Attached files
EXHIBIT 10.3
RETIREMENT PENSION PLAN
FOR EMPLOYEES OF
TRANS-LUX CORPORATION
AND
CERTAIN OF ITS SUBSIDIARIES
AND/OR AFFILIATES
Effective January 1, 1945
As Amended and
Restated Effective
January 1, 2011
(Most recent determination letter
dated June 28, 2002)
INDEX
INTRODUCTION..................................................1-2
SECTION I: DEFINITIONS..................................3-20
SECTION II: ELIGIBILITY.................................21-23
SECTION III: RETIREMENT DATES............................24-25
SECTION IV: RETIREMENT BENEFITS.........................26-33
SECTION V: NORMAL FORM OF BENEFIT AT RETIREMENT........34-37
SECTION VI: OPTIONAL FORM OF BENEFITS...................38-42
SECTION VII: DEATH BENEFITS..............................43-47
SECTION VIII: CONTRIBUTIONS...............................48-49
SECTION IX: TERMINATION OF SERVICE......................50-54
SECTION X: DISABILITY..................................55-56
SECTION XI: TIME OF COMMENCEMENT OF PAYMENT.............57-69
SECTION XII: REEMPLOYMENT................................70-71
SECTION XIII: LIMITATION OF ASSIGNMENT....................72-74
SECTION XIV: LIMITATION OF RIGHTS OF EMPLOYEE...............75
SECTION XV: AMENDMENT TO OR TERMINATION OF THE PLAN.....76-81
SECTION XVI: GOVERNMENTAL RESTRICTIONS...................82-87
SECTION XVII: ADMINISTRATION OF THE PLAN..................88-94
SECTION XVIII: TRUST AGREEMENT................................95
SECTION XIX: TOP HEAVY PROVISIONS.......................96-106
SECTION XX: MISCELLANEOUS.............................107-109
APPENDIX A: OPTION FACTORS............................110-111
INTRODUCTION
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Pursuant to a resolution of the Board of Directors of each of the
participating corporations (defined in Section I as the "Company"), the
Retirement Pension Plan for the benefit of the eligible employees of each
participating corporation was adopted effective as of January 1, 1945. The Plan
was amended and restated in its entirety effective as of January 1, 1976. The
Plan was again amended and restated effective January 1, 1985 to conform to the
applicable provisions of the Tax Equity Act of 1984, the Retirement Equity Act
of 1984 and, furthermore, to incorporate amendments generally effective January
1, 1984 with respect to the Tax Equity and Fiscal Responsibility Act. The Plan
was again amended and restated for the primary purpose of conformance to the Tax
Reform Act of 1986 and other applicable legislation and was subsequently amended
to comply with changes required to comply with the Uruguay Round Agreements Act,
the Uniformed Services Employment and Reemployment Rights Act of 1994, the Small
Business Job Protection Act of 1996 and the Taxpayer Relief Act of 1997. The
Plan was again amended and restated effective January 1, 2001 to comply with
applicable legal requirements, including the Economic Growth and Tax Relief
Reconciliation Act of 2001. The Plan is amended and restated effective January
1, 2011 to incorporate amendments since the last
restatement and to make other changes deemed necessary by the Board of
Directors. This amendment and restatement of the Plan is effective January 1,
2011 except as may otherwise be provided in the Plan. The Plan as amended and
restated shall apply to Employees who have one Hour of Service on and after
January 1,2011. The rights of those Employees who have retired, died or
terminated employment shall be governed by the Plan in existence on the date of
retirement, death, or termination of employment and shall not be changed by
virtue of this Plan as amended or restated unless specifically provided for
herein.
2
SECTION I
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DEFINITIONS
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The following words and phrases shall be defined as stated below, unless a
different meaning is clearly indicated by the context.
1.1 "Accrued Benefit" means the annual amount of a Member's retirement benefit
under the normal form of payment provided in Section 5.2 hereof and payable
as of the Member's Normal Retirement Date or as of the date the Member
otherwise ceases to be an Employee, whichever is applicable. A Member's
Accrued Benefit shall be computed in accordance with Section 4.1 hereof
based on the Member's Salary at the time of computation and his expected
years of Credited Service at the date of calculation; provided, however,
that the Member's Credited Service for periods commencing after December 31,
2003 shall not be taken into account and a Member's Salary after April 30,
2009 shall not be taken into account. A Member's Accrued Benefit shall not
be reduced on account of any increase in the Member's age or service.
1.2 "Act" means the Employee Retirement Income Security Act of 1974 and any
amendments thereto.
1.3 "Actuarial Equivalent," when used with reference to any form of benefit,
means a form of benefit which has the same value
3
as the referenced benefit, based on the actuarial factors set forth in
Appendix A hereof.
1.4 "Actuary" means a person who is enrolled by the Joint Board for the
Enrollment of Actuaries established under the Act and engaged by the Pension
Committee on behalf of the Members.
