FIRST AMENDMENT TO THE QUANEX CORPORATION EMPLOYEES’ PENSION PLAN
Exhibit 10.1
FIRST AMENDMENT TO THE
QUANEX CORPORATION EMPLOYEES’ PENSION PLAN
QUANEX CORPORATION EMPLOYEES’ PENSION PLAN
THIS AGREEMENT by Quanex Corporation (the “Sponsor”) effective as of the 1st day of January
2007 or as otherwise set forth in the specific provision,
W I T N E S S E T H:
WHEREAS, the Sponsor maintains the Quanex Corporation Employees’ Pension Plan (the “Plan”);
WHEREAS, the Sponsor reserved the right in Section 10.01 to amend the Plan; and
WHEREAS, the Sponsor has determined to amend the Plan;
NOW, THEREFORE, the Plan is hereby amended as set forth below:
1. Effective January 1, 2007, Section 1.22 of the Plan is completely amended and restated to
provide as follows:
1.22 “Eligible Employee” means an Employee who (a) is classified by the Sponsor
as (1) working at the Sponsor’s Corporate Office in Houston, Texas; (2) working at
or for the Sponsor’s MACSTEEL group office in Jackson, Michigan and compensated on a
salaried basis; (3) working at or for the Sponsor’s MACSTEEL operating unit in
Jackson, Michigan and compensated on a salaried basis; (4) working at or for the
Sponsor’s MACSTEEL operating unit in Fort Xxxxx, Arkansas and compensated on a
salaried basis; (5) working at or for the Sponsor’s MACSTEEL Heat Treating operating
unit in Huntington, Indiana and compensated on a salaried or hourly basis; (6)
working at or for the Sponsor’s Xxxxxxx Aluminum Casting division and compensated on
a salaried basis; (7) working at or for the Sponsor’s Homeshield-Chatsworth division
and compensated on a salaried or hourly basis; (8) working at or for the Sponsor’s
Homeshield-Rice Lake division and compensated on a salaried or hourly basis; (9)
working at or for the Sponsor’s Homeshield-The Dalles division and compensated on a
salaried or hourly basis; (10) working at or for the Sponsor’s Xxxxxxx Aluminum
Lincolnshire division and compensated on a salaried basis; (11) working at its
Homeshield-Dubuque division and compensated on a salaried or hourly basis; (12)
working at or for the Sponsor’s Xxxxxxx Aluminum General Office and compensated on a
salaried basis; (13) working at or for the Sponsor’s Xxxxxxx Aluminum Davenport
division and compensated on a salaried basis; or (14) working at or for the
Sponsor’s MACSTEEL NitroSteel division and compensated on a salaried or hourly
basis; or (b) is an Employee of MACSTEEL Monroe, Inc. and compensated on a salaried
basis; (c) is an Employee of Xxxxxxx Aluminum-Alabama, Inc. and compensated on a
salaried basis; (d) is an Employee of Colonial Craft, Inc. working at or for its
Homeshield-Mounds View
or Homeshield-Luck divisions and compensated on a salaried or hourly basis; (e)
is an Employee of Imperial Products, Inc. working at its Homeshield-Richmond
divisions and compensated on a salaried or hourly basis; (f) is an Employee of
Mikron Industries, Inc. and compensated on a salaried or hourly basis; (g) is an
Employee of Mikron Washington LLC and compensated on a salaried or hourly basis; (h)
is an Employee of Besten Equipment, Inc. and compensated on a salaried or hourly
basis; (i) is an Employee of TruSeal Technologies, Inc. and compensated on a
salaried basis or (j) effective February 1, 2007, is an Employee of MacSteel
Atmosphere Annealing, Inc. and compensated on a salaried or hourly basis.
