4.04 DISABILITY RETIREMENT
Upon demonstration of a Participant's Disability, the Participant shall
automatically become fully vested and be eligible for disability
retirement under Section 9.06.
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4.05 SPECIAL RULES UPON DISABILITY RETIREMENT
(a) As a condition of his continuing to receive Disability retirement
income, the Committee shall have the right to require a
Participant to provide such evidence as it considers appropriate
for verifying his continued eligibility for disability insurance
benefit payments under the Social Security Act.
(b) The Committee shall require evidence that the application for such
benefits has been approved by the Social Security Administrator.
The final determination shall be made by the Committee on the
basis of such evidence.
(c) Upon the cessation of the Participant's Disability, he shall not
be entitled to further benefits as the result of such Disability
and he shall only be entitled to such other benefits as may be
provided under the terms of the Plan for which he was eligible as
of his Disability Retirement Date reduced in accordance with
Section 14.14. If such Participant is reemployed by the Employer
following the cessation of his Disability, he shall resume the
classification of an Eligible Employee and future benefits payable
on his subsequent termination of employment will be reduced in
accordance with Section 14.14. The Participant shall remain 100%
vested in the Accrued Benefit determined as of his Disability
Retirement Date, but his vested interest with respect to
additional accruals will be determined in accordance with Article
IX.
(d) If a Participant eligible for Disability Retirement is eligible
for Early Retirement, he may, in lieu of the Disability Retirement
benefit payable under this Section, elect to receive the benefit
applicable under Section 9.02 or the Early Retirement benefit.
4.06 CONTINUATION OF BENEFITS UPON REEMPLOYMENT
If, after a Participant begins receiving benefits under this Plan, he
then re-enters employment hereunder, his monthly benefit payments shall
continue unreduced. Upon subsequent termination of employment, his
benefit amount shall be recalculated on the basis of his Average Monthly
Compensation determined as of his subsequent retirement date and his
Credited Service earned prior and subsequent to his re-employment
hereunder, reduced by the actuarial value of the payments previously
made, but in no event less than the benefit amount paid prior to his
reemployment.
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4.07 COMMENCEMENT OF BENEFITS
Unless the Participant elects otherwise, distribution of benefits will
begin no later than the 60th day after the latest of the close of the
Plan Year in which:
(a) the Participant attains age sixty-five (65) (or Normal Retirement
Age, if earlier);
(b) occurs the tenth (10th) anniversary of the year in which the
Participant commenced participation in the Plan; or
(c) the Participant terminates service with the Employer.
Notwithstanding the foregoing, the failure of a Participant and Spouse to
consent to a distribution while a benefit is immediately distributable,
within the meaning of Section 9.05 of the Plan, shall be deemed to be an
election to defer commencement of payment of any benefit sufficient to
satisfy this Section.
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ARTICLE V
RETIREMENT BENEFITS
5.01 NORMAL RETIREMENT BENEFIT
(a) Upon retirement at his Normal Retirement Date, a Participant shall
receive a monthly retirement benefit which shall commence on such
date and which shall be payable under the Normal Form of
Retirement Benefit defined in Section 1.37 of the Plan. The amount
of each such monthly retirement benefit shall be equal to the sum
of (i) plus (ii) as follows:
(i) .375% of Average Monthly Compensation for each year of
Credited Service,
(ii) .25% of Average Monthly Compensation in excess of Covered
Compensation for each year of Credited Service.
(b) A Participant who remains in employment after his Normal
Retirement Date may elect to commence payment of his retirement
benefit during employment on the first day of any month coincident
with or following his Normal Retirement Date. The amount of such
monthly retirement benefit shall be determined in the same manner
as for retirement at Normal Retirement Date except that Years of
Credited Service and Average Monthly Compensation shall be
determined as of the date of his actual retirement. However, the
benefit described in the preceding sentence shall be recalculated
as of the first payment date each year thereafter to reflect
changes in Credited Service and Average Monthly Compensation. In
no event shall the retirement benefit payable be less than the
benefit being paid prior to such recalculations. Solely for
purposes of Article VI, upon such commencement of his retirement
benefit, he shall be treated as a retired Participant.
5.02 DELAYED RETIREMENT BENEFIT
If a Participant does not retire on his Normal Retirement Date and does
not elect to commence his benefits while employed, the Committee shall
establish an account and maintain a separate accounting in the name of
the Participant as of the first day of the
Plan Year following the Plan Year in which the Participant's Normal
Retirement Date occurred. The Participant's account value as of such date
shall be the Actuarial Equivalent of the Participant's Normal Form of
Retirement Income as of such date.
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(a) All such accounts shall be invested either (i) as part of the
Trust Fund and shall not be segregated or invested as a separate
unit; or (ii) if the Committee, with the approval of the Trustee
determines, as part of a segregated fixed income fund, which shall
consist of such assets as the Trustee deems appropriate. If
implemented, all such separate accounts shall be invested and
administered as a unit. The Committee shall promulgate whatever
regulations it deems appropriate with respect to the
implementation. of such fixed income fund.
(b) The Trust Fund (including the fixed income fund, if implemented)
shall be valued at fair market value on the last day of each Plan
Year and all accounts shall be adjusted as of such date to reflect
a proportionate share of investment income and realized and
unrealized profits and losses as applicable under either
Subparagraph (a)(i) or (a)(ii).
(c) The benefits to which the Participant will be entitled upon his
subsequent retirement, or, in the event of the Participant's
death, the benefits to which the Beneficiary would be entitled,
will normally be determined as of the last day of the Plan Year
during which the Participant's employment terminated. Such
benefits may, however, be determined by the Committee,
(i) as of any other date, in which event the Committee shall
authorize the Trustee to value such Participant's account
as of such date; or
(ii) as of the last day of the Plan Year before the
Participant's termination of employment, but such
determination by the Committee may only be exercised with
the written consent of the Participant or, in the event of
the Participant's death, his Beneficiary. In determining
such benefits, the Committee must also consider changes in
the market value of the Trust Fund.
(d) Subject to the provisions of Section 5.04, the Participant, or in
the event of the Participant's death, his Beneficiary, shall be
entitled to such retirement income (under the Normal Form of
Retirement Benefit or such other options as provided under Article
VII) as may be Actuarially Equivalent to such Participant's
account value. Notwithstanding the above, in no event shall the
Normal Form of Retirement Benefit provided under these provisions
be less than the greater of 1) the Actuarial Equivalent of the
Participant's Normal Form of Retirement Benefit determined as of
the date such benefit was segregated or 2) the Participant's
benefit determined based on his years of Credited Service and
Average Monthly Compensation as of his Delayed Retirement Date.
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5.03 EARLY RETIREMENT BENEFIT
A Participant shall, upon retirement on Early Retirement Date, receive
the Actuarial Equivalent of his Accrued Benefit which shall commence on
the date elected in accordance with Section 4.03 and shall be payable
under the Normal Form of Retirement Benefit. The amount of such monthly
retirement benefit shall, subject to the provisions of Section 5.04
hereof, be determined in the same manner as for retirement at his Normal
Retirement Date, except that years of Credited Service and Average
Monthly Compensation shall be determined as of his Early Retirement Date.
The benefit shall be reduced based on the number of months by which the
Participant's early retirement precedes his Normal Retirement Date using
the factors in Section 1.02.
5.04 MAXIMUM RETIREMENT BENEFIT
The definition of certain words and phrases used in this Section 5.04 are
contained in Section 5.04(d) and shall, for purposes of this Section
5.04, supersede definitions for such words and phrases contained in
Article I. Defined terms are capitalized.
(a) This Section, except for Section (a)(ii), applies regardless of
whether any Participant is or has ever been a Participant in
another qualified plan maintained by the Employer. If any
Participant is or has ever been a Participant in another qualified
plan maintained by the Employer, or a welfare benefit fund, as
defined in Section 419(e) of the Code, maintained by the Employer,
or an individual medical account, as defined in Section 415(1)(2)
of the Code, which provides an Annual Addition, Section 5.04(b) is
also applicable to that Participant's benefits.
(i) The Annual Benefit otherwise payable to a Participant at
any time will not exceed the Maximum Permissible Amount. If
the benefit the Participant would Otherwise accrue in a
Limitation Year would produce an annual benefit in excess
of the Maximum Permissible Amount, the rate of accrual will
be reduced so that the annual benefit will equal the
Maximum Permissible Amount.
(ii) The Maximum Permissible Amount limitation is deemed
satisfied if the Annual Benefit payable to a Participant is
not more than $1,000 multiplied by the Participant's number
of Years of Service or portions thereof (not to exceed ten
(10)) with the Employer, and the Employer has not at any
time maintained a defined contribution plan, a welfare
benefit plan as defined in Section 419(e) of the Code, or
an individual medical account as defined in Section
415(1)(2) of the Code in which such Participant
participated.
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(b) (i) If a Participant is, or has ever been, covered under more
than one defined benefit plan maintained by the Employer,
the sum of the Participant's Annual Benefits from all such
plans may not exceed the Maximum Permissible Amount.
(ii) If the Employer maintains, or at any time maintained, one
or more qualified defined contribution plans covering any
Participant in this Plan, a welfare benefit fund, as
defined in Section 419(e) of the Code, or an individual
medical account as defined in Section 415(1)(2) of the
Code, the sum of the Participant's Defined Contribution
Fraction and Defined Benefit Fraction will not exceed 1.0
in any limitation year.
(iii) If in any Plan Year the sum of the Defined Benefit Fraction
and the Defined Contribution Fraction shall exceed 1.0 with
respect to any Participant, the Employer shall reduce any
contribution to the defined contribution plan on behalf of
such Participant to the extent necessary to lower the
numerator of the Defined Contribution Fraction so that the
sum of both fractions does not exceed 1.0.
(iv) Effective January 1, 2000, the provisions of this
subsection (b) shall no longer be applicable.
(c) In the case of an individual who was a Participant in one or more
defined benefit plans of the Employer as of the first day of the
first Limitation Year beginning after December 31, 1986, the
application of the limitations of this Article V shall not cause
the Maximum Permissible Amount for such individual under all such
defined benefit plans to be less than the individual's current
Accrued Benefit. The preceding sentence applies only if such
defined benefit plans met the requirements of Code Section 415,
for all Limitation Years beginning before January 1, 1987.
For this purpose, a Participant's Accrued Benefit under the Plan,
shall be determined as if the Participant had separated from
service as of the close of the last Limitation Year beginning
before January 1, 1987, expressed as an Annual Benefit within the
meaning of Section 415(b)(2) of the Code.
In determining the amount of a Participant's current Accrued
Benefit, the following shall be disregarded:
(i) any change in the terms and conditions of the Plan after
May 5,1986; and
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(ii) any cost of living adjustments occurring after May 5, 1986.
(d) DEFINITIONS.
(i) ANNUAL ADDITIONS: The sum of the following amounts credited
to a Participant's account for limitation year:
(A) Employer contributions;
(B) Employee contributions;
(C) Forfeitures, and
(D) Amounts allocated to an individual medical account,
as defined in Section 415(1)(2) of the Code, which
is part of a pension or annuity plan maintained by
the Employer are treated as Annual Additions to a
defined contribution plan. Also, amounts derived
from contributions paid or accrued after December
31, 1985, in taxable years ending after such date,
which are attributable to post-retirement medical
benefits allocated to the separate account of a Key
Employee, as defined in Section 419A(d)(3) of the
Code, under a welfare benefit fund, as defined in
Section 419(e) of the Code, maintained by the
Employer, are treated as Annual Additions to a
defined contribution plan.
(ii) ANNUAL BENEFIT: A retirement benefit under the Plan which
is payable annually in the form of a straight life annuity.
Except as provided below, a benefit payable in a form other
than a straight life annuity must be adjusted to an
actuarially equivalent straight life annuity before
applying the limitations of this Section 5.04. Effective
for Limitation Years beginning on or after January 1, 1995
the interest rate assumption used to determine actuarial
equivalence will be determined using the assumptions set
forth in Section 1.02(b) or an interest rate of 5% and the
mortality table specified in Section 417(e)(3) of the Code,
whichever produces the larger straight life annuity; and in
the event the benefit is payable in a lump sum the 5%
interest rate will be replaced by the rate on 30-year
Treasury Constant Maturities for the month of November
prior to the Plan Year of distribution. The Annual Benefit
does not include any benefits attributable to Employee
contributions or rollover contributions, or the assets
transferred from a qualified plan that was not maintained
by the Employer. No actuarial adjustment to the benefit is
required for (a) the value of a
-24-
qualified joint and survivor annuity, (b) the value of
benefits that are not directly related to retirement
benefits (such as the qualified disability benefit,
pre-retirement death benefits, and post-retirement medical
benefits), and (c) the value of post-retirement
cost-of-living increases made in accordance with Section
415(d) of the Code and Section 1.415-3(c)(2)(iii) of the
Federal Income Tax Regulations.
(iii) COMPENSATION: A Participant's earned income, wages,
salaries, and fees for professional services, and other
amounts received for personal services actually rendered in
the course of employment with the Employer maintaining the
Plan (including, but not limited to, commissions paid
salesmen, compensation for services on the basis of a
percentage of profits, commissions on insurance premiums,
tips and bonuses), and excluding the following:
(A) Employer contributions to a plan of deferred
compensation which are not included in the
Employee's gross income for the taxable year in
which contributed, or any distributions from a plan
of deferred compensation;
(B) Amounts realized from the exercise of a nonqualified
stock option, or when restricted stock (or property)
held by the Employee either becomes freely
transferable or is no longer subject to a
substantial risk of forfeiture;
(C) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified
stock option; and
(D) Effective for limitation years beginning after
December 31, 1997, earnings shall include (i) any
elective deferral as defined in Code Section
402(g)(3), and (ii) any amount which is contributed
or deferred by the Employee at the election of the
employee and which is not includible in the gross
income of the employee by reason of Code Section
125, or, effective January 1, 2001, any amounts not
includible in the gross income of the employee by
reason of Section 132(f)(4) of the Code.
Compensation for any limitation year is the compensation
actually paid or includible in gross income during such
year.
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(iv) DEFINED BENEFIT DOLLAR LIMITATION: $90,000. Effective on
January 1, 1988, and each January thereafter, the $90,000
limitation above will be automatically adjusted by
multiplying such limit by the cost. of living adjustment
factor prescribed by the Secretary of the Treasury under
Section 415(d) of the Code in such manner as the Secretary
shall prescribe. The new limitation will apply to
Limitation Years ending within the calendar year of the
date of the adjustment.
(v) DEFINED BENEFIT FRACTION: A fraction, the numerator of
which is the sum of the Participant's projected Annual
Benefits under all the defined benefit plans (whether or
not terminated) maintained by the Employer, and the
denominator of which is the lesser of one hundred
twenty-five percent (125%) of the dollar limitation
determined for the Limitation Year under Sections 415(b)
and (d) of the Code and in accordance with Section
5.04(d)(x)(B) below or one hundred forty percent (140%) of
the Participant's Highest Average Compensation, including
any adjustments under Section 415(b) of the Code.
Notwithstanding the above, if the Participant was a
Participant as of the first day of the first Limitation
Year beginning after December 31, 1986, in one or more
defined benefit plans maintained by the Employer which were
in existence on May 6, 1986, the denominator of this
fraction will not be less than one hundred twenty-five
percent (125%) of the sum of the Annual Benefits under such
plans which the Participant had accrued as of the close of
the last Limitation Year beginning before January 1, 1987,
disregarding any changes in the terms and conditions of the
Plans after May 5,1986. The preceding sentence applies only
if the defined benefit plans individually and in the
aggregate satisfied the requirements of Code Section 415
for all Limitation Years beginning before January 1, 1987.
Effective January 1, 2000, the provisions of this
subsection (v) shall no longer be applicable.
(vi) DEFINED CONTRIBUTION FRACTION: A fraction, the numerator of
which is the sum of the Annual Additions to the
Participant's account under all the defined contribution
plans (whether or not terminated) maintained by the
Employer for the current and all prior Limitation Years,
(including the annual additions attributable to the
Participant's nondeductible Employee contributions to this
and all other defined benefit plans, (whether or not
terminated) maintained by the Employer, and the Annual
Additions attributable to all welfare benefit funds, as
defined in Section 419(e) of the
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Code or individual medical accounts, as defined in Section
415(1)(2) of the Code, maintained by the Employer), and the
denominator of which is the sum of the Maximum Aggregate
Amounts for the current and all prior Limitation Years of
service with the Employer (regardless of whether a defined
contribution plan was maintained by the Employer).
The Maximum Aggregate Amount in any Limitation Year is the
lesser of one hundred twenty-five percent (125 %) of the
dollar limitation in effect under Section 415(c)(1)(A) of
the Code or thirty-five percent (35%) of the Participant's
Compensation for such year.
The Annual Addition for any limitation year beginning
before January 1, 1987, shall not be recomputed to treat
all Employee contributions as Annual Additions.
Effective January 1, 2000, the provisions of this
subsection (vi) shall no longer be applicable.
(vii) EMPLOYER: For purposes of this Article, Employer shall mean
the Employer that adopts this Plan, and all members of a
controlled group of corporations (as defined in Section
414(b) of the Code, as modified by Section 415(h)), all
commonly controlled trades or businesses (as defined in
Section 414(c) as modified by Section 415(h)), or
affiliated service groups (as defined in Section 414(m)) of
which the adopting Employer is a part, and any other entity
required to be aggregated with the Employer pursuant to
regulations under Section 414(o) of the Code.
(viii) HIGHEST AVERAGE COMPENSATION: The average compensation for
the three consecutive Years of Service with the Employer
that produces the highest average.
(ix) LIMITATION YEAR: The Plan Year.
(x) MAXIMUM PERMISSIBLE AMOUNT:
(A) The lesser of the Defined Benefit Dollar Limitation
or one hundred percent (100%) of the Participant's
Highest Average Compensation.
(B) If the Participant has less than ten (10) years of
participation with the Employer, the Defined Benefit
Dollar Limitation is reduced by
-27-
one-tenth (1/10) for each year of participation (or
part thereof) less than ten (10).
To the extent provided in regulations or in other
guidance issued by the Internal Revenue Service, the
preceding sentence shall be applied separately with
respect to each change in the benefit structure of
the Plan. If the Participant has less than ten (10)
Years of Credited Service with the Employer, the
Compensation limitation is reduced by one-tenth
(1/10) for each Year of Credited Service (or part
thereof) less than ten (10). The adjustments of this
Section (B) shall be applied in the denominator of
the Defined Benefit Fraction based upon Years of
Service. Years of Service shall include future years
occurring before the Participant's Normal Retirement
Age. Such future years shall include the year which
contains the date the Participant reaches Normal
Retirement Age, only if it can be reasonably
anticipated that the Participant will receive a Year
of Credited Service for such year.
(C) If the annual benefit of the Participant commences
before the Participant's Social Security Retirement
Age, but on or after age sixty-two (62), the Defined
Benefit Dollar Limitation as reduced above, if
necessary, shall be determined as follows:
(1) If a Participant's Social Security Retirement
Age is sixty-five (65), the dollar limitation
for benefits commencing on or after age
sixty-two (62) is determined by reducing the
Defined Benefit Dollar Limitation by five
ninths (5/9) of one percent (1%) for each
month by which benefits commence before the
month in which the participant attains age
sixty-five (65).
(2) If a Participant's Social Security Retirement
Age is greater than sixty-five (65), the
dollar limitation for benefits commencing on
or after age sixty-two (62) is determined by
reducing the Defined Benefit Dollar
Limitation by five ninths (5/9) of one
percent (1%) for each of the first thirty-six
(36) months and five twelfths (5/12) of one
percent (1 %) for each of the additional
months (up to twenty-four (24) months) by
which benefits commence before the month of
the Participant's Social Security Retirement
Age.
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(D) If the Annual Benefit of a Participant commences
prior to age sixty-two (62), the Defined Benefit
Dollar Limitation shall be the actuarial equivalent
of an Annual Benefit beginning at age sixty-two
(62), as determined above, reduced for each month by
which benefits commence before the month in which
the Participant attains age sixty-two (62).
Effective for Limitation Years beginning on or after
January 1, 1995, to determine actuarial equivalence,
the assumption specified in Section 1.02(c) or an
interest rate of 5% per annum and the mortality
table specified in Code Section 417(e)(3), whichever
produces the larger reduction in the Defined Benefit
Dollar Limitation shall be used.
(E) If the Annual Benefit of a Participant commences
after the Participant's Social Security Retirement
Age, the Defined Benefit Dollar Limitation, as
reduced in (B) above, if necessary, shall be
adjusted so that it is the actuarial equivalent of
an Annual Benefit of such dollar limitation
beginning at the Participant's Social Security
Retirement Age. Effective for Limitation Years
beginning on or after January 1, 1995, to determine
actuarial equivalence, the assumption set forth in
Section 1.02(d) or an interest rate of 5% and the
mortality table specified in Code Section 417(e)(3)
whichever produces the smaller increase in the
Defined Benefit Dollar Limitation shall be used.
(xi) PROJECTED ANNUAL BENEFIT: The Annual Benefit as defined in
Section (d)(ii), to which the Participant would be entitled
under the terms of the Plan assuming:
(A) The Participant will continue employment until
Normal Retirement Age under the Plan (or current
age, if later), and
(B) the Participant's Compensation for the current
Limitation Year and all other relevant factors used
to determine benefits under the Plan will remain
constant for all future Limitation Years.
(xii) SOCIAL SECURITY RETIREMENT AGE: Age sixty-five (65) in the
case of a Participant attaining age sixty-two (62) before
January 1, 2000 (i.e., born before January 1, 1938), age
sixty-six (66) for a Participant attaining age sixty-two
(62) after December 31, 1999, and before January 1, 2017
(i.e., born after December 31, 1937, but before January 1,
1955), and age sixty-
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seven (67) for a Participant attaining age sixty-two (62)
after December 31, 2016 (i.e., born after December 31,
1954).