1.5 "Adjustment Factor" means the cost-of-living adjustment factor prescribed by
the Secretary of the Treasury under Section 415(d) of the Code for Plan
Years beginning after December 31, 1987, applied to such items and in such
manner as the Secretary shall prescribe.
1.6 "Affiliated Employer" shall mean the Company and any corporation which is a
member of a controlled group of corporations (as defined in Section 414(b)
of the Code) which includes the Company; any trade or business (whether or
not incorporated) which is under common control (as defined in Section
414(c) of the Code) with the Company; any organization (whether or not
incorporated) which is a member of an affiliated service group (as defined
in Section 414(m) of the Code) which includes the Company; and any other
entity required to be aggregated with the Company pursuant to regulations
under Section 414(o) of the Code.
1.7 "Approved Leave of Absence" means an unpaid leave of absence granted by the
Company for such reason as the Pension
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Committee may determine by rules applied in a non-discriminatory manner to
persons in similar circumstances.
1.8 "Beneficiary" means any person (including a Contingent Annuitant),
designated by the Member to receive any death benefits which may be payable
under the Plan in the event of the Member's death. Such Beneficiary
designation is subject to the spousal consent requirements of Section 5.1.
1.9 "Board" means the Board of Directors of Trans-Lux Corporation.
1.10 "Code" means the Internal Revenue Code of 1986 as now in effect or as
hereafter amended. All citations to sections of the Code are to such
sections as they may from time to time be amended or renumbered.
1.11 "Company" means Trans-Lux Corporation and any subsidiary or Affiliated
Employer as shall adopt the Plan by resolution of their respective Boards
of Directors under the terms and conditions set forth by the Board.
1.12 "Contingent Annuitant" means a person designated by a Member, who has
elected a Joint and Survivorship Annuity option under Section 6.1(b)
hereof, to receive any death benefit payable under such option.
Designation of a Contingent Annuitant is subject to the spousal consent
requirements of Section 5.1.
1.13 "Credited Service" means for an Employee who first completes an Hour of
Service after January 1, 1986, the years of service
5
rendered by an Employee to the Company commencing on the first of the month
coincident with or next following the completion of one Year of Eligibility
Service and ending on his Deferred, Normal, or Earlier Retirement Date,
date of death, or other termination of employment. In the year of a
Member's Deferred, Normal or Earlier Retirement Date, date of death or
other termination of employment, such Member shall accrue Credited Service
at the rate of 1/12th of a year for each month during which he is credited
with at least one Hour of Service for the performance of duties.
For an Employee who first performs an Hour of Service prior to January
1, 1986, Credited Service shall begin on the earlier of a) January 1st
nearest to the completion of one Year of Eligibility Service or b) the
first of the month coincident with or next following the completion of one
Year of Eligibility Service.
Notwithstanding anything in this Section 1.13 to the contrary, all
periods of service in the uniformed services of the United States (as
defined in Section 4303(13) and 4303(16) of the Uniformed Services
Employment and Reemployment Rights Act of 1994) shall be included in the
Employee's Credited Service if he returns to employment with the Company or
an
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Affiliated Employer having applied to return while his reemployment rights
were protected by law.
1.14 "Employee" means any person employed on a salaried basis, including an
officer or director who is otherwise regularly employed in the service of
the Company, who received earnings from the Company other than a pension,
severance pay, retainer, or fee under contract. Effective January 1, 1996,
"Employee" shall also include salaried employees of Integrated Systems
Engineering, Inc. as well as full-time salaried employees of the theater
executive office and theater managers. The term "Employee" shall include
"leased employees" (as defined in Section 414(n)(2) of the Code) for
purposes of Section 410 of the Code but such employees shall not be
eligible for participation in the Plan. Notwithstanding anything to the
contrary in this Section, "Employee" does not include any person not deemed
by the Company to be a common law employee of the Company in accordance
with the Company's standard practice and does not include any person
covered by a collective bargaining agreement to which the Company is a
party unless such agreement specifically provides for participation in the
Plan. In addition, any person classified as an independent contractor or
consultant by the Company shall, during such
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period, be excluded from the definition of Employee, regardless of such
person's reclassification for such period by the Internal Revenue Service
for tax withholding purposes. "Employee" may, however, include the
employee of another company whose assets the Company may acquire and the
Board admits to membership in the Plan on such terms and conditions as it
may in its discretion decide, provided that it shall act in a uniform and
non-discriminatory manner.
The Chairman of the Board shall not be eligible to participate in the
Plan and immediately upon his election as Chairman shall cease to be a
member of the Plan.