2. Effective January 1, 2007, Sections 1.30, 1.31, 1.32, 1.33, 1.34, 1.35, 1.36, 1.37, 1.38,
1.39, 1.40, 1.41, 1.42, 1.43, 1.44, 1.45, 1.46, 1.47, 1.48, 1.49, 1.50, 1.51, 1.52, 1.53, 1.54,
1.55, 1.56, 1.57, 1.58, 1.59, 1.60, 1.61, 1.62, 1.63, 1.64, 1.65, 1.66, 1.67, 1.68 and 1.69 are
hereby renumbered as 1.31, 1.32, 1.33, 1.34, 1.35, 1.36, 1.37, 1.38, 1.39, 1.40, 1.41, 1.42, 1.43,
1.44, 1.45, 1.46, 1.47, 1.48, 1.49, 1.50, 1.51, 1.52, 1.53, 1.54, 1.55, 1.56, 1.57, 1.58, 1.59,
1.60, 1.61, 1.62, 1.63, 1.64, 1.65, 1.66, 1.67, 1.68, 1.69 and 1.70, respectively.
3. Effective January 1, 2007, a new Section 1.30 is hereby added to the Plan to provide as
follows.
1.30 “Grandfathered Cash Balance Member” means a Cash Balance Member who for
January 1, 2007, was classified by the Sponsor as: (1) working at or for the
Sponsor’s Xxxxxxx Aluminum Casting division and compensated on a salaried basis; (2)
working at or for the Sponsor’s Homeshield-Chatsworth division and compensated on a
salaried or hourly basis; (3) working at or for the Sponsor’s Homeshield-Rice Lake
division and compensated on a salaried or hourly basis; (4) working at or for the
Sponsor’s Homeshield-The Dalles division and compensated on a salaried or hourly
basis; (5) working at its Homeshield-Dubuque division and compensated on a salaried
or hourly basis; (6) working at or for the Sponsor’s Xxxxxxx Aluminum Lincolnshire
division and compensated on a salaried basis; (7) working at or for the Sponsor’s
Xxxxxxx Aluminum General Office and compensated on a salaried basis; (8) working at
or for the Sponsor’s Xxxxxxx Aluminum Davenport division and compensated on a
salaried basis; (9) an Employee of Xxxxxxx Aluminum-Alabama, Inc. compensated on a
salaried basis; (10) an Employee of Colonial Craft, Inc. working at or for its
Homeshield-Mounds View or Homeshield-Luck divisions and is compensated on a salaried
or hourly basis; and (11) an Employee of Imperial Products, Inc. working at or for
its Homeshield-Richmond division compensated on a salaried or hourly basis.
4. Effective January 1, 2007, Section 1.41 of the Plan, as renumbered herein, is completely
amended and restated to provide as follows:
1.41 “Notional Employer Contribution” means the percentage of a Member’s
Compensation accrued for a Plan Year, or portion thereof, in a Member’s Account as
provided under Section 3.02. Effective as of January 1,
2007, such percentage shall equal 4% of the Member’s Compensation for a Plan
Year; provided, however, that such percentage for the Grandfathered Cash Balance
Members described in the chart below shall equal the percentage corresponding to
such Member as reflected in the chart below:
| For a Grandfathered Cash | For such | For such members | ||
| Balance Member who was | Members who are | who are hourly | ||
| working at or for the following on | salaried | compensated | ||
| January 1, 2007 | Employees | Employees | ||
Homeshield — Mounds View |
5% | 5.5% | ||
Homeshield — Luck |
5% | 5.5% | ||
Homeshield — Chatsworth |
5% | 6.5% | ||
Homeshield — Rice Lake |
5% | 6.5% | ||
Homeshield — The Dalles |
5% | 6.5% | ||
Homeshield — Dubuque |
5% | 6.5% | ||
Xxxxxxx Aluminum — Davenport &
General Office |
5% | N/A | ||
Xxxxxxx Aluminum — Casting |
5% | N/A | ||
Xxxxxxx Aluminum — Lincolnshire |
5% | N/A | ||
Xxxxxxx Aluminum — Alabama |
5% | N/A |
If a Grandfathered Cash Balance Member is transferred from the division or
subsidiary at which or for which such Member was working on January 1, 2007, the
Notional Employer Contribution for such Member shall continue to be based on the
percentage that is provided to Grandfathered Cash Balance Members who were working
at or for such division or subsidiary on January 1, 2007, until such Member
Separates From Service and incurs a Period of Severance of at least one year. If an
Employee who is a Grandfathered Cash Balance Member Separates From Service, incurs a
Period of Severance of at least one year, is reemployed by an adopting Employer of
the Plan, and is eligible to recommence participation in the Plan, such Employee
shall be a Cash Balance Member but will no longer be a Grandfathered Cash Balance
Member.
