10/11/93
11/2/93
2/28/94
9/21/94
12/27/94
3/7/96
1/10/97
1/30/97
12/18/97
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The Pep Boys -- Xxxxx, Xxx & Jack
Pension Plan
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Table Of Contents
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Article I. Introduction...........................................................................................1
Article II. Definitions...........................................................................................2
Article III. Participation And Service............................................................................8
Article IV. Plan Benefits.........................................................................................9
Article V. Vesting...............................................................................................14
Article VI. Funding..............................................................................................15
Article VII. Amendment And Termination...........................................................................16
Article VIII. Administration.....................................................................................17
Article IX. Limitations On Contributions And Benefits............................................................20
Article X. Xxxxxx, Transfer Or Consolidation Of Plans............................................................22
Article XI. Miscellaneous........................................................................................23
Article XII. Determination Of Top-Heavy Status...................................................................24
Article XIII. ERISA Transition Provisions........................................................................26
Appendix A.......................................................................................................29
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Article I. Introduction
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THE PEP BOYS -- XXXXX, MOE & JACK Pension Plan (the "Plan") is
established and maintained in accordance with the terms of this instrument. The
assets of this Plan are held by the Trustee in accordance with the terms of the
Trust Agreement, which is considered to be an integral part of this Plan. Except
as provided herein or in the Trust Agreement, the Trustee has the exclusive
authority to manage and control the assets of this Plan. Except as otherwise
noted herein, this amended and restated version of the Plan applies to those
Participants who are credited with an Hour of Service with the Employer on or
after January 1, 1989.
The Plan is further amended effective January 1, 1989 to comply with
the Tax Reform Act of 1986, as amended, ("TRA 86") except for those provisions
that became effective in years prior to 1989 as described below, or as
specifically noted in the Plan.
(1) Titles XI and XVIII of TRA '86;
(2) Subtitle C of Title IX of OBRA '86;
(3) Optional Form of Benefit Regulations;
(4) Temporary regulations under section 414(q) and (s);
(5) Proposed regulations under sections 401(a)(9);
(6) Notice 87-20, regarding amendments to sections 411(a)
(11)(B) and 417(e)(3) of the Code made by section 1139
of TRA '86; and
(7) Notice 87-21, regarding changes to section 415 of the Code
made by TRA '86;
The rights of those individuals (or their beneficiaries) who terminated
employment prior to January 1, 1989, in and to their benefits payable from the
Plan, are governed by the terms and conditions of the Plan in effect prior to
such date.
1
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Article II. Definitions
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2.1 Definitions. When used in this Plan, the following initially
capitalized words and phrases shall have the meanings indicated herein:
Accrued Annual Pension means as of any applicable date, the pension
determined in accordance with the provisions of Section 4.1 that the Participant
would be entitled to receive commencing on his Normal Retirement Date based on
his Compensation and Years of Credited Service through the applicable date. An
Accrued Annual Pension to which a Former Participant is entitled shall not be
increased or decreased by reason of any amendments to the Plan adopted on or
after the date he ceased to be a Participant or the date of his Termination. The
Accrued Annual Pensions of all Participants shall be frozen as of December 31,
1996.
Actuarial Equivalent(ce) or Actuarially Equivalent means a benefit of
equivalent current value to the benefit which would otherwise have been provided
on the basis of the following assumptions and determined as of the applicable
Annuity Starting Date:
(a) For lump sum distributions, the UP-1984 Table of Mortality
and the immediate or deferred interest rate, as applicable, used by the Pension
Benefit Guaranty Corporation (in effect on January 1 of the Plan Year in which
the distribution occurs) for valuing benefits in pay status for plans
terminating at the same time, shall be used. The Actuarial Equivalent value of a
lump sum distribution that is payable to a Former Participant prior to Early
Retirement Date, shall be the Actuarial Equivalent value of the benefit
determined as of Normal Retirement Date (using the applicable PBGC rate).
(b) For purposes of any lump sum distribution that is made to
any Participant on or after January 1, 1998, the Actuarial Equivalent value for
such lump sum distribution shall be determined by using the annual interest rate
on 30-year Treasury securities, as specified by the Commissioner, that is in
effect for the month of November which precedes the applicable Plan Year (the
"stability period") in which the lump sum distribution is made, and by using the
applicable mortality table under Section 417(e)(3) of the Code and Treasury
Regulation Section 1.417(e)-1T(d)(2). The Actuarial Equivalent value of a lump
distribution that is payable to a Former Participant prior to Early Retirement
Date, shall be the Actuarial Equivalent value of the benefit determined as of
Normal Retirement Date (using the applicable 30-year Treasury security rate).
(c) For conversions under Section 4.6(b), for optional forms
paid according to Section 4.6(e), early retirement under Section 4.3,
conversions with respect to annuity payments made pursuant to qualified domestic
relations orders and adjustments under Section 9.4, the UP-1984 Table of
Mortality at 7 1/2 percent interest, shall be used. For purposes of establishing
present value for Top-Heavy determinations, interest at 7 1/2 percent shall be
used and the UP-1984 Table of Mortality.
Actuary means an enrolled actuary qualifying as such in accordance with
Title III of ERISA or any firm or entity employing such enrolled actuaries.
Administrative Committee means the individual or group of individuals
appointed to manage the administration of this Plan.
Affiliate means any employer which has not adopted this Plan and is not
a Participating Employer, but which is included as a member with the Employer in
a controlled group of corporations, or which is a trade or business (whether or
not incorporated) included with the Employer in a brother-sister group or
combined group of trades or businesses under common control or which is a member
of an affiliated service group in which the Employer is a member, determined in
each instance in accordance with the appropriate sections of the Code.
Annuity Starting Date means the first day on which benefits are payable
as an annuity or in the case of benefits not payable as an annuity, the first
day on which all events have occurred which entitle the Participant or Former
Participant to the benefits
Beneficiary means the individual or entity designated to receive any
death benefits payable under the Plan.
Anything herein to the contrary notwithstanding, in the case of a
married Participant or Former Participant, no Beneficiary designation which
designates a Beneficiary other than the Participant's Spouse shall be effective
unless such designation constitutes a valid waiver of the qualified joint and
survivor annuity. In the event that the Participant failed to designate a
2
Beneficiary or is predeceased by all designated primary and contingent
Beneficiaries, death benefits under this Plan shall be payable to the following
classes of recipients, each class to take to the exclusion of all subsequent
classes, and all members of each class to share equally:
(1) Surviving Spouse;
(2) lineal descendants (including adopted children and stepchildren),
by right of representation;
(3) surviving parents;
(4) surviving brothers and sisters;
(5) Participant's estate.
Board of Directors means the board of directors of the Company.
Break in Service or One-Year Break in Service means a Plan Year during
which an individual is not credited with more than 500 Hours of Service. An
Eligible Employee will not be deemed to have incurred a Break in Service if he
is absent from employment by reason of (1) pregnancy of the Eligible Employee,
(2) birth of a child of the Eligible Employee, (3) placement of a child in
connection with the adoption of the child by an individual, or (4) caring for
the child during the period immediately following the birth or placement for
adoption. During the period of absence the Eligible Employee shall be credited
with the number of hours that would be generally credited but for such absence
or if the general number of work hours is unknown, eight Hours of Service for
each normal workday during the leave (whether or not approved). These hours
shall be credited to the Plan Year in which the leave of absence commences if
crediting of such hours is required to prevent the occurrence of a Break in
Service in such computation period, and in other cases in the immediately
following Plan Year. No more than 501 Hours of Service shall be credited under
this paragraph for any single continuous period (whether or not such period
occurs in a single computation period).
Code or IRC means the Internal Revenue Code of 1986, as amended, and
includes any regulations issued thereunder.
Company means the PEP BOYS -- MANNY, MOE & JACK, a Pennsylvania
corporation.
Compensation means, effective with respect to any Participant who is
credited with an Hour of Service on or after January 1, 1993, for any Plan Year,
total income reported to the Participant as wages for the Employee on Box 1 of
Form W-2 (Box 10 prior to 1993) less any expense reimbursements and taxable
fringe benefits, including any amounts that the Participant has authorized the
Employer to make on his behalf to a 401(k) plan as elective deferrals or to a
cafeteria plan under Section 125 of the Code.
Effective January 1, 1989, with respect to Participants who Terminated
employment on or after that date, Compensation shall be limited to the amount
permitted under the applicable limitation of Section 401(a)(17) of the Code, as
amended, in effect for any Plan Year (adjusted each year to reflect such higher
amount as may be permitted each year under the Code). Notwithstanding the
foregoing, in applying the limits imposed by Section 401(a)(17) for Plan Years
beginning on or after January 1, 1989 and ending on or before January 1, 1994,
with respect to Participants who Terminated employment on or after January 1,
1989, Compensation up to $235,840 may be taken into account for each Plan Year.
Effective January 1, 1994, Compensation shall be limited to $150,000 (adjusted
each year to reflect such higher amount as may be permitted each year under the
Code).
In determining the Compensation of a Participant who is a five percent
owner or Highly Compensated Employee in the group consisting of the ten Highly
Compensated Employees paid the greatest Compensation during the Plan Year, (the
"limited individuals"), then with respect to any individuals in such
Participant's family,
(i) such individual shall not be considered to
be a separate Participant, and
(ii) any Compensation paid to such individual (and any applicable
contribution or benefit on behalf of such individual) shall be treated as if it
were paid (or on behalf of) to the five percent owner or Highly Compensated
Employee.
The term "family" shall include only the Spouse of the Participant and
any lineal descendants of the Participant who might have not attained age 19
before the last day of the Plan Year.
The term "family unit" shall include the limited individuals and
family.
The maximum amount of Compensation permitted to be taken into account
under Section 401(a)(17) of the Code for any Plan Year, shall be allocated among
the members of the family unit in proportion to each member's Compensation for
the Plan Year.
3
Direct Rollover means a payment by the Plan to the Eligible Retirement
Plan specified by the Distributee.
Disability means a medically determinable physical or mental impairment
of a permanent nature which prevents a Participant from performing his customary
employment duties without endangering his health.
Distributee means a Participant or Former Participant. In addition, the
Participant's or Former Participant'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.
Early Retirement Age means the date on which a Participant has attained
age 55 and completed five Years of Credited Service.
Early Retirement Date means the first day of any month following
attainment of his Early Retirement Age.
Effective Date of this amended and restated Plan means January 1, 1989,
except as otherwise provided in the Plan. The original effective date of the
Plan is December 15, 1942.
Eligible Employee means an Employee performing services for the
Employer, including any officer or director who shall so qualify. Eligible
Employee shall not include any individual who qualifies as a Leased Employee and
any individual whose terms and conditions of employment are covered by a
collective bargaining agreement that does not provide for participation in the
Plan.