1.15 "Final Average Salary" means the average of a Member's Salaries during the
60 highest months within the final 120 months of service preceding his
Normal, Deferred or Earlier Retirement Date (whichever is applicable),
death, or other severance of employment; provided, however, that if such
Member has less than 60 months of Salaries as of the applicable date, his
average salary for the actual period of service prior to such applicable
date shall be used. Notwithstanding anything in the Plan to the contrary,
a Member's Salary for periods after April 30, 2009 shall be disregarded for
purposes of determining his Final Average Salary.
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1.16 "Highly Compensated Employee" means any employee of the Company or an
Affiliated Employer (whether or not eligible for membership in the Plan)
who
(i) was a five percent owner (as defined in Section 416(i) of the Code) for
such Plan Year or the Prior Plan Year, or
(ii) for the preceding Plan Year received "statutory compensation" in
excess of $80,000, and was among the highest 20 percent of employees
for the preceding Plan Year when ranked by "statutory compensation"
paid for that year excluding, for purposes of determining the number of
such employees, such employees as the Pension Committee may determine
on a consistent basis pursuant to Section 414(q) of the Code. The
$80,000 dollar amount in the preceding sentence shall be adjusted from
time to time for cost of living in accordance with Section 414(q) of
the Code.
Notwithstanding the foregoing, employees who are nonresident aliens and
who receive no earned income from the Company or an Affiliated Employer
which constitutes income from sources within the United States shall be
disregarded for all purposes of this Section.
9
The Company's top-paid group election as described above, shall be used
consistently in determining Highly-Compensated Employees for determination
years of all employee benefit plans of the Company and Affiliated Employers
for which Section 414(q) of the Code applies (other than a multi-employer
plan) that begin with or within the same calendar year, until such election
is changed by Plan amendment in accordance with IRS requirements.
Notwithstanding the foregoing, the consistency provision in the preceding
sentence shall not apply for the Plan Year beginning in 1997, and for the
Plan Years beginning in 1998 and 1999, shall apply only with respect to all
qualified retirement plans (other than a multi-employer plan) of the
Company and Affiliated Employers.
The provisions of this Section shall be further subject to such
additional requirements as shall be described in Section 414(q) of the Code
and its applicable regulations, which shall override any aspects of this
Section inconsistent therewith.
For purposes of this Section, "statutory compensation" means the wages,
salaries, and other amounts paid in respect of an employee for service
actually rendered to the Company or an Affiliated Employer, including by
way of example, overtime, bonuses and commissions, but excluding deferred
compensation,
10
stock plans, and other distributions which receive special tax benefits
under the Code. Any employee's statutory compensation shall be determined
prior to any reduction under a cash or deferred arrangement which meets the
requirements of Section 401(k) of the Code or any reductions pursuant to a
cafeteria plan under Section 125 of the Code. Statutory compensation shall
also include amounts required to be recognized under the provisions of U.S.
Treasury Department regulation 1.415(c)-2(e).
1.17 "Hour of Service" means:
(a) each hour for which an Employee is paid or entitled to payment for the
performance of duties for an Affiliated Employer;
(b) each hour for which an Employee is paid or entitled to payment by an
Affiliated Employer prior to his termination of employment with the
Affiliated Employer, up to a maximum of 501 hours for any single
continuous period on account of a period of time during which no duties
are performed due to vacation, holiday, illness, incapacity, (including
disability), layoff, jury duty, military duty, or leave of absence.
Notwithstanding the preceding sentence, the Employee will not be
credited with the Hours of Service if no duties are
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performed and payment is made or due under a plan maintained solely for
the purpose of complying with the applicable workers compensation or
unemployment compensation or disability insurance laws and Hours of
Service will not be credited for payment which solely reimburses an
Employee for medical or medically related expenses incurred by the
Employee;
(c) each hour for which back pay, irrespective of mitigation of damages, is
either awarded or agreed to by an Affiliated Employer, provided,
however, that no more than 501 Hours of Service will be credited for
payments of back pay to the extent that such back pay is awarded or
agreed to for a period during which an Employee did not or would not
have performed duties. Hours of Service shall be computed and credited
in accordance with paragraphs (b) and (c) of Section 2530.200b-2 of the
Department of Labor Regulations which are herein incorporated by
reference. Such hours of Service shall be credited under either
subparagraphs (a), (b), and (c) of this definition 1.17.
Hours of Service shall include all periods of an Employee's service in the
services of the United States (as defined in Sections 4303(13) and 4303(16)
of the Uniformed Services
12
Employment and Reemployment Rights Act of 1994) if the Employee returns to
employment with the Company or an Affiliated Company having applied to
return while his reemployment rights were protected by law.
1.18 "Member" means any Employee participating in the Plan in accordance with
Section II hereof.
1.19 "One Year Break in Service" means a Plan Year during which an Employee or
Member shall not have accumulated more than 500 Hours of Service.