5. Effective as of May 1, 2007, each reference to “Option D” in Sections 5.01(a)(2) and
5.01(b)(2) shall be changed to a reference to “Option E”.
6. Effective as of May 1, 2007, Section 6.07 of the Plan is hereby amended and restated to
provide as follows:
6.07 Optional Forms Of Distribution. Subject to the provisions of Sections
6.03 and 6.05, a Member may elect another pension which is the Actuarial Equivalent
of his Accrued Benefit, limited however, to one of the following options:
(a) Option A. A pension under which the Member shall receive equal monthly
payments for his life with no minimum number of payments guaranteed. (This is the
normal form of payment of benefits under the Plan.)
(b) Option B. A last survivor pension under which the Member shall receive 85
percent of the monthly pension benefit otherwise payable under Option A, and upon
the death of the Member, the Beneficiary shall receive 1/2 of the monthly pension
benefit paid to the Member prior to his death; provided however, that if the
Beneficiary is younger than the Member, the 85 percent factor shall be reduced by
one percent for each full year’s difference in the age of the Member and the
Beneficiary, and if the Beneficiary is older than the Member, the 85 percent factor
shall be increased by one percent for each full year’s difference in the age of the
Member and the Beneficiary (up to a maximum of 100 percent).
(c) Option C. A last survivor pension under which the Member shall receive a
monthly pension reduced from the monthly pension benefit otherwise payable under
Option A, and upon the death of the Member, the Beneficiary shall receive a monthly
pension benefit equal to that paid to the Member.
(d) Option D. A last survivor pension under which the Member shall receive a
monthly pension reduced from the monthly pension benefit otherwise payable under
Option A, and upon the death of the Member, the Beneficiary shall receive a monthly
pension benefit equal to 75 percent of that paid to the Member.
(e) Option E. A reduced monthly pension payable to the Member during his
lifetime, provided that, if the Member dies prior to his receipt of an amount equal
to 120 monthly payments, the then Present Value of the remainder of such 120 monthly
payments shall be payable to his Beneficiary in a lump sum. If a Member first
became eligible to participate in the Plan on or after November 3, 2005, his reduced
monthly pension shall be the Actuarial Equivalent of his Accrued Benefit. If a
Member was already a participant prior to November 3, 2005, his reduced monthly
pension shall be the greater of (A) the Actuarial Equivalent of his Accrued Benefit
or (B) an amount determined under the terms of the Plan applicable to Option D
immediately prior to November 3, 2005. If the Member dies prior to his receipt of
all of such 120 payments without having designated a Beneficiary, of if the
Beneficiary predeceases the Member, the then Present Value of any remaining payments
shall be paid in a lump sum to the Member’s estate. If the Beneficiary dies after
the Member and before all of such 120 monthly payments have been made, the then
Present Value of the unpaid balance of such payments shall be paid in a lump sum to
the Beneficiary’s estate.
(f) Option F. In the case of an Hourly Pension Plan Participant, a lump sum
payment if the requirements of Section 6.08 are satisfied.
(g) Option F. In the case of a Cash Balance Member, a lump sum payment.
Options B, C, D and E will not be available to any Member if the reduced
pension is less than $10.00 per month.
If the monthly pension benefit payable to a Member, his Spouse or his
Beneficiary would be less than $10.00 per month, quarterly payments equal in amount
to three times the monthly benefit otherwise payable will be made in lieu of monthly
payments, commencing on the date payments would otherwise commence to the payee.
Options B, C, D, E and F are not available to Hourly Pension Plan Participants.
Except otherwise as provided elsewhere in the Plan, any election shall be
automatically revoked if either the Member or Beneficiary should die before the
Member’s Annuity Starting Date.
If there is more than a 15-year age difference between the Member and his
Beneficiary, then the amount payable pursuant to either Option B or Option C will be
determined on an Actuarial Equivalent Basis.
In cases where the Beneficiary is a person other than the Member’s Spouse, the
Beneficiary under either Option B, C or D must be of such age and sex that the
amount payable to the Member will exceed 50 percent of the amount that would
otherwise be payable if such Member had elected the normal form of benefit.