Notwithstanding the foregoing, (i) any individual initially hired or
rehired by the Employer or an Affiliate on or after February 2, 1992, shall not
be deemed to be an Eligible Employee and shall not be eligible to participate or
resume participation in the Plan; and (ii) any individual whose employment
status as of February 1, 1992, is covered by a collective bargaining agreement
that does not provide for participation in the Plan and whose employment status
changes on or after February 2, 1992 so that he (A) is no longer covered by a
collective bargaining agreement that does not provide for participation in the
Plan, and (B) would otherwise be eligible to participate in the Plan, shall not
be deemed to be an Eligible Employee and shall not be eligible to participate in
the Plan.
Eligible Retirement Plan means: (i) an individual retirement account
described in Section 408(a) of the Code; (ii) an individual retirement annuity
described in Section 408(b) of the Code; (iii) an annuity plan described in
Section 403(a) of the Code; or (iv) 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.
Eligible Rollover Distribution means any distribution of all or any
portion of the balance to the credit of the Distributee, but 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) and any other distribution that does not qualify as an Eligible
Rollover Distribution, as defined in Section 401(a)(31)(C) of the Code.
Employee means any individual employed by the Employer as a common law
employee, but does not include any individual that the Employer treats as an
independent contractor even if such individual would be classified as an
employee of the Employer under common law.
Employer means the Company and any Participating Employer, which with
the approval of the Board of Directors, has adopted this Plan. Entry Date means
January 1 and July 1 of each Plan Year.
ERISA means the Employee Retirement Income Security Act of 1974, as
amended, and includes any regulations issued thereunder.
Final Average Compensation means the average monthly Compensation for
the five consecutive Plan Years, out of the last ten Plan Years that a
Participant completes, coincident with or prior to the date of determination (or
actual period of employment if shorter than five years) in which a Participant
was employed by the Employer for which such average is the highest.
Former Participant means any Eligible Employee, who was a Participant
in the Plan and with respect to whom a benefit remains payable from the Plan.
4
Fund means the trust or account consisting of the assets of the Plan.
Highly Compensated Employee means:
(a) Employees who were five percent owners, as defined in section
416(i)(1)(iii) of the Code, at any time during the determination year or the
look-back year;
(b) Employees with Compensation greater than $75,000 (as adjusted
at the same time and in the same manner as Section 415(d) of the Code) during
the look-back year;
(c) Employees with Compensation greater than $50,000 (as adjusted
at the same time and in the same manner as Section 415(d) of the Code) during
the look-back year and who are in the top-paid group for the look-back year;
(d) Employees who are officers during the look-back year and who
have compensation in the look-back year greater than 150% of the contribution
limit in Section 415(c) of the Code; and
(e) Employees who are both described in paragraph (b), (c), or
(d) above when these paragraphs are modified to substitute the determination
year for the look-back year and one of the 100 Employees who receive the highest
compensation from the Employer during the determination year.
(1) The top-paid group shall consist of the top 20% of
active Employees, ranked on the basis of compensation received from the Employer
during the year excluding Employees with less than 6 months of service,
part-time Employees (less than 17 1/2 hours per week or less than 6 months a
year), Employees who are not yet age 21 and nonresident aliens. These Employees
shall not be excluded for purposes of identifying the particular Employees in
the top-paid group. If the Plan being tested covers only non-collective
bargaining Employees, and collective bargaining Employees constitute 90 percent
or more of the Employer's Employees, then such collective bargaining Employees
shall be excluded both from the total number of active Employees and the
identification of particular Employees in the top-paid group. The top-paid group
shall not include Employees who perform no service during the year.
(2) For purposes of determining whether an Employee is
highly compensated, the determination year is the Plan Year for which the
determination is being made. The look-back year shall be the preceding Plan
Year. Notwithstanding the foregoing, the Administrative Committee shall have the
authority to make the look-back year be the calendar year ending with or within
the current Plan Year of determination. If the Administrative Committee makes
this election, it shall be deemed to apply to all plans of the Employer and
Affiliates.
(3) The number of officers shall be limited to the lesser of
(a) 50, or (b) the greater of 3 or 10 percent of all Employees. If the Employer
does not have at least one officer whose compensation is in excess of 150% of
the limit in Section 415(c) of the Code, then the highest paid officer of the
Employer shall be treated as a Highly Compensated Employee.
(4) For purposes of defining Highly Compensated Employee,
compensation means any permissible definition of compensation as defined in
Section 415(c)(3) of the Code, including elective contributions, as determined
by the Administrative Committee. The dollar limits are those for the calendar
year in which the determination or look-back year begins.
(5) The Plan shall take into account Employees of all
employers aggregated under Sections 414(b), (c), (m) and (o) of the Code, in
determining who is highly compensated. Also, for this purpose, the term
"Employee" shall include Leased Employees.
Hours of Service means:
(a) Performance of Duties. The actual hours for which an Eligible
Employee is paid or entitled to be paid for the performance of duties by the
Employer;
(b) Nonworking Paid Time. Each hour for which an Eligible
Employee is paid or entitled to be paid 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, disability, layoff, jury duty, military duty or leave of absence;
provided, however, no more than 501 Hours of Service shall be credited to an
Eligible Employee on account of any single continuous period during which he
performed no duties; and provided further that no credit shall be given for
payments made or due under a plan maintained solely for the purpose of complying
with applicable workers' or unemployment compensation or for payments which
solely reimburse an Eligible Employee for medical or medically related expenses
incurred by the Eligible Employee;
5
(c) Back Pay. Each hour for which pay, irrespective of mitigation
of damages, is either awarded or agreed to by the Employer; provided, however,
Hours of Service credited under paragraphs (a) and (b) above shall not be
recredited by operation of this paragraph;
(d) Equivalencies. The Administrative Committee shall have the
authority to adopt any of the following equivalency methods for counting Hours
of Service that are permissible under regulations issued by the Department of
Labor: (1) Working Time; (2) Periods of Employment or (3) Earnings. The adoption
of any equivalency method for counting Hours of Service shall be evidenced by a
certified resolution of the Administrative Committee, which shall be attached to
and made part of the Plan. Such resolution shall indicate the date from which
such equivalency shall be effective.
(e) Miscellaneous. Unless the Administrative Committee directs
otherwise the methods of determining Hours of Service when payments are made for
other than the performance of duties and of crediting such Hours of Service to
Plan Years set forth in Regulations ss.2530.200b-2(b) and (c) promulgated by the
Secretary of Labor, shall be used hereunder and are incorporated by reference
into the Plan.
Participants on military leaves of absence who are not directly or
indirectly compensated or entitled to be compensated by the Employer while on
such leave shall be credited with Hours of Service as required by Section 9 of
the Military Selective Service Act.
Notwithstanding any other provision of this Plan to the contrary, an
Eligible Employee shall not be credited with Hours of Service more than once
with respect to the same period of time.
Eligible Employees shall be credited with any Hours of Service required
to be credited to them in accordance with the Family and Medical Leave Act and
The Uniformed Services Employment and Reemployment Rights Act of 1994.
Investment Manager means an investment adviser, bank or insurance
company which meets the requirements of Section 3(38) of ERISA.
Leased Employee means any person who is not an Employee of the Employer
and who provides services to the Employer if:
(a) such services are provided pursuant to an agreement between
the Employer and any leasing organization;
(b) such person has performed such services for the Employer (or
for the Employer and Affiliates) on a substantially full-time basis for a period
of at least one year; and
(c) such services are of a type historically performed in the
business field of the Employer by Employees.
Notwithstanding the foregoing, a person shall not be deemed to be a
Leased Employee if he is covered by a plan maintained by the leasing
organization and Leased Employees (as determined without regard to this
paragraph) do not comprise more than 20% of the Employer's nonhighly compensated
workforce. Such plan must be a money purchase pension plan providing for
nonintegrated employer contributions of ten percent of compensation and also
providing for immediate participation and vesting.
Limitation Year means the Plan Year.
Normal Annual Pension means the lifetime annual pension determined in
accordance with the provisions of Section 4.1.
Normal Retirement Age means the Participant's 65th birthday.
Normal Retirement Date means the first day of the month coincident with
or next following Normal Retirement Age.
Participant means an Eligible Employee participating in the Plan in
accordance with the provisions of Article III.
Participating Employer means any direct or indirect subsidiary of the
Company or any other entity designated by the Board of Directors, which has
adopted this Plan with the approval of the Company. Participating Employers
shall be limited to those direct or indirect subsidiaries of the Company that
would be Affiliates except for the fact that they have adopted the Plan.
Plan means THE PEP BOYS -- XXXXX, MOE & JACK Pension Plan, as herein
set forth and as it may be amended hereafter. This Plan also includes the PEP
BOYS -- MANNY, MOE & JACK of California Pension Plan, the assets and liabilities
of which were merged with and into this Plan, effective as of December 31, 1987.
Plan Year means the period from January 1 through December 31 of each
year.
6
Spouse (Surviving Spouse) means the spouse or surviving spouse of the
Participant or Former Participant; provided that a former spouse will be treated
as the spouse or surviving spouse to the extent provided under a qualified
domestic relations order as described in Section 414(p) of the Code.
Terminated (or Termination) means a termination of employment with the
Employer or with an Affiliate for any reason other than a transfer of employment
from the Employer to an Affiliate or from an Affiliate to another Affiliate.
Trust Agreement means the agreements forming a part of the Plan
pursuant to which the assets of the Plan are held and managed by the Trustee.
Trustee means the trustee or trustees named in the Trust Agreement, or
any successor thereto.
Years of Credited Service means the periods of employment taken into
account in determining a Participant's Accrued Annual Pension or Normal Annual
Pension under this Plan. A Participant shall be credited with a Year of Credited
Service for each Plan Year in which he has completed 1,000 Hours of Service with
the Employer.
A Participant shall be credited with a partial Year of Credited
Service, to the completed month, for the portion of a Plan Year during which he
was not a Participant for the entire Plan Year, provided that the number of
Hours completed by the Participant during such portion of a Plan Year equal or
exceed the product of (i) 83.33 and (ii) the number of full months the
Participant was actually a Plan Participant in such Plan Year.
A Participant who was employed by the Employer between December 15,
1978 and December 31, 1978, shall be credited with .04167 of a Year of Credited
Service for such period.
A Participant shall not earn Years of Credited Service prior to the
Entry Date on which he first became a Participant except that any Participant
who was employed on December 14, 1976, shall earn Years of Credited Service for
his pre-participation eligibility waiting period to the extent that such service
would have been credited as Years of Credited Service, if the eligibility
requirements in effect on December 15, 1976 had been in effect when such
Participant's employment commenced with the Employer. Effective as of December
31, 1996, a Participant shall not earn any additional Years of Credited Service
under the Plan.