For Plan Years commencing on or after January 1, 1985, solely for
purposes of determining whether a Break in Service has occurred, an
Employee will be granted Hours of Service, which otherwise would normally
not have been credited up to a maximum of 501 Hours of Service for absences
due to pregnancy, birth or adoption of a child or caring for a child
following birth or adoption, provided the Employee furnishes the Pension
Committee with such timely information as the Committee shall require that
such absence from service is the result of the reasons specified under this
paragraph. For purposes of the preceding sentence, Hours of Service shall
be credited in the Year of Eligibility Service or year of Vesting Service
(whichever is applicable) in which such absence occurs if such crediting of
Hours of Service would prevent a Break in
13
Service. In each other case, such Hours of Service will be credited in the
subsequent Year of Eligibility Service or year of Vesting Service.
Commencing August 5, 1993, solely for the purpose of determining whether a
Break in Service has occurred, an Employee will be granted Hours of Service
for a period of leave on or after such date granted pursuant to the Family
and Medical Leave Act of 1993 and its regulations for the birth, adoption,
or placement of a child, to care for a spouse or an immediate family member
with a serious illness, or for the employee's own illness.
Effective October 13, 1996, a Break in Service shall not be deemed to
have occurred if the Employee is absent because of service in the uniformed
services of the United States (as defined in Sections 4303(13) and 4303(16)
of the Uniformed Services Employment and Reemployment Rights Act of 1994)
and he returns to employment with the Company or an Affiliated Employer
having applied to return while his reemployment rights were protected by
law.
1.20 "Pension Committee" means the committee which shall direct the general
administration of the Plan in accordance with Section XVII hereof.
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1.21 "Plan" means the Retirement Pension Plan for Employees of Trans-Lux
Corporation and certain of its subsidiaries and affiliates.
1.22 "Plan Year" means the consecutive 12-month period commencing on January 1
of each year.
1.23 "Qualified Domestic Relations Order" means a judgement, decree, or order
which relates to the provision of child support, alimony payments, or
marital property rights of a Spouse, former spouse, child or other
dependent of a Member made pursuant to a State domestic relations order.
Such Qualified Domestic Relations Order must specify the name and address
of the Member and alternate payee, the amount or percentage (or a
determination thereof) of the Member's benefit to be paid to the alternate
payee, the number of payments (or periods) to which the order applies and
that the order applies to the Plan.
1.24 "Qualified Joint and Survivor Annuity" means the benefit payable at
retirement for the life of the Member with payments continuing after his
death to, and for the life of, his Spouse in an amount equal to half of the
amount of the benefits payable during the joint lives of the Member and his
Spouse and which is the Actuarial Equivalent of a benefit payable for the
life of the Member.
15
1.25 "PBGC" means the Pension Benefit Guaranty Corporation.
1.26 "Reemployment Commencement Date" means the date on which an Employee
completes his first Hour of Service following his last One Year Break in
Service.
1.27 "Retirement Commencement Date" means the first day of the first period for
which a Member's retirement benefits are paid as an annuity or in any other
form, regardless of the actual date of payment.
1.28 "Retirement Date" means a Member's Normal, Earlier or Deferred Retirement
Date as set forth in Section III.
1.29 "Salary" means the basic compensation, excluding overtime, bonuses, and
commissions, paid to an Employee of the Company. Salary shall also include
amounts elected by the Employee and deferred through a salary reduction
feature of a qualified profit sharing plan meeting the requirements of Code
Section 401(k). Effective January 1, 1989, Salary for any purpose under
the Plan shall be limited to $200,000 in any Plan Year multiplied by the
Adjustment Factor, for Plan Years beginning in 1990, and each Plan Year
thereafter.
Salary for any prior Plan Year that is taken into account in
determining benefits in a current Plan Year shall be subject to the
applicable Salary limitation of the prior Plan Year. For this purpose,
Salary for Plan Years beginning
16
before January 1, 1990, shall be deemed to be limited to $200,000.
Notwithstanding the above, effective for years beginning on and after
January 1, 1994, the Salary taken into account under the Plan shall not
exceed $150,000 as adjusted by the Adjustment Factor in $10,000 increments
rounded down to the nearest $10,000 in accordance with Code Sections
401(a)(17) and 415(d). The limitation of this paragraph shall not operate
so as to reduce a Member's Accrued Benefit to an amount which is less than
such Member's Accrued Benefit determined on December 31, 1993 without
regard to this provision and, further provided that a Member's Salary
earned prior to January l, l994 shall continue to be adjusted in accordance
with this Section 1.28 as if the $200,000 limitation, and any adjustments
thereto, continued to apply.
The annual Salary of each Member taken into account in determining
benefit accruals in any Plan Year beginning after December 31, 2001, shall
not exceed $200,000. Salary means the amount determined in accordance with
the first paragraph of this Section for the Plan Year or such other
consecutive 12-month period over which Salary is otherwise determined under
the Plan (the determination period). For purposes of determining benefit
accruals in a Plan Year beginning after
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December 31, 200l, Salary for any prior determination period shall be
limited to $200,000.