No pension can exceed the life of the Member or the life of the Member and his
designated Beneficiary, or in the case of a period certain, the life expectancy of
the Member or the life expectancy of the Member and his designated Beneficiary.
An election of an option available under this Section may be made, rescinded,
or changed by a Member at any time prior to his Annuity Starting Date. An election
of an option or a change or rescission of one must be made by executing and properly
filing the form or forms approved by the Committee. Proof of age and other
information may be required by the Committee.
No pension payable under the Plan shall exceed the life of the Member or the
life of him and his Beneficiary, or in the case of a period certain, the life
expectancy of the Member or the life expectancy of him and his Beneficiary.
If the Member’s Spouse dies before the Member’s Annuity Starting Date and an
election or a failure to make an election under Section 6.05 would have caused such
Member to receive a pension based upon his and his Spouse’s joint life expectancy,
then the joint and survivor form of pension shall become inapplicable and, instead,
the Member shall become entitled to the normal form of monthly pension. If the
Member or his Spouse dies on or after his Annuity Starting Date, and he and his
Spouse were to receive a joint and survivor annuity,
such annuity shall continue in accordance with its terms and the amount of the
pension shall not be increased thereby.
7. Effective as of the first day of the month following the adoption of this Amendment,
Section 6.10 of the Plan is completely amended and restated to provide as follows:
6.10 Direct Rollover Option. To the extent required under Regulations, a
Distributee has the right to direct that any portion of his Eligible Rollover
Distribution will be directly paid in a Direct Rollover to an Eligible Retirement
Plan specified by him that will accept the Eligible Rollover Distribution.
Effective January 1, 2007, pursuant to Code section 402(c)(11), a designated
beneficiary (as defined in Code section 401(a)(9)(E)) who is not the surviving
Spouse of the Member may direct the Plan to make a direct trustee-to-trustee
transfer of all or any portion of the deceased Member’s Account to an individual
retirement plan described in Code section 402(c)(8)(B)(i) or 402(c)(8)(B)(ii)
established for purposes of receiving the distribution on behalf of such individual,
provided that such distribution satisfies all of the requirements to be an eligible
rollover distribution (as described under the Code and the regulations and guidance
issued thereunder) other than the requirement that the distribution be made to the
Member’s or former Member’s Spouse. To the extent inconsistent with the terms and
provisions of the Plan and this Section 6.10, the requirements of Code section
402(c)(11) and the regulations and guidance issued thereunder shall govern such
rollovers by nonspouse Beneficiaries.
8. Effective 180 days following the adoption of this Amendment, Section 6.11 of the Plan is
completely amended and restated to provide as follows:
6.11 Time of Payment of Distribution.
(a) Members Other than Cash Balance Members. Subject to Sections 6.03, 6.06
and 6.12, the benefit of a Member other than a Cash Balance Member shall be paid or
commence to be paid by the first day of the third month coincident with or next
following the later of (1) the date of his Separation From Service, or (2) the date
on which he attains age 55; provided, however, that such Member may elect to have
his Plan benefit paid or commence to be paid as of either (a) the first day of any
subsequent month, or (b) the first day of the first or second month following the
later of (i) the date of his Separation from Service, or (ii) the date on which he
attains age 55.
(b) Cash Balance Members. Subject to Sections 6.03, 6.06 and 6.12, a Cash
Balance Member’s Plan benefit may be paid or commence to be paid on the first day of
the third month coincident with or next following the date of his Separation From
Service; provided, however, that such Member may elect to have his Plan benefit paid
or commence to be paid as of either (a) the first day of any subsequent month or (b)
the first day of the first or second month following the date of his Separation from
Service.
(c) Notwithstanding the foregoing provisions of this Section 6.11, in no event
shall a Member’s Plan benefit be paid or commence to be paid later than the first
day of the third month following the later of the month in which (1) the Member
attains Normal Retirement Age, or (2) the Member’s final Separation from Service.