Year of Service means (a) when applied to eligibility provisions, (i)
the 12-month period commencing on an individual's date of employment with the
Employer in which he is credited with 1,000 or more Hours of Service, and (ii)
thereafter, the Plan Year which includes the first anniversary of the Eligible
Employee's initial date of employment and successive anniversaries of such Plan
Year, in which he is credited with 1,000 or more Hours of Service; and (b) when
applied to vesting provisions, each Plan Year in which an Eligible Employee is
credited with 1,000 Hours of Service.
An Employee who was credited with 1,000 Hours of Service in the 12
consecutive month period beginning (i) December 15, 1977 and ending on December
14, 1978; and (ii) beginning January 1, 1978 and ending December 31, 1978, shall
earn a Year of Service for such additional time periods.
Years of Service completed prior to December 15, 1976 shall be
disregarded if such service would have been disregarded under the break in
service rules then in effect.
For purposes of determining an Eligible Employee's eligibility to
participate in the Plan pursuant to Section 3.1 and vesting pursuant to Section
5.1, Years of Service shall include an Eligible Employee's Years of Service (i)
as a Leased Employee of the Employer or an Affiliate (after the employer became
an Affiliate) and not described in Section 414(n)(5) or (ii) as an Employee of
the Employer or an Affiliate (after the employer became an Affiliate) covered by
the terms of a collective bargaining agreement that does not provide for
participation in this Plan, (iii) while a common law Employee of the Employer
who is not deemed to be an Eligible Employee or as a common law Employee of an
Affiliate, or (iv) while an Employee of a predecessor organization of the
Employer in any case where the Employer maintains the plan of such predecessor
organization.
2.2 Construction. The masculine gender, where appearing in this Plan,
shall be deemed to include the feminine gender, unless the context clearly
indicates to the contrary. Titles of sections are inserted for convenience and
shall not affect the meaning or construction of the Plan.
7
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Article III. Participation And Service
--------------------------------------------------------------------------------
3.1 Eligibility to Participate. Each Eligible Employee who was a
Participant in the Plan on December 31, 1988 shall continue as a Participant on
January 1, 1989 if he is still employed on that date. Each other Eligible
Employee shall commence participation in the Plan on the Entry Date coincident
with or next following attainment of age 21 and completion of one Year of
Service.
Any individual hired or rehired by the Employer or an Affiliate on or
after February 2, 1992, shall not be eligible to commence or resume
participation in the Plan. Notwithstanding any provision of this Plan to the
contrary, any individual whose employment status as of February 1, 1992, is
covered by the terms of a collective bargaining agreement that does not provide
for participation in the Plan and whose employment status changes on or after
February 2, 1992 so that he is no longer covered by a collective bargaining
agreement that does not provide for participation in the Plan, shall not be
eligible to participate in the Plan.
3.2 Cessation of Participation. An Eligible Employee shall cease to be
a Participant upon the earliest of: (a) the date on which he retires under the
retirement provisions of the Plan; (b) the date on which he ceases to satisfy
the eligibility requirements of Section 3.1; or (iii) the date on which his
employment Terminates for any reason including death, or Disability.
3.3 Changes in Status and Transfers to Affiliates.
(a) An Employee who transfers from an Affiliate to the Employer
and becomes an Eligible Employee or an Employee of the Employer who becomes an
Eligible Employee shall be eligible to participate in the Plan on the date as of
which he has satisfied the eligibility requirements of Section 3.1. He shall
commence participation in the Plan on the later of his transfer or change in
status or the Entry Date next following the date he has satisfied the
eligibility requirements of Section 3.1.
(b) A Participant's status as such under the Plan shall be
changed, as provided below, upon and after the occurrence of:
(1) In the case of a Participant whose employment was not
covered by a collective bargaining agreement at the time the Participant became
such, the date as of which the Participant's employment becomes covered by a
collective bargaining agreement that excludes such individual from participation
in this Plan;
(2) The date as of which a Participant becomes a Leased
Employee; or
(3) The date as of which a Participant is transferred to or
hired by an Affiliate.
(c) The Participant's status under the Plan upon and after the
occurrence of one of the above events shall be modified as follows:
(1) The Participant's Accrued Annual Pension shall not be
increased or decreased thereafter by reason of the Participant's continued
employment with the Employer or with an Affiliate or by reason of any increases
or decreases in Compensation after such date; and
(2) The Participant will remain eligible for the benefits
provided by Article IV, if at the time his employment with the Employer or an
Affiliate ceases, he has satisfied the age, service and other requirements of
this Plan for such benefits.
(3) The Participant will continue to be credited with
additional Years of Service if he continues to be employed by the Employer or an
Affiliate except as otherwise provided for under the Plan.
3.4 Reemployment. A Participant who Terminated employment with the
Employer and is reemployed by the Employer shall again be eligible to become a
Participant on the date he again performs an Hour of Service for the Employer. A
former Eligible Employee who is reemployed by the Employer prior to incurring
five consecutive one year Breaks in Service, shall become eligible to become a
Participant on the Entry Date he has satisfied the age and service requirements
of Section 3.1 or the date he is reemployed by the Employer, if later. A former
Eligible Employee who is reemployed after incurring five consecutive one year
Breaks in Service shall be treated as a new Eligible Employee and must meet the
requirements of Section 3.1 for purposes of eligibility to participate.
8
--------------------------------------------------------------------------------
Article IV. Plan Benefits
--------------------------------------------------------------------------------
4.1 Normal Retirement. A Participant may retire on his Normal
Retirement Date. Each Participant who retires on his Normal Retirement Date, and
who has not received benefits, under other provisions of the Plan, shall be
entitled to receive the greater of a Normal Annual Pension or an Accrued Annual
Pension determined as of any previous date on which the Participant was eligible
for early retirement pursuant to Section 4.3. Any Former Participant whose
rights and interests in the Plan are vested, and who has not received benefits
under other provisions of the Plan, shall be entitled to receive an Accrued
Annual Pension commencing on his Normal Retirement Date and continuing during
his lifetime.
The Plan may suspend the benefits of a Participant who continues in the
service of the Employer after Normal Retirement Date, provided that if such
Participant is an Eligible Employee, such Eligible Employee receives payment
from the Employer for 80 Hours of Service during a calendar month. Any
Participant whose Normal Annual Pension is suspended shall be notified in
writing by personal delivery or first class mail during the first month or
payroll period for which payment of benefits is suspended.
The Normal Annual Pension payable to each Participant or Former
Participant shall be equal to .008 of the Participant's Final Average
Compensation, multiplied by his Years of Credited Service, multiplied by 12.
Notwithstanding the foregoing, in no event shall (i) a Participant's
monthly benefit hereunder exceed $1,666.67; nor (ii) a Participant's monthly
benefit hereunder be less than his Accrued Annual Pension as of December 31,
1988, (with Final Average Compensation and Years of Credited Service determined
as of such date) without the limitations on Compensation that became effective
on January 1, 1989.
In addition, the monthly benefit payable to any Participant who is
employed by the Employer on or after January 1, 1994 shall not be less than his
Accrued Annual Pension determined as of December 31, 1993, (with Final Average
Compensation and Years of Credited Service determined as of such date) based on
the limitations on Compensation that were in effect under Section 401(a)(17) of
the Code prior to January 1, 1994.
A Participant or Former Participant to whom Article XIII of the Plan
relates, shall receive the greater of the benefit described in this Section 4.1
or the benefit set forth in Section 13.2.
Effective as of December 31, 1996, the Normal Annual Pensions of all
Participants under the Plan shall be frozen and no additional benefits shall
accrue after that date.
4.2 Deferred Retirement. A Participant who continues in employment
beyond his Normal Retirement Date may retire on the first day of any succeeding
calendar month that coincides with or next follows the month in which his actual
retirement occurs. A Participant's deferred retirement benefit shall be
determined either under (a) or (b), whichever produces the greater benefit:
(a) by continuing to apply the formula set forth in Section 4.1 to
his Compensation and Years of Credited Service after his Normal Retirement Date;
or
(b) by using the increased Actuarial Equivalent of the
Participant's benefit which he had accrued under the terms of the Plan as of his
Normal Retirement Date.
4.3 Early Retirement. By written notice delivered to the Administrative
Committee before the date his pension is to commence, effective January 1, 1989,
a Participant who has attained Early Retirement Date and whose employment
Terminates on or after January 1, 1989, may elect to receive an early retirement
pension after Termination. In such event he shall be entitled to either:
(a) A deferred pension commencing at his Normal Retirement Date
equal to the Accrued Annual Pension determined on the basis of his Compensation
and Years of Credited Service to the date of his early retirement hereunder; or
(b) A pension commencing as of the first day of any month
coincident with or next following his Early Retirement Date which is equal to
the Actuarial Equivalent of the benefit calculated under Section 4.1 payable at
the Participant's Normal Retirement Date.
4.4 Disability Benefit. A Participant who becomes Disabled shall be
eligible to receive a pension commencing at his Normal Retirement Date in an
amount equal to his Accrued Annual Pension, determined as of his Disability
Date. In lieu of the foregoing, a Participant may elect to receive his Accrued
Annual Pension as of the first day of any month following his Disability, which
shall be the Actuarial Equivalent of the Participant's benefit payable at his
Normal Retirement Date.
9
4.5 Termination Benefit. A Participant who Terminates his employment
with a vested interest in his Accrued Annual Pension shall be eligible to
receive his benefit in accordance with Section 4.1 or Section 4.3, as
applicable. A Former Participant who Terminated employment on or after January
1, 1989 who met the service requirement for early retirement when he Terminated
employment, may elect to receive an early retirement pension as of the first day
of any month coincident with or next following attainment of age 55.
4.6 Form of Payments.
(a) Single Participants. If a Participant or Former Participant is
single on the Annuity Starting Date, the normal form of payment, unless elected
otherwise within the 90 day period ending on the Annuity Starting Date, shall be
a single life annuity with payments guaranteed for 120 months.
(b) Married Participants. If a Participant or Former Participant is
married on the Annuity Starting Date, the normal form of payment, unless elected
otherwise, within the 90 day period ending on the Annuity Starting Date, and
with the consent of the Participant's or Former Participant's Spouse, pursuant
to subsection (d), shall be a qualified joint and survivor annuity, which shall
be the Actuarial Equivalent of the normal form for single Participants described
in Section 4.6(a), as applicable, payable for life to the Participant or Former
Participant and thereafter, for the life of the Participant's or Former
Participant's Surviving Spouse in an amount equal to 50% of the amount that was
payable to the Participant or Former Participant.
(c) Notice and Information to Participants. The Administrative
Committee shall furnish each Participant or Former Participant with the
following information regarding benefits payable under the Plan in written
nontechnical language:
(1) A general description or explanation of the automatic
post-retirement Xxxxxx's benefit described in Section 4.6(b) and single life
annuity benefit with payments guaranteed for 120 months described in Section
4.6(a) and notification of the Participant's or Former Participant's right to
waive the right to receive his benefits in a qualified joint and survivor
annuity or single life annuity with payments guaranteed for 120 months and the
right to make or revoke a previous election to waive the qualified joint and
survivor annuity or single life annuity with payments guaranteed for 120 months.