Solely to the extent it does not violate the provisions of Section 415
of the Code or any other provision of applicable law, the salary to be used
for determining the Accrued Benefit earned by such an Employee during his
years in the uniformed services of the United States shall be the salary
the Employee would have received but for his service in the uniformed
services of the United States or, if the Pension Committee determines that
such rate cannot be determined with reasonable certainty, the Employee's
average rate of compensation during the 12-month period (or his entire
period of employment, if less) immediately preceding the Employee's service
in the uniformed services of the United States. Notwithstanding anything
in the Plan to the contrary, a Member's Salary for periods after April 30,
2009 shall be disregarded for purposes of determining the Member's Final
Average Salary under Section 1.15 and for determining his Accrued Benefit
under Section 1.1 and Section IV of this Plan.
1.30 "Spouse" means the legally married husband or wife of a Member. In certain
circumstances the Committee shall determine the designation of a Spouse.
18
1.31 "Social Security Covered Compensation" means, for a Plan Year, the average
(without indexing) of the taxable wage bases in effect for each calendar
year during the 35-year period ending on the last day of the calendar year
in which the Member attains Social Security Retirement Age. In determining
a Member's covered compensation for a Plan Year, the taxable wage base for
the current Plan Year and any subsequent Plan Year shall be assumed to be
the same as the taxable wage base in effect as of the beginning of the Plan
Year for which the determination is being made. A Member's covered
compensation for a Plan Year after the 35-year period is the Member's
covered compensation for the Plan Year during which the Member attained
Social Security Retirement Age. A Member's covered compensation before the
35-year period is the taxable wage base in effect as of the beginning of
the Plan Year. A Member's covered compensation shall automatically be
adjusted for each Plan Year.
1.32 "Social Security Retirement Age" means the age used as the retirement age
for the Member under Section 216(l) of the Social Security Act, except that
such section shall be applied without regard to the age increase factor,
and as if the early retirement age under Section 216(i)(2) of such Act were
age 62.
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1.33 "Terminated Vested Participant" means a Member who has terminated
employment with an Affiliated Employer for reasons other than death or
retirement, at any time after he has attained a non-forfeitable interest in
his Accrued Benefit in accordance with Section 9.2 or Section 9.3,
whichever is applicable.
1.34 "Trust Agreement" means the agreement providing for the Trust Fund.
1.35 "Trustee" means the trustee under the Trust Agreement or any successor
trustee.
1.36 "Trust Fund" or "Fund" means the fund established under a Trust Agreement
by contributions made by the Company.
1.37 "Vesting Service" means the period of service of an Employee with an
Affiliated Employer, as determined under Section 9.4 hereof, recognized for
purposes of determining eligibility for a nonforfeitable benefit under
Section IX of the Plan.
1.38 "Year of Eligibility Service" means the completion of 1,000 Hours of
Service in an eligibility computation period. The eligibility computation
period is the 12 consecutive month period commencing on the date the
Employee first performs an Hour of Service for an Affiliated Employer and
each anniversary thereof.
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SECTION II
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ELIGIBILITY
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2.1 Each Member of the Plan as of December 31, 1975 shall continue to be a
Member of the Plan on January 1, 1976.
2.2 Each Employee on and after January 1, 1976 and prior to January 1, 1985
shall become a Member on the January 1 nearest the date on which he
completes one Year of Eligibility Service and attains age 25.
2.3 Each other Employee on and after January 1, 1985, shall become a Member on
the January 1 nearest the date on which he completes one Year of Eligibility
Service and attains age 21.
2.4 A Member, who ceases to be an Employee, due to his becoming covered under
another pension or retirement plan established pursuant to a collective
bargaining agreement to which the Company is a party, will be deemed to
continue as a Member of this Plan with respect to his Accrued Benefit as of
the date of such coverage. No Credited Service shall be earned during the
period of such coverage. Upon becoming once again an Employee, he shall
resume Plan participation as of the date he again becomes an Employee. If
such a Member receives credit for service under a plan established pursuant
to such collective bargaining agreement, which service is also Credited
Service under this Plan, his Accrued Benefit based on
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such Credited Service under this Plan shall be reduced by the Actuarial
Equivalent of the benefit for such service under such other plan.
2.5 An Employee who incurs a One Year Break in Service prior to January 1, 1985
and who is not entitled to a nonforfeitable benefit pursuant to Section 9.2
shall be admitted or readmitted to membership on his Reemployment
Commencement Date and prior Years of Eligibility Service shall be restored
on such date provided that the number of consecutive One Year Breaks in
Service does not equal or exceed his aggregate Years of Eligibility Service
accrued prior to such One Year Break in Service and is not disregarded as a
result of a previous One Year Break in Service, and further provided that,
the Employee has satisfied the minimum age and service requirements of this
Plan.