(xiii) YEAR OF PARTICIPATION: The Participant shall be credited
with a Year of Participation (computed to fractional parts
of a- year) for each accrual Computation Period for which
the following conditions are met: (1) The Participant is
credited with a Period of Service for benefit accrual
purposes, required under the terms of the Plan in order to
accrue a benefit for the accrual Computation Period, and
(2) the Participant is included as a Participant under the
eligibility provisions of the Plan for at least one (1) day
of the accrual Computation Period. If these two conditions
are met, the portion of a Year of Participation credited to
the Participant shall equal the amount of benefit accrual
service credited to the Participant for such accrual
Computation Period. A Participant who is permanently and
totally disabled within the meaning of Plan Section 9.06
for an accrual Computation Period shall receive a Year of
Participation with respect to that period. In addition, for
a Participant to receive a Year of Participation (or part
thereof) for an accrual Computation Period, the Plan must
be established no later than the last day of such accrual
Computation Period. In no event will more than one Year of
Participation be credited for any 12-month period.
5.05 REQUIRED BENEFIT COMMENCEMENT
Notwithstanding the Delayed Retirement provisions above, each Participant
who remains employed beyond his Required Beginning Date (as defined in
Article VIII), must begin to receive the minimum distributions required
under Article VIII. Such Participant's benefit shall be recalculated for
each calendar year following the initial required distribution on the
basis of his Average Monthly Compensation and Credited Service as of each
January 1, but in no event less than the benefit amount paid prior to the
recalculation.
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ARTICLE VI
JOINT AND SURVIVOR AND PRERETIREMENT DEATH BENEFITS
6.01 AUTOMATIC JOINT AND SURVIVOR ANNUITY
(a) Unless an optional form of benefit is selected, as described in Article
VII, pursuant to a qualified election described in Section 6.02, within
the 90-day period ending on the Annuity Starting Date, a married
Participant's vested Accrued Benefit will be paid in the form of an
automatic joint and survivor annuity and an unmarried Participant's
vested Accrued Benefit will be paid in the form of an immediate life
annuity with 120 monthly payments certain. The Participant may elect to
have such annuity distributed upon attainment of the earliest retirement
age under the Plan.
(b) An "automatic joint and survivor annuity" is an immediate non
transferable annuity for the life of the Participant with a survivor
annuity for the life of the Spouse which is fifty percent (50%) of the
amount of the annuity which is payable during the joint lives of the
Participant and the Spouse and which is the Actuarial Equivalent of the
Normal Form of Retirement Benefit.
(c) A Participant's "earliest retirement age" is the earliest date on which,
under the Plan, the Participant could elect to receive retirement
benefits.
6.02 QUALIFIED ELECTION
A Participant may waive the automatic joint and survivor annuity
|
described in Section 6.01 only if:
(a) the Participant's Spouse consents in writing to the election;
(b) with the exception of a life annuity the election designates a
specific alternate Beneficiary, including any class of
Beneficiaries or any contingent Beneficiaries, which may not be
changed without spousal consent, or the Spouse expressly permits
designations by the Participant without any further spousal
consent;
(c) the Spouse's consent acknowledges the effect of the election; and
(d) the Spouse's consent is witnessed by a plan representative or
notary public. Additionally, a Participant's waiver of the
qualified joint and survivor annuity will not be effective unless
the election designates a form of benefit payment
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which may not be changed without spousal consent, or the spouse
expressly permits designations by the participant without any
further spousal consent.
If it is established to the satisfaction of the Committee that
such written consent may not be obtained because there is no
Spouse or the Spouse cannot be located, a waiver will be deemed a
qualified election.
Any consent by a Spouse obtained under this provision (or
establishment that the consent of a Spouse may not be obtained)
shall be effective only with respect to such Spouse. A consent
that permits designations by the Participant without any
requirement of further consent by such Spouse must acknowledge
that the Spouse has the right to limit consent to a specific
Beneficiary, and a specific form of benefit where applicable, and
that the Spouse voluntarily elects to relinquish either or both of
such rights. A revocation of a prior waiver may be made by a
Participant without the consent of the Spouse at any time prior to
the commencement of benefits. The number of revocations shall not
be limited. No consent obtained under this provision shall be
valid unless the Participant has received notice as provided in
subsection (e) below.
(e) The Committee shall provide each Participant, no less than thirty
(30) days and no more than ninety (90) days prior to the payment
commencement date, a written explanation of:
(i) the terms and conditions of an automatic joint and survivor
annuity;
(ii) the Participant's right to make and the effect of an
election to waive the automatic joint and survivor annuity
form of benefit;
(iii) the rights of a Participant's Spouse;
(iv) the right to make, and the effect of, a revocation of a
previous election to waive the automatic joint and survivor
annuity; and
(iv) the relative values of the various optional forms of
benefit under the Plan.
The benefit commencement date for a distribution in a form other
than a Qualified Joint and Survivor Annuity may be less than 30
days after receipt of the written explanation of the Qualified
Joint and Survivor Annuity, provided: (i) the Participant has been
provided with information that clearly indicates that the employee
has at least 30 days to consider whether to waive the Qualified
Joint and Survivor Annuity and elect (with spousal consent) to a
form of distribution
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other than a Qualified Joint and Survivor Annuity; (ii) the
Participant is permitted to revoke any affirmative distribution
election at least until the benefit commencement date or, if
later, at any time prior to the expiration of the 7-day period
that begins the day after the explanation of the Qualified Joint
and Survivor Annuity is provided to the Participant; and (iii) the
benefit commencement date is a date after the date the written
explanation was provided to the Participant.
6.03 QUALIFIED PRERETIREMENT SURVIVOR ANNUITY
(a) If a vested Participant dies after the earliest retirement age,
but prior to the Annuity Starting Date, such Participant's
surviving Spouse, if any, will receive the same benefit that would
be payable if the Participant had retired with an immediate
automatic joint and survivor annuity, as defined in Section
6.01(b), payable on the day before such Participant's death.
(b) The surviving Spouse may elect to commence payment under such
annuity on the first day of any month after the Participant's
death. The actuarial value of benefits which commence later than
the date on which payments would have been made to the surviving
Spouse under an automatic joint and survivor annuity commencing at
the Participant's earliest retirement age under the Plan in
accordance with this provision shall be adjusted to reflect the
delayed payment.
(c) If a vested Participant dies on or before the earliest retirement
age, the Participant's surviving Spouse (if any) will receive the
same benefit that would be payable if the Participant had:
(i) separated from service on the date of death (or date of
separation from service, if earlier),
(ii) survived to the earliest retirement age,
(iii) retired with an immediate qualified joint and survivor
annuity at the earliest retirement age, and
(iv) died on the day after the earliest retirement age.
(d) Subject to the provisions of Section 8.04 of the Plan, a surviving
Spouse will begin to receive payments at the Participant's
earliest retirement age. Benefits commencing after the
Participant's earliest retirement age will be the Actuarial
Equivalent of the benefit to which the surviving Spouse would have
been entitled
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if benefits had commenced at the earliest retirement age under an
immediate automatic joint and survivor annuity.
(e) Before the commencement of a retirement benefit, upon the death of
(i) a Vested Participant subsequent to termination of employment
(ii) a Retired Participant who had elected to defer the
commencement of his retirement benefit, or (iii) a Participant for
whom the commencement of benefits had been deferred, an automatic
joint and survivor annuity with 50% of such annuity continued to
his Spouse commencing on the earliest commencement date. In no
event shall the benefit provided to the Spouse be . benefit which
may be provided from the applicable portion of e accumulation
value under a deferred annuity payable upon the Participant's
death before the commencement of a retirement benefit. For Retired
Participants in accordance with Subsection (ii) above, the
applicable portion shall be 100% of the accumulation value and for
Participants in accordance with Subsection (i) and (iii) above,
50% of the accumulation value.
In lieu of the benefits described in the above paragraph, the
Participant may elect to provide for the payment of the portion of
the accumulation value under the deferred annuity payable upon
death to any designated Beneficiary, provided the Participant's
Spouse consents to such election. In the absence of a surviving
Spouse or designated Beneficiary, the death benefit shall be paid
to the Participant's estate. In the event of the Participant's
death before the purchase of the annuity contract, benefits will
be provided as if the annuity had been purchased on the day before
the Participant's death.
6.04 QUALIFIED ELECTION
(a) A Participant may waive the 100% joint and survivor annuity with
his Spouse as Beneficiary in accordance Section 6.03(e) only if:
(i) the Participant's Spouse consents in writing to the
election;
(ii) the election designates a specific alternate Beneficiary,
including any class of Beneficiaries or any contingent
Beneficiaries, which may not be changed without spousal
consent, or the Spouse expressly permits designations by
the Participant without any further spousal consent;
(iii) the Spouse's consent acknowledges the effect of the
election; and
(iv) the Spouse's consent is witnessed by a plan representative
or notary public.
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If it is established to the satisfaction of the Committee that
such written consent may not be obtained because there is no
Spouse or the Spouse cannot be located, a waiver will be deemed a
qualified election. Any consent by a Spouse obtained under this
provision (or establishment that the consent of a Spouse may not
be obtained) shall be effective only with respect to such Spouse.
A consent that permits designations by the Participant without any
requirement of further consent by such Spouse must acknowledge
that the Spouse has the right to limit consent to a specific
Beneficiary, and a specific form of benefit where applicable, and
that the Spouse voluntarily elects to relinquish either or both of
such rights. A revocation of a prior waiver may be made by a
Participant without the consent of the Spouse at any time prior to
the commencement of benefits. The number of revocations shall not
be limited. No consent obtained under this provision shall be
valid unless the Participant has received notice as provided in
6.05 below.
6.05 NOTICE REQUIREMENTS
The Committee shall provide each Participant within the applicable period
for such Participant, a written explanation of the qualified
preretirement survivor annuity in such terms and in such a manner as
would be comparable to the explanation provided for meeting the
requirements applicable to an automatic joint and survivor annuity in
Section 6.02(e). The applicable period for a Participant is whichever of
the following periods ends last:
(a) the period beginning with the first day of the Plan Year in which
the Participant attains age thirty-two (32) and ending with the
close of the Plan Year preceding the Plan Year in which the
Participant attains age thirty-five (35);
(b) a reasonable period ending after the individual becomes a
Participant;
(c) a reasonable period ending after this Article first applies to the
Participant.
Notwithstanding the foregoing, notice must be provided within a
reasonable period ending after separation of service in case of a
Participant who separates from service before attaining age thirty-five
(35).
For purposes of the preceding paragraph, a reasonable period ending after
the enumerated events described in (b) and (c) is the end of the two (2)
year period beginning one (1) year prior to the date the applicable event
occurs and ending one (1) year after that date. In the case of a
Participant who separates from service before the Plan Year in which age
thirty-five (35) is attained, notice shall be provided within the two (2)
year period
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|
beginning one (1) year prior to separation and ending one (1) year after
separation. If such a Participant thereafter returns to employment with
the Employer, the applicable period for such Participant shall be
redetermined.
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ARTICLE VII
OPTIONAL METHODS OF RETIREMENT PAYMENTS
7.01 OPTIONAL ELECTIONS
Each vested Participant whose Accrued Benefit has a present value in
excess of three thousand five hundred dollars ($3,500), shall have the
right, at any time and from time to time prior to the commencement of a
retirement benefit hereunder, to elect to have such retirement benefit
payable under any one of the options hereinafter set forth in this
Section in lieu of the retirement benefit otherwise payable under any of
the provisions of the Plan. The amount of any optional retirement benefit
shall be the Actuarial Equivalent of the Normal Form of Retirement
Benefit otherwise payable to such Participant. The Participant shall make
such an election by written request to the Committee and such an election
will be subject to the spousal consent requirement of Article VI.
(a) JOINT AND SURVIVOR OPTION: A married Participant may elect to
receive a monthly retirement benefit during the lifetime of the
Participant and have either fifty percent (50%) or one hundred
percent (100%) of such monthly retirement benefit continued after
the Participant's death to a Contingent Annuitant or Spouse during
the remaining lifetime of the Contingent Annuitant or Spouse
within the restrictions contained in Section 8.04(b)(ii).
(b) LUMP-SUM OPTION: Prior to October 1, 1995, a Participant who is
eligible for Early or Normal Retirement may elect to receive, in
lieu of any other benefits hereunder, a lump sum payment
representing the Actuarial Equivalent of the Participant's Accrued
Benefit under the Plan. On or after October 1, 1995, a Participant
who is eligible for Early or Normal Retirement may elect to
receive a lump sum payment representing the Actuarial Equivalent
of the Participant's Accrued. Benefit under the Plan as of
September 30, 1995, in addition to the Participant's Accrued
Benefit earned on and after October 1, 1995 in another form of
payment provided under the Plan.
(c) PERIOD CERTAIN OPTION: A Participant may elect to receive a
monthly retirement benefit during the Participant's lifetime, with
payments guaranteed for one hundred eighty (180) months. Should a
Participant who has elected this option die before receiving the
specified number of payments, such payments shall be continued to
a Beneficiary designated by the Participant until the total
payments made are equal to the guaranteed number.
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(d) A Participant may elect to receive a monthly retirement benefit
under any optional form available under the Plan prior to the
effective date of this restated Plan of that portion of his
benefit as accrued through such effective date.
Notwithstanding the above, the Joint and 100% Survivor Option as
described in subsection (a) hereof and the one hundred eighty
(180) month Period Certain Option as described in subsection (c)
hereof are not available to Participants who are eligible for a
Disability Retirement.
7.02 LIMITATION ON OPTIONAL ELECTIONS
(a) Payments under any optional retirement benefit elected under the
provisions of Section 7.01 hereof shall be subject to the
distribution period restrictions of Sections 8.03 and 8.04.
(b) A Participant may not elect irrevocably before retirement any
option which would with certainty pay all or part of his
non-forfeitable interest to a designated Beneficiary after the
Participant's death.
(c) Any annuity contract distributed by the Plan must be
nontransferable.
(d) Once distributions under an optional form of benefit have begun,
such form of payment shall be irrevocable.
(e) If a Participant's benefits are required to commence in accordance
with Article VIII, such Participant shall make an irrevocable
election as to the optional form of payment. All such benefits
shall be paid directly from the Trust Fund. Subject to Section
6.01 the options available will include options available to
retirees in accordance with Section 7.01. Upon subsequent
termination of employment for any reason, the optional form
previously elected will remain in effect.
(f) The distribution of a lump sum payment or an annuity to the
Participant or his Beneficiary will constitute the complete
discharge of all obligations of the Plan.
7.03 DEFERRED ANNUITY PURCHASE
A deferred annuity shall be purchased on behalf of
|
(a) a Vested Participant;
-38-
(b) a Retired Participant who makes an election to defer commencement
of his retirement benefit in accordance with Section 4.07 or
7.02(e); and
(c) a Participant's Spouse entitled to deferred benefits in accordance
with Article VIII or who makes an election to defer commencement
in accordance with Article VIII.
The retirement benefit under the deferred annuity will initially
be payable under the Normal Form of Retirement Benefit or one of
the optional forms under Section 7.01, as elected by the
Participant. Subject to Section 6.01, a Participant may, before
the commencement of his retirement benefit, change such optional
form to any other form of retirement benefit available under the
annuity, including those available under Section 7.01 and the
Normal Form of Retirement Benefit, by filing a request with the
insurance company and complying with the terms and provisions of
such annuity.
If a deferred annuity is purchased on behalf of a Participant or
Beneficiary, a lump sum distribution shall not be permitted at any
later date.
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ARTICLE VIII
REQUIRED COMMENCEMENT OF BENEFITS
8.01 GENERAL RULES
The terms of the Watts Industries, Inc. Pension Plan shall apply in
determining required distributions as required under Section 401(a)(9) of
the Code.
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ARTICLE IX
BENEFITS ON TERMINATION OF EMPLOYMENT AND RETIREMENT UPON DISABILITY
9.01 TERMINATION GENERALLY
All rights of a Participant to all benefits under the Plan will cease
upon his termination of employment with the Employer prior to
satisfaction of the conditions for retirement set forth in Article IV of
the Plan, for a reason other than death, except as otherwise provided in
the following Sections of this Article. The only benefits of any kind
payable under any of the provisions of the Plan in the event of the death
of a Participant prior to commencement of his retirement benefit are
those provided in Article VI and Article VII hereof.
9.02 CONDITIONS FOR VESTED RETIREMENT BENEFITS
If a Participant is in the employment of the Employer on the date he
attains Normal Retirement Age, he shall have a one hundred percent (100%)
vested interest in his Accrued Benefit. If the Participant terminates
employment with the Employer at any time prior to his Normal or Early
Retirement Date, other than by death or Disability, the Participant shall
have a vested interest in his Accrued Benefit equal to the percentage
determined in accordance with the following schedule on the basis of his
|
Years of Service:
NUMBER OF YEARS PERCENTAGE OF ACCRUED BENEFIT
Less than 5 full years 0%
5 full years 100%
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9.03 AMOUNT OF VESTED RETIREMENT BENEFIT
(a) A terminated vested Participant shall receive his Accrued Benefit,
determined as provided in this Section 9.03, commencing on his
Normal Retirement Date. The amount of monthly retirement benefit
payable shall be determined in the manner provided in Section 5.01
with years of Credited Service and Average Monthly Compensation
determined as of the date of his termination of employment.
(b) If a Participant satisfies the requirement for the commencement of
benefits prior to his Normal Retirement Date in accordance with
the provisions of Section 4.03(b) the amount of such pension shall
be the vested amount provided in Section 9.02 reduced in
accordance with the provisions of Section 1.02.
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9.04 SINGLE SUM PAYMENT OF VALUE OF VESTED RETIREMENT BENEFITS
(a) Upon a Participant's termination of Service, the Committee shall
direct the Trustee to pay him, in a single sum, an amount equal to
the Actuarial Equivalent value, as of the date of payment of the
vested Accrued Benefit payable in lieu of any other form of such
retirement benefit, provided the amount of such Actuarial
Equivalent is not in excess of $3,500 ($5,000, effective October
1, 2001). The Actuarial Equivalent value of such cash out shall be
determined in accordance with the provisions of Section 1.02 of
the Plan. The nonvested portion of a Participant's Accrued
Benefit, if any, shall be treated as a forfeiture upon such cash
out. For purposes of this Section, if the Actuarial Equivalent
value of a Participant's vested Accrued Benefit is zero, the
Participant shall be deemed to have received a distribution of
such vested benefit.
(b) If a Participant receives or is deemed to receive a distribution
pursuant to this Section at a time when his Accrued Benefit was
not fully vested and the Participant resumes covered employment
under the Plan, he shall have the right to restore his
Employer-derived Accrued Benefit (including all optional forms of
benefits and subsidies relating to such benefits) to the extent
forfeited upon the repayment to the Plan of the full amount of the
distribution plus interest, compounded annually from the date of
distribution at the rate of five percent (5%). Such repayment must
be made not later than five (5) years after the first date on
which the Participant is subsequently reemployed by the Employer.
(c) If a Participant receives or is deemed to receive a cashout under
paragraph (a) above, then all Periods of Service for which he
receives payment shall be disregarded for purposes of benefit
accrual unless he makes the repayment described in paragraph
(b)above.
9.05 PARTICIPANT AND SPOUSAL CONSENT FOR IMMEDIATELY DISTRIBUTABLE BENEFITS
If the present value of a Participant's vested Accrued Benefit exceeds
(or at any time of any prior distribution exceeded) three thousand five
hundred dollars ($3,500), and the Accrued Benefit is immediately
distributable, the Participant and the Participant's Spouse (or where
either the Participant or the Spouse has died, the survivor) must consent
to any distribution of such Accrued Benefit. The consent of the
Participant and the Participant's Spouse shall be obtained in writing
within the 90-day period ending on the Annuity Starting Date. The
Committee shall notify the Participant and the Participant's Spouse of
the right to defer any distribution until the Participant's Accrued
Benefit is no longer immediately distributable. Such notification shall
include a general description of the
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material features, and an explanation of the relative values of, the
optional forms of benefit available under Article VII of the Plan in a
manner that would satisfy the notice requirements of Code Section
417(a)(3), and shall be provided no less than thirty (30) days and no
more than ninety (90) days prior to the Annuity Starting Date.
Notwithstanding the foregoing, only the Participant need consent to the
commencement of a distribution in the form of an Automatic Joint and
Survivor Annuity, described in Section 6.01 of the Plan, while the
Accrued Benefit is immediately distributable. Neither the consent of the
Participant nor the Participant's Spouse shall be required to the extent
that a distribution is required to satisfy Section 401(a)(9) or Section
415 of the Code. An Accrued Benefit is "immediately distributable" if any
part of the Accrued Benefit could be distributed to the Participant (or
surviving Spouse) before the Participant attains (or would have attained
if not deceased) the later of Normal Retirement Age or age sixty-two
(62).
Notwithstanding the foregoing, the failure of a Participant and Spouse to
consent to a distribution while a benefit is immediately distributable
shall be deemed to be an election to defer commencement of any benefit
sufficient to satisfy this Section.
9.06 DISABILITY TERMINATION
(a) A Participant shall be eligible for a Disability Retirement as
defined in Section 4.04 if he has incurred, through some
unavoidable cause, a total and permanent Disability as defined in
Article I. Disability shall be deemed to have resulted from an
unavoidable cause unless it was contracted, suffered, or incurred
while the Participant was engaged in a willful criminal enterprise
or resulted from a deliberate self-inflicted injury.
(b) Upon a Participant's retirement under this Section 9.06, the
Participant shall be automatically entitled to receive a monthly
retirement benefit, commencing on the first day of the month
following his date of Disability, and continuing on the first day
of each month thereafter during his lifetime. Such monthly
retirement benefit shall be equal to (i) a benefit determined in
the same manner as the monthly retirement benefit payable upon
retirement at the Normal Retirement Date of the Participant, with
Average Monthly Compensation and Credited Service determined as of
the date of his Disability Retirement but reduced using the
factors described in Article I for Early Retirement, or (ii) if
the Disability Retirement commences prior to January 1, 1995, $200
multiplied by his full Years of Service, if greater than (i)
above. Upon the election of the Participant, any pension payable
under this Section 9.06 may be paid in an optional method of
retirement payment as provided in Section 7.01 hereof, subject to
the limitations
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|
therein for Disability Retirement and subject to the spousal
consent provisions of Article VI.