(2) A general explanation of the relative financial effect on a
Participant's or Former Participant's benefits of any of the foregoing
elections.
(3) Notification of the availability, upon written request of a
Participant or Former Participant of an explanation of the financial effect of
any of the foregoing elections upon the requesting Participant's or Former
Participant's benefits under the Plan and notification that each Participant or
Former Participant may make only one such request.
(4) A general explanation of the rights of a Participant's or
Former Participant's Spouse. The Administrative Committee shall provide a
Participant or Former Participant with the information described in this Section
no later than 30 days and no earlier than 90 days prior to each Participant's or
Former Participant's Annuity Starting Date.
(d) Election and Revocation of Spouse's Annuities. A
Participant or Former Participant who is entitled to receive his benefits or
Xxxxxx's benefits in the form described in Section 4.6(a) or (b) may elect to
receive such benefits in any other form permitted by the Plan by giving written
notification to the Administrative Committee during the election period of his
intent to receive his benefits in such other form. Such election period shall be
the 90 day period ending on the Annuity Starting Date.
Any election to waive the qualified joint and survivor annuity
under Section 4.6(b) shall not take effect unless the Spouse of the Participant
or Former Participant consents in writing to such election and the Spouse's
consent acknowledges the effect of such election and is witnessed by a notary
public or a representative of the Administrative Committee. The requirements
with respect to spousal consent may be waived if it is established to the
satisfaction of the Administrative Committee that the consent may not be
obtained because there is no Spouse or because the Spouse cannot be located or
because of such other circumstances as may be prescribed by regulation. Any
consent necessary under this provision will be irrevocable and valid only with
respect to the Spouse who signs the consent.
Any election made under this Section may be revoked by the
Participant or Former Participant during the specified election period. Such
revocation shall be effected by written notification to the Administrative
10
Committee. Following such revocation, another election under this Section may be
made at any time during the specified election period. A revocation of a prior
waiver may be made at any time by a Participant or Former Participant without
the consent of the Spouse before the Annuity Starting Date.
Any actual or constructive election under this paragraph (d) having the
effect of providing a Spouse's benefit shall automatically be revoked if the
electing person ceases to have a Spouse during the election period. However, if
the electing person subsequently remarries, the spousal consent requirements
will automatically be reinstated at that time.
(e) Optional Forms. In lieu of the normal form of benefit set forth
in Sections 4.6(a) and (b), a Participant or Former Participant may elect one of
the optional forms of payment described below. All optional forms of payment
shall be the Actuarial Equivalent of the normal form for single Participants set
forth in Section 4.1, determined as of the Annuity Starting Date.
(1) Life Annuity Option Guaranteed for 120 months. A
Participant or Former Participant may elect to have his pension paid in the form
of a straight life annuity with payments guaranteed for 120 months. Under such
annuity, payments will be made monthly during the Participant's or Former
Participant's lifetime in an amount equal to the Participant's or Former
Participant's Normal Annual Pension or Accrued Annual Pension. If the
Participant or Former Participant should die before receiving 120 months of
payments, the remaining payments shall be payable to a Beneficiary designated by
such Participant or Former Participant.
(2) Life Annuity Option. A Participant or Former Participant
may elect to have his pension paid in the form of a straight life annuity. Under
such annuity, payments will be made monthly during the Participant's or Former
Participant's lifetime in an amount equal to the Participant's or Former
Participant's Normal Annual Pension or Accrued Annual Pension.
(3) Additional Options. A Participant or Former Participant to
whom the provisions of Article XIII apply may elect to have his Normal Annual
Pension or Accrued Annual Pension paid in the forms set forth therein.
Any election of an optional form of payment may be revoked by the
Participant or Former Participant prior to the first day on which such optional
form is scheduled to be paid.
If the Surviving Spouse or other joint annuitant, whichever is
applicable, dies before the first day on which an optional form is scheduled to
be paid, the optional form is replaced by the normal form that would have been
paid absent the election of an optional form.
Any election of an optional form of benefit provided shall provide that
any death benefit payable hereunder shall comply with the incidental death
benefit requirements of Section 401(a)(9)(G) of the Code and regulations
thereunder.
4.7 Death Prior to the Annuity Starting Date. If a Participant or
Former Participant dies prior to the Annuity Starting Date, a death benefit may
be payable under the circumstances described below.
(a) On the death of a vested Participant or Former Participant who
has reached his Early Retirement Date, his Spouse shall, if his Spouse has
survived him and they have been married through the one-year period ending on
the date of death, be entitled to receive immediately a monthly benefit equal to
one-half (1/2) of the Participant's Accrued Annual Pension or Normal Annual
Pension determined as of the date of his death, payable as a qualified joint and
50% survivor annuity set forth in Section 4.6(b) and reduced for early payment,
as applicable, in accordance with Section 4.3.
(b) On the death of a vested Participant or Former Participant who
has not reached his Early Retirement Date, but who is entitled to a vested
interest in his Accrued Annual Pension, his Spouse shall, if his Spouse has
survived him and they have been married through the one-year period ending on
the date of death, be entitled to receive a monthly benefit, payable on the
Participant's earliest retirement date under the Plan, equal to one-half (1/2)
of the Participant's Accrued Annual Pension determined as of the date of his
death, payable as a qualified joint and 50% survivor annuity set forth in
Section 4.6(b) and reduced for early payment, as applicable, in accordance with
Section 4.3.
(c) A Participant's or Former Participant's Surviving Spouse shall
have the right to elect to defer payment of the Spouse's survivor benefit until
the date the Participant would have reached his Normal Retirement Date, had he
lived.
11
4.8 Form of Pension Payments. Payments shall be paid monthly as of the
first of the month, except that the Administrative Committee shall direct that
payments which would otherwise be less than $20 per month be made quarterly,
semi-annually or annually.
4.9 Restrictions and Limitations on Distributions. Distribution of
benefits to a Participant or Former Participant must commence no later than
April 1 of the calendar year following the calendar year in which the
Participant or Former Participant attains age 70 1/2; provided, however, that
distribution to a Participant or Former Participant who attained age 70 1/2
before January 1, 1988 and is not a five percent owner as defined in Section
416(i) of the Code (with respect to the Plan Year ending in the calendar year in
which the Participant or Former Participant attains age 66 1/2 or any succeeding
Plan Year) must commence no later than April 1 of the calendar year following
the later of the calendar year in which the Participant or Former Participant
attains age 70 1/2 or the calendar year in which the Participant or Former
Participant retires.
To the extent a Participant continues to accrue additional benefits,
his Accrued Annual Pension shall be redetermined annually to include such
additional accruals, but shall not be offset by the Actuarial Equivalent value
of any payments previously made. The Annuity Starting Date of such Participant
shall be deemed to occur at the date the first payment required by this Section
is due to be paid. Any additional accruals after benefits commence hereunder
shall be paid in accordance with the election made by the Participant pursuant
to Section 4.6.
4.10 Restrictions on Death Distributions. Distributions pursuant to the
death of a Participant or Former Participant shall be distributed no later than
December 31 of the calendar year in which occurs the fifth anniversary of the
Participant's or Former Participant's death. However, if such distribution had
already commenced in the form of payments over a period permitted by Section
4.5, the remaining benefits may be distributed over such period.
The first sentence of the preceding paragraph shall not apply if either
condition of (a) or (b) as set forth below are satisfied:
(a) If the Participant's or Former Participant's designated
Beneficiary is the Surviving Spouse of the Participant or Former Participant,
such distribution shall not be required to begin prior to the later of (i)
December 31 of the calendar year following the calendar year in which the
Participant or Former Participant died, or (ii) December 31 of the calendar year
in which the Participant or Former Participant would have attained age 70 1/2,
and at such time may be distributed over the life of such Spouse (if the
Surviving Spouse dies prior to commencement of distributions to such Spouse,
then this subsection (a) shall be applied as if the Surviving Spouse were the
Participant or Former Participant);
(b) If the Participant's or Former Participant's distribution, or
any portion thereof, is payable to a designated Beneficiary, such distribution
or portion thereof may be distributed in accordance with regulations over the
life of such designated Beneficiary if such distribution or portion thereof
begins not later than December 31 of the calendar year in which occurs the first
anniversary of the Participant's or Former Participant's death. For purposes of
subsections (a) and (b), life expectancy shall be calculated in accordance with
the provisions of Section 72 of the Code.
Any amount payable to a child pursuant to the death of a Participant or
Former Participant shall be treated as if it were payable to the Participant's
or Former Participant's Surviving Spouse if such amount would become payable to
the Surviving Spouse upon such child reaching majority (or other designated
event permitted by regulations).
4.11 Cash-Out of Small Benefits.
(a) Notwithstanding any other provision of this Article IV, the
Actuarial Equivalent value of (i) a qualified joint and survivor annuity payable
to a Participant or Former Participant who meets the requirements of Section
4.6(b) and who is fully vested or (ii) a single life annuity with payments
guaranteed for 120 months payable to a Participant or Former Participant who
meets the requirements of Section 4.6(a) and who is fully vested shall be
distributed to the Former Participant no later than the end of the second Plan
Year after his retirement or termination at his election, if such Actuarial
Equivalent value of his entire Accrued Annual Pension or Normal Annual Pension
is $3,500 or less, and effective with respect to any Participant who Terminates
on or after January 1, 1998, if such Actuarial Equivalent value of his entire
Accrued Annual Pension or Normal Annual Pension is $5,000 or less. A Participant
who has a zero vested interest in his Accrued Annual Pension shall be deemed to
have received a distribution of his Accrued Annual Pension immediately upon his
Termination of employment.
12
Effective with respect to any Former Participant whose employment Terminated
prior to January 1, 1998, if the Actuarial Equivalent value of such
Participant's Accrued Annual Pension or Normal Annual Pension, determined as of
any date after 1997 does not exceed $5,000, then if the Participant consents in
writing, with the consent of his Spouse if applicable (in accordance with
Section 4.6(d) of the Plan), such Actuarial Equivalent value may be distributed
to the Former Participant as soon as practicable following receipt by the
Administrative Committee of such written consent.
(b) Notwithstanding any other provision of this Article IV, the
Actuarial Equivalent value of the Spouse's death benefit payable to the Spouse
of a Participant or Former Participant pursuant to Section 4.7 shall be
distributed to such Spouse as soon as practicable following the Participant's or
Former Participant's death if such Actuarial Equivalent value is $3,500 or less.
Effective with respect to any Participant or Former Participant whose death
occurs on or after January 1, 1998, the foregoing reference to the Actuarial
Equivalent value of $3,500, shall be increased to $5,000 (determined at the time
of any distribution).