An Employee who (i) is not entitled to a nonforfeitable benefit
pursuant to Sections 3.1, 9.2, or 9.3 and (ii) incurs a One Year Break in
Service on or after January 1, 1985, shall be admitted or readmitted to
membership on his Reemployment Commencement Date provided such Employee has
met the minimum age and service requirements of this Section II. Prior
Years of Eligibility Service, not previously disregarded as a result of a
previous One Year Break in Service, shall be restored as
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of the Reemployment Commencement Date provided the consecutive number of One
Year Breaks in Service does not equal or exceed the greater of:
(a) the aggregate number of Years of Eligibility Service completed prior to
the One Year Break in Service; or
(b) 5 years.
For purposes of this section 2.5 a One Year Break in Service is a Year of
Eligibility Service in which an Employee shall not have accumulated more
than 500 Hours of Service.
An Employee entitled to a nonforfeitable benefit shall be restored to
membership upon his Reemployment Commencement Date.
Any other Employee, upon reemployment, shall be considered a new
Employee and shall be required to satisfy the minimum age and service
requirements of this Section II without regard to service prior to a One
Year Break in Service or employment termination.
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SECTION III
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RETIREMENT DATES
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3.1 Normal Retirement Date
----------------------
The Normal Retirement Date for a Member who has completed one Hour of
Service on or after January 1, 1988 shall be the first day of the month
coinciding with or next following his Normal Retirement Age which shall be
the later of his 65th birthday or the fifth anniversary of the date on which
he became a Plan Member.
A Member shall be fully (100%) vested in his Accrued Benefit upon
attainment of Normal Retirement Age.
3.2 Earlier Retirement Date
-----------------------
Any Member who was such on December 31, 1982, may elect an Earlier
Retirement Date which may be the first day of any month not more than ten
years prior to his Normal Retirement Date. Any Member who became a Member
on or after January 1, 1983, may elect an Earlier Retirement Date which may
be the first day of any month which is not more than ten years prior to the
Member's Normal Retirement Date, provided that such Member has completed ten
years of Credited Service on the Earlier Retirement Date. Effective January
1, 1988, a Member may elect an Earlier Retirement Date which shall be the
first
24
day of any month following the attainment of age 55 and completion of 10
Years of Credited Service.
3.3 Deferred Retirement Date
------------------------
A Member who continues employment after Normal Retirement Date may elect to
commence payments under the Plan on the first day of any month on or after
the attainment of his Normal Retirement Date or defer commencement of
payment until the earlier of the first of the month following termination of
employment or the April 1 following the calendar year of his attainment of
age 70-1/2. In the event a benefit commences under this Section 3.3 prior
to the Member's actual retirement date, the benefit accrued under Section
4.1 at the end of each Plan Year, beginning on and after the date in which
the Participant attains Normal Retirement Date, shall be reduced by the
Actuarial Equivalent of the benefit payments received in such Plan Year. In
no event shall the reduction provided in the preceding sentence reduce
additional accrual in any Plan Year below zero.
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SECTION IV
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RETIREMENT BENEFITS
-------------------
4.1 At Normal or Deferred Retirement Date
-------------------------------------
Effective on and after January 1, 1989, solely for Members who have
completed an Hour of Service on or after such date, the annual amount of
retirement benefit commencing on or after Normal Retirement shall be equal
to: (i) 1% of Final Average Salary plus (ii) .5% of Final Average Salary in
excess of Social Security Covered Compensation, multiplied by years (or
fractions thereof) of Credited Service.
Notwithstanding the above, in determining the amount of a Member's
retirement benefit under this paragraph,
(a) Such benefit shall not be less than the benefit the Member would have
been entitled to receive under (b) or (c) of this Section 4.1
determined on the date so specified;
(b) Effective on and after January 1, 1983, and prior to January 1, 1989,
for Members who had not attained Normal Retirement Date as of January
1, 1983, the annual amount of retirement benefit commencing at Normal
Retirement Date to such Member who retires on or after Normal
Retirement Date shall be equal to (i) 1-
26
1/2% of Final Average Salary determined on December 31, 1988, and
without regard to the annual limitation on Salary for years prior to
January 1, 1990, (as defined in Section 1.28), (ii) less 1-1/4% for
Primary Social Security Benefit, multiplied by the years (and fractions
thereof) of his Credited Service determined on December 31, 1988. For
purposes of this subsection (b), Primary Social Security Benefit means
an amount equal to the annual old-age primary insurance benefit under
the Social Security Act in effect at the Member's Social Security
Retirement Age or other date of termination of his employment with the
Company, if earlier; provided, however, that if a Member (i) elects to
retire on an Earlier Retirement Date prior to his Social Security
Retirement Age, or (ii) his employment by the Company is otherwise
terminated prior to his Social Security Retirement Age, his Primary
Social Security Benefit shall be determined by projecting to Social
Security Retirement Age his annual Compensation as of this Early
Retirement Date or the date of his last employment, as the case may be,
assuming that there shall be no change in the social security wage base
or social security benefit schedule caused by the
27
automatic provision with respect to the cost of living under the Social
Security Act.