(c) Benefits payable under this Section 9.06 shall be in lieu of any
benefits payable under any other Section of this Plan; provided
however, any loss of rights to benefits under this Section 9.06
shall not deprive a Participant of any benefits that he might
otherwise be entitled to receive under the Plan.
(d) If a Participant loses all rights to any benefits under this
Section 9.06 because, prior to his Normal Retirement Date, his
total and permanent Disability has ceased, and if such Participant
resumes employment for the Employer immediately after the
cessation of such Disability, then automatically after such
resumption of employment he shall resume participation in the
Plan. The benefits to which such Participant will subsequently be
entitled, however, will be reduced by an amount which is the
Actuarial Equivalent of any benefits the Participant has received.
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ARTICLE X
FUNDING
10.01 CONTRIBUTIONS BY PARTICIPANTS
No contributions by Participants will be required or permitted under the
Plan.
10.02 CONTRIBUTIONS BY EMPLOYER
(a) The cost of all benefits payable under the Plan will be borne by
the Employer. The Employer shall establish and maintain a policy
for funding such cost so that such policy causes the Plan to be
funded consistent with Federal law. Contributions by the Employer
shall be paid to a Trustee or Life Insurance Company at such times
and in such amounts as shall be determined by the Board acting
under the advice of an actuary, who shall be an actuary enrolled
by the United States Government in accordance with Subtitle C of
Title III of the Employee Retirement Income Security Act of 1974,
as amended. All contributions shall be irrevocable and may be used
only for the benefit of the Participants and their Contingent
Annuitants, Spouses and/or Beneficiaries. The actuarial
liabilities for benefits under the Plan that may be forfeited in
the. event of severance of employment, death, or for any other
reason, shall be used in the determination of Employer
Contributions made immediately following such forfeiture to effect
a reduction in such contributions and shall in no event be applied
to increase any of the benefits under the Plan.
(b) In addition to its contributions, the Employer may elect to pay
all the administrative expenses of the Plan and all fees and
retainers of the Plan's Trustee, actuary, accountant, counsel,
consultant, administrator, or other specialist so long as the Plan
or Trust Fund remains in effect. If the Employer does not pay all
or part of such expenses, the Trustee shall pay these expenses
from the Trust Fund. All expenses directly relating to the
investments of the Trust Fund, including taxes, brokerage
commissions, and registration charges must be paid from the Trust
Fund.
10.03 FUND
The Employer, in order to establish a fund for payment .of benefits under
the Plan, has entered into a Trust Agreement with the Trustee, whereby
the contributions are held, invested and applied to the payment of
benefits hereunder. The Trust Agreement shall contain such powers and
reservations as to investments, reinvestment, control and
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|
disbursements of the funds, and such other provisions consistent with the
provisions of the Plan and its nature and purposes as shall be agreed
upon and set forth therein. The Trustee shall, in accordance with the
terms of such agreement, accept and receive all sums of money paid to it
from time to time by the Employer and shall hold, invest, reinvest,
manage and administer such moneys and the increment, increase, earnings
and income thereof as a fund for the exclusive benefit of the
Participants and their Contingent Annuitants, Spouses and/or
Beneficiaries. In no event shall it be possible at any time prior to the
satisfaction of all liabilities, fixed or contingent, under the Plan for
any part of the assets of the Trust Fund, whether principal or income, to
be used for, or diverted to, purposes other than those stated herein. The
Trustee shall not have the power to inquire into the correctness of the
amounts tendered to it as required by the Plan, nor to enforce the
payment of any contributions hereunder.
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ARTICLE XI
ADMINISTRATION
11.01 ASSIGNMENT OF ADMINISTRATIVE AUTHORITY
The Board shall appoint a Committee the members of which shall be
officers or other Employees, or any other individuals, who shall be
appointed by and serve at the pleasure of the Board. A member may resign,
by written resignation to the Board and Committee. Vacancies arising by
virtue of resignation, death or otherwise, shall be filled by the Board.
The members of the Committee shall exercise their duties on the Committee
as fiduciaries, having due regard for the standards that a prudent man
would exercise under similar circumstances. No member shall participate
in the discussion or vote on any matter regarding his own benefit.
11.02 ORGANIZATION AND OPERATION OF COMMITTEE
The Committee shall hold meetings upon such notice, at such place or
places and at such time or times, as the Committee may, from time to
time, determine. The Committee shall act by a majority of its members at
the time in office, and such action may be taken either by a vote at a
meeting or in writing without a meeting. The Committee may authorize any
one or more of its members to execute any document or documents on behalf
of the Committee, in which event the Committee shall notify the Trustee
in writing of such action and the name or names of its member or members
so designated. Committee directions to the Trustee must be performed in a
manner consistent with the terms of the applicable Trust Agreement. The
Committee may adopt such bylaws and regulations as it deems desirable for
the conduct of its affairs. It may appoint such agents who need not be
members of the Committee, as it may deem necessary for the effective
performance of it's duties, and may delegate to such agents such powers
and duties, whether ministerial or discretionary, as the Committee may
deem expedient or appropriate. The compensation of such agents shall be
fixed by the Committee within limits set by the Board. Any delegates
appointed by the Committee pursuant to this Section 11.02 shall enjoy and
be bound by the same powers and duties accorded to the Committee by
Section 11.03.
11.03 POWERS AND DUTIES
The Committee shall administer the Plan in accordance with its terms and
pursuant to uniform rules of procedure; it shall have full discretionary
authority and responsibility for administration of the Plan. The
Committee shall interpret the Plan and shall determine eligibility to
participate and, all questions arising in the administration,
interpretation, and application of the Plan. All disbursements of
benefits under the Plan by the Trustee shall
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be made upon, and in accordance with, the written instructions of the
Committee. The decisions by the Committee upon all matters within the
scope of its authority shall be conclusive and binding on all persons.
11.04 RECORDS AND REPORTS OF COMMITTEE
The Committee shall keep a record of all its proceedings and acts, and
shall keep all such books of account, records, and other data as may be
necessary for proper administration of the Plan. The Committee shall
notify the Board of any action taken by the Committee and, when required,
shall notify any other interested person or persons.
11.05 PAYMENT OF EXPENSES
The members of the Committee shall serve without compensation for
services as such, but the Employer shall pay or reimburse the Committee
for all expenses reasonably incurred by the Committee, including the
compensation of its agents.
11.06 DETERMINATION OF BENEFITS
(a) The Committee shall establish rules and procedures to . be
followed by the Participants, Spouses and Contingent Annuitants,
in filing applications for benefits and for furnishing and
verifying proofs necessary to establish age, Service, Credited
Service, Average Monthly Compensation, and any other matters
required in order to establish the right to benefits in accordance
with the Plan.
(b) The Committee shall receive all applications for benefits. Upon
receipt by the Committee of such an application, it shall
determine all facts which are necessary to establish the right of
the applicant to benefits under the provisions of the Plan and the
amount thereof as herein provided. Upon request, the Committee
will afford any applicant the right of a hearing with respect to
any finding of fact or determination.
(c) To enable the Committee to perform its functions, the Employer
shall supply full and timely information to the Committee of all
matters relating to the retirement, death or other cause for
termination of employment of all Participants and such other
pertinent facts as the Committee may require; and the Committee
shall advise the Trustee of such of the foregoing facts as may be
pertinent to the Trustee's administration of the Fund.
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11.07 ADDITIONAL COMMITTEE DUTIES
The Committee shall prepare and distribute to the Participants, at the
expense of the Employer, and in such a manner as it shall deem
appropriate, information concerning the Plan.
11.08 RELIANCE ON REPORTS
Members of the Committee and the Employer shall be entitled to rely upon
all tables, valuations, certificates and reports furnished by any actuary
designated by the Board, upon all certificates and reports made by an
accountant selected or approved by the Board, upon all opinions by any
counsel selected or approved by the Committee and upon all opinions by
any counsel selected or approved by the Board, and the members of the
Committee and the Employer and its, officers and the Trustee shall be
fully protected in respect to any action taken or suffered in good faith
reliance upon the advice or opinion of any such actuary, accountant,
physician or counsel, provided such actuary, accountant, physician or
counsel was selected in a prudent manner, and all action so taken or
suffered shall be conclusive upon each of them and upon all Participants,
Contingent Annuitants, Spouses and/or Beneficiaries.
11.09 LIABILITY AND INDEMNIFICATION
The members of the Committee shall act as fiduciaries with respect to all
of the provisions of the Plan, except with regard to the holding,
investing, reinvesting and managing the assets of the Fund, and shall act
with respect to all matters within their scope of authority as prudent
men would act under like circumstances. The Trustee designated hereof
shall be a fiduciary or fiduciaries solely with regard to the holding,
investing, reinvesting and managing of the assets of the Fund.
Nevertheless, the Employer shall indemnify the members of the Committee
with regard to any expense the Trustee may incur in defending a suit
arising out of the performance of the duties imposed upon them by this
Plan or any liability that may arise with respect to the payment of any
judgment or settlement arising from any responsibility imposed by this
Plan, except' for any willful misconduct or any act done in bad faith.
The Employer shall also indemnify any member of the Board and any other
Employee of the Employer with regard to any expense they may incur in
defending a suit arising out of the performance of the duties imposed
upon them by this Plan or any liability that may arise with respect to
the payment of any judgment or settlement from any responsibility imposed
by this Plan, except for any willful misconduct or any act done in bad
faith.
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11.10 LIMITATION OF POWERS OF COMMITTEE
The Committee shall have no power in any way to modify, alter, add to or
subtract from any provision of the Plan without formal Plan amendment.
Further, actions taken or instructions given by the Committee shall be
uniform in their nature and applicable to all Participants in a
non-discriminatory manner.
11.11 CLAIM PROCEDURE FOR BENEFITS
(a) Any application for benefits or request for specific information
with respect to benefits under the Plan, must be made to the
Committee in writing by a Participant or his Beneficiary. Oral
communications will not be recognized as a formal request or claim
for benefits.
(b) The Committee shall provide adequate notice in writing to any
Participant or Beneficiary whose claim for benefits under the Plan
has been denied (i) setting forth the specific `reasons for such
denial, specific references to pertinent plan provisions, a
description of any material and information which had been
requested but not received by the Committee, and (ii) advising
such Participant or Beneficiary that any appeal of such adverse
determination must be in writing to the Committee, within such
period of time designated by the Committee but, until changed, not
more than sixty (60) days after receipt of such notification, and
must include a full description of the pertinent issues and basis
of claim.
(c) If the Participant or Beneficiary fails to appeal such action to
the Committee in writing within the prescribed period of time, the
Committee's adverse determination shall be final.
(d) If an appeal is filed with the Committee, the Participant or
Beneficiary shall submit such issues he. feels are pertinent and
the Committee shall re-examine all facts, make a final
determination as to whether the denial of benefits is justified
under the circumstances, and advise the Participant or Beneficiary
in writing of its decision and the specific reasons on which such
decision was based, within sixty (60) days of receipt of such
written request, unless special circumstances require a reasonable
extension of such 60-day period.
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ARTICLE XII
AMENDMENT AND TERMINATION OF THE PLAN
12.01 AMENDMENT OF PLAN
(a) The Employer shall, by written resolution of the Board, have the right at
any time, and from time to time, to amend, in whole or in part, any or
all of the provisions of the Plan. However, no such amendment shall
authorize or permit any part of the Fund (other than such part as is
required to pay taxes and administration expenses) to be used or diverted
to purposes other than for the exclusive benefit of the Participants or
their Contingent Annuitants, Spouses or Beneficiaries; no such amendment
shall cause any reduction in the amount of benefits which at the time of
such amendment shall have accrued for the Participants or their
Contingent Annuitants, Spouses or Beneficiaries, or cause or permit any
portion of the Fund to revert to or become property of the Employer,
except as provided in Section 12.02 hereof in the event of the
termination of the Plan; and no such amendment which affects the rights,
duties or responsibilities of a Trustee may be made without the affected
party's written consent. No such amendment shall have retroactive effect
except that an amendment adopted during a Plan Year, or within two and
one-half (2-1/2) months after the close of the Plan Year, which does not
reduce the Accrued Benefit of any Participant may be made effective
retroactively, but in no event shall the retroactive date of the effect
of such amendment be earlier than the first day of the Plan Year.
(b) Furthermore, no amendment shall be made to the vesting provisions of
Article IX of the Plan which has the effect of reducing the
nonforfeitable benefit to which the Participant would have been entitled
to in accordance with the provisions of Article IX if he had terminated
his employment with the Employer on the date on which such amendment is
to be effective, nor shall any amendment affecting the vesting provisions
in Article IX of the Plan be made unless any Participant who has
completed three (3) Years of Service on the date on which such amendment
is to be effective, is allowed to elect to have this nonforfeitable
percentage computed under the prior vesting schedule. For Participants
who do not have one (1) Hour of Service in any Plan Year beginning after
December 31, 1988, the preceding sentence shall be applied by
substituting "five (5)" for "three (3)" Years of Service.
The period during which the election may be made shall commence with the
date the amendment is adopted or deemed to be made and shall end on the
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latest of:
(i) sixty (60) days after the amendment is adopted;
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(ii) sixty (60) days after the amendment becomes effective; or
(iii) sixty (60) days after the Participant is issued written notice of
the amendment by the Committee.
(c) Any amendment to the Plan shall become effective upon execution of
an appropriate written instrument, undertaken pursuant to
authorization by the Board, except that for the purposes of this
Section 12.01, should the top heavy provisions of Section 15.01
become operative, the vesting schedule in Section 9.02 shall be
deemed to have been amended.
12.02 TERMINATION OF PLAN
(a) The Trust established under Article X hereof, shall be an
irrevocable Trust and the Employer expects to continue the Plan
indefinitely. However, necessarily, the Employer by action of the
Board reserves the right to terminate the Plan at any time: If the
Employer terminates the Plan, or it is otherwise terminated, the
Trustee shall continue to administer the Fund in accordance with
the provisions hereof. Under no conditions, however, will any
portion of the Fund at any time revert to or become the property
of the Employer except as provided in Subsection (e) of this
Section 12.02. Upon termination or partial termination of the
Plan, the rights of each Participant involved in such termination
to benefits accrued to the date of such termination or partial
termination are nonforfeitable.
(b) However, any termination (other than a partial termination or an
involuntary termination pursuant to Section 4042 of ERISA) must
satisfy the requirements and follow the procedures outlined herein
and in Section 4041 of ERISA for a Standard Termination or a
Distress Termination. Upon any termination (full or partial), all
amounts shall be allocated in accordance with the provisions
hereof and the Accrued Benefit, to the extent funded as of such
date, of .each affected Participant shall become fully vested and
shall not thereafter be subject to forfeiture.
(c) STANDARD TERMINATION PROCEDURE
(i) The Administrator shall first notify all "affected parties"
(as defined in Section 4001(a)(21) of ERISA) of the
Employer's intention to terminate the Plan and the proposed
date of termination. Such termination notice must be
provided at least sixty (60) days prior to the proposed
termination date. However, in the case of a standard
termination, it shall not be necessary to provide such
notice to the Pension Benefit Guaranty
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Corporation (PBGC). As soon as practicable after the
termination notice is given, the Administrator shall
provide a follow-up notice to the PBGC setting forth the
following:
(A) a certification of an enrolled actuary of the
projected amount of the assets of the Plan as of the
proposed date of final distribution of assets, the
actuarial present value of the "benefit liabilities"
(as defined in Section 4001(a)(16) of ERISA) under
the Plan as of the proposed termination date, and
confirmation that the Plan is projected to be
sufficient for such "benefit liabilities" as of the
proposed date of final distribution;
(B) a certification by the Administrator that the
information provided to the PBGC and upon which the
enrolled actuary based his certification is accurate
and complete; and
(C) such other information as the PBGC may prescribe by
regulation. The certification of the enrolled
actuary and of the Administrator shall not be
applicable in the case of a plan funded exclusively
by individual insurance contracts.
(ii) No later than the date on which the follow-up notice is
sent to the PBGC, the Administrator shall provide all
Participants and Beneficiaries under the Plan with an
explanatory statement specifying each such person's
"benefit liabilities", the benefit form on the basis of
which such amount is determined, and any additional
information used in determining "benefit liabilities" that
may be required pursuant to regulations promulgated by the
PBGC.
(iii) A standard termination may only take place if at the time
the final distribution of assets occurs, the Plan is
sufficient to meet all "benefit liabilities" determined as
of the termination date.
(d) Upon termination of the Plan, benefits of missing Participants
shall be treated in accordance with Section 4050 of ERISA.
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12.03 LIMIT FOR 25 HIGHEST PAID EMPLOYEES
(a) In years beginning on or after January 1, 1992 and in the event of
Plan termination, the benefit of any Highly Compensated active or
former Employee is limited to a benefit that is nondiscriminatory
under Section 401(a)(4).
For Plan Years beginning on or after January 1, 1992, benefits
distributed to any of the twenty-five (25) most Highly Compensated
active and former Highly Compensated Employees are restricted such
that the annual payments are no greater than an amount equal to
the payment that would be made on behalf of the Employee under a
single life annuity that is the Actuarial Equivalent of the sum of
the Employee's Accrued Benefit and the Employee's other benefits
under the Plan.
The preceding paragraph shall not apply if:
(i) after payment of the benefit to an Employee described in
the preceding paragraph, the value of plan assets equals or
exceeds one hundred ten percent (110%) of the value of
current liabilities, as defined in Code Section 412(1)(7),
or
(ii) the value of the benefits for an Employee described above
is less than one percent (1%) of the value of current
liabilities.
For purposes of this Section, benefit includes loans in excess of
the amount set forth in Code Section 72(p)(2)(a), any periodic
income, any withdrawal values payable to a living Employee, and
any death benefits not provided for by insurance on the Employee's
life.
(b) Notwithstanding the otherwise applicable restrictions on
distributions of benefits incident to early Plan termination, a
Participant's otherwise restricted benefit may be distributed in
full upon depositing with an acceptable depository property having
a fair market value equal to one hundred twenty-five percent
(125%) of the amount which would be repayable had the Plan
terminated on the date of the lump sum distribution. If the market
value of the property held by the depository falls below one
hundred ten percent (110%) of the amount which would be repayable
if the Plan were then to terminate, additional property necessary
to bring the value of the property held by the depository up to
one hundred twenty-five percent (125%) of such amount will be
deposited.
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ARTICLE XIII
PARTICIPATING COMPANIES
13.01 ADOPTION BY OTHER ENTITIES
Any corporation or other business entity may, by resolution of its own
governing body, and with the written approval of the Board, adopt the
Plan and thereby become an Employer. Notwithstanding the adoption of the
Plan by other entities, the Plan will be administered as a single plan
and all Plan assets will be available to pay benefits to all Participants
under the Plan.
13.02 ACTUARIAL VALUATION
The Committee shall have the Plan's actuary make an annual actuarial
valuation with respect to the Plan to determine the contribution as
required in accordance with Article X.
13.03 RIGHT TO WITHDRAW (PLAN SPINOFF)
Each Employer having adopted the Plan shall have the right as of the last
day of any month to withdraw from `the Plan and/or Trust Agreement by
delivering to the Board, the Committee and the Trustee written
notification from its own governing body of such action and setting forth
the date as of which the withdrawal shall be effective.
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ARTICLE XIV
MISCELLANEOUS
14.01 HEADINGS AND SUBHEADINGS
The headings and subheadings in the Plan have been inserted for
convenience of reference only and are to be ignored in any construction
of the provisions hereof.
14.02 GENDER AND NUMBER
Wherever any words are used herein in the masculine gender they shall be
construed as though they were also used in the feminine gender in all
cases where they would so apply, and wherever any words are used herein
in the singular form they shall be construed as though they were also
used in the plural form in all cases where they would so apply.
14.03 PARTICIPANTS' RIGHTS: ACQUITTANCE
Neither the establishment of the Plan, nor any modification thereof, nor
the creation of the Fund, nor the payment of any benefits, shall be
construed as giving to a Participant or other person any legal or
equitable right against the Employer, or any officer or Employee thereof,
or a Trustee, or the Committee, except as herein provided. Under no
circumstances shall the terms of employment of a Participant be modified
or in any way affected hereby.
14.04 RECEIPT OR RELEASE
Any payment to a Participant, Contingent Annuitant, Spouse or Beneficiary
or to their legal representatives, in accordance with the provisions of
the Plan, shall to the extent thereof be in full satisfaction of all
claims hereunder against the Trustee, the Committee and the Employer, any
of whom may require such Participant, Contingent Annuitant, Spouse,
Beneficiary, or legal representative, as a condition precedent to such
payment, to execute a receipt and release therefor in such form as shall
be determined by a Trustee, the Committee or the Employer as the case may
be.
14.05 SPENDTHRIFT CLAUSE
Except insofar as may be contrary to any applicable law, no payment of
any benefit under the Plan shall be assignable and no such payment or
contribution shall be subject to the claims of any creditor. The
preceding sentence shall not apply to the creation, assignment
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or recognition of a right to any benefit payable with respect to a
Participant, pursuant to a qualified domestic relations order as defined
in Section 414(p) of the Code, or any domestic relations order entered
before January 1, 1985. In any event, benefits shall be paid from the
Plan in accordance with the applicable requirements of such qualified
domestic relations order. The Committee shall set forth in writing,
reasonable procedures for determining the qualified status of a `domestic
relations order and for administering distributions under such qualified
order.
14.06 PAYMENTS TO LEGALLY INCOMPETENT
If any Participant, Contingent Annuitant, Spouse or Beneficiary is a
minor or is, in the judgment of the Committee, otherwise legally
incapable of personally receiving and giving a valid receipt for any
payment due him under the Plan, the Committee may, unless and until claim
shall have been made by a duly appointed guardian or committee of such
person, make such payment or any part thereof to such person's Spouse,
child, parent, brother or sister or other person deemed by the Committee
to have incurred expense for or assumed responsibility for the expenses
of such person. Any payment so made shall be a complete discharge of any
liability under the Plan for such payment.