9. Effective 180 days following the adoption of this Amendment, Section 6.14 of the Plan is
completely amended and restated to provide as follows:
6.14 Information Provided To Members. Information regarding the form of
benefits available under the Plan shall be provided to Members in accordance with
the following provisions:
(a) QJSA Notice and Notice of Right to Defer Receipt of Distribution. Except
as otherwise provided in paragraph (c), the Sponsor shall provide a Member a written
notice explaining the terms and conditions of each retirement option, and in
particular (1) the automatic QJSA or life annuity, (2) the Member’s right to make,
and the effect of, a waiver of the automatic QJSA, (3) the right of the Member’s
Spouse to consent or not to consent to such a waiver, (4) the right to make, and the
effect of, a revocation of a previous waiver or election, (5) the eligibility
conditions and other material features of the optional forms of benefit, and, if
applicable (6) the Member’s right to defer receipt of the Member’s distribution.
The notice shall also either contain (1) a description, that is specific to the
Member, of the financial effect of the Member selecting an optional form of benefit
or (2) a general description of the financial effect of the election that complies
with the requirements of Department of Treasury Regulations issued under section 417
of the Code. If a general description of the financial effect of the election is
included in the notice, the notice must also be accompanied by a statement that
includes an offer to provide, upon the Member’s request, a statement of financial
effect and a description of how the Member may obtain this additional information.
The notice shall also either contain (1) a description, that is specific to the
Member, of the relative values of the optional forms of benefit compared to the
value of the QJSA or (2) a general description of the relative values that complies
with the requirements of Department of Treasury Regulations issued under section 417
of the Code. If a general description of the relative values is included in the
notice, the notice must also be accompanied by a statement that includes an offer to
provide, upon the Member’s request, a comparison of relative values that is specific
to the Member for any presently available optional form of benefit and a description
of how the Member may obtain this additional information. The notice requirements
set forth in this paragraph (a) are collectively referred to as the “QJSA Notice.
(b) Time for Giving QJSA Notice. Except as specified below in this paragraph
(b) or as permitted under Section 6.18, the QJSA Notice shall be provided to a
Member during the period beginning 90 days before his Annuity Starting Date and
ending 30 days before his Annuity Starting Date (or as soon after the expiration of
such period as is administratively practicable). If the
Member, after having received the QJSA Notice, affirmatively elects a form of
distribution with the consent of the Member’s Spouse (if necessary), the 30-day
timing requirement of this paragraph (b) will not apply if all of the following
conditions are satisfied: (1) the Sponsor informs the Member in writing that the
Member has a right to at least 30 days to consider whether to waive the QJSA and
consent to a form of distribution other than a QJSA, (2) the Member is permitted to
revoke an affirmative distribution election at least until the Annuity Starting
Date, or, if later, at any time prior to the expiration of the seven-day period that
begins the day after the QJSA Notice is provided to the Member, (3) the Annuity
Starting Date is after the date the QJSA Notice is provided to the Member, and (4) a
distribution of the Member’s benefit in accordance with the Member’s affirmative
election does not commence before the expiration of the seven-day period that begins
the day after the QJSA Notice is provided to the Member. The 90-day timing
requirement of this paragraph (b) will not be failed merely because, due solely to
administrative delay, a distribution commences more than 90 days after the QJSA
Notice is provided to the Member.
(c) Exception for Members with Small Benefit Amounts. Notwithstanding the
preceding provisions of this Section, no QJSA Notice shall be provided to the Member
if his benefit is payable in a lump sum under Section 6.03.
10. Effective 180 days following the adoption of this Amendment, Section 6.18(a) of the Plan
is completely amended and restated to provide as follows:
6.18 Failure to Timely Provide QJSA Notice Prior to the Originally Scheduled
Payment Date.
(a) Choice of Annuity Starting Dates. If for any reason a QJSA Notice is not
provided to a Member prior to his originally scheduled Annuity Starting Date (his
“Retroactive Annuity Starting Date”), the Member shall have the right to elect to
receive his Plan benefits calculated as of either (1) his Retroactive Annuity
Starting Date, or (2) the date for which the payment of his benefits will be
rescheduled to commence (his “Prospective Annuity Starting Date”).
IN WITNESS WHEREOF, the Sponsor has executed this Agreement this 1st day of May, 2007.
| QUANEX CORPORATION | ||||
| By: | /s/ XXXXX X. XXXXXXX | |||
| Title: | Senior Vice President-General Counsel and Secretary | |||