The amount of Primary Social Security Benefit shall be estimated
based on actual salary in all years for which records are available
while an Employee of the Company, and a salary discount assumption
applied to Annual Earnings in the year of the last recorded salary and
each year prior thereto until age 22, which shall be a level percentage
of 6% per year. In the event that within 180 days, beginning on the
date which is the later of the date the Member separates from service
or the date the Member is notified of the benefit amount, the Member
supplies accurate documentation of the Member's actual salary history
as determined by the Social Security Administration, the benefit to
which the Member is entitled shall be adjusted based on any differences
which shall occur.
(c) The benefit of a Member, who was such on December 31, 1982, shall not
be less than the Accrued Benefit to which he was entitled under the
provisions of the Plan as in effect on December 31, 1982. The benefit
payable under the form of payment elected by such a Member shall not be
less than benefit payable under the same
28
form of payment based on the Accrued Benefit as of December 31, 1982.
(d) On and after May 11, 1981, solely for purposes of determining the
annual amount of retirement benefit commencing at Normal Retirement
Date for a Member who was a member in the Pension Plan for Employees of
Canadian Trans-Lux Corporation Limited (the "Canadian Plan"), the
Normal Retirement Benefit shall be determined in accordance with this
Section 4.1 based on years of Credited Service while a Member of the
Plan and Credited Service while a member of the Canadian Plan, but only
if such service under the Canadian Plan would qualify as Credited
Service under the Plan if such service were performed while a Member of
the Plan, reduced by the amount of benefit such individual is entitled
to receive under the Canadian Plan. Such reduction shall not reduce
the amount such Member is entitled to receive under this Plan to an
amount less than zero.
(e) On and after January 1, 1996, solely for purposes of determining the
annual amount of retirement benefit commencing at Normal Retirement
Date for a Member who was an employee of Integrated Systems
Engineering,
29
Inc., as well as full-time salaried employees of the theatre executive
office and theatre managers, the Normal Retirement Benefit shall be
determined in accordance with this Section 4.1 based on years of
Credited Service completed after January 1, 1996.
4.2 At Earlier Retirement Date
--------------------------
The annual retirement benefit, commencing at Earlier Retirement Date to a
Member who retires on an Earlier Retirement Date, shall be equal to the
Actuarial Equivalent (as set forth in Appendix A) of the Accrued Benefit he
would have received commencing at Normal Retirement Date, as computed in
accordance with Section 4.1 hereof. Notwithstanding the foregoing, a
Participant may elect to defer the commencement of benefits until the date
the Member would have attained Normal Retirement Date, in which case the
benefit shall equal the Member's Accrued Benefit.
4.3 Maximum Benefits
----------------
(a) The following provisions of this Section reflecting the increased
limitations of Section 415(b) of the Code effective on and after
January 1, 2002 shall apply to all current and former Members (with
benefits limited by Section 415(b) of the Code) who have an Accrued
Benefit under the Plan immediately prior to January 1,
30
2002 (other than an Accrued Benefit resulting from a benefit increase
solely as a result of the increases in limitations under Section
415(b)).
(b) Notwithstanding any other provision of the Plan, the annual benefit to
which a Member is entitled under the Plan shall not, in any calendar
year, which shall be the limitation year, be in an amount which would
exceed the applicable limitations under Section 415 of the Code and
regulations thereof, which are hereby incorporated by reference. If
the benefit payable under the Plan would (but for this Section) exceed
the limitations of Section 415 of the Code by reason of a benefit
payable under another defined benefit plan aggregated with this Plan
under Code Section 415(f), the benefit under this Plan shall be reduced
only after all reductions have been made under such other plan. As of
January 1 of each calendar year commencing on or after January 1, 2002,
the dollar limitation as determined by the Commissioner of Internal
Revenue for that calendar year shall become effective as the maximum
permissible dollar amount of benefit payable under the Plan during the
limitation year ending within
31
that calendar year including benefits payable to Members who retired
prior to that limitation year.
(c) The term "compensation" for purposes of applying the applicable
limitations under Section 415 of the Code with respect to any Member
shall mean compensation from the company or any Affiliated Employer as
defined in U.S. Treasury Department regulations 1.415(c)-2(d)(4)(i.e.,
information required to be reported under sections 6041, 6051, and 6052
of the Code ("W-2 Pay") plus amounts that would be included in wages
but for an election under Section 125(a), 132(f)(4), 402(e)(3),
402(h)(1)(B), 402(k), or 457(b) of the Code). The term "compensation"
shall also include amounts required to be recognized under the
provisions of U.S. Treasury Department regulation 1.415(c)-2(e) and
amounts permitted to be recognized under the provisions of U.S.