Effective with respect to any Former Participant whose death occurred
prior to January 1, 1998, if the Actuarial Equivalent value of the Spouse's
death benefit determined as of any date after 1997, exceeds $3,500, but does not
exceed $5,000, then if the Spouse consents in writing, such Actuarial Equivalent
value may be distributed to the Spouse as soon as practicable following receipt
by the Administrative Committee of such written consent.
4.12 Rollovers from the Plan. Notwithstanding any provision of the Plan
to the contrary, effective January 1, 1993, a Distributee may elect, at the time
and in the manner prescribed by the Administrative Committee, to have any
portion of an Eligible Rollover Distribution paid directly to an Eligible
Retirement Plan, specified by the Distributee, in a Direct Rollover.
4.13 Payments to an Alternate Payee. Payments to an Alternate Payee
pursuant to a qualified domestic relations order under Section 414(p) of the
Code shall not be made prior to the date that the Participant or Former
Participant has reached or would have reached his earliest retirement date under
the Plan, except for any small payments provided under Section 4.11.
13
--------------------------------------------------------------------------------
Article V. Vesting
--------------------------------------------------------------------------------
5.1 Vesting Schedule. A Participant's right to a Normal Annual Pension
or an Accrued Annual Pension shall be fully vested and nonforfeitable if he is
living and employed by the Employer or an Affiliate on his Normal Retirement
Age. Prior thereto, the rights and interests of a Participant or Former
Participant in and to his Accrued Annual Pension under the Plan shall become
fully vested and nonforfeitable in accordance with the following schedule:
Years of Service Vested Percentage Forfeited Percentage
---------------- ----------------- --------------------
less than 5 years 0% 100%
5 years of more 100% 0%
Each Participant who is employed on December 31, 1996 shall be 100%
vested in his Accrued Annual Pension, which he had accrued as of December 31,
1996.
5.2 Forfeitures. Notwithstanding Section 5.1, and except as otherwise
provided under the Plan, a Participant's or Former Participant's rights and
interests in the Plan, shall be forfeited, if prior to full vesting under
Section 5.1, he dies before Normal Retirement Date or actual retirement date,
whichever is later. All forfeitures shall occur immediately upon Termination of
employment and shall not be used to increase the benefits of any Participant.
5.3 Reemployment.
(a) Upon the reemployment of a Participant who was vested when
he Terminated employment, his Years of Service and Years of Credited Service
shall be reinstated as of his date of reemployment.
(b) Upon the reemployment of a Participant or Employee who was
not vested when he Terminated employment, his Years of Service and Years of
Credited Service shall be reinstated as of his date of reemployment unless the
number of his consecutive One-Year Breaks in Service equals or exceeds the
greater of five years or the number of his Years of Service with which he was
credited prior to such consecutive One-Year Breaks in Service.
14
--------------------------------------------------------------------------------
Article VI. Funding
--------------------------------------------------------------------------------
6.1 Contributions by Employer. The Employer shall contribute to the
Fund on account of each Plan Year an aggregate amount, in cash or other
property, determined pursuant to a funding method and actuarial assumptions,
which shall be selected by the Administrative Committee, and which shall be, in
the opinion of an Actuary who shall be appointed by the Administrative
Committee, designed to fund the Plan's benefits on a sound actuarial basis. Such
amount shall also be sufficient to satisfy the Plan's "minimum funding standard"
within the meaning of the Code for that Plan Year. The Employer's contribution
for each Plan Year shall be made no later than the time permitted under the Code
and regulations promulgated by the Secretary of the Treasury.
6.2 Insurance. The Employer may enter into a contract or contracts with
an insurance company, qualified to perform services under the laws of more than
one state, which shall become part of this Plan, for purposes of providing the
benefits and funding the Plan.
6.3 Investment Policies. The investment policies of the Plan shall be
established and may be changed at any time by the Administrative Committee,
which shall thereupon communicate such policies to any persons having authority
to manage the Plan's assets. The Investment Manager shall have the authority to
invest in any collective investment fund maintained exclusively for the
investment of assets of exempt, qualified employee benefit trusts. The assets so
invested shall be subject to all the provisions of the instrument establishing
such collective investment fund, as amended from time to time, which is hereby
incorporated herein by reference and deemed to be an integral part of the Plan
and corresponding Trust.
The Administrative Committee, whose membership is to be determined by
the Board, is the named fiduciary to act on behalf of the Company in the
management and control of the Plan assets and to establish and carry out a
funding policy consistent with the Plan objectives and with the requirements of
any applicable law. The Administrative Committee shall carry out the Company's
responsibility and authority:
(a) To appoint as such term is defined in Section 3(38) of
ERISA, one or more persons to serve as Investment Manager with respect to all or
part of the Plan assets, including assets maintained under separate accounts of
an insurance company;
(b) To allocate the responsibilities and authority being
carried out by the Administrative Committee among the members of the
Administrative Committee.
(c) To take any action appropriate to assure that the Plan
assets are invested for the exclusive purpose of providing benefits to
Participant and their Beneficiaries in accordance with the Plan and defraying
reasonable expenses of administering the Plan, subject to the requirements of
any applicable law.
(d) To establish any rules it deems necessary. The
Administrative Committee including each member and former member to whom duties
and responsibilities have been allocated, shall be indemnified and held harmless
by the Employer with respect to any breach of alleged responsibilities performed
or to be performed hereunder.
15
--------------------------------------------------------------------------------
Article VII. Amendment And Termination
--------------------------------------------------------------------------------
7.1 Amendments Generally. The Company, by action of the Board of
Directors or to the extent indicated under Section 8.2, by the Administrative
Committee, reserves the right to make from time to time any amendment or
amendments to this Plan or Trust Agreement that do not cause any part of the
Fund to be used for, or diverted to, any purpose other than the exclusive
benefit of Participants or Former Participants.
Except as may be permitted by ERISA or the Code, no amendment to the
Plan shall decrease a Participant's or Former Participant's accrued benefits or
eliminate an optional form of benefit as those terms are defined in the Code.
7.2 Amendments to Vesting Schedule. Any future amendment to the Plan
which alters the vesting schedule set forth in Section 5.1 or which affects a
Participant's nonforfeitable percentage in and to his rights and interests in
benefits provided by Employer contributions shall be deemed to include the
following terms:
(a) The vested percentage of a Participant applicable to his
Accrued Annual Pension under the Plan determined as of the later of the date
such amendment is adopted or the date such amendment becomes effective shall not
be reduced unless the amendment is for purposes of conforming the Plan to
requirements of the Code, or any other applicable law; and
(b) A Participant with at least three Years of Service on the
later of the adoption or effective date of any amendment to the Plan may elect
to have his nonforfeitable interest computed under the Plan without regard to
such amendment. Such election must be made within 60 days from the later of date
on which the amendment was adopted, the amendment was effective or the
Participant was issued written notice of such amendment by the Administrative
Committee.
7.3 Termination, Discontinuance of Contributions or Curtailment.
Subject to the provisions of Title IV of ERISA, the Plan may be terminated or
curtailed, or the Employer's obligation to contribute to the Fund may be
discontinued, in whole or in part, at any time without the consent of any other
person by action of the Board of Directors.
7.4 Distributions on Termination. In the event that the Plan is
completely or partially terminated, the rights of all affected, actively
employed Participants to their Accrued Annual Pensions to the date of such
termination shall become fully vested and nonforfeitable only to the extent
funded. The assets of the Plan available to provide benefits shall be allocated
among the persons who are entitled or who may become entitled to benefits under
the Plan, subject to and in the manner prescribed by the applicable provisions
of Title IV of ERISA. Any other provision of the Plan to the contrary
notwithstanding, if there remain any assets of the Plan after all liabilities of
the Plan to Participants or Former Participants and their Beneficiaries have
been satisfied or provided for, such residual assets shall thereupon be
distributed to the Employer subject to and in accordance with Title IV of ERISA.
7.5 Action by Company. Any action by the Company under the Plan shall
be by a duly adopted resolution of the Board of Directors or by any person or
persons duly authorized by a duly adopted resolution of that Board to take such
action.
16
--------------------------------------------------------------------------------
Article VIII. Administration
--------------------------------------------------------------------------------
8.1 Duties and Responsibilities of Fiduciaries; Allocation of
Responsibility Among Fiduciaries for Plan and Trust Administration. A Fiduciary
shall have only those specific powers, duties, responsibilities and obligations
as are specifically given him under this Plan or the Trust. In general, the
Employer, shall have the sole responsibility for making the contributions
provided for under Section 6.1. The Board of Directors shall have the sole
authority to appoint and remove the Trustee and the Administrative Committee and
to amend or terminate, in whole or in part, this Plan or the Trust. The
Administrative Committee shall have the sole responsibility for the
administration of this Plan, which responsibility is specifically described in
this Plan and the Trust. The Administrative Committee also shall have the right
to appoint and remove any Investment Manager which may be provided for under the
Trust and to designate investment and funding policies under which the Trustee
and any Investment Manager shall act, which provisions are described in Section
6.3. Except as provided in the Trust agreement and within the scope of any
funding and investment policies designated by the Administrative Committee the
Trustee shall have the sole responsibility for the administration of the Trust
and the management of the assets held under the Trust. It is intended that each
Fiduciary shall be responsible for the proper exercise of his own powers,
duties, responsibilities and obligations under this Plan and the Trust and
generally shall not be responsible for any act or failure to act of another
Fiduciary. A Fiduciary may serve in more than one fiduciary capacity with
respect to the Plan (including service both as Trustee and as a member of the
Administrative Committee).
8.2 Allocation of Duties and Responsibilities. The Administrative
Committee shall be appointed by the Board of Directors and shall have the sole
responsibility for actual administration of the Plan, as delegated by the Board
of Directors. The Administrative Committee may also adopt amendments to the
Plan, which upon advice of counsel, it deems necessary or advisable to comply
with ERISA or the Code, or any other applicable law, or to facilitate the
administration of the Plan. The Administrative Committee may designate persons
other than their members to carry out any of its duties and responsibilities.
Any duties and responsibilities thus allocated must be described in the written
instrument. If any person other than an Eligible Employee of the Employer is so
designated, such person must acknowledge in writing his acceptance of the duties
and responsibilities thus allocated to him. All such instruments shall be
attached to, and shall be made a part of, the Plan.
8.3 Administration and Interpretation. Subject to the limitations of
the Plan, the Administrative Committee shall have complete authority and control
regarding the administration and interpretation of the Plan and the transaction
of its business, and shall, from time to time, establish such rules as may be
necessary or advisable in connection therewith. To the extent permitted by law,
all acts and determinations of the Administrative Committee, as to any disputed
question or otherwise, shall be binding and conclusive upon Participants,
retired Participants, Employees, Spouses, Beneficiaries and all other persons
dealing with the Plan. The Administrative Committee may deem its records
conclusively to be correct as to the matters reflected therein with respect to
information furnished by an Employee. All actions, decisions and interpretations
of the Administrative Committee in administering the Plan shall be performed in
a uniform and nondiscriminatory manner.