14.07 DELEGATION OF AUTHORITY BY THE BOARD
Whenever the Employer, under the terms of the Plan, is permitted or
required to do or perform any act or matter or thing, it shall be done
and performed by any person thereunto duly authorized by the Board.
14.08 DISTRIBUTION OF BENEFITS UNDER PLAN
No benefits shall be distributed under the Plan except (a) in the event
of the retirement of a Participant as provided in Article IV hereof, (b)
in the event of death, disability, or other termination of employment of
a Participant before retirement for any cause as provided in Article VI
and Article IX hereof, or (c) in the event that a court of competent
jurisdiction compels payment of benefits from this Plan pursuant to an
order which the Committee determines to be a qualified domestic relations
order, as described in Code Section 414(p). The Committee shall establish
rules to determine whether a court order is a qualified domestic
relations order.
14.09 DIVESTMENT OF BENEFITS
No payment of benefits provided under the Plan shall be forfeited, when
due, because of any action of a Participant or his Contingent Annuitant,
Spouse or Beneficiary, except for the lack of fulfillment of any
requirement under any of the terms of the Plan for the
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completion of any specified period of Service, Credited Service or the
attainment of any specified age, for qualification for such benefits.
14.10 CONSTRUCTION OF PLAN
The Plan shall be governed and construed under the laws of the State of
New York to the extent not preempted by ERISA.
14.11 EXECUTION OF PLAN
The Plan may be executed in any number of counterparts, each of which may
be deemed the original although the others shall not be produced.
14.12 DEDUCTIBILITY OF CONTRIBUTIONS
Each Employer Contribution is specifically conditioned on the
deductibility of the contribution under Code Section 404, and to the
extent such contribution, or any part thereof, is disallowed, the
contribution, or any part thereof that is disallowed, shall be returned
to the Employer within one year after the date of disallowance.
14.13 LOST BENEFICIARY OR PARTICIPANT
If a benefit is forfeited because the Participant, Spouse, Contingent
Annuitant or Beneficiary cannot be found, such benefit will be reinstated
if a claim is made by the Participant, Spouse, Contingent Annuitant or
Beneficiary. In the event that any check or final notice of payment of
benefits under the Plan remains outstanding at the expiration of six
months from the date of mailing of such check or notice to the last known
address of the payee, the Committee shall notify the Trustee to stop
payment on all outstanding checks `and to suspend the issuance of further
checks or notice, if any, to such payee. If, during the three-year period
(or such other period as specified in the Trust Agreement) from the date
of mailing of the first such check or of notice that a benefit is due
under the Plan, the Committee cannot establish contact with the payee by
taking such action as it deems appropriate and the payee does not make
contact with the Committee, any benefits to which such payee is entitled
shall be forfeited. Any benefit so forfeited shall be restored if a claim
is made for the unpaid benefit at any subsequent date and the Plan has
not been terminated as of such date. Contributions required to be made in
accordance with Article X shall reflect such forfeitures and restoration
in the same manner as expense gains and losses are reflected in the
funding method used by the Plan.
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14.14 DUPLICATION OF BENEFITS
(a) If a Participant is entitled to any retirement income or other
benefits attributable to Employer Contributions from any other
qualified defined benefit retirement plan or annuity maintained by
the Employer, the benefits to which such Participant may be
entitled under this Plan shall be reduced by an amount equal to
such other retirement income or benefits, to the extent such
benefits are attributable to concurrent periods of employment.
(b) In the determination of any benefit to which a Participant or
Beneficiary will be entitled under the Plan, adjustments shall be
made to reflect any amounts previously distributed under the Plan
and to reflect any amounts required to be paid to the
Participant's Spouse or former Spouse under any law or qualified
domestic relations order as described in Code Section 414(p).
14.15 MERGER OR CONSOLIDATION
The Plan may be merged or consolidated with, or its assets or liabilities
transferred in whole or in part to, another Plan which meets the
requirements of Sections 401(a) and 501(a) of the Code only if each
Participant would, if either the Plan or the other plan terminated
immediately after the merger, consolidation or transfer, then receive a
benefit which is equal to or greater than the benefit he would have been
entitled to receive immediately before the merger, consolidation or
transfer if the Plan then terminated.
14.16 RETURN OF CONTRIBUTIONS AS A RESULT OF MISTAKE OF FACT
Notwithstanding any other provision to the contrary the general
prohibition against diversion of plan assets does not preclude the return
of contributions made by an Employer to the Plan if the contribution was
made by reason of a mistake of fact and the return to the Employer of the
amount involved is made within one year of the mistaken payment of the
contribution.
14.17 DIRECT ROLLOVER OF ELIGIBLE ROLLOVER DISTRIBUTIONS
(a) With respect to distributions made on and after January 1, 1993, a
Distributee may elect, at the time and in the manner prescribed by
the Committee, to have any portion of an Eligible Rollover
Distribution paid, in a direct rollover, directly to an Eligible'
Retirement Plan specified by the Distributee, subject to the
limitations and exceptions granted in proposed and temporary
regulations issued under Section 401(a)(31) of the Code and other
guidance issued for reliance by the Internal Revenue Service.
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The Committee, in establishing administrative procedures and plan
distribution rules, shall comply with the provisions of Section
401(a)(31) of the Code and proposed and temporary as well as any
future final regulations thereunder, including any guidance issued
for reliance by the Internal Revenue Service.
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(b) DEFINITIONS.
(i) ELIGIBLE ROLLOVER DISTRIBUTION: 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 ten years or more; any distribution to
the extent such distribution is required under Section
401(a)(9) of the Code; effective January 1, 1999, any
hardship distribution described in Section
401(k)(2)(B)(i)(IV) 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).
(ii) ELIGIBLE RETIREMENT PLAN: 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.
(iii) DISTRIBUTEE: A distributee includes an Employee or former
Employee. In addition, the Employee's or former Employee's
surviving Spouse or former Spouse who is an 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.
(iv) DIRECT ROLLOVER: A Direct Rollover is a payment by the Plan
to the Eligible Retirement Plan specified by the
Distributee.
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14.18 QUALIFIED DOMESTIC RELATIONS ORDERS
(a) Qualified Domestic Relations Order
(i) A Qualified Domestic Relations Order (hereinafter referred
to as "QDRO") is a Domestic Relations Order which creates
or recognizes the existence of an Alternate Payee's right
to, or assigns to an Alternate Payee the right to, receive
all or a portion of the benefits payable with respect to a
Participant under the Plan, and which the Committee has
determined meets the requirements of Paragraphs (ii) and
(iii).
(ii) A Domestic Relations Order meets the requirements of a QDRO
only if the order clearly specifies
(A) the name and the last known mailing address (if any)
of the Participant and the name and mailing address
of each Alternate Payee covered by the order;
(B) the amount or percentage of the Participant's
benefits to be paid by the Plan to each such
Alternate Payee, or the manner in which such amount
or percentage is to be determined;
(C) the number of payments or period to which such order
applies; and
(D) that the order applies to this Plan.
(iii) A Domestic Relations Order meets the requirements of a QDRO
only if the order
(A) does not require the Plan to provide any type or
form of benefits, or any option, not otherwise
provided under the Plan;
(B) does not require the Plan to provide increased
benefits (determined on the basis of actuarial
value); and
(C) does not require the payment of benefits to an
Alternate Payee which are required to be paid to
another Alternate Payee under another Domestic
Relations Order previously determined to be a QDRO.
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(iv) In the case of any payment before a Participant has
separated from service, a QDRO shall not be treated as
failing to meet the requirements of Paragraph (iii)(A)
above solely because the order requires the payment of
benefits to an Alternate Payee
(A) on or after the date on which the Participant
attains(or would have attained) the Earliest
Retirement Age;
(B) as if the Participant had retired on the date such
payment is to begin under such order; and
(C) in any form in which such benefits may be paid under
the Plan to the Participant (other than in the form
of a joint and survivor annuity with respect to the
Alternate Payee and his or her subsequent spouse).
(v) For purposes of Paragraph (iv), Earliest Retirement Age
means the earlier of
(A) the date on which the Participant is entitled to a
distribution under the Plan; or
(B) the later of (1) the date the Participant attains
age 50 or (2) the earliest date on which the
Participant could begin receiving benefits under the
Plan if such Participant separated from service.
Notwithstanding any provisions of the Plan to the contrary,
for purposes of Subparagraph (A) above, a distribution to
an Alternate Payee may be made prior to the date on which
the Participant is entitled to a distribution under Section
4.03 if requested by the Alternate Payee to the extent such
distribution is permitted under the QDRO. Nothing in this
provision shall permit the Participant to receive a
distribution at a date otherwise not permitted under
Section 4.03 nor shall it permit the Alternate Payee to
receive a form of payment not permitted in Section 7.01.
(b) PROCEDURES
Upon receipt of a Domestic Relations Order, the Committee shall
take, or cause to be taken, the following actions:
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(i) The Committee shall promptly notify the Participant, each
Alternate Payee covered by the order and each
representative for these parties of the receipt of the
Domestic Relations Order. Such notice shall include a copy
of the order and these QDRO Procedures for determining
whether such order is a QDRO.
(ii) Once a Domestic Relations Order has been received no
distributions will be made from the Plan to the Participant
upon a subsequent termination until after the payment to
the Alternate Payee has been determined, unless the
Committee determines the order not to be a QDRO.
(iii) Within a reasonable period after receipt of a Domestic
Relations Order, the Committee shall determine whether it
is a QDRO and shall notify the parties indicated in
Paragraph (i) of such determination. Such notice shall
indicate whether the benefits payable to the Alternate
Payee in accordance with the QDRO are subject to a
previously existing QDRO.
(iv) Pending the Committee's determination of whether a Domestic
Relations Order is a QDRO, if payments are due to be paid
to the Participant, the Committee shall withhold payment
and separately account for the amounts otherwise payable to
the Alternate Payee during such period if the order is
subsequently determined to be a QDRO (hereinafter referred
to as the "segregated amounts"). If, within the 18-month
period beginning with the date the first payment would have
been required to be made under the Domestic Relations
Order, the Committee determines the order to be a QDRO, the
Committee shall pay the segregated amounts, including any
interest thereon, to the person or persons entitled
thereto. If, within such 18-month period, the Committee
determines an order is not a QDRO or the Committee fails to
reach a decision, the Committee shall pay the segregated
amounts to the Participant. If, after the 18-month period,
the Committee subsequently determines that the order is a
QDRO, the Committee shall pay benefits subsequent to such
determination in accordance with the order. If action is
taken in accordance with this Subsection (b), the Plan's
obligation to the Participant and each Alternate Payee
shall be discharged to the extent of any payment made
pursuant to the QDRO.
(v) In determining the segregated amounts in accordance with
Paragraph (iv), the Participant's vested interest shall be
prorated between the Participant and Alternate Payee and
the entire amount of any nonvested interest will be
credited to the Participant and not taken into
consideration in making
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such determination. Any future accruals will be credited to
the Participant and not the Alternate Payee.
(vi) Upon a determination by the Committee that a Domestic
Relations Order is a QDRO, the Committee shall arrange for
benefits to be paid to the Alternate Payee in accordance
with such order and Sections 4.03 and 7.01 as if the
Participant had terminated employment at such time.
(vii) If benefits are not immediately distributable to the
Alternate Payee, such amount shall be separately accounted
for until such time as the distribution is made.
(viii) The Alternate Payee shall be treated as a Beneficiary for
all purposes of the Plan. The foregoing provisions are
effective for QDROs entered into on or after January 1,
1985, except that, in the case of a Domestic Relations
Order entered into before January 1, 1985, the Committee
(i) may treat such order as a QDRO even though such order
fails to meet the requirements of Subsections (a)(ii) and
(iii) above, and (ii) must treat such order as a QDRO if
benefits were being paid pursuant to such order on
January 1, 1985.
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ARTICLE XV
TOP-HEAVY PROVISIONS
15.01 GENERAL PROVISIONS
For any Plan Year for which this Plan is a "top-heavy plan" or a "super
top-heavy plan" as defined in Section 15.07 below, and any other
provisions of this Plan to the contrary notwithstanding, this Plan shall
|
be subject to:
(a) The vesting provisions of Section 15.02,
(b) The minimum benefit provisions of Section 15.03,
(c) The limitation on Compensation set by Section 15.04, and
(d) The limitation on benefits set by Section 15.05.
15.02 MINIMUM VESTING
Each Participant who has completed the number of Years of Service
specified in the following table shall have a nonforfeitable right to the
percentage of the benefit accrued under this Plan correspondingly
|
specified in the following table:
Percentage of
Years Nonforfeitable
of Service Benefit
---------- --------------
2 20
3 40
4 60
5 or more 100
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15.03 MINIMUM BENEFITS
Each Participant who is a Non-Key Employee shall be entitled to an
Accrued Benefit in the form of an annual benefit, payable as a single
life annuity (with no ancillary benefits) beginning at the Participant's
Normal Retirement Date, that shall be not less than the applicable
percentage (as defined in paragraph (a) below) of the Participant's
average annual Compensation for years in the testing period (as defined
in paragraph (b) below).
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|
(a) "Applicable percentage" means the lesser of two percent (2%) multiplied
by the number of Plan Years in which the Plan is top-heavy or super
top-heavy, or twenty percent (20%).
(b) "Testing period" means, with respect to a Participant, the period of
consecutive Years of Service (not exceeding five (5)) during which the
Participant had the greatest aggregate Compensation from the Employer.
The testing period shall not include any year not included as a Year of
Service in Article III hereof. The testing period shall also not include
any Year of Service that ends in a Plan Year beginning before January 1,
1984, or that begins after the close of the last Plan Year in which the
Plan was a top-heavy plan.
The minimum benefit under this Section 15.03 shall not take into account
any benefits payable under the Social Security Act or any other Federal
or state law.
15.04 LIMITS ON COMPENSATION
For any Plan Year in which the Plan is a top-heavy plan or a super
top-heavy plan, annual Compensation taken into account under this Article
XV shall be Compensation as defined in Article I, `without regard to Code
Sections 125, 402(a)(8), 402(h)(1)(B) or any Employer contributions under
a salary reduction agreement, except those made under Code Section
403(b).
15.05 TRANSITIONAL RULE
(a) Except as otherwise provided in subsection (b) and (c) of this
Section 15.05, if for any Plan Year this Plan is a top-heavy plan,
or a super top-heavy plan then the denominator of both the Defined
Contribution Fraction and the Defined Benefit Fraction shall be
calculated as set forth in Section 5.04 for the limitation year
ending in such Plan Year by substituting "1 .0" for "1.25" in each
place such figure appears. Furthermore, the transitional rule set
forth in Section 5.04 shall be applied by substituting "$41,500"
for "$51,875."
(b) If, but for this subsection (b), subsection (a) would begin to
apply with respect to this Plan because it is determined to be
top-heavy or super top-heavy, the application of subsection (a)
shall be suspended with respect to any individual for whom there
are no Employer contributions, forfeitures or voluntary
nondeductible contributions allocated, or accruals for such
individual under this Plan.
(c) For any Plan Year in which this Plan is a top-heavy plan, but not
a super top-heavy plan, the provisions of Section 5.04 shall be
applied without reference to subsection (a) above and the'
transitional rule set forth in Section 5.04 shall be
-66-
|
applied without reference to subsection (a) above, provided that
the "applicable percentage" in paragraph (a) of Section 15.03 is
applied by substituting "three percent (3%)" for "two percent
(2%)" and by increasing twenty percent (20%) by one (1) percentage
point (up to a maximum of thirty percent (30%)) for each year
during which this subsection (c) applies.
15.06 AGGREGATION OF PLANS
(a) In the event that another defined benefit plan provided by the
Employer provides benefits for Participants in this Plan, and that
plan is required to be aggregated with this Plan, the minimum
benefit required by Section 15.03 shall be provided by this Plan.
(b) "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 participating, and each
other plan of the Employer which enables a plan in which a
Key Employee participates to meet the requirements of
either I.R.C. Section 401(a)(4) or Section 410.
(ii) The group of plans that are permitted to be aggregated (the
"Permissive Aggregation Group") includes any plan that is
not part of the required group and that the Committee
certifies as constituting a plan within the permissive
aggregation group. Such plan may be added to the permissive
aggregation group only if, after the addition, the
aggregation group as a whole continues to meet the
requirements of both Code Sections 401(a)(4) and 410.
(c) If any Participant is also covered by a defined contribution plan
or plans maintained by the Employer, the minimum Accrued Benefit
determined in accordance with subsection (a) shall be reduced by
the amount of retirement income payable in the form of a life only
annuity commencing on the first day of the month coincident with
or next following the Participant's Normal Retirement Date which
may be provided with the Participant's Account. The amount of
retirement income available shall be determined using the
actuarial assumptions specified in the Plan for determining the
lump sum value of an Accrued Benefit.
|
-67-
(d) For purposes of this Section, only benefits derived from Employer
contributions are to be taken into account to determine whether
the minimum benefit has been satisfied.
15.07 THE-HEAVY DEFINITIONS
(a) TOP HEAVY PLAN
This Plan shall be a "top-heavy plan" for any Plan Year if, as of
the Determination Date, the present value of the cumulative
Accrued Benefits including the value of any non-proportionally
subsidized benefits (and excluding the value of proportionally
subsidized benefits) under the Plan for Participants (including
former Participants) who are Key Employees exceeds sixty percent
(60%) of the present value of such cumulative Accrued Benefits
under the Plan for all Participants; or if this Plan is included
in a Required Aggregation Group which for such Plan Year is a
top-heavy group. In determining whether this Plan constitutes a
top-heavy plan, the Committee shall make the following adjustments
in connection therewith:
(i) In determining the present value of the cumulative Accrued
Benefit of any Participant, such present value shall
include the amount in dollar value of the aggregate
distributions made to such Participant under the applicable
plan during the five (5) year period ending on the
Determination Date. The preceding sentence shall also apply
to distributions made on account of death to the extent
such benefits do not exceed the present value of Accrued
Benefits existing immediately prior to death, as well as
distributions under a terminated plan which if it had not
been terminated would have been required to be included in
an Aggregation Group.
(ii) Further, in making any determination whether the Plan is
top-heavy or the Aggregation Group of which it is a part is
a top-heavy group, such present value shall not include any
unrelated rollover contribution (or similar transfer) which
is both initiated by the Participant and made to the Plan
after December 31, 1983 from a plan maintained by another
Employer.
(iii) Further, in making such determination, in any case where an
individual is a Non-Key Employee with respect to an
applicable plan but was a Key Employee with respect to such
plan for any prior Plan Year, any Accrued Benefit of such
Participant shall be altogether disregarded. For this
purpose, to the extent that a Key Employee is deemed to be
a Key Employee if he or she met the definition of Key
Employee within any of
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the four (4) preceding Plan Years, this provision shall
apply following the end of such period of time.
(iv) Further, in making such determination for Plan Years
beginning after December 31, 1984, the present value of the
Accrued Benefit or account of any Participant who has not
received any Compensation from the Employer during the five
(5) year period ending on the Determination Date, shall be
disregarded.
(v) For purposes of determining whether the Plan is top heavy,
a Participant's Accrued Benefit will be determined under a
uniform accrual method which applies in all defined benefit
plans of the Employer, or where there is no such method,
under the fractional rule.
(b) SUPER TOP-HEAVY PLAN
This Plan shall be a "super top-heavy plan" for any Plan Year if,
as of the Determination Date, the Plan would be top-heavy if
"ninety percent (90%)" were substituted for "sixty percent (60%)"
in the preceding paragraph, or if this Plan is included in a
Required Aggregation Group which for such Plan Year would be a
Top-heavy Group, if "ninety percent (90%)" were substituted for
"sixty percent (60%)" in the paragraph above.
(c) Actuarial Factors For the purpose of determining the present value
of Accrued Benefits under this Article XV, the actuarial factors
shall be the mortality and interest rates used in the most recent
actuarial valuation completed to comply with Section 412 of the
Internal Revenue Code of 1986, as amended, within the twelve (12)
month period ending on the applicable Determination Date.
(d) "Determination Date" means for any Plan Year the last day of the
immediately preceding Plan Year.
(e) "Top-Heavy Group" means the Required 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 Required Aggregation Group
plus the aggregate of the accounts of Key Employees under all
defined contribution plans included in the Required Aggregation
Group exceeds sixty percent (60%) of the sum of the present value
of the cumulative Accrued Benefits for all Participants under all
such defined benefit plans plus the aggregate accounts for all
Participants under all such defined contribution plans.
-69-
15.08 EXCLUDED PARTICIPANTS
The provisions of this Article do not apply with respect to any
Participant included in a unit of Participants covered by a collective
bargaining agreement unless the application of this Article has been
agreed upon with the collective bargaining agent.
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-70-
FIRST AMENDMENT TO THE
WATTS INDUSTRIES, INC.
PENSION PLAN
WHEREAS, Watts Industries, Inc. (the "Sponsoring Employer") established the
Watts Industries, Inc. Pension Plan (the "Plan") effective January 1, 1985 for
the benefit of Eligible Employees; and
WHEREAS the Plan was most recently amended and restated effective January
1, 1997, and
WHEREAS the Sponsoring Employer desires to amend the Plan to comply with
the Economic Growth and Tax Relief Reconciliation Act of 2001 ("EGTRRA") and
other recent legislative and regulatory changes;
NOW THEREFORE, in consideration of the foregoing, the Plan is hereby
amended as set forth herein effective January 1, 2002 unless specifically stated
otherwise. This amendment is intended to be a "good faith EGTRRA amendment"
within the meaning of Notice 2001-57 and is to be construed in accordance with
EGTRRA and the guidance thereunder.
29. Section 1.02 is hereby amended by the addition of the following at the end
thereof:
"(g) Notwithstanding any other Plan provision to the contrary, with respect
to lump sum distributions made on or after January 1, 2003, Actuarial
Equivalence shall be determined based on the mortality table specified
in Section 417(e)(3) of the Code and an interest rate equal to the
rate defined in Section 417(e)(3)(A)(ii)(II) of the Code for the
November immediately preceding the Plan Year of distribution."