8.4 Expenses. The Employer shall pay all expenses authorized and
incurred by the Administrative Committee in the administration of the Plan
except to the extent such expenses are paid from the Trust.
8.5 Claims Procedure:
(a) Filing of Claim. Any Participant, Former Participant or
Beneficiary under the Plan ("Claimant"), may file a written claim for a Plan
benefit with the Administrative Committee or with a person named by the
Administrative Committee to receive claims under the Plan.
(b) Notification on Denial of Claim. In the event of a denial
or limitation of any benefit or payment due to or requested by any Claimant, he
shall be given a written notification containing specific reasons for the denial
or limitation of his benefit. The written notification shall contain specific
reference to the pertinent Plan provisions on which the denial or limitation of
benefits is based. In addition, it shall contain a description of any additional
material or information necessary for the Claimant to perfect a claim and an
explanation of why such material or information is necessary. Further, the
notification shall provide appropriate information as to the steps to be taken
17
if the Claimant wishes to submit his claim for review. This written notification
shall be given to a Claimant within 90 days after receipt of his claim by the
Administrative Committee unless special circumstances require an extension of
time to process the claim. If such an extension of time for processing is
required, written notice of the extension shall be furnished to the Claimant
prior to the termination of said 90-day period and such notice shall indicate
the special circumstances which make the postponement appropriate. Such
extension shall not extend to a date later than 120 days after receipt of the
request for review of a claim.
(c) Right of Review. In the event of a denial or limitation of
benefits, the Claimant or his duly authorized representative shall be permitted
to review pertinent documents and to submit to the Administrative Committee
issues and comments in writing. In addition, the Claimant or his duly authorized
representative may make a written request for a full and fair review of his
claim and its denial by the Administrative Committee provided, however, that
such written request must be received by the Administrative Committee (or his
delegate to receive such requests) within sixty days after receipt by the
Claimant of written notification of the denial or limitation of the claim. The
sixty day requirement may be waived by the Administrative Committee in
appropriate cases.
(d) Decision on Review.
(i) A decision shall be rendered by the
Administrative Committee within 60 days after the receipt of the request for
review, provided that where special circumstances require an extension of time
for processing the decision, it may be postponed on written notice to the
Claimant (prior to the expiration of the initial 60 day period), for an
additional 60 days, but in no event shall the decision be rendered more than 120
days after the receipt of such request for review.
(ii) Notwithstanding subparagraph (i), if the
Administrative Committee specifies a regularly scheduled time at least quarterly
to review such appeals, a Xxxxxxxx's request for review will be acted upon at
the specified time immediately following the receipt of the Claimant's request
unless such request is filed within 30 days preceding such time. In such
instance, the decision shall be made no later than the date of the second
specified time following the Administrative Committee's receipt of such request.
If special circumstances (such as a need to hold a hearing) require a further
extension of time for processing a request, a decision shall be rendered not
later than the third specified time of the Administrative Committee following
the receipt of such request for review and written notice of the extension shall
be furnished to the Claimant prior to the commencement of the extension.
(iii) Any decision by the Administrative Committee
shall be furnished to the Claimant in writing and in a manner calculated to be
understood by the Claimant and shall set forth the specific reason(s) for the
decision and the specific Plan provision(s) on which the decision is based.
8.6 Records and Reports. The Administrative Committee shall exercise
such authority and responsibility as it deems appropriate in order to comply
with ERISA and governmental regulations issued thereunder relating to records of
Participants' account balances and the percentage of such account balances which
are nonforfeitable under the Plan; notifications to Participants; and annual
reports and registration with the Internal Revenue Service.
8.7 Other Powers and Duties. The Administrative 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, decide all questions
of eligibility and determine the amount, manner and time of payment of any
benefits hereunder;
(b) to prescribe procedures to be followed by Participants,
Former Participants or Beneficiaries filing applications for benefits;
(c) to prepare and distribute information explaining the Plan;
(d) to receive from the Employer and from Participants, Former
Participants and Beneficiaries 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 deems
convenient or proper) reports of the financial condition, and of the receipts
and disbursements, of the Trust Fund from the Trustees;
18
(g) to appoint or employ advisors including legal and
actuarial counsel to render advice with regard to any responsibility of the
Administrative Committee under the Plan or to assist in the administration of
the Plan; and
(h) to determine the status of qualified domestic relations
orders under Section 414(p) of the Code.
The Administrative Committee shall have no power to add to, subtract
from or modify any of the terms of the Plan, or to change or add to any benefits
provided by the Plan, or to waive or fail to apply any requirements of
eligibility for a benefit under the Plan.
8.8 Rules and Decisions. The Administrative Committee may adopt such
rules as it deems necessary, desirable, or appropriate. All rules and decisions
of the Administrative Committee shall be applied uniformly and consistently to
all Participants in similar circumstances. When making a determination or
calculation, the Administrative Committee shall be entitled to rely upon
information furnished by a Participant, Former Participant or Beneficiary, the
Employer, the legal counsel of the Employer, or the Trustee.
8.9 Authorization of Benefit Payments. The Administrative Committee
shall issue proper directions to the Trustee concerning all benefits which are
to be paid from the Trust Fund pursuant to the provisions of the Plan.
8.10 Application and Forms for Benefits. The Administrative Committee
may require a Participant, Former Participant or Beneficiary to complete and
file with it an application for a benefit, and to furnish all pertinent
information requested by it. The Administrative Committee may rely upon all such
information so furnished to it, including the Participant's, Former
Participant's or Beneficiary's current mailing address.
8.11 Facility of Payment. Whenever, in the Administrative 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 Administrative Committee
may direct the Trustee to make payments to such person or to his legal
representative or to a relative or friend of such person for his benefit, or he
may direct the Trustee to apply the payment for the benefit of such person in
such manner as it considers advisable.
8.12 Indemnification. The Employer shall indemnify each individual who
is an officer, director or Employee of the Employer and who may be called upon
or designated to perform fiduciary duties or to exercise fiduciary authority or
responsibility with respect to the Plan and shall save and hold him harmless
from any and all claims, damages, and other liabilities, including without
limitation all expenses (including attorneys' fees and costs), judgments, fines
and amounts paid in settlement and actually and reasonably incurred by him in
connection with any action, suit or proceeding, resulting from his alleged or
actual breach of such duties, authority or responsibility, whether by
negligence, gross negligence or misconduct, to the maximum extent permitted by
law, provided, however, that this indemnification shall not apply with respect
to any actual breach of such duties, authority or responsibility, if the
individual concerned did not act in good faith and in the manner he reasonably
believed to be in (or not opposed to) the best interest of the Employer, or,
with respect to any criminal action or proceeding, had reasonable cause to
believe his conduct was unlawful.
8.13 Resignation or Removal of the Administrative Committee. An
Administrative Committee member may resign at any time by giving ten days'
written notice to the Employer and the Trustee. The Board of Directors may
remove any member of the Administrative Committee by giving written notice to
him and the Trustee. Any such resignation or removal shall take effect at a date
specified on such notice, or upon delivery to the Administrative Committee if no
date is specified.
19
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Article IX. Limitations On Contributions And Benefits
--------------------------------------------------------------------------------
9.1 Determination by Internal Revenue Service. Contributions to the
Trust Fund are conditioned specifically upon the initial qualification of the
Plan under the Code and if the Plan does not so initially qualify, such
contribution or part thereof shall be returned to the Employer within one year
after such denial of initial qualification.
9.2 Conditional Contributions. To the extent permitted under ERISA and
the Code, all contributions to the Plan are subject to the following conditions:
(a) All contributions made to the Plan by the Employer shall
be conditioned upon the deductibility of such contributions under the Code. To
the extent that any such deduction is disallowed by the Internal Revenue
Service, the Employer by action of the Administrative Committee shall have the
right to demand and receive the return of the related contribution to the extent
disallowed within one year after the disallowance of said deduction.
(b) If the Employer makes a contribution, or any part thereof,
by mistake of fact, such contribution or part thereof shall be returned to the
Employer within one year after such contribution is made.
9.3 Twenty-Five HCE Limitation. Effective for Plan Years commencing on
or after January 1, 1991, the annual payments made by the Plan to any individual
who is one of the twenty-five (25) highest-paid Highly Compensated Employees,
for any Plan Year, shall not exceed the limitations set forth in Treas. Reg.
Section 1.401(a)(4)-5.
9.4 General Limitation on Benefits. In addition to the limitations
possibly applicable by reason of Section 9.3, and any other provision of the
Plan to the contrary notwithstanding, the annual benefit payable to any
Participant or Former Participant shall not exceed the limitations imposed by
Section 415 of the Code. The provisions of Section 415 of the Code are
incorporated into this Plan by reference. If a Participant's participation in
other plans maintained by the Employer or an Affiliate would result in a
violation of the limitations of Section 415 of the Code, the Participant's
benefit under this Plan shall be reduced to the extent necessary to satisfy
Section 415 of the Code.
9.5 Suspension of Benefits on Reemployment.
(a) In the event that any person receiving benefits under the
Plan by reason of retirement is reemployed by the Employer, the Plan shall
suspend the payment of benefits as of the first day of the month following the
first month in which an Eligible Employee receives payment from the Employer for
at least 80 Hours of Service performed during a calendar month during such
person's reemployment;
(b) Xxxxxxxx suspended hereunder shall resume as of the first
day of the third month commencing after the earlier of the day the reemployed
person Terminates employment with the Employer or, if such person is an Eligible
Employee, receives payment from the Employer for any Hours of Service performed
for fewer than 80 Hours of Service during a calendar month in such reemployed
status;
(c) Any person whose benefits are suspended under this Section
shall be entitled to receive a pension on subsequent retirement or Termination
that is not less than the pension received as of the date of suspension
hereunder. The person's resumed pension shall be determined on the basis of the
Participant's Compensation and Years of Credited Service before the suspension
hereunder and Compensation and Years of Credited Service after his reemployment,
reduced however, by the value of any pension benefits paid to him previously
either (i) prior to his Normal Retirement Date; or (ii) while reemployed by the
Employer under circumstances in which his benefits should have been suspended
under paragraph (a), but were not.
(d) Any Participant whose benefits are suspended pursuant to
the foregoing shall be notified in writing of the suspension by personal
delivery or first class mail during the first calendar month or payroll period
in which benefits are suspended.
(e) The Annuity Starting Date with respect to a Participant
who is reemployed after commencement of his benefits at Normal Retirement Date,
shall be the date his benefits originally commenced for benefits accrued before
and after the suspension.
(f) The Annuity Starting Date with respect to a Participant
who is reemployed after commencement of his benefits at Early Retirement Date
shall be:
20
(1) the date his benefits originally commenced with
respect to the benefits accrued prior to the suspension; and
(2) with respect to the benefits he accrued after his
reemployment (if any), and the suspension of his original benefit payments
hereunder, the date such subsequent accruals commence to be paid. The provisions
of Section 4.6(d) of the Plan shall apply to such subsequent accruals as a
second Annuity Starting Date.
21
--------------------------------------------------------------------------------
Article X. Merger, Transfer Or Consolidation Of Plans
--------------------------------------------------------------------------------
10.1 Plan Assets. There shall be no merger or consolidation of the Plan
with, or transfer of assets or liabilities of the Fund to, any other plan of
deferred compensation maintained or to be established for the benefit of all or
some of the Participants of the Plan, unless each Participant would (if either
this Plan or the other plan then terminated) receive a benefit immediately after
the merger, consolidation or transfer which is equal to or greater than the
benefit he would have been entitled to receive immediately before the merger,
consolidation or transfer (if this Plan had then terminated), and unless a duly
adopted resolution of the Board of Directors authorizes such merger,
consolidation or transfer of assets.
22
--------------------------------------------------------------------------------
Article XI. Miscellaneous
--------------------------------------------------------------------------------
11.1 Mandatory Commencement of Benefits. Notwithstanding any provision
of this Plan to the contrary, payment of benefits under this Plan shall commence
upon the written election of a Participant or Former Participant not later than
sixty days after the close of the Plan Year in which the latest of the following
events occurs: (a) the Participant attains Normal Retirement Date; (b) the tenth
anniversary of the Plan Year in which the Participant commenced participation in
the Plan; or (c) the Termination of the Participant's service with the Employer.
11.2 Nonguarantee of Employment. Nothing contained in this Plan shall
be construed as a contract of employment between the Employer and any Eligible
Employee, or as a right of any Eligible Employee to be continued in the
employment of the Employer, or as a limitation of the right of the Employer to
discharge any of its Eligible Employees with or without cause.
11.3 Rights to Fund Assets. No Eligible Employee or Beneficiary shall
have any right to, or interest in, any assets of the Fund upon Termination of
his employment or otherwise, except as provided from time to time under this
Plan, and then only to the extent of the benefits payable under the Plan to such
Eligible Employee out of the assets of the Fund. All payments of benefits as
provided for in this Plan shall be made solely out of the assets of the Fund.
11.4 Nonalienation of Benefits. Benefits payable under this Plan shall
not be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumber, charge, garnishment, execution, or levy of any
kind, either voluntary or involuntary, including any such liability which is for
alimony or other payments for the support of a spouse or former spouse, or for
any other relative of the Eligible Employee prior to actually being received by
the person entitled to the benefit under the terms of the Plan, except as
required under a qualified domestic relations order as defined in Section 414(p)
of the Code. Any attempt to anticipate, alienate, sell, transfer, assign,
pledge, encumber, charge or otherwise dispose of any right to benefits payable
hereunder, shall be void. The Fund shall not in any manner be liable for, or
subject to, the debts, contracts, liabilities, engagements or torts of any
person entitled to benefits hereunder.
11.5 Inability to Locate Payee. Each person entitled to receive
benefits under the Plan shall be responsible for informing the Administrative
Committee of his mailing address for purposes of receiving such benefits. If the
Administrative Committee is unable to locate any person entitled to receive
benefits under the Plan, such benefits shall not be forfeited but shall be
carried as a contingent liability of the Plan and shall be payable when a proven
and legitimate claim therefor has been submitted to the Administrative
Committee.
11.6 Applicable Law. This Plan shall be construed, interpreted,
administered and enforced in accordance with the laws of the Commonwealth of
Pennsylvania, except to the extent superseded, only when required, by ERISA as
in effect from time to time.
23
--------------------------------------------------------------------------------
Article XII. Determination Of Top-Heavy Status
--------------------------------------------------------------------------------
12.1 General. Notwithstanding any other provision of the Plan to the
contrary, for any Plan Year, in which the Plan is Top-Heavy or Super Top-Heavy,
as defined below, the provisions of this Article 12 shall apply, but only to the
extent required by Section 416 of the Code and the regulations thereunder.
12.2 Top-Heavy Plan. This Plan shall be Top-Heavy and an Aggregation
Group shall be Top-Heavy if as of the Determination Date for such Plan Year, the
sum of the Cumulative Accrued Benefits and Cumulative Accounts of Key Eligible
Employees for the Plan Year exceeds 60% of the aggregate of all the Cumulative
Accounts and Cumulative Accrued Benefits. The Cumulative Accrued Benefits and
Cumulative Accounts of those Participants who have not performed any service for
the Employer during the five year period ending on the Determination Date, shall
be disregarded.
(a) If the Plan is not included in a Required Aggregation
Group with other plans, then it shall be Top-Heavy only if (i) when considered
by itself it is Top-Heavy and (ii) it is not included in a Permissive
Aggregation Group that is not Top-Heavy.
(b) If the Plan is included in a Required Aggregation Group
with other plans, it shall be Top-Heavy only if the Required Aggregation Group,
including any permissively aggregated plans, is Top-Heavy.
12.3 Super Top-Heavy Plan. This Plan shall be Super Top-Heavy if it
would be Top-Heavy under Section 12.2, but substituting 90% for 60%.
12.4 Cumulative Accrued Benefits and Cumulative Accounts. The
determination of the Cumulative Accrued Benefits and Cumulative Accounts under
the Plan shall be made in accordance with Section 416 of the Code and the
regulations thereunder.
12.5 Definitions.
(a) "Aggregation Group" means either a Required Aggregation
Group or a Permissive Aggregation Group.
(b) "Determination Date" means with respect to any Plan Year,
the last day of the preceding Plan Year or in the case of the first Plan Year of
any plan, the last day of such Plan Year or such other date as permitted by the
Secretary of the Treasury or his delegate.
(c) "Group Employer" means the Employer that adopts this Plan
and all members of a controlled group of corporations (as defined in Section
414(b) of the Code), all commonly controlled trades or businesses (as defined in
Section 414(c) of the Code), all affiliated service groups (as defined in
Section 414(m) of the Code) and any other affiliated entities (as provided in
Section 414(o) of the Code) of which the Employer is a part.
(d) "Key Eligible Employee" means those individuals described
in Section 416(i)(1) of the Code and the regulations thereunder.
(e) "Non-Key Eligible Employee" means those Eligible Employees
who are not Key Eligible Employees and includes a former Key Eligible Employee.
(f) "Permissive Aggregation Group" means a Required
Aggregation Group plus any other plans selected by the Company provided that all
such plans when considered together satisfy the requirements of Section
401(a)(4) and 410 of the Code.
(g) "Required Aggregation Group" means each plan of the
Employer in which a Key Eligible Employee participates (in the Plan Year
containing the Determination Date or any of the four preceding Plan Years) and
each other plan which enables any plan in which a Key Eligible Employee
participates during the period tested to meet the requirements of Section
401(a)(4) or 410 of the Code. All employers aggregated under Section 414(b), (c)
or (m) of the Code are considered a single employer. The Required Aggregation
Group shall include any terminated plan that covered a Key Eligible Employee and
was maintained within the five year period ending on the Determination Date.
24
(h) "Valuation Date" means the annual date on which Plan
assets must be valued for purposes of determining the Plan's assets and
liabilities and the value of account balances maintained under any defined
contribution plan of the Employer. The valuation date for purposes of the
preceding sentence shall be the same valuation date for computing Plan costs for
minimum funding.
12.6 Minimum Annual Retirement Benefit.
(a) Each Participant who is a Non-Key Eligible Employee will
receive the greater of his Accrued Annual Pension as defined in Section 2.1 or a
Minimum Annual Retirement Benefit (expressed as a life annuity commencing at
Normal Retirement Date) equal to two percent of the Participant's average
compensation (as determined under any permissible definitions under Section 415
of the Code and the regulations thereunder) but limited in amount under Section
401(a)(17) of the Code for the five consecutive years for which the Participant
had the highest aggregate compensation multiplied by the Participant's Years of
Credited Service with the Employer, up to a maximum of 20%.
(b) For purposes of this Section 12.6, Years of Credited
Service shall not include service if the Plan were not Top-Heavy for any Plan
Year ending in such period of Years of Credited Service or Years of Credited
Service completed in a Plan Year commencing before January 1, 1984. For purposes
of this Section 12.6, compensation in years prior to January 1, 1984 and
compensation in years after the close of the last Plan Year in which the Plan is
Top-Heavy shall be disregarded.
(c) A Minimum Annual Retirement Benefit shall not be provided
under this Section 12.6 to the extent that the Participant is covered under any
other plan or plans of the Group Employer and the Group Employer has provided
that the minimum benefit requirements applicable to this Plan will be met by the
other plan or plans.
(d) A Participant who is a Non-Key Eligible Employee shall not
fail to accrue a Minimum Annual Retirement Benefit because of (i) his level of
Compensation or (ii) a failure to make mandatory Eligible Employee
contributions.
12.7 Vesting. A Participant who is credited with one Hour of Service in
any Plan Year during which the Plan is Top-Heavy or Super Top-Heavy shall have a
nonforfeitable interest in that portion of his Normal Annual Pension, Accrued
Annual Pension or Minimum Annual Retirement Benefit attributable to
participation during the Plan Year in which the Plan is Top-Heavy or Super
Top-Heavy and all prior Plan Years in accordance with the following schedule:
Years of Service Nonforfeitable Percentage
----------------- -------------------------
less than 2 years 0
2 but less than 3 20%
3 but less than 4 40%
4 but less than 5 60%
5 or more 100%
If the Plan ceases to be Top-Heavy in any Plan Year, the vesting provisions of
Section 5.1 determined without regard to this Section 12.7, shall apply with
respect to subsequent Plan Years, subject to Section 7.2(b).
12.8 Defined Benefit and Defined Contribution Plans. For each Plan Year
in which the Plan is Super Top-Heavy or for each Plan Year in which the Plan is
Top-Heavy and the additional minimum benefits or contributions required by
Section 416(h) of the Code are not provided, the dollar limitations in the
denominator of the defined benefit plan fraction and defined contribution plan
fraction as defined in Section 415(e) of the Code shall be multiplied by 100
percent rather than 125 percent. If the application of the provisions of this
Section 12.8 would cause any Participant to exceed 1.0 for any Limitation Year
as set forth in Section 9.4, then the application of this Section 12.8 shall be
suspended as to such Participant until such time as he no longer exceeds 1.0.
During the period of such suspension, there shall be no accruals for such
Participant under this Plan and no Group Employer contributions, forfeitures or
voluntary nondeductible contributions allocated to such Participant under any
defined contribution plan of the Group Employer.