30. Section 1.09 is hereby amended effective January 1, 1998 by the addition of
the following at the end thereof:
"For purposes of this definition of Compensation, contributions pursuant to
a cafeteria plan established under Section 125 of the Code shall include
any amounts not available to a Participant in cash in lieu of group health
coverage because the Participant is unable to certify that he or she has
other health coverage. An amount will be treated as a contribution under
Section 125 of the Code only if the Employer does not request or collect
information regarding the Participant's other health coverage as part of
the enrollment process for the health plan."
31. Section 1.09 is hereby further amended by the addition of the following at
the end thereof:
"Notwithstanding any provision of the Plan the contrary, in no event shall
a Participant's Compensation taken into account under the Plan for any Plan
Year beginning on or after
1
January 1, 2002 exceed the applicable limit specified in Code Section
401(a)(17)(A) for any Plan Year. This dollar limit on Compensation shall be
adjusted for cost-of-living increases in accordance with Section
401(a)(17)(B) of the Code. The cost-of-living adjustment shall apply only
to Compensation taken into account for Plan Years beginning with the Plan
Year in which such increase is effective.
For purposes of determining benefit accruals in Plan Years beginning after
December 31, 2001 for Participants who earn an Hour of Service after
December 31, 2001, Compensation for any prior Plan Year shall be limited to
$200,000."
32. Article 5 is hereby amended effective as of January 1, 2003 by the addition
of the following new Section 5.11:
"5.11 MINIMUM DISTRIBUTION REQUIREMENTS
(a) GENERAL RULES
(i) EFFECTIVE DATE. The provisions of this Section 5.11 will
apply for purposes of determining required minimum
distributions for calendar years beginning with the 2003
calendar year.
(ii) PRECEDENCE. The requirements of this article will take
precedence over any inconsistent provisions of the Plan.
(iii) REQUIREMENTS OF TREASURY REGULATIONS INCORPORATED. All
distributions required under this Section 5.11 will be
determined and made in accordance with the Treasury
regulations under Section 401(a)(9) of the Code.
(iv) TEFRA SECTION 242(b)(2) ELECTIONS. Notwithstanding the
other provisions of this Section 5.11, other than
paragraph (a)(iii) above, distributions may be made
under a designation made before January 1, 1984, in
accordance with Section 242(b)(2) of the Tax Equity and
Fiscal Responsibility Act ("TEFRA") and the provisions
of the Plan that relate to Section 242(b)(2) of TEFRA.
(b) TIME AND MANNER OF DISTRIBUTION
(i) REQUIRED BEGINNING DATE. The Participant's entire
interest will be distributed, or begin to be
distributed, to the Participant no later than the
Participant's Required Beginning Date.
(ii) DEATH OF PARTICIPANT BEFORE DISTRIBUTIONS BEGIN. If the
Participant dies before distributions begin, the
Participant's entire interest will be distributed, or
begin to be distributed, no later than as follows:
2
|
(A) If the Participant's surviving Spouse is the
Participant's sole Designated Beneficiary, then
distributions to the surviving Spouse will begin by
December 31 of the calendar year immediately
following the calendar year in which the Participant
died, or by December 31 of the calendar year in
which the Participant would have attained age 70
1/2, if later.
(B) If the Participant's surviving Spouse is not the
Participant's sole Designated Beneficiary, then
distributions to the Designated Beneficiary will
begin by December 31 of the calendar year
immediately following the calendar year in which the
Participant died.
(C) If there is no Designated Beneficiary as of
September 30 of the year following the year of the
Participant's death, the Participant's entire
interest will be distributed by December 31 of the
calendar year containing the fifth anniversary of
the Participant's death.
(D) If the Participant's surviving Spouse is the
Participant's sole Designated Beneficiary and the
surviving Spouse dies after the Participant but
before distributions to the surviving Spouse begin,
this Subsection 5.11(b)(ii), other than Subsection
5.11(b)(ii)(A), will apply as if the surviving
Spouse were the Participant.
For purposes of this Subsection 5.11(b)(ii) and
Subsection 5.11(e), distributions are considered to
begin on the Participant's Required Beginning Date (or,
if Subsection 5.11(b)(ii)(D) applies, the date
distributions are required to begin to the surviving
Spouse under Subsection 5.11(b)(ii)(A). If annuity
payments irrevocably commence to the Participant before
the Participant's Required Beginning Date (or to the
Participant's surviving Spouse before the date
distributions are required to begin to the surviving
Spouse under Subsection 5.11(b)(ii)(A), the date
distributions are considered to begin is the date
distributions actually commence.
3
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(iii) FORM OF DISTRIBUTION. Unless the Participant's interest
is distributed in the form of an annuity purchased from
an insurance company or in a single sum on or before the
Required Beginning Date, as of the first Distribution
Calendar Year distributions will be made in accordance
with Sections (c), (d) and (e) of this Section 5.10. If
the Participant's interest is distributed in the form of
an annuity purchased from an insurance company,
distributions thereunder will be made in accordance with
the requirements of Section 401(a)(9) of the Code and
the Treasury regulations. Any part of the Participant's
interest which is in the form of an individual account
described in Section 414(k) of the Code will be
distributed in a manner satisfying the requirements of
section 401(a)(9) of the Code and the Treasury
regulations that apply to individual accounts.
(c) DETERMINATION OF AMOUNT TO BE DISTRIBUTED EACH YEAR
(i) GENERAL ANNUITY REQUIREMENTS. If the Participant's
interest is paid in the form of annuity distributions
under the plan, payments under the annuity will satisfy
the following requirements:
(A) the annuity distributions will be paid in periodic
payments made at intervals not longer than one year;
(B) the distribution period will be over a life (or
lives) or over a period certain not longer than the
period described in Subsection (d) or (e);
(C) once payments have begun over a period certain, the
period certain will not be changed even if the
period certain is shorter than the maximum
permitted;
(D) payments will either be nonincreasing or increase
only as follows:
(1) by an annual percentage increase that does not
exceed the annual percentage increase in a
cost-of-living index that is based on prices of
all items and issued by the Bureau of Labor
Statistics;
4
|
(2) to the extent of the reduction in the amount of
the Participant's payments to provide for a
survivor benefit upon death, but only if the
Beneficiary whose life was being used to
determine the distribution period described in
Subsection (d) dies or is no longer the
Participant's Beneficiary pursuant to a
Qualified Domestic Relations Order within the
meaning of section 414(p);
(3) to provide cash refunds of employee
contributions upon the Participant's death; or
(4) to pay increased benefits that result from a
Plan amendment.
(ii) AMOUNT REQUIRED TO BE DISTRIBUTED BY REQUIRED BEGINNING
DATE. The amount that must be distributed on or before
the Participant's Required Beginning Date (or, if the
Participant dies before distributions begin, the date
distributions are required to begin under Subsection
5.11(b)(ii)(A) or (B) is the payment that is required
for one payment interval. The second payment need not be
made until the end of the next payment interval even if
that payment interval ends in the next calendar year.
Payment intervals are the periods for which payments are
received, e.g., bi-monthly, monthly, semi-annually, or
annually. All of the Participant's benefit accruals as
of the last day of the first Distribution Calendar Year
will be included in the calculation of the amount of the
annuity payments for payment intervals ending on or
after the Participant's Required Beginning Date.
(iii) ADDITIONAL ACCRUALS AFTER FIRST DISTRIBUTION CALENDAR
YEAR. Any additional benefits accruing to the
Participant in a calendar year after the first
Distribution Calendar Year will be distributed beginning
with the first payment interval ending in the calendar
year immediately following the calendar year in which
such amount accrues.
(d) REQUIREMENTS FOR ANNUITY DISTRIBUTIONS THAT COMMENCE DURING
PARTICIPANT'S LIFETIME
(i) JOINT LIFE ANNUITIES WHERE THE BENEFICIARY IS NOT THE
PARTICIPANT'S SPOUSE. If the Participant's interest is
being distributed in the form of a Joint and Survivor
Annuity for the joint lives of the Participant and a
nonspouse Beneficiary, annuity payments to be made on or
after the Participant's Required Beginning Date to the
Designated Beneficiary after the Participant's death
must not at any time exceed the applicable percentage of
the annuity payment for such period that would have
5
|
been payable to the Participant using the table set
forth in Q&A-2 of Section 1.401(a)(9)-6T of the Treasury
regulations. If the form of distribution combines a
Joint and Survivor Annuity for the joint lives of the
Participant and a nonspouse Beneficiary and a period
certain annuity, the requirement in the preceding
sentence will apply to annuity payments to be made to
the Designated Beneficiary after the expiration of the
period certain.
(ii) PERIOD CERTAIN ANNUITIES. Unless the Participant's
Spouse is the sole Designated Beneficiary and the form
of distribution is a period certain and no life annuity,
the period certain for an annuity distribution
commencing during the Participant's lifetime may not
exceed the applicable distribution period for the
Participant under the Uniform Lifetime Table set forth
in Section 1.401(a)(9)-9 of the Treasury regulations for
the calendar year that contains the Benefit Commencement
Date. If the Benefit Commencement Date precedes the year
in which the Participant reaches age 70, the applicable
distribution period for the Participant is the
distribution period for age 70 under the Uniform
Lifetime Table set forth in Section 1.401(a)(9)-9 of the
Treasury regulations plus the excess of 70 over the age
of the Participant as of the Participant's birthday in
the year that contains the Benefit Commencement Date. If
the Participant's Spouse is the Participant's sole
Designated Beneficiary and the form of distribution is a
period certain and no life annuity, the period certain
may not exceed the longer of the Participant's
applicable distribution period, as determined under this
Subsection (d)(ii), or the joint life and last survivor
expectancy of the Participant and the Participant's
Spouse as determined under the Joint and Last Survivor
Table set forth in Section 1.401(a)(9)-9 of the Treasury
regulations, using the Participant's and Spouse's
attained ages as of the Participant's and Spouse's
birthdays in the calendar year that contains the Benefit
Commencement Date.
(e) REQUIREMENTS FOR MINIMUM DISTRIBUTIONS WHERE PARTICIPANT DIES
BEFORE DATE DISTRIBUTIONS BEGIN
(i) PARTICIPANT SURVIVED BY DESIGNATED BENEFICIARY. If the
Participant dies before the date distribution of his or
her interest begins and there is a Designated
Beneficiary, the Participant's entire interest will be
distributed, beginning no later than the time described
in Subsection (b)(ii)(A) or (B), over the life of the
Designated Beneficiary or over a period certain not
exceeding:
6
|
(A) unless the Benefit Commencement Date is before the
first Distribution Calendar Year, the Life
Expectancy of the Designated Beneficiary determined
using the Beneficiary's age as of the Beneficiary's
birthday in the calendar year immediately following
the calendar year of the Participant's death; or
(B) if the Benefit Commencement Date is before the first
Distribution Calendar Year, the Life Expectancy of
the Designated Beneficiary determined using the
Beneficiary's age as of the Beneficiary's birthday
in the calendar year that contains the Benefit
Commencement Date.
(ii) NO DESIGNATED BENEFICIARY. If the Participant dies
before the date distributions begin and there is no
Designated Beneficiary as of September 30 of the year
following the year of the Participant's death,
distribution of the Participant's entire interest will
be completed by December 31 of the calendar year
containing the fifth anniversary of the Participant's
death
(iii) DEATH OF SURVIVING SPOUSE BEFORE DISTRIBUTIONS TO
SURVIVING SPOUSE BEGIN. If the Participant dies before
the date distribution of his or her interest begins, the
Participant's surviving Spouse is the Participant's sole
Designated Beneficiary, and the surviving Spouse dies
before distributions to the surviving Spouse begin, this
Subsection (e) will apply as if the surviving Spouse
were the Participant, except that the time by which
distributions must begin will be determined without
regard to Subsection (b)(ii)(A).
(f) DEFINITIONS
(i) DESIGNATED BENEFICIARY. The individual who is designated
as the Beneficiary under Section 8.07 of the Plan and is
the designated beneficiary under Section 401(a)(9) of
the Code and Section 1.401(a)(9)-1, Q&A-4, of the
Treasury regulations.
(ii) DISTRIBUTION CALENDAR YEAR. A calendar year for which a
minimum distribution is required. For distributions
beginning before the Participant's death, the first
Distribution Calendar Year is the calendar year
immediately preceding the calendar year which contains
the Participant's Required Beginning Date. For
distributions beginning after the Participant's death,
the first Distribution Calendar Year is the calendar
year in which distributions are required to begin
pursuant to Subsection (b)(ii).
7
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(iii) LIFE EXPECTANCY. Life expectancy as computed by use of
the Single Life Table in Section 1.401(a)(9)-9 of the
Treasury regulations.
(iv) REQUIRED BEGINNING DATE. The date described in Section
5.06(b) of the Plan."
|
5. Subsection 12.09(b) is hereby amended by the addition of the following at
the end thereof:
"Effective for distributions after December 31, 2001,
(1) an Eligible Rollover Distribution does not include any hardship
distribution, and
(2) a portion of a distribution shall not fail to be an Eligible
Rollover Distribution merely because the portion consists of
after-tax employee contributions which are not includible in gross
income. However, such portion may be paid only to an individual
retirement account or annuity described in Section 408(a) or (b) of
the Code, or to a qualified defined contribution plan described in
Section 401(a) or 403(a) of the Code which agrees to separately
account for amounts so transferred, including separately accounting
for the portion of such distribution which is includible in gross
income and the portion of such distribution which is not so
includible."
6. Subsection 12.09(c) is hereby amended by the addition of the following at
the end thereof:
"Effective for distributions after December 31, 2001, an Eligible
Retirement Plan shall also mean an annuity contract described in Section
403(b) of the Code and an eligible plan under Section 457(b) of the Code
which is maintained by an eligible employer described in Section
457(e)(1)(A) of the Code.
The definition of Eligible Retirement Plan shall also apply in the case of
a distribution to a surviving Spouse, or to a Spouse or former Spouse who
is the Alternate Payee under a qualified domestic relations order, as
defined in Code Section 414(p)."
7. Article 10 is hereby amended effective for claims filed on or after January
1, 2003 by the deletion of Section 10.10 and the substitution in lieu
thereof of the following:
"10.10 PROCEDURE FOR CLAIMING BENEFITS UNDER THE PLAN
(a) Claims for benefits under the Plan made by a Participant or
Beneficiary covered by the Plan must be submitted in writing to
the Committee. Approved claims will be processed and
instructions issued to the Trustee authorizing payments as
claimed.
If a claim is denied in whole or in part, the Committee shall
notify the claimant of its decision by written notice, in a
manner calculated to be understood by the claimant. The
|
Committee shall set forth in the notice:
8
(i) the specific reason or reasons for the denial of the
claim;
(ii) the specific references to the pertinent Plan provisions
on which the denial is based;
(iii) a description of any additional material or information
necessary to perfect the claim, and an explanation of
why such material or information is necessary;
(iv) an explanation of the Plan's claim review procedure; and
(v) a statement of the claimant's right to bring a civil
action in accordance with section 502(a) of ERISA if the
claimant's claim is denied upon review.
Such notification shall be given within 90 days after the claim
is received by the Committee. This period may be extended for
another 90 days if the claimant is notified that the extension
is necessary due to matters beyond the control of the Plan,
before the end of the original 90-day period. Any notice for an
extension will explain the reason for the extension and the
date by which the Committee expects to rule on the claim.
(b) Upon denial of a claim in whole or in part, a claimant or his
duly authorized representative shall have the right to submit a
written request to the Committee for a full and fair review of
the denied claim, to submit written comments, documents,
records, and other information relating to the claim, and to be
provided, upon request and free of charge, access to, and
copies of, all documents, records and other information
relevant to the claimant's claim for benefits. A request for
review of a claim must be submitted within 60 days of receipt
by the claimant of written notice of the denial of the claim.
The Committee shall advise the claimant of the results of the
review within 60 days after receipt of the written request for
review. This period may be extended for another 60 days if the
Committee determines that special circumstances require an
extension of time for processing the request and if written
notice of such extension and circumstances is given to such
claimant within the initial 60 day period. Any notice for an
extension will explain the reason for the extension and the
date by which the Committee expects to rule on the claim.
In the event an appeal is denied, the claimant will be notified
in writing. The Committee shall set forth in the notice:
(i) the specific reason or reasons for the denial of the
claim;
9
(ii) the specific references to the pertinent Plan provisions
on which the denial is based;
(iii) a statement of the claimant's right to receive, upon
request and free of charge, reasonable access to, and
copies of, all documents, records, and other information
relevant to the claimant's claim for benefits; and
(iv) a statement of the claimant's right to bring a civil
action in accordance with Section 502(a) of ERISA.
The decision of the Committee by majority vote shall be final
and binding upon any and all claimants, including but not
limited to Participants and their Beneficiaries, and any other
individuals making a claim through or under them."
8. Subsection 5.04(a)(i) is hereby amended by the deletion of the phrase
"$90,000" and the substitution in lieu thereof of the following:
"the dollar limitation specified in Code Section 415(b)(1)(A), (The new
limit specified in Section 415(b)(1)(A) of the Code shall apply only to
Participants who are credited with at least one Hour of Service on or after
the first day of the first Limitation Year beginning after December 31,
2001.)"
9. Subsection 5.04(c) is hereby amended effective January 1, 1998 by the
addition of the following:
"For Limitation Years beginning on or after January 1, 1998, for purposes
of determining Section 415 Compensation, amounts included pursuant to
Section 125 of the Code shall include amounts not available to a
Participant in cash in lieu of group health coverage because the
Participant is unable to certify that he or she has other health coverage.
An amount will be treated as an amount under Section 125 only if the
Employer does not request or collect information regarding the
Participant's other health coverage as part of the enrollment process for
the health plan."
10. Subsection 5.04(e) is hereby amended by the addition of the following at
the end thereof:
"Notwithstanding the foregoing, for Limitation Years beginning on or after
January 1, 2002, if the benefit payable to a Participant commences prior to
age 62, the maximum dollar limitation defined in paragraph (a)(i), adjusted
by paragraph (d), shall be the actuarial equivalent of such amount payable
at age 62. For purposes of this paragraph, actuarial equivalent shall be
based on the plan's early retirement reductions or the mortality table
specified in Code Section 417(e)(3) and an interest rate of 5%, whichever
produces the smaller amount."
10
11. Subsection 5.04(f) is hereby amended by the addition of the following at
the end thereof:
"Notwithstanding the foregoing, effective for Limitation Years beginning on
or after January 1, 2002, if the benefit payable to a Participant commences
after his or her attainment of age 65, the dollar limitation defined in
paragraph (a)(i) above, adjusted by paragraph (d), shall be increased so it
is the actuarial equivalent of such amount payable commencing at age 65.
For purposes of this paragraph, actuarial equivalent shall be determined
using the assumptions in Section 1.02, or the mortality table specified in
Code Section 417(e)(3) and an interest rate of 5%, whichever produces the
smaller increase."
12. Section 5.04 is hereby amended by the addition by the addition of the
following subsection (m) at the end thereof:
"(m) Notwithstanding any other Plan provision to the contrary, with
respect to distributions with benefit commencement dates occurring
on or after January 1, 2003 the mortality table used for purposes
of adjusting any benefit or limitation under Section 415(b)(2)(B),
(C) or (D) of the Code as set forth in Subsections (e), (f), or (g)
of this Section 5.04 shall be the mortality table specified in
Section 417(e)(3) of the Code."
13. Article XV is hereby replaced in its entirety by the following effective
January 1, 2002:
"15.01 TOP HEAVY PROVISIONS
(a) For purposes of this Section, the following terms shall have
the meanings indicated below:
(i) "AGGREGATION GROUP" means either:
(A) A "PERMISSIVE AGGREGATION GROUP". The Committee may
also include any other qualified plan not required
to be included in the Required Aggregation Group,
provided the resulting group, taken as a whole,
would continue to satisfy the provisions of Sections
401(a)(4) and 410 of the Code. Such group shall be
known as a Permissive Aggregation Group.
(B) A "REQUIRED AGGREGATION GROUP". In determining a
Required Aggregation Group hereunder, each qualified
plan of the Employer or an Affiliated Employer in
which a Key Employee participates and each other
plan of the Employer or an Affiliated Employer,
including terminated plans maintained within the
one-year period ending on the Determination Date,
which enables any plan in which a Key Employee
participates to meet the requirements of Sections
401(a)(4) or 410 of the Code will be required to be
aggregated. Such group shall be known as a Required
Aggregation Group. Notwithstanding the foregoing,
11
|
the Required Aggregation Group will not include
"safe harbor" plans described in Section 401(k)(12)
and 401(m)(11) of the Code.
Solely for purposes of determining if the Plan or
any other qualified plan in the Required Aggregation
Group is a top heavy plan for a Plan Year, the
accrued benefits of Non-Key Employees shall be
determined for Plan Years beginning after 1986 under
the method, if any, which is uniformly applied for
accrual purposes under all defined benefit plans
maintained by the Employer or Affiliated Employers
or, if there is no such method, as if such benefit
accrued not more rapidly than under the slowest
accrual rate permitted under Section 411(b)(1)(C) of
the Code.
In no event shall this Plan be considered a top
heavy plan if it is part of a Required Aggregation
Group or a Permissive Aggregation Group that is not
a top heavy group.
Only those plans of the Employer or Affiliated
Employers in which the determination dates fall
within the same calendar year shall be aggregated in
order to determine whether such plans are top heavy
plans.
(ii) "DETERMINATION DATE" means the last day of the preceding
Plan Year, except that for the first Plan Year the
Determination Date is the last day of that Plan Year.
(iii) "EMPLOYEE", "FORMER EMPLOYEE", "KEY EMPLOYEE" and
"NON-KEY EMPLOYEE" shall also include Beneficiaries of
such an employee.
(iv) "KEY EMPLOYEE" means any employee or former employee
(including any deceased employee) of the Employer or an
Affiliated Employer who at any time during the Plan Year
containing the Determination Date for the Plan Year in
question is:
(A) An officer of the Employer or Affiliated Employer,
if such individual received Section 415 Compensation
of more than $130,000 as adjusted. No more than 50
employees (or, if lesser, the greater of 3 employees
or 10% of the employees) shall be treated as
officers (exclusive of employees described in
Section 414(q)(8) of the Code).
(B) A 5% owner of the Employer or an Affiliated
Employer. A "5% owner" means a person owning (or
considered as owning, within
12
|
the meaning of Section 318 of the Code) more than 5%
of the outstanding stock of the Employer or an
Affiliated Employer, or stock possessing more than
5% of the total combined voting power of all stock
of the Employer or an Affiliated Employer (or having
more than 5% of the capital or profits interest in
any Employer or Affiliated Employer that is not a
corporation determined under similar principles).
(C) A 1% owner of the Employer or an Affiliated Employer
having Section 415 Compensation of more than
$150,000. A "1% owner" means any person who would be
described in paragraph (a)(iv)(B) above if "1%" were
substituted for "5%" in each place where it appears
in paragraph (a)(iv)(B).
A Key Employee shall be determined in accordance with
the provisions of Section 416(i) of the Code.
(v) "NON-KEY EMPLOYEE" means an employee who is not a Key
Employee, including any employee who is a former Key
Employee.
(vi) "VALUATION DATE" means the date used to calculate the
value of accrued benefits or account balances for
purposes of determining the top heavy ratio specified in
paragraph (b) below.
For purposes of this Plan, the Valuation Date shall be
the valuation date used for computing the Plan's minimum
funding requirements under Section 412 of the Code. For
each other plan, the Valuation Date shall be, subject to
Section 416 of the Code, the most recent Valuation Date
which falls within or ends within the twelve consecutive
months ending on the applicable determination date for
such plan.
(b) TOP HEAVY PLAN
The Plan shall be deemed a top heavy plan for a Plan Year if,
as of the Valuation Date preceding the applicable Determination
Date, the sum of (1) the present value of accrued benefits of
Key Employees under this Plan and all other defined benefit
plans in the Aggregation Group, and (2) the account balances of
Key Employees under all defined contribution plans in the
Aggregation Group exceeds 60% of the sum of (3) the present
value of accrued benefits of all Participants under this Plan
and all other defined benefit plans in the Aggregation Group
(but excluding Participants who are former Key Employees); and
(4) the account balances of all Participants under all defined
contribution plans in the Aggregation Group.
|
For purposes of this test, the following rules shall apply:
13
(i) Subject to subparagraph (ii) below, any distributions
from this Plan or any other plan in the Aggregation
Group, and any accrued benefit distributed from any
other plan in the Aggregation Group during the one-year
period ending on the Determination Date (in the case of
any distribution made for a reason other than separation
from service, death or disability, the five-year period
ending on the Determination Date) shall be taken into
consideration.
(ii) The benefits of and distributions to all former
employees who have not been credited with at least one
Hour of Service during the one-year period ending on the
Determination Date shall be disregarded, provided,
however, that if such former Employee again completes an
Hour of Service with the Employer after such one-year
period, such former Employee's accounts shall be taken
into consideration.
Notwithstanding any provision of this paragraph (ii) to
the contrary, in any Plan Year in which this Plan is a
top heavy Plan, each Non-Key Employee who is also
covered under a defined contribution plan of the
Employer, shall accrue a Minimum Benefit as provided by
this Plan.
Notwithstanding any provision of this paragraph (ii) to
the contrary, in any Plan Year in which this Plan is a
top heavy Plan, each Non-Key Employee who is also
covered under a defined contribution plan of the
Employer, shall have credited to his defined
contribution plan account a minimum Employer
contribution equal to the minimum contribution provided
by such defined contribution plan; however, in no event
shall the minimum Employer contribution be less than 5%
of such Participant's Section 415 Compensation. No
Minimum Benefit shall accrue under this Plan.
(iii) If an Employee is a Non-Key Employee for the Plan Year
containing the Determination Date, but such individual
was a Key Employee during any previous Plan Year, the
value of his or her benefits and distributions shall not
be taken into consideration.
(iv) Solely for purposes of determining if the Plan or any
other plan in the Required Aggregation Group is a top
heavy plan for a Plan Year, the accrued benefits under
any defined benefit plans of Non-Key Employees shall be
determined for Plan Years beginning after 1986 under the
method, if any, which is uniformly applied for accrual
purposes under all defined benefit plans maintained by
the Employer or an Affiliated Employer or, if there is
no such method, as if such benefit accrued not more
rapidly than under the slowest accrual rate permitted
under Section 411(b)(1)(C) of the Code.
14
(v) The determination of account balances under all defined
contribution plans in the Aggregation Group shall be
increased for contributions due as of the Determination
Date to the extent required under Section 416 of the
Code.
(vi) The determination of the present value of accrued
benefits under all defined benefit plans in the
Aggregation Group shall be based on the interest rate
and mortality table specified in Section 1.02(a).
(vii) Distributions, rollovers and trust to trust transfers
shall be taken into consideration to the extent required
under Section 416 of the Code.
(viii) "Deductible employee contributions" (within the meaning
of Section 501(c)(18)(D) of the Code) contributed to any
plan in the Aggregation Group shall not be taken into
consideration.
The calculation of the top heavy ratio shall be made in
accordance with the provisions of Section 416 of the Code.
(c) Notwithstanding any other provision of the Plan to the
contrary, for any Plan Year in which the Plan is deemed to be a
top heavy plan, the following provisions shall apply:
(i) MINIMUM VESTING
Any Participant who completes an Hour of Service in a
Plan Year in which the Plan is deemed to be a top heavy
plan shall have a nonforfeitable interest in a
percentage of his or her Accrued Benefit determined by
multiplying the Accrued Benefit by the applicable
percentage from the following schedule:
YEARS OF VESTING SERVICE VESTED PERCENTAGE
Less than 3 years 0 %
3 or more years 100 %
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Furthermore, if the vesting schedule under the Plan for
any Plan Year shifts into or out of the above schedule
because of the Plan's top heavy status, such shift shall
be regarded as an amendment to the Plan's vesting
schedule.
The provisions of this paragraph (c)(i) shall not be
applied to reduce the Participant's vested percentage
computed in accordance with the provisions of the Plan.
15
(ii) MINIMUM BENEFIT
Each Participant who is a Non-Key Employee shall have an
Accrued Benefit calculated as of the last day of the top
heavy Plan Year or, if earlier, as of his or her
termination of employment date occurring during such
Plan Year, at least equal to the product of (A) 2% of
his or her Section 415 Compensation (as defined in
Section 415(c) of the Code) from an Employer or
Affiliated Employer during the five consecutive years
for which the Participant had the highest Compensation,
and (B) his or her years of Benefit Service up to a
maximum of ten years. For purposes of this paragraph
(ii), years of Benefit Service shall not include Plan
Years during which the Plan is not a top heavy plan nor
a Plan Year in which no Key or former Key Employee
benefits under the Plan.
For purposes of this Plan, the minimum annual retirement
benefit means a benefit payable annually in the form of
a single life annuity (with no ancillary benefits)
beginning at a Participant's Normal Retirement Date.
If a Non-Key Employee participates in a defined
contribution plan included in the Aggregation Group, the
minimum benefit shall be provided under this Subsection.
(iii) In any Plan Year that the Plan ceases to be top heavy,
the above provisions shall no longer apply, except that
the portion of a Participant's Accrued Benefit which was
vested pursuant to paragraph (i) above shall remain
vested."
14. Section 1.01 of Part A is hereby amended by the addition of the following
at the end thereof:
(f) "Notwithstanding any other Plan provision to the contrary, with respect
to lump sum distributions made on or after January 1, 2003, Actuarial
Equivalence shall be determined based on the mortality table specified
in Section 417(e)(3) of the Code and an interest rate equal to the rate
defined in Section 417(e)(3)(A)(ii)(II) of the Code for the November
immediately preceding the Plan Year of distribution."
15. Article 5 of Part A is hereby amended effective as of January 1, 2003 by
the addition of the following new Section 5.12:
"5.12 MINIMUM DISTRIBUTION REQUIREMENTS
(d) GENERAL RULES
(j) EFFECTIVE DATE. The provisions of this Section 5.12 will
apply for purposes of determining required minimum
distributions for calendar years beginning with the 2003
calendar year.
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16
(v) PRECEDENCE. The requirements of this article will take
precedence over any inconsistent provisions of the Plan.
(vi) REQUIREMENTS OF TREASURY REGULATIONS INCORPORATED. All
distributions required under this Section 5.12 will be
determined and made in accordance with the Treasury
regulations under Section 401(a)(9) of the Code.
(vii) TEFRA SECTION 242(b)(2) ELECTIONS. Notwithstanding the
other provisions of this Section 5.12, other than
paragraph (a)(iii) above, distributions may be made
under a designation made before January 1, 1984, in
accordance with Section 242(b)(2) of the Tax Equity and
Fiscal Responsibility Act ("TEFRA") and the provisions
of the Plan that relate to Section 242(b)(2) of TEFRA.
(e) TIME AND MANNER OF DISTRIBUTION
(j) REQUIRED BEGINNING DATE. The Participant's entire
interest will be distributed, or begin to be
distributed, to the Participant no later than the
Participant's Required Beginning Date.
(ii) DEATH OF PARTICIPANT BEFORE DISTRIBUTIONS BEGIN. If the
Participant dies before distributions begin, the
Participant's entire interest will be distributed, or
begin to be distributed, no later than as follows:
(A) If the Participant's surviving Spouse is the
Participant's sole Designated Beneficiary, then
distributions to the surviving Spouse will begin by
December 31 of the calendar year immediately
following the calendar year in which the Participant
died, or by December 31 of the calendar year in
which the Participant would have attained age 70
1/2, if later.
(B) If the Participant's surviving Spouse is not the
Participant's sole Designated Beneficiary, then
distributions to the Designated Beneficiary will
begin by December 31 of the calendar year
immediately following the calendar year in which the
Participant died.
(C) If there is no Designated Beneficiary as of
September 30 of the year following the year of the
Participant's death, the Participant's entire
interest will be distributed by December 31 of the
calendar year containing the fifth anniversary of
the Participant's death.
17
(D) If the Participant's surviving Spouse is the
Participant's sole Designated Beneficiary and the
surviving Spouse dies after the Participant but
before distributions to the surviving Spouse begin,
this Subsection 5.12(b)(ii), other than Subsection
5.12(b)(ii)(A), will apply as if the surviving
Spouse were the Participant.
For purposes of this Subsection 5.12(b)(ii) and
Subsection 5.12(e), distributions are considered to
begin on the Participant's Required Beginning Date (or,
if Subsection 5.12(b)(ii)(D) applies, the date
distributions are required to begin to the surviving
Spouse under Subsection 5.12(b)(ii)(A). If annuity
payments irrevocably commence to the Participant before
the Participant's Required Beginning Date (or to the
Participant's surviving Spouse before the date
distributions are required to begin to the surviving
Spouse under Subsection 5.12(b)(ii)(A), the date
distributions are considered to begin is the date
distributions actually commence.
(iii) FORM OF DISTRIBUTION. Unless the Participant's interest
is distributed in the form of an annuity purchased from
an insurance company or in a single sum on or before the
Required Beginning Date, as of the first Distribution
Calendar Year distributions will be made in accordance
with Sections (c), (d) and (e) of this Section 5.12. If
the Participant's interest is distributed in the form of
an annuity purchased from an insurance company,
distributions thereunder will be made in accordance with
the requirements of Section 401(a)(9) of the Code and
the Treasury regulations. Any part of the Participant's
interest which is in the form of an individual account
described in Section 414(k) of the Code will be
distributed in a manner satisfying the requirements of
section 401(a)(9) of the Code and the Treasury
regulations that apply to individual accounts.
(f) DETERMINATION OF AMOUNT TO BE DISTRIBUTED EACH YEAR
(i) GENERAL ANNUITY REQUIREMENTS. If the Participant's
interest is paid in the form of annuity distributions
under the plan, payments under the annuity will satisfy
the following requirements:
(A) the annuity distributions will be paid in periodic
payments made at intervals not longer than one year;
(B) the distribution period will be over a life (or
lives) or over a period certain not longer than the
period described in Subsection (d) or (e);
18
(C) once payments have begun over a period certain, the
period certain will not be changed even if the
period certain is shorter than the maximum
permitted;
(D) payments will either be nonincreasing or increase
only as follows:
(1) by an annual percentage increase that does not
exceed the annual percentage increase in a
cost-of-living index that is based on prices of
all items and issued by the Bureau of Labor
Statistics;
(2) to the extent of the reduction in the amount of
the Participant's payments to provide for a
survivor benefit upon death, but only if the
Beneficiary whose life was being used to
determine the distribution period described in
Subsection (d) dies or is no longer the
Participant's Beneficiary pursuant to a
Qualified Domestic Relations Order within the
meaning of section 414(p);
(3) to provide cash refunds of employee
contributions upon the Participant's death; or
(4) to pay increased benefits that result from a
Plan amendment.
(ii) AMOUNT REQUIRED TO BE DISTRIBUTED BY REQUIRED BEGINNING
DATE. The amount that must be distributed on or before
the Participant's Required Beginning Date (or, if the
Participant dies before distributions begin, the date
distributions are required to begin under Subsection
5.12(b)(ii)(A) or (B) is the payment that is required
for one payment interval. The second payment need not be
made until the end of the next payment interval even if
that payment interval ends in the next calendar year.
Payment intervals are the periods for which payments are
received, e.g., bi-monthly, monthly, semi-annually, or
annually. All of the Participant's benefit accruals as
of the last day of the first Distribution Calendar Year
will be included in the calculation of the amount of the
annuity payments for payment intervals ending on or
after the Participant's Required Beginning Date.
(iii) ADDITIONAL ACCRUALS AFTER FIRST DISTRIBUTION CALENDAR
YEAR. Any additional benefits accruing to the
Participant in a calendar year after the first
Distribution Calendar Year will be distributed beginning
with
19
the first payment interval ending in the calendar year
immediately following the calendar year in which such
amount accrues.
(d) REQUIREMENTS FOR ANNUITY DISTRIBUTIONS THAT COMMENCE DURING
PARTICIPANT'S LIFETIME
(i) JOINT LIFE ANNUITIES WHERE THE BENEFICIARY IS NOT THE
PARTICIPANT'S SPOUSE. If the Participant's interest is
being distributed in the form of a Joint and Survivor
Annuity for the joint lives of the Participant and a
nonspouse Beneficiary, annuity payments to be made on or
after the Participant's Required Beginning Date to the
Designated Beneficiary after the Participant's death
must not at any time exceed the applicable percentage of
the annuity payment for such period that would have been
payable to the Participant using the table set forth in
Q&A-2 of Section 1.401(a)(9)-6T of the Treasury
regulations. If the form of distribution combines a
Joint and Survivor Annuity for the joint lives of the
Participant and a nonspouse Beneficiary and a period
certain annuity, the requirement in the preceding
sentence will apply to annuity payments to be made to
the Designated Beneficiary after the expiration of the
period certain.
(ii) PERIOD CERTAIN ANNUITIES. Unless the Participant's
Spouse is the sole Designated Beneficiary and the form
of distribution is a period certain and no life annuity,
the period certain for an annuity distribution
commencing during the Participant's lifetime may not
exceed the applicable distribution period for the
Participant under the Uniform Lifetime Table set forth
in Section 1.401(a)(9)-9 of the Treasury regulations for
the calendar year that contains the Benefit Commencement
Date. If the Benefit Commencement Date precedes the year
in which the Participant reaches age 70, the applicable
distribution period for the Participant is the
distribution period for age 70 under the Uniform
Lifetime Table set forth in Section 1.401(a)(9)-9 of the
Treasury regulations plus the excess of 70 over the age
of the Participant as of the Participant's birthday in
the year that contains the Benefit Commencement Date. If
the Participant's Spouse is the Participant's sole
Designated Beneficiary and the form of distribution is a
period certain and no life annuity, the period certain
may not exceed the longer of the Participant's
applicable distribution period, as determined under this
Subsection (d)(ii), or the joint life and last survivor
expectancy of the Participant and the Participant's
Spouse as determined under the Joint and Last Survivor
Table set forth in Section 1.401(a)(9)-9 of the Treasury
regulations, using the Participant's and Spouse's
attained ages as of the Participant's and Spouse's
birthdays in the calendar year that contains the Benefit
Commencement Date.
20
(e) REQUIREMENTS FOR MINIMUM DISTRIBUTIONS WHERE PARTICIPANT DIES
BEFORE DATE DISTRIBUTIONS BEGIN
(i) PARTICIPANT SURVIVED BY DESIGNATED BENEFICIARY. If the
Participant dies before the date distribution of his or
her interest begins and there is a Designated
Beneficiary, the Participant's entire interest will be
distributed, beginning no later than the time described
in Subsection (b)(ii)(A) or (B), over the life of the
Designated Beneficiary or over a period certain not
exceeding:
(A) unless the Benefit Commencement Date is before the
first Distribution Calendar Year, the Life
Expectancy of the Designated Beneficiary determined
using the Beneficiary's age as of the Beneficiary's
birthday in the calendar year immediately following
the calendar year of the Participant's death; or
(B) if the Benefit Commencement Date is before the first
Distribution Calendar Year, the Life Expectancy of
the Designated Beneficiary determined using the
Beneficiary's age as of the Beneficiary's birthday
in the calendar year that contains the Benefit
Commencement Date.
(ii) NO DESIGNATED BENEFICIARY. If the Participant dies
before the date distributions begin and there is no
Designated Beneficiary as of September 30 of the year
following the year of the Participant's death,
distribution of the Participant's entire interest will
be completed by December 31 of the calendar year
containing the fifth anniversary of the Participant's
death
(iii) DEATH OF SURVIVING SPOUSE BEFORE DISTRIBUTIONS TO
SURVIVING SPOUSE BEGIN. If the Participant dies before
the date distribution of his or her interest begins, the
Participant's surviving Spouse is the Participant's sole
Designated Beneficiary, and the surviving Spouse dies
before distributions to the surviving Spouse begin, this
Subsection (e) will apply as if the surviving Spouse
were the Participant, except that the time by which
distributions must begin will be determined without
regard to Subsection (b)(ii)(A).
(f) DEFINITIONS
(i) DESIGNATED BENEFICIARY. The individual who is designated
as the Beneficiary under Section 8.05 of Part A of the
Plan and is the designated beneficiary under Section
401(a)(9) of the Code and Section 1.401(a)(9)-1, Q&A-4,
of the Treasury regulations.
21
(ii) DISTRIBUTION CALENDAR YEAR. A calendar year for which a
minimum distribution is required. For distributions
beginning before the Participant's death, the first
Distribution Calendar Year is the calendar year
immediately preceding the calendar year which contains
the Participant's Required Beginning Date. For
distributions beginning after the Participant's death,
the first Distribution Calendar Year is the calendar
year in which distributions are required to begin
pursuant to Subsection (b)(ii).
(iii) LIFE EXPECTANCY. Life expectancy as computed by use of
the Single Life Table in Section 1.401(a)(9)-9 of the
Treasury regulations.
(iv) REQUIRED BEGINNING DATE. The date described in Section
5.06(b) of the Plan."
16. Subsection 12.10(b) of Part A is hereby amended by the addition of the
following at the end thereof:
"Effective for distributions after December 31, 2001,
(1) an Eligible Rollover Distribution does not include any hardship
distribution, and
(2) a portion of a distribution shall not fail to be an Eligible
Rollover Distribution merely because the portion consists of
after-tax employee contributions which are not includible in gross
income. However, such portion may be paid only to an individual
retirement account or annuity described in Section 408(a) or (b) of
the Code, or to a qualified defined contribution plan described in
Section 401(a) or 403(a) of the Code which agrees to separately
account for amounts so transferred, including separately accounting
for the portion of such distribution which is includible in gross
income and the portion of such distribution which is not so
includible."
17. Subsection 12.10(c) of Part A is hereby amended by the addition of the
following at the end thereof:
"Effective for distributions after December 31, 2001, an Eligible
Retirement Plan shall also mean an annuity contract described in Section
403(b) of the Code and an eligible plan under Section 457(b) of the Code
which is maintained by an eligible employer described in Section
457(e)(1)(A) of the Code.
The definition of Eligible Retirement Plan shall also apply in the case of
a distribution to a surviving Spouse, or to a Spouse or former Spouse who
is the Alternate Payee under a qualified domestic relations order, as
defined in Code Section 414(p)."
22
18. Section 10 of Part A is hereby amended effective for claims filed on or
after January 1, 2003 by the deletion of Section 10.10 and the substitution
in lieu thereof of the following:
"10.10 PROCEDURE FOR CLAIMING BENEFITS UNDER THE PLAN
(a) Claims for benefits under the Plan made by a Participant or
Beneficiary covered by the Plan must be submitted in writing to
the Committee. Approved claims will be processed and
instructions issued to the Trustee authorizing payments as
claimed.
If a claim is denied in whole or in part, the Committee shall
notify the claimant of its decision by written notice, in a
manner calculated to be understood by the claimant. The
Committee shall set forth in the notice:
(i) the specific reason or reasons for the denial of the
claim;
(ii) the specific references to the pertinent Plan provisions
on which the denial is based;
(iii) a description of any additional material or information
necessary to perfect the claim, and an explanation of
why such material or information is necessary;
|
(v) an explanation of the Plan's claim review procedure; and
(v) a statement of the claimant's right to bring a civil
action in accordance with section 502(a) of ERISA if the
claimant's claim is denied upon review.
Such notification shall be given within 90 days after the claim
is received by the Committee. This period may be extended for
another 90 days if the claimant is notified that the extension
is necessary due to matters beyond the control of the Plan,
before the end of the original 90-day period. Any notice for an
extension will explain the reason for the extension and the
date by which the Committee expects to rule on the claim.
(b) Upon denial of a claim in whole or in part, a claimant or his
duly authorized representative shall have the right to submit a
written request to the Committee for a full and fair review of
the denied claim, to submit written comments, documents,
records, and other information relating to the claim, and to be
provided, upon request and free of charge, access to, and
copies of, all documents, records and other information
relevant to the claimant's claim for benefits. A request for
review of a claim must be submitted within 60 days of receipt
by the claimant of written notice of the denial of the claim.