25
--------------------------------------------------------------------------------
Article XIII. ERISA Transition Provisions
--------------------------------------------------------------------------------
13.1 Scope and Purpose. The provisions of this Article XIII shall apply
only to those Participants or Former Participants who were Participants on
December 14, 1976 and Employees on December 15, 1976. The purpose of this
Article XIII is to preserve for those Participants or Former Participants
certain of the provisions of the Plan as in effect before December 15, 1976.
13.2 Calculation of Benefit. With respect to a Participant or Former
Participant covered by this Section 13.2, the Participant's or Former
Participant's monthly benefit at his Normal Retirement Date under the Plan shall
be the greater of (i) the Participant's or Former Participant's benefit
calculated under Section 4.1 or (ii) one-twelfth of the product of (A) and (B),
but not in excess of $625, where (A) equals 45% of the Participant's or Former
Participant's "Basic Salary" on December 15, 1975 and (B) equals a fraction, the
numerator of which is the Participant's or Former Participant's total number of
"Years of Participation" at December 14, 1976 and the denominator of which is
the total number of "Years of Participation" with which he would have been
credited if he separated from service on the "Anniversary Date" nearest his 65th
birthday, all as defined under the terms of the Plan as in effect on December
14, 1976. Such amount is set forth in Schedule A, Column 1.
13.3 Form of Payment of Normal, Late, Early and Disability Benefit. In
addition to the forms of settlement provided under Section 4.6(e), a Participant
or Former Participant covered under this Article XIII, shall be entitled to
elect in writing on forms provided by the Administrative Committee payment of
the "value of the accrued benefit" (as determined under Section 13.7) to which
he is entitled under Schedule A, Column 2, increased by interest at the rate of
5% per annum from December 14, 1976 to the date of determination, counting only
completed months, in a lump sum upon Normal, Late, Early or Disability
Retirement in accordance with the provisions of Sections 4.1, 4.2, 4.3 or 4.4.
In the event a Participant or Former Participant elects payment of some or all
of the amount of the "value of the accrued benefit" to which he is entitled
under Schedule A, Column 2, increased by interest as described in the preceding
sentence, in a lump sum, the "actuarial value" (as determined under Section
13.7) of the benefit to which he is otherwise entitled under Article IV shall be
reduced by the amount of such payment and the "remaining value", if any, will be
paid in a form provided by Section 4.6(e) of the Plan. However, any Participant
or Former Participant covered under this Article XIII, the value of whose
benefit under Schedule A, Column 2, without increase, is $20,000 or more,
alternatively may elect in writing, on forms provided by the Administrative
Committee, payment of the value of the entire benefit to which he is entitled
under the Plan in an "actuarially equivalent" (as determined under Section 13.6)
lump sum upon Normal, Late, Early or Disability Retirement in accordance with
the provisions of Section 4.6.
Notwithstanding the foregoing, effective January 1, 1989, any
Participant covered under this Section 13, who is a Highly Compensated Employee,
determined as of any date, and the value of whose benefit under Schedule A,
Column 2, without increase, is $20,000 or more, alternatively may elect in
writing, on forms provided by the Administrative Committee payment of (i) the
value of the benefit which he had accrued as of December 31, 1988 under the Plan
in an actuarially equivalent lump sum (as determined under Section 13.7) upon
Normal, Late, Early or Disability Retirement in accordance with the provisions
of Section 4.1, 4.2, 4.3 or 4.4; and (ii) the remainder of his Accrued Annual
Pension, which he had accrued after December 31, 1988, paid to him in one of the
forms provided for under Section 4.6 of the Plan.
13.4 Payment of Vested Benefits. Any Participant or Former Participant
covered under this Article XIII who terminates employment with the Employer and
all Affiliates with a nonforfeitable benefit under Section 5.1 may elect in
writing on forms provided by the Administrative Committee to receive the value
of his benefit under Schedule A, Column 2, increased by interest at the rate of
5% per annum from December 14, 1976 to the date of determination, counting only
completed months, in a lump sum. The "remaining value" of his benefit, if any,
shall be paid in accordance with Section 4.6(e). Any such Participant or Former
Participant, the value of whose accrued benefit under Schedule A, Column 2,
without increase, is $20,000 or more, alternatively may elect in writing, on
forms provided by the Administrative Committee, payment of the value of the
entire benefit to which he is entitled under the Plan in an "actuarially
equivalent" lump sum.
26
Notwithstanding the foregoing, effective January 1, 1989, any
Participant covered under this Section 13, who is a Highly Compensated Employee,
determined as of any date, and the value of whose benefit under Schedule A,
Column 2, without increase, is $20,000 or more, alternatively may elect in
writing, on forms provided by the Administrative Committee, payment of (i) only
the value of the benefit which he had accrued as of December 31, 1988 under the
Plan in an actuarial equivalent lump sum (as determined under Section 13.7) upon
his Termination of employment in accordance with the provisions of Section 4.5;
and (ii) the remainder of his Accrued Annual Pension, which he had accrued after
December 31, 1988, paid to him in one of the forms provided for under Section
4.6 of the Plan.
If a Participant or Former Participant who receives a distribution
hereunder returns to service covered by the Plan, his prior service shall be
restored for purposes of benefit accrual if he contributes to the Trust Fund in
cash the amount of the distribution he received, together with interest thereon
at the rate set forth in Section 411(c)(2)(C) of the Code per annum, compounded
annually, before suffering five consecutive Breaks in Service or five years
following the date he is reemployed by the Employer, if earlier. If the
Participant or Former Participant does not make such a contribution as provided
above, his Accrued Annual Pension upon subsequent termination of service shall
be based on accruals arising from and after his return to service under the
terms of the Plan plus any "remaining value" of his benefit at the date of his
previous termination of service not paid hereunder upon his previous termination
of service.
13.5 Death Benefits. The Beneficiary of any Participant or Former
Participant covered under this Article XIII who attained his Normal Retirement
Date, as defined under the terms of the Plan as in effect on December 14, 1976,
on or before December 14, 1976, and dies on or after December 15, 1976, but
prior to the earlier of the date (i) benefit payments to him commence or (ii) an
annuity contract is purchased to provide his retirement benefit, shall be
entitled to receive a death benefit equal to the "actuarial value" at the time
of death of such Participant's or Former Participant's accrued benefit under
Schedule A, Column 2. The benefit will be paid in the mode of distribution
designated by the Participant or Former Participant in writing; provided,
however, if the Participant's or Former Participant's designated Beneficiary
should die on or before the commencement of distribution of benefits or the
Participant or Former Participant fails to designate the mode of distribution,
the mode of distribution shall be determined by the Administrative Committee
after consultation with the Participant's or Former Participant's Beneficiary.
Notwithstanding the foregoing, if the Participant or Former Participant is
married, the Participant's or Former Participant's Spouse shall be the
Beneficiary unless the Spouse waives the right to be the Beneficiary in writing
witnessed by a notary public or a member of the Administrative Committee in
accordance with the rules established by the Administrative Committee.
Notwithstanding the foregoing, effective January 1, 1989, any
Participant covered under this Section 13, who is a Highly Compensated Employee,
determined as of any date, and the value of whose benefit under Schedule A,
Column 2, without increase, is $20,000 or more, alternatively may elect in
writing, on forms provided by the Administrative Committee, payment of (i) the
value of the benefit which he had accrued as of December 31, 1988 under the Plan
in an actuarial equivalent lump sum (as determined under Section 13.7) upon his
death paid to his Beneficiary; and (ii) the remainder of his Accrued Annual
Pension, which he had accrued after December 31, 1988, paid to his Beneficiary
in the form provided for under Section 4.7 of the Plan.
13.6 Transfer of Benefit.
(i) Any Participant or Former Participant (A) who has reached
his Normal Retirement Date on or before December 15, 1976, (B) whose benefit is
calculated under the Plan as effective prior to December 15, 1976 and (C) whose
benefit payments have not started prior to October 9, 1979, shall be entitled to
elect irrevocably in writing as hereinafter provided that the Administrative
Committee transfer the amount of his accrued benefit to be held as a separate
bookkeeping account under the terms of the Trust Agreement. The election may be
made effective as of the January 1st or July 1st next following the delivery of
a written request to the Administrative Committee at least 30 days before such
date.
(ii) In addition to the forms of settlement provided under
Section 4.6, a Participant or Former Participant covered under this Section
13.5, shall be entitled to elect in writing on forms provided by the
Administrative Committee one of the following settlement options:
(A) approximately equal monthly, quarterly or annual
installments as elected by the Participant or Former Participant over a period
not exceeding the life expectancy of the Participant or Former Participant or
the joint life expectancy of the Participant or Former Participant and his
designated Beneficiary with the remainder of such installments, if any, after
the Participant's or Former Participant's death payable to his designated
beneficiary or Beneficiaries; or
27
(B) a lump sum; or
(C) any combination of the above.
Notwithstanding the foregoing, the Participant or Former Participant
must elect under this Section 13.5(ii) or 4.6(e) a method of settlement under
which the present value of the installments to be paid to the Participant or
Former Participant over his projected life span is more than 50% of the present
value of the installments payable to both the Participant or Former Participant
and his Beneficiary or Beneficiaries.
(iii) The Beneficiary of any Participant or Former Participant
eligible to make the election under Section 13.6(i) who is to receive death
benefits under Section 13.5, may subject to the approval of the Administrative
Committee, request that the value of the death benefit be held as a separate
bookkeeping account under the terms of the Trust Agreement, with distribution to
be made in the mode provided for under Section 13.5.
13.7 Actuarial Equivalency. With respect to Article XIII, when
referring to amounts developed under Article IV, "actuarial value", "remaining
value", "actuarial equivalent" and "value of the accrued benefit" shall be
determined using GAM71 Male mortality table and interest at the rate of 5.5% per
annum. However, the value so determined for any Participant or Former
Participant to whom this Article XIII applies shall not be less than the
actuarial value of the accrued benefit for that Participant or Former
Participant as of July 31, 1983, determined using the GAM71 Male and Female (as
appropriate) mortality table and interest at the rate of 5.5% per annum. When
referring to amounts developed from Schedule A, Column 2, the amount of accrued
benefits and actuarial equivalents shall be determined as described, using
interest at the rate of 5% per annum.
Effective with respect to any lump sum distribution or the value of
amounts developed pursuant to this Article XIII with respect to any Participant
whose employment Terminates on or after January 1, 1998, the value of such
benefit shall be determined in accordance with the foregoing assumptions;
provided, however, that in no event shall the amount be less than the amount
determined using the assumptions set forth in paragraph (b) of the definition of
Actuarial Equivalence.
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Appendix A
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Participating Employers
The Pep Boys -- Xxxxx, Moe & Jack
The Pep Boys -- Xxxxx, Moe & Jack of California
Pep Boys -- Manny, Moe & Jack of Delaware, Inc. (effective 1/29/95)
29