23
The Committee shall advise the claimant of the results of the
review within 60 days after receipt of the written request for
review. This period may be extended for another 60 days if the
Committee determines that special circumstances require an
extension of time for processing the request and if written
notice of such extension and circumstances is given to such
claimant within the initial 60 day period. Any notice for an
extension will explain the reason for the extension and the
date by which the Committee expects to rule on the claim.
In the event an appeal is denied, the claimant will be notified
in writing. The Committee shall set forth in the notice:
(i) the specific reason or reasons for the denial of the
claim;
(ii) the specific references to the pertinent Plan provisions
on which the denial is based;
(iii) a statement of the claimant's right to receive, upon
request and free of charge, reasonable access to, and
copies of, all documents, records, and other information
relevant to the claimant's claim for benefits; and
(iv) a statement of the claimant's right to bring a civil
action in accordance with Section 502(a) of ERISA.
The decision of the Committee by majority vote shall be final
and binding upon any and all claimants, including but not
limited to Participants and their Beneficiaries, and any other
individuals making a claim through or under them."
19. Subsection 5.04(a)(i) of Part A is hereby amended by the deletion of the
phrase "$90,000" and the substitution in lieu thereof of the following:
"the dollar limitation specified in Code Section 415(b)(1)(A)(The new limit
specified in Section 415(b)(1)(A) of the Code shall apply only to
Participants who are credited with at least one Hour of Service on or after
the first day of the first Limitation Year beginning after December 31,
2001.)"
20. Subsection 5.04(c) of Part A is hereby amended effective January 1, 1998 by
the addition of the following:
"For Limitation Years beginning on or after January 1, 1998, for purposes
of determining Section 415 Compensation, amounts included pursuant to
Section 125 of the Code shall include amounts not available to a
Participant in cash in lieu of group health coverage because the
Participant is unable to certify that he or she has other health coverage.
An amount will be treated as an amount under Section 125 only if the
Employer does not request or collect information regarding the
Participant's other health coverage as part of the enrollment process for
the health plan."
24
21. Subsection 5.04(e) of Part A is hereby amended by the addition of the
following at the end thereof:
"Notwithstanding the foregoing, for Limitation Years beginning on or after
January 1, 2002, if the benefit payable to a Participant commences prior to
age 62, the maximum dollar limitation defined in paragraph (a)(i), adjusted
by paragraph (d), shall be the actuarial equivalent of such amount payable
at age 62. For purposes of this paragraph, actuarial equivalent shall be
based on the plan's early retirement reductions or the mortality table
specified in Code Section 417(e)(3) and an interest rate of 5%, whichever
produces the smaller amount."
22. Subsection 5.04(f) of Part A is hereby amended by the addition of the
following at the end thereof:
"Notwithstanding the foregoing, effective for Limitation Years beginning on
or after January 1, 2002, if the benefit payable to a Participant commences
after his or her attainment of age 65, the dollar limitation defined in
paragraph (a)(i) above, adjusted by paragraph (d), shall be increased so it
is the actuarial equivalent of such amount payable commencing at age 65.
For purposes of this paragraph, actuarial equivalent shall be determined
using the assumptions in Section 1.01(b) of Part A, or the mortality table
specified in Code Section 417(e)(3) and an interest rate of 5%, whichever
produces the smaller increase."
23. Section 5.04 of Part A is hereby amended by the addition by the addition of
the following subsection (l) at the end thereof:
"(l) Notwithstanding any other Plan provision to the contrary, with
respect to distributions with Benefit Commencement Dates occurring
on or after January 1, 2003, the mortality table used for purposes
of adjusting any benefit or limitation under Section 415(b)(2)(B),
(C) or (D) of the Code as set forth in Subsections (e), (f), or (g)
of this Section 5.04 of Part A shall be the mortality table
specified in Section 417(e)(3) of the Code.
24. Article 14 of Part A is hereby replaced in its entirety by the following
effective January 1, 2002:
"14.01 TOP HEAVY PROVISIONS
(a) For purposes of this Section, the following terms shall have
the meanings indicated below:
25
(i) "AGGREGATION GROUP" means either:
(A) A "PERMISSIVE AGGREGATION GROUP". The Committee may
also include any other qualified plan not required
to be included in the Required Aggregation Group,
provided the resulting group, taken as a whole,
would continue to satisfy the provisions of Sections
401(a)(4) and 410 of the Code. Such group shall be
known as a Permissive Aggregation Group.
(B) A "REQUIRED AGGREGATION GROUP". In determining a
Required Aggregation Group hereunder, each qualified
plan of the Employer or an Affiliated Employer in
which a Key Employee participates and each other
plan of the Employer or an Affiliated Employer,
including terminated plans maintained within the
one-year period ending on the Determination Date,
which enables any plan in which a Key Employee
participates to meet the requirements of Sections
401(a)(4) or 410 of the Code will be required to be
aggregated. Such group shall be known as a Required
Aggregation Group. Notwithstanding the foregoing,
the Required Aggregation Group will not include
"safe harbor" plans described in Section 401(k)(12)
and 401(m)(11) of the Code.
Solely for purposes of determining if the Plan or
any other qualified plan in the Required Aggregation
Group is a top heavy plan for a Plan Year, the
accrued benefits of Non-Key Employees shall be
determined for Plan Years beginning after 1986 under
the method, if any, which is uniformly applied for
accrual purposes under all defined benefit plans
maintained by the Employer or Affiliated Employers
or, if there is no such method, as if such benefit
accrued not more rapidly than under the slowest
accrual rate permitted under Section 411(b)(1)(C) of
the Code.
In no event shall this Plan be considered a top
heavy plan if it is part of a Required Aggregation
Group or a Permissive Aggregation Group that is not
a top heavy group.
Only those plans of the Employer or Affiliated
Employers in which the determination dates fall
within the same calendar year shall be aggregated in
order to determine whether such plans are top heavy
plans.
26
(ii) "DETERMINATION DATE" means the last day of the preceding
Plan Year, except that for the first Plan Year the
Determination Date is the last day of that Plan Year.
(iii) "EMPLOYEE", "FORMER EMPLOYEE", "KEY EMPLOYEE" and
"NON-KEY EMPLOYEE" shall also include Beneficiaries of
such an employee.
(iv) "KEY EMPLOYEE" means any employee or former employee
(including any deceased employee) of the Employer or an
Affiliated Employer who at any time during the Plan Year
containing the Determination Date for the Plan Year in
question is:
(A) An officer of the Employer or Affiliated Employer,
if such individual received Section 415 Compensation
of more than $130,000 as adjusted. No more than 50
employees (or, if lesser, the greater of 3 employees
or 10% of the employees) shall be treated as
officers (exclusive of employees described in
Section 414(q)(8) of the Code).
(B) A 5% owner of the Employer or an Affiliated
Employer. A "5% owner" means a person owning (or
considered as owning, within the meaning of Section
318 of the Code) more than 5% of the outstanding
stock of the Employer or an Affiliated Employer, or
stock possessing more than 5% of the total combined
voting power of all stock of the Employer or an
Affiliated Employer (or having more than 5% of the
capital or profits interest in any Employer or
Affiliated Employer that is not a corporation
determined under similar principles).
(C) A 1% owner of the Employer or an Affiliated Employer
having Section 415 Compensation of more than
$150,000. A "1% owner" means any person who would be
described in paragraph (a)(iv)(B) above if "1%" were
substituted for "5%" in each place where it appears
in paragraph (a)(iv)(B).
A Key Employee shall be determined in accordance with
the provisions of Section 416(i) of the Code.
(v) "NON-KEY EMPLOYEE" means an employee who is not a Key
Employee, including any employee who is a former Key
Employee.
(vi) "VALUATION DATE" means the date used to calculate the
value of accrued benefits or account balances for
purposes of determining the top heavy ratio specified in
paragraph (b) below.
27
For purposes of this Plan, the Valuation Date shall be
the valuation date used for computing the Plan's minimum
funding requirements under Section 412 of the Code. For
each other plan, the Valuation Date shall be, subject to
Section 416 of the Code, the most recent Valuation Date
which falls within or ends within the twelve consecutive
months ending on the applicable determination date for
such plan.
(b) TOP HEAVY PLAN
The Plan shall be deemed a top heavy plan for a Plan Year if,
as of the Valuation Date preceding the applicable Determination
Date, the sum of (1) the present value of accrued benefits of
Key Employees under this Plan and all other defined benefit
plans in the Aggregation Group, and (2) the account balances of
Key Employees under all defined contribution plans in the
Aggregation Group exceeds 60% of the sum of (3) the present
value of accrued benefits of all Participants under this Plan
and all other defined benefit plans in the Aggregation Group
(but excluding Participants who are former Key Employees); and
(4) the account balances of all Participants under all defined
contribution plans in the Aggregation Group.
For purposes of this test, the following rules shall apply:
(i) Subject to subparagraph (ii) below, any distributions
from this Plan or any other plan in the Aggregation
Group, and any accrued benefit distributed from any
other plan in the Aggregation Group during the one-year
period ending on the Determination Date (in the case of
any distribution made for a reason other than separation
from service, death or disability, the five-year period
ending on the Determination Date) shall be taken into
consideration.
(ii) The benefits of and distributions to all former
employees who have not been credited with at least one
Hour of Service during the one-year period ending on the
Determination Date shall be disregarded, provided,
however, that if such former Employee again completes an
Hour of Service with the Employer after such one-year
period, such former Employee's accounts shall be taken
into consideration.
Notwithstanding any provision of this paragraph (ii) to
the contrary, in any Plan Year in which this Plan is a
top heavy Plan, each Non-Key Employee who is also
covered under a defined contribution plan of the
Employer, shall accrue a Minimum Benefit as provided by
this Plan.
Notwithstanding any provision of this paragraph (ii) to
the contrary, in any Plan Year in which this Plan is a
top heavy Plan, each Non-Key Employee who is also
covered under a defined contribution plan of the
28
Employer, shall have credited to his defined
contribution plan account a minimum Employer
contribution equal to the minimum contribution provided
by such defined contribution plan; however, in no event
shall the minimum Employer contribution be less than 5%
of such Participant's Section 415 Compensation. No
Minimum Benefit shall accrue under this Plan.
(iii) If an Employee is a Non-Key Employee for the Plan Year
containing the Determination Date, but such individual
was a Key Employee during any previous Plan Year, the
value of his or her benefits and distributions shall not
be taken into consideration.
(iv) Solely for purposes of determining if the Plan or any
other plan in the Required Aggregation Group is a top
heavy plan for a Plan Year, the accrued benefits under
any defined benefit plans of Non-Key Employees shall be
determined for Plan Years beginning after 1986 under the
method, if any, which is uniformly applied for accrual
purposes under all defined benefit plans maintained by
the Employer or an Affiliated Employer or, if there is
no such method, as if such benefit accrued not more
rapidly than under the slowest accrual rate permitted
under Section 411(b)(1)(C) of the Code.
(v) The determination of account balances under all defined
contribution plans in the Aggregation Group shall be
increased for contributions due as of the Determination
Date to the extent required under Section 416 of the
Code.
(vi) The determination of the present value of accrued
benefits under all defined benefit plans in the
Aggregation Group shall be based on the interest rate
and mortality table specified in Section 1.01(a) of part
A.
(vii) Distributions, rollovers and trust to trust transfers
shall be taken into consideration to the extent required
under Section 416 of the Code.
(viii) "Deductible employee contributions" (within the meaning
of Section 501(c)(18)(D) of the Code) contributed to any
plan in the Aggregation Group shall not be taken into
consideration.
The calculation of the top heavy ratio shall be made in
accordance with the provisions of Section 416 of the Code.
(c) Notwithstanding any other provision of the Plan to the
contrary, for any Plan Year in which the Plan is deemed to be a
top heavy plan, the following provisions shall apply:
29
(i) MINIMUM VESTING
Any Participant who completes an Hour of Service in a
Plan Year in which the Plan is deemed to be a top heavy
plan shall have a nonforfeitable interest in a
percentage of his or her Accrued Benefit determined by
multiplying the Accrued Benefit by the applicable
percentage from the following schedule:
YEARS OF VESTING SERVICE VESTED PERCENTAGE
Less than 3 years 0 %
3 or more years 100 %
|
Furthermore, if the vesting schedule under the Plan for
any Plan Year shifts into or out of the above schedule
because of the Plan's top heavy status, such shift shall
be regarded as an amendment to the Plan's vesting
schedule.
The provisions of this paragraph (c)(i) shall not be
applied to reduce the Participant's vested percentage
computed in accordance with the provisions of the Plan.
(ii) MINIMUM BENEFIT
Each Participant who is a Non-Key Employee shall have an
Accrued Benefit calculated as of the last day of the top
heavy Plan Year or, if earlier, as of his or her
Severance from Service Date occurring during such Plan
Year, at least equal to the product of (A) 2% of his or
her Section 415 Compensation (as defined in Section
415(c) of the Code) from an Employer or Affiliated
Employer during the five consecutive years for which the
Participant had the highest Compensation, and (B) his or
her years of Benefit Service up to a maximum of ten
years. For purposes of this paragraph (ii), years of
Benefit Service shall not include Plan Years during
which the Plan is not a top heavy plan nor a Plan Year
in which no Key or former Key Employee benefits under
the Plan.
For purposes of this Plan, the minimum annual retirement
benefit means a benefit payable annually in the form of
a single life annuity (with no ancillary benefits)
beginning at a Participant's Normal Retirement Date.
If a Non-Key Employee participates in a defined
contribution plan included in the Aggregation Group, the
minimum benefit shall be provided under this Subsection
(ii).
(iii) In any Plan Year that the Plan ceases to be top heavy,
the above provisions shall no longer apply, except that
the portion of a Participant's
30
Accrued Benefit which was vested pursuant to paragraph
(i) above shall remain vested."
25. Section 1.02 of Part B is hereby amended by the addition of the following
at the end thereof:
"Notwithstanding any other Plan provision to the contrary, with respect to
lump sum distributions made on or after January 1, 2003, Actuarial
Equivalence shall be determined based on the mortality table specified in
Section 417(e)(3) of the Code and an interest rate equal to the rate
defined in Section 417(e)(3)(A)(ii)(II) of the Code for the November
immediately preceding the Plan Year of distribution."
26. Section 1.12 of Part B is hereby amended effective January 1, 1998 by the
addition of the following at the end thereof:
"For purposes of this definition of Compensation, contributions pursuant to
a cafeteria plan established under Section 125 of the Code shall include
any amounts not available to a Participant in cash in lieu of group health
coverage because the Participant is unable to certify that he or she has
other health coverage. An amount will be treated as a contribution under
Section 125 of the Code only if the Employer does not request or collect
information regarding the Participant's other health coverage as part of
the enrollment process for the health plan."
27. Section 1.12 of Part B is hereby further amended by the addition of the
following at the end thereof:
"Notwithstanding any provision of the Plan the contrary, in no event shall
a Participant's Compensation taken into account under the Plan for any Plan
Year beginning on or after January 1, 2002 exceed the applicable limit
specified in Code Section 401(a)(17)(A) for any Plan Year. This dollar
limit on Compensation shall be adjusted for cost-of-living increases in
accordance with Section 401(a)(17)(B) of the Code. The cost-of-living
adjustment shall apply only to Compensation taken into account for Plan
Years beginning with the Plan Year in which such increase is effective.
For purposes of determining benefit accruals in Plan Years beginning after
December 31, 2001 for Participants who earn an Hour of Service after
December 31, 2001, Compensation for any prior Plan Year shall be limited to
$200,000."
28. Article VIII of Part B is hereby amended effective as of January 1, 2003 by
the addition of the following new Section 8.01:
"8.01 MINIMUM DISTRIBUTION REQUIREMENTS
(g) GENERAL RULES
31
(k) EFFECTIVE DATE. The provisions of this Section 8.01 will
apply for purposes of determining required minimum
distributions for calendar years beginning with the 2003
calendar year.
(viii) PRECEDENCE. The requirements of this article will take
precedence over any inconsistent provisions of the Plan.
(ix) REQUIREMENTS OF TREASURY REGULATIONS INCORPORATED. All
distributions required under this Section 8.01 will be
determined and made in accordance with the Treasury
regulations under Section 401(a)(9) of the Code.
(x) TEFRA SECTION 242(b)(2) ELECTIONS. Notwithstanding the
other provisions of this Section 8.01, other than
paragraph (a)(iii) above, distributions may be made
under a designation made before January 1, 1984, in
accordance with Section 242(b)(2) of the Tax Equity and
Fiscal Responsibility Act ("TEFRA") and the provisions
of the Plan that relate to Section 242(b)(2) of TEFRA.
(h) TIME AND MANNER OF DISTRIBUTION
(k) REQUIRED BEGINNING DATE. The Participant's entire
interest will be distributed, or begin to be
distributed, to the Participant no later than the
Participant's Required Beginning Date.
(ii) DEATH OF PARTICIPANT BEFORE DISTRIBUTIONS BEGIN. If the
Participant dies before distributions begin, the
Participant's entire interest will be distributed, or
begin to be distributed, no later than as follows:
(A) If the Participant's surviving Spouse is the
Participant's sole Designated Beneficiary, then
distributions to the surviving Spouse will begin by
December 31 of the calendar year immediately
following the calendar year in which the Participant
died, or by December 31 of the calendar year in
which the Participant would have attained age 70
1/2, if later.
(B) If the Participant's surviving Spouse is not the
Participant's sole Designated Beneficiary, then
distributions to the Designated Beneficiary will
begin by December 31 of the calendar year
immediately following the calendar year in which the
Participant died.
32
(C) If there is no Designated Beneficiary as of
September 30 of the year following the year of the
Participant's death, the Participant's entire
interest will be distributed by December 31 of the
calendar year containing the fifth anniversary of
the Participant's death.
(D) If the Participant's surviving Spouse is the
Participant's sole Designated Beneficiary and the
surviving Spouse dies after the Participant but
before distributions to the surviving Spouse begin,
this Subsection 8.01(b)(ii), other than Subsection
8.01(b)(ii)(A), will apply as if the surviving
Spouse were the Participant.
For purposes of this Subsection 8.01(b)(ii) and
Subsection 8.01(e), distributions are considered to
begin on the Participant's Required Beginning Date (or,
if Subsection 8.01(b)(ii)(D) applies, the date
distributions are required to begin to the surviving
Spouse under Subsection 8.01(b)(ii)(A). If annuity
payments irrevocably commence to the Participant before
the Participant's Required Beginning Date (or to the
Participant's surviving Spouse before the date
distributions are required to begin to the surviving
Spouse under Subsection 8.01(b)(ii)(A), the date
distributions are considered to begin is the date
distributions actually commence.
(iii) FORM OF DISTRIBUTION. Unless the Participant's interest
is distributed in the form of an annuity purchased from
an insurance company or in a single sum on or before the
Required Beginning Date, as of the first Distribution
Calendar Year distributions will be made in accordance
with Sections (c), (d) and (e) of this Section 8.01. If
the Participant's interest is distributed in the form of
an annuity purchased from an insurance company,
distributions thereunder will be made in accordance with
the requirements of Section 401(a)(9) of the Code and
the Treasury regulations. Any part of the Participant's
interest which is in the form of an individual account
described in Section 414(k) of the Code will be
distributed in a manner satisfying the requirements of
section 401(a)(9) of the Code and the Treasury
regulations that apply to individual accounts.
(i) DETERMINATION OF AMOUNT TO BE DISTRIBUTED EACH YEAR
(i) GENERAL ANNUITY REQUIREMENTS. If the Participant's
interest is paid in the form of annuity distributions
under the plan, payments under the annuity will satisfy
the following requirements:
33
(A) the annuity distributions will be paid in periodic
payments made at intervals not longer than one year;
(B) the distribution period will be over a life (or
lives) or over a period certain not longer than the
period described in Subsection (d) or (e);
(C) once payments have begun over a period certain, the
period certain will not be changed even if the
period certain is shorter than the maximum
permitted;
(D) payments will either be nonincreasing or increase
only as follows:
(1) by an annual percentage increase that does not
exceed the annual percentage increase in a
cost-of-living index that is based on prices of
all items and issued by the Bureau of Labor
Statistics;
(2) to the extent of the reduction in the amount of
the Participant's payments to provide for a
survivor benefit upon death, but only if the
Beneficiary whose life was being used to
determine the distribution period described in
Subsection (d) dies or is no longer the
Participant's Beneficiary pursuant to a
Qualified Domestic Relations Order within the
meaning of section 414(p);
(3) to provide cash refunds of employee
contributions upon the Participant's death; or
(4) to pay increased benefits that result from a
Plan amendment.
(ii) AMOUNT REQUIRED TO BE DISTRIBUTED BY REQUIRED BEGINNING
DATE. The amount that must be distributed on or before
the Participant's Required Beginning Date (or, if the
Participant dies before distributions begin, the date
distributions are required to begin under Subsection
8.01(b)(ii)(A) or (B) is the payment that is required
for one payment interval. The second payment need not be
made until the end of the next payment interval even if
that payment interval ends in the next calendar year.
Payment intervals are the periods for which payments are
received, e.g., bi-monthly, monthly, semi-annually, or
annually. All of the Participant's benefit accruals as
of the last day of the first Distribution Calendar Year
will be included in the calculation of the
34
amount of the annuity payments for payment intervals
ending on or after the Participant's Required Beginning
Date.
(iii) ADDITIONAL ACCRUALS AFTER FIRST DISTRIBUTION CALENDAR
YEAR. Any additional benefits accruing to the
Participant in a calendar year after the first
Distribution Calendar Year will be distributed beginning
with the first payment interval ending in the calendar
year immediately following the calendar year in which
such amount accrues.
(d) REQUIREMENTS FOR ANNUITY DISTRIBUTIONS THAT COMMENCE DURING
PARTICIPANT'S LIFETIME
(i) JOINT LIFE ANNUITIES WHERE THE BENEFICIARY IS NOT THE
PARTICIPANT'S SPOUSE. If the Participant's interest is
being distributed in the form of a Joint and Survivor
Annuity for the joint lives of the Participant and a
nonspouse Beneficiary, annuity payments to be made on or
after the Participant's Required Beginning Date to the
Designated Beneficiary after the Participant's death
must not at any time exceed the applicable percentage of
the annuity payment for such period that would have been
payable to the Participant using the table set forth in
Q&A-2 of Section 1.401(a)(9)-6T of the Treasury
regulations. If the form of distribution combines a
Joint and Survivor Annuity for the joint lives of the
Participant and a nonspouse Beneficiary and a period
certain annuity, the requirement in the preceding
sentence will apply to annuity payments to be made to
the Designated Beneficiary after the expiration of the
period certain.
(ii) PERIOD CERTAIN ANNUITIES. Unless the Participant's
Spouse is the sole Designated Beneficiary and the form
of distribution is a period certain and no life annuity,
the period certain for an annuity distribution
commencing during the Participant's lifetime may not
exceed the applicable distribution period for the
Participant under the Uniform Lifetime Table set forth
in Section 1.401(a)(9)-9 of the Treasury regulations for
the calendar year that contains the Benefit Commencement
Date. If the Benefit Commencement Date precedes the year
in which the Participant reaches age 70, the applicable
distribution period for the Participant is the
distribution period for age 70 under the Uniform
Lifetime Table set forth in Section 1.401(a)(9)-9 of the
Treasury regulations plus the excess of 70 over the age
of the Participant as of the Participant's birthday in
the year that contains the Benefit Commencement Date. If
the Participant's Spouse is the Participant's sole
Designated Beneficiary and the form of distribution is a
period certain and no life annuity, the period certain
may not exceed the longer of the Participant's
applicable distribution period, as determined under this
Subsection (d)(ii), or the joint life and last
35
survivor expectancy of the Participant and the
Participant's Spouse as determined under the Joint and
Last Survivor Table set forth in Section 1.401(a)(9)-9
of the Treasury regulations, using the Participant's and
Spouse's attained ages as of the Participant's and
Spouse's birthdays in the calendar year that contains
the Benefit Commencement Date.
(e) REQUIREMENTS FOR MINIMUM DISTRIBUTIONS WHERE PARTICIPANT DIES
BEFORE DATE DISTRIBUTIONS BEGIN
(i) PARTICIPANT SURVIVED BY DESIGNATED BENEFICIARY. If the
Participant dies before the date distribution of his or
her interest begins and there is a Designated
Beneficiary, the Participant's entire interest will be
distributed, beginning no later than the time described
in Subsection (b)(ii)(A) or (B), over the life of the
Designated Beneficiary or over a period certain not
exceeding:
(A) unless the Benefit Commencement Date is before the
first Distribution Calendar Year, the Life
Expectancy of the Designated Beneficiary determined
using the Beneficiary's age as of the Beneficiary's
birthday in the calendar year immediately following
the calendar year of the Participant's death; or
(B) if the Benefit Commencement Date is before the first
Distribution Calendar Year, the Life Expectancy of
the Designated Beneficiary determined using the
Beneficiary's age as of the Beneficiary's birthday
in the calendar year that contains the Benefit
Commencement Date.
(ii) NO DESIGNATED BENEFICIARY. If the Participant dies
before the date distributions begin and there is no
Designated Beneficiary as of September 30 of the year
following the year of the Participant's death,
distribution of the Participant's entire interest will
be completed by December 31 of the calendar year
containing the fifth anniversary of the Participant's
death
(iii) DEATH OF SURVIVING SPOUSE BEFORE DISTRIBUTIONS TO
SURVIVING SPOUSE BEGIN. If the Participant dies before
the date distribution of his or her interest begins, the
Participant's surviving Spouse is the Participant's sole
Designated Beneficiary, and the surviving Spouse dies
before distributions to the surviving Spouse begin, this
Subsection (e) will apply as if the surviving Spouse
were the Participant, except that the time by which
distributions must begin will be determined without
regard to Subsection (b)(ii)(A).
36
(f) DEFINITIONS
(i) DESIGNATED BENEFICIARY. The individual who is designated
as the Beneficiary and is the designated beneficiary
under Section 401(a)(9) of the Code and Section
1.401(a)(9)-1, Q&A-4, of the Treasury regulations.
(ii) DISTRIBUTION CALENDAR YEAR. A calendar year for which a
minimum distribution is required. For distributions
beginning before the Participant's death, the first
Distribution Calendar Year is the calendar year
immediately preceding the calendar year which contains
the Participant's Required Beginning Date. For
distributions beginning after the Participant's death,
the first Distribution Calendar Year is the calendar
year in which distributions are required to begin
pursuant to Subsection (b)(ii).
(iii) LIFE EXPECTANCY. Life expectancy as computed by use of
the Single Life Table in Section 1.401(a)(9)-9 of the
Treasury regulations.
(iv) REQUIRED BEGINNING DATE. The date described in Section
5.06(b) of the Plan."
29. Subsection 14.17(b)(i) of Part B is hereby amended by the addition of the
following at the end thereof:
"Effective for distributions after December 31, 2001,
(1) an Eligible Rollover Distribution does not include any hardship
distribution, and
(2) a portion of a distribution shall not fail to be an Eligible
Rollover Distribution merely because the portion consists of
after-tax employee contributions which are not includible in gross
income. However, such portion may be paid only to an individual
retirement account or annuity described in Section 408(a) or (b) of
the Code, or to a qualified defined contribution plan described in
Section 401(a) or 403(a) of the Code which agrees to separately
account for amounts so transferred, including separately accounting
for the portion of such distribution which is includible in gross
income and the portion of such distribution which is not so
includible."
30. Subsection 14.17(b)(ii) of Part B is hereby amended by the addition of the
following at the end thereof:
"Effective for distributions after December 31, 2001, an Eligible
Retirement Plan shall also mean an annuity contract described in Section
403(b) of the Code and an eligible plan under Section 457(b) of the Code
which is maintained by an eligible employer described in Section
457(e)(1)(A) of the Code.
37
The definition of Eligible Retirement Plan shall also apply in the case of
a distribution to a surviving Spouse, or to a Spouse or former Spouse who
is the Alternate Payee under a qualified domestic relations order, as
defined in Code Section 414(p)."
31. Article XI of part B is hereby amended effective for claims filed on or
after January 1, 2003 by the deletion of Section 11.11 and the substitution
in lieu thereof of the following:
"11.1.1 PROCEDURE FOR CLAIMING BENEFITS UNDER THE PLAN
(a) Claims for benefits under the Plan made by a Participant or
Beneficiary covered by the Plan must be submitted in writing to
the Committee. Approved claims will be processed and
instructions issued to the Trustee authorizing payments as
claimed.
If a claim is denied in whole or in part, the Committee shall
notify the claimant of its decision by written notice, in a
manner calculated to be understood by the claimant. The
Committee shall set forth in the notice:
(i) the specific reason or reasons for the denial of the
claim;
(ii) the specific references to the pertinent Plan provisions
on which the denial is based;
(iii) a description of any additional material or information
necessary to perfect the claim, and an explanation of
why such material or information is necessary;
(vi) an explanation of the Plan's claim review procedure; and
(v) a statement of the claimant's right to bring a civil
action in accordance with section 502(a) of ERISA if the
claimant's claim is denied upon review.
Such notification shall be given within 90 days after the claim
is received by the Committee. This period may be extended for
another 90 days if the claimant is notified that the extension
is necessary due to matters beyond the control of the Plan,
before the end of the original 90-day period. Any notice for an
extension will explain the reason for the extension and the
date by which the Committee expects to rule on the claim.
(b) Upon denial of a claim in whole or in part, a claimant or his
duly authorized representative shall have the right to submit a
written request to the Committee for a full and fair review of
the denied claim, to submit written comments, documents,
records, and other information relating to the claim, and to be
38
provided, upon request and free of charge, access to, and
copies of, all documents, records and other information
relevant to the claimant's claim for benefits. A request for
review of a claim must be submitted within 60 days of receipt
by the claimant of written notice of the denial of the claim.
The Committee shall advise the claimant of the results of the
review within 60 days after receipt of the written request for
review. This period may be extended for another 60 days if the
Committee determines that special circumstances require an
extension of time for processing the request and if written
notice of such extension and circumstances is given to such
claimant within the initial 60 day period. Any notice for an
extension will explain the reason for the extension and the
date by which the Committee expects to rule on the claim.
In the event an appeal is denied, the claimant will be notified
in writing. The Committee shall set forth in the notice:
(i) the specific reason or reasons for the denial of the
claim;
(ii) the specific references to the pertinent Plan provisions
on which the denial is based;
(iii) a statement of the claimant's right to receive, upon
request and free of charge, reasonable access to, and
copies of, all documents, records, and other information
relevant to the claimant's claim for benefits; and
(iv) a statement of the claimant's right to bring a civil
action in accordance with Section 502(a) of ERISA.
The decision of the Committee by majority vote shall be final
and binding upon any and all claimants, including but not
limited to Participants and their Beneficiaries, and any other
individuals making a claim through or under them."
32. Subsection 5.04(d)(iv) of Part B is hereby amended by the deletion of the
phrase "$90,000" wherever it appears and the substitution in lieu thereof
of the following:
"the dollar limitation specified in Code Section 415(b)(1)(A)."
And further amended by the addition of the following at the end thereof:
"The new limit specified in Section 415(b)(1)(A) of the Code shall apply
only to Participants who are credited with at least one Hour of Service on
or after the first day of the first Limitation Year beginning after
December 31, 2001."
33. Subsection 5.04(d)(iii) of Part B is hereby amended effective January 1,
1998 by the addition of the following:
39
"For Limitation Years beginning on or after January 1, 1998, for purposes
of determining Section 415 Compensation, amounts included pursuant to
Section 125 of the Code shall include amounts not available to a
Participant in cash in lieu of group health coverage because the
Participant is unable to certify that he or she has other health coverage.
An amount will be treated as an amount under Section 125 only if the
Employer does not request or collect information regarding the
Participant's other health coverage as part of the enrollment process for
the health plan."
34. Subsection 5.04(d)(x)(c) of Part B is hereby deleted.
35. Subsection 5.04(d)(x)(D) of Part B is hereby amended by the addition of the
following at the end thereof:
"Notwithstanding the foregoing, for Limitation Years beginning on or after
January 1, 2002, if the benefit payable to a Participant commences prior to
age 62, the maximum dollar limitation defined in paragraph (a)(i), adjusted
by paragraph (d), shall be the actuarial equivalent of such amount payable
at age 62. For purposes of this paragraph, actuarial equivalent shall be
based on the plan's early retirement reductions or the mortality table
specified in Code Section 417(e)(3) and an interest rate of 5%, whichever
produces the smaller amount."
36. Subsection 504(d)(x)(E) of Part B is hereby amended by the addition of the
following at the end thereof:
"Notwithstanding the foregoing, effective for Limitation Years beginning on
or after January 1, 2002, if the benefit payable to a Participant commences
after his or her attainment of age 65, the dollar limitation defined in
paragraph (a)(i) above, adjusted by paragraph (d), shall be increased so it
is the actuarial equivalent of such amount payable commencing at age 65.
For purposes of this paragraph, actuarial equivalent shall be determined
using the assumptions in Section 1.02(d), or the mortality table specified
in Code Section 417(e)(3) and an interest rate of 5%, whichever produces
the smaller increase."
37. Section 5.04(d)(x) of Part B is hereby amended by the addition of the
following subsection (F) at the end thereof:
"(F) Notwithstanding any other Plan provision to the contrary, with
respect to distributions with benefit commencement dates occurring
on or after January 1, 2003 the mortality table used for purposes
of adjusting any benefit or limitation under Section 415(b)(2)(B),
(C) or (D) of the Code shall be the mortality table specified in
Section 417(e)(3) of the Code."
38. Article XV of Part B is hereby replaced in its entirety by the following
effective January 1, 2002]:
40
"15.01 TOP HEAVY PROVISIONS
(a) For purposes of this Section, the following terms shall have
the meanings indicated below:
(i) "AGGREGATION GROUP" means either:
(A) A "PERMISSIVE AGGREGATION GROUP". The Committee may
also include any other qualified plan not required
to be included in the Required Aggregation Group,
provided the resulting group, taken as a whole,
would continue to satisfy the provisions of Sections
401(a)(4) and 410 of the Code. Such group shall be
known as a Permissive Aggregation Group.
(B) A "REQUIRED AGGREGATION GROUP". In determining a
Required Aggregation Group hereunder, each qualified
plan of the Employer or an Affiliated Employer in
which a Key Employee participates and each other
plan of the Employer or an Affiliated Employer,
including terminated plans maintained within the
one-year period ending on the Determination Date,
which enables any plan in which a Key Employee
participates to meet the requirements of Sections
401(a)(4) or 410 of the Code will be required to be
aggregated. Such group shall be known as a Required
Aggregation Group. Notwithstanding the foregoing,
the Required Aggregation Group will not include
"safe harbor" plans described in Section 401(k)(12)
and 401(m)(11) of the Code.
Solely for purposes of determining if the Plan or
any other qualified plan in the Required Aggregation
Group is a top heavy plan for a Plan Year, the
accrued benefits of Non-Key Employees shall be
determined for Plan Years beginning after 1986 under
the method, if any, which is uniformly applied for
accrual purposes under all defined benefit plans
maintained by the Employer or Affiliated Employers
or, if there is no such method, as if such benefit
accrued not more rapidly than under the slowest
accrual rate permitted under Section 411(b)(1)(C) of
the Code.
In no event shall this Plan be considered a top
heavy plan if it is part of a Required Aggregation
Group or a Permissive Aggregation Group that is not
a top heavy group.
Only those plans of the Employer or Affiliated
Employers in which the determination dates fall
within the same calendar year
41
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shall be aggregated in order to determine whether
such plans are top heavy plans.
(ii) "DETERMINATION DATE" means the last day of the preceding
Plan Year, except that for the first Plan Year the
Determination Date is the last day of that Plan Year.
(iii) "EMPLOYEE", "FORMER EMPLOYEE", "KEY EMPLOYEE" and
"NON-KEY EMPLOYEE" shall also include Beneficiaries of
such an employee.
(iv) "KEY EMPLOYEE" means any employee or former employee
(including any deceased employee) of the Employer or an
Affiliated Employer who at any time during the Plan Year
containing the Determination Date for the Plan Year in
question is:
(A) An officer of the Employer or Affiliated Employer,
if such individual received Section 415 Compensation
of more than $130,000 as adjusted. No more than 50
employees (or, if lesser, the greater of 3 employees
or 10% of the employees) shall be treated as
officers (exclusive of employees described in
Section 414(q)(8) of the Code).
(B) A 5% owner of the Employer or an Affiliated
Employer. A "5% owner" means a person owning (or
considered as owning, within the meaning of Section
318 of the Code) more than 5% of the outstanding
stock of the Employer or an Affiliated Employer, or
stock possessing more than 5% of the total combined
voting power of all stock of the Employer or an
Affiliated Employer (or having more than 5% of the
capital or profits interest in any Employer or
Affiliated Employer that is not a corporation
determined under similar principles).
(C) A 1% owner of the Employer or an Affiliated Employer
having Section 415 Compensation of more than
$150,000. A "1% owner" means any person who would be
described in paragraph (a)(iv)(B) above if "1%" were
substituted for "5%" in each place where it appears
in paragraph (a)(iv)(B).
A Key Employee shall be determined in accordance with
the provisions of Section 416(i) of the Code.
(v) "NON-KEY EMPLOYEE" means an employee who is not a Key
Employee, including any employee who is a former Key
Employee.
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42
(vi) "VALUATION DATE" means the date used to calculate the
value of accrued benefits or account balances for
purposes of determining the top heavy ratio specified in
paragraph (b) below.
For purposes of this Plan, the Valuation Date shall be
the valuation date used for computing the Plan's minimum
funding requirements under Section 412 of the Code. For
each other plan, the Valuation Date shall be, subject to
Section 416 of the Code, the most recent Valuation Date
which falls within or ends within the twelve consecutive
months ending on the applicable determination date for
such plan.
(b) TOP HEAVY PLAN
The Plan shall be deemed a top heavy plan for a Plan Year if,
as of the Valuation Date preceding the applicable Determination
Date, the sum of (1) the present value of accrued benefits of
Key Employees under this Plan and all other defined benefit
plans in the Aggregation Group, and (2) the account balances of
Key Employees under all defined contribution plans in the
Aggregation Group exceeds 60% of the sum of (3) the present
value of accrued benefits of all Participants under this Plan
and all other defined benefit plans in the Aggregation Group
(but excluding Participants who are former Key Employees); and
(4) the account balances of all Participants under all defined
contribution plans in the Aggregation Group.
For purposes of this test, the following rules shall apply:
(i) Subject to subparagraph (ii) below, any distributions
from this Plan or any other plan in the Aggregation
Group, and any accrued benefit distributed from any
other plan in the Aggregation Group during the one-year
period ending on the Determination Date (in the case of
any distribution made for a reason other than separation
from service, death or disability, the five-year period
ending on the Determination Date) shall be taken into
consideration.
(ii) The benefits of and distributions to all former
employees who have not been credited with at least one
Hour of Service during the one-year period ending on the
Determination Date shall be disregarded, provided,
however, that if such former Employee again completes an
Hour of Service with the Employer after such one-year
period, such former Employee's accounts shall be taken
into consideration.
Notwithstanding any provision of this paragraph (ii) to
the contrary, in any Plan Year in which this Plan is a
top heavy Plan, each Non-Key Employee who is also
covered under a defined contribution plan of the
Employer, shall accrue a Minimum Benefit as provided by
this Plan.
43
Notwithstanding any provision of this paragraph (ii) to
the contrary, in any Plan Year in which this Plan is a
top heavy Plan, each Non-Key Employee who is also
covered under a defined contribution plan of the
Employer, shall have credited to his defined
contribution plan account a minimum Employer
contribution equal to the minimum contribution provided
by such defined contribution plan; however, in no event
shall the minimum Employer contribution be less than 5%
of such Participant's Section 415 Compensation. No
Minimum Benefit shall accrue under this Plan.
(iii) If an Employee is a Non-Key Employee for the Plan Year
containing the Determination Date, but such individual
was a Key Employee during any previous Plan Year, the
value of his or her benefits and distributions shall not
be taken into consideration.
(iv) Solely for purposes of determining if the Plan or any
other plan in the Required Aggregation Group is a top
heavy plan for a Plan Year, the accrued benefits under
any defined benefit plans of Non-Key Employees shall be
determined for Plan Years beginning after 1986 under the
method, if any, which is uniformly applied for accrual
purposes under all defined benefit plans maintained by
the Employer or an Affiliated Employer or, if there is
no such method, as if such benefit accrued not more
rapidly than under the slowest accrual rate permitted
under Section 411(b)(1)(C) of the Code.
(v) The determination of account balances under all defined
contribution plans in the Aggregation Group shall be
increased for contributions due as of the Determination
Date to the extent required under Section 416 of the
Code.
(vi) The determination of the present value of accrued
benefits under all defined benefit plans in the
Aggregation Group shall be based on the interest rate
and mortality table specified in Section 1.02.
(vii) Distributions, rollovers and trust to trust transfers
shall be taken into consideration to the extent required
under Section 416 of the Code.
(viii) "Deductible employee contributions" (within the meaning
of Section 501(c)(18)(D) of the Code) contributed to any
plan in the Aggregation Group shall not be taken into
consideration.
The calculation of the top heavy ratio shall be made in
accordance with the provisions of Section 416 of the Code.
44
(c) Notwithstanding any other provision of the Plan to the
contrary, for any Plan Year in which the Plan is deemed to be a
top heavy plan, the following provisions shall apply:
(i) MINIMUM VESTING
Any Participant who completes an Hour of Service in a
Plan Year in which the Plan is deemed to be a top heavy
plan shall have a nonforfeitable interest in a
percentage of his or her Accrued Benefit determined by
multiplying the Accrued Benefit by the applicable
percentage from the following schedule:
YEARS OF VESTING SERVICE VESTED PERCENTAGE
Less than 3 years 0 %
3 or more years 100 %
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Furthermore, if the vesting schedule under the Plan for
any Plan Year shifts into or out of the above schedule
because of the Plan's top heavy status, such shift shall
be regarded as an amendment to the Plan's vesting
schedule.
The provisions of this paragraph (c)(i) shall not be
applied to reduce the Participant's vested percentage
computed in accordance with the provisions of the Plan.
(ii) MINIMUM BENEFIT
Each Participant who is a Non-Key Employee shall have an
Accrued Benefit calculated as of the last day of the top
heavy Plan Year or, if earlier, as of his or her
Severance from Service Date occurring during such Plan
Year, at least equal to the product of (A) 2% of his or
her Section 415 Compensation (as defined in Section
415(c) of the Code) from an Employer or Affiliated
Employer during the five consecutive years for which the
Participant had the highest Compensation, and (B) his or
her years of Benefit Service up to a maximum of ten
years. For purposes of this paragraph (ii), years of
Benefit Service shall not include Plan Years during
which the Plan is not a top heavy plan nor a Plan Year
in which no Key or former Key Employee benefits under
the Plan.
For purposes of this Plan, the minimum annual retirement
benefit means a benefit payable annually in the form of
a single life annuity (with no ancillary benefits)
beginning at a Participant's Normal Retirement Date.
45
If a Non-Key Employee participates in a defined
contribution plan included in the Aggregation Group, the
minimum benefit shall be provided under this Plan.
(iii) In any Plan Year that the Plan ceases to be top heavy,
the above provisions shall no longer apply, except that
the portion of a Participant's Accrued Benefit which was
vested pursuant to paragraph (i) above shall remain
vested."
IN WITNESS WHEREOF, the Sponsoring Employer has caused this amendment to be
executed by its duly authorized representative and its seal affixed hereto on
this 28h day of October, 2002.
WATTS INDUSTRIES, INC.
By: /s/ William C. McCartney
(Seal)
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46