Treasury Department regulation 1.415(c)-2(e)(2)."
4.4 Limit on Credited Service
-------------------------
Notwithstanding anything in the Plan to the contrary, a Member's Credited
Service for periods on and after January 1, 2004 shall be disregarded for
all purposes of this Section IV.
32
4.5 Accruals After Benefit Commencement
-----------------------------------
Notwithstanding anything in this Plan to the contrary, the Salary of a
Member who has elected to have his benefit commence under this Plan after
attaining his Normal Retirement Age but before he terminates his employment
with the Company and all Affiliated Employers shall be disregarded for all
purposes of this Section IV. However, a Member whose benefit is required to
commence in accordance with the provisions of Section 11.1 of the Plan shall
not be treated as having elected to have his benefits commence for purposes
of this Section.
4.6 HEART Act
---------
For years beginning after December 31, 2008:
(a) an individual receiving a differential wage payment as defined by Code
Section 3401(h)(2) is treated as an employee of the employer making the
payment;
(b) the differential wage payment is treated as compensation for purposes
of Code Section 415(c)(3) and Treasury Regulation 1.415(c)-2; and
(c) the Plan is not treated as failing to meet the requirements of a
provision described in Code Section 414(u)(1)(c) by reason of any
contribution or benefit which is based on the differential wage
payment.
33
SECTION V
---------
NORMAL FORM OF BENEFIT AT RETIREMENT
------------------------------------
5.1 Subject to the provisions of Section 11.2, effective on and after August 23,
1984, the normal form of payment of retirement benefits for a Member who is
married on his Retirement Commencement Date shall be the Qualified Joint and
Survivor Annuity. No sooner than 30 days nor later than 90 days prior to a
Member Retirement Commencement Date, the Committee shall provide the Member
with written explanation of (a) the terms and conditions of the Qualified
Joint and Survivor Annuity, (b) the Member's right to revoke and reelect the
Qualified Joint and Survivor Annuity, (c) the rights of the Member's Spouse
to consent to any revocation of the Qualified Joint and Survivor Annuity,
(d) effective on and after August 22, 1988, a general description of the
eligibility conditions and other material features of any optional form of
benefit and sufficient additional information to explain the relative values
of the optional forms of benefit under the Plan, and (e) effective January
1, 2007, a description of the Participant's right to defer receipt of a
distribution and the consequences of failing to defer receipt of a
34
distribution. An election to waive the Qualified Joint and Survivor Annuity
must be made within the 90-day period commencing prior to the Member's
Retirement Commencement Date. An election to waive the Qualified Joint and
Survivor Annuity shall only be effective if the Member's Spouse consents in
writing to such election. Spousal consent must acknowledge the effect of
such election, specify the alternate form of payment selected, designate the
alternate beneficiary who is eligible to receive the benefits under the
Plan, if any, and be witnessed by a Plan representative or a notary public.
If such Member effectively elects not to receive his retirement benefits in
the form of a Qualified Joint and Survivor Annuity, then the Member may
elect to receive payment of such retirement benefit in the form of a life
annuity as provided in Section 5.2 below, or in any optional form of payment
provided in Section 6.1. A Spouse's consent to waive any benefits hereunder
shall only be effective with respect to such Spouse. An alternate
beneficiary or form of payment consented to by a Spouse in lieu of the form
of benefit payable under this Section 5.1 may not be changed unless such
change is to the Qualified Joint and Survivor Annuity or the Spouse again
consents in writing to such change. In
35
the event a Spouse is legally incompetent to give consent, the legal
guardian of the Spouse may give consent.
Former Members of the Plan who completed one Hour of Service after September
1, 1974, and separated from service prior to January 1, 1976, and who have
not commenced benefits under this Plan, as of August 23, 1984, may elect or
revoke the Qualified Joint and Survivor Annuity according to the provisions
of the Plan in effect on August 22, 1984.
5.2 Subject to the provisions of Section 11.2, if a Member has no Spouse, his
Spouse cannot be located, the Member is legally separated from or has been
abandoned by said Spouse (within the meaning of local law) and the Member
has a court order to such effect, or the Member is otherwise exempt from the
requirements of Section 5.1 pursuant to regulations issued by the Secretary
of the Treasury, the normal form of payment of his retirement benefits shall
be a monthly life annuity terminating with the last payment preceding his
death. A Member who meets the requirements of this Section 5.2 shall be
eligible to reject the normal form of payment and elect an optional form of
benefit in the same manner and within the same time period prescribed
36
in Section 5.1, except that spousal consent shall not be required.
37
SECTION VI
----------
OPTIONAL FORM OF BENEFITS
-------------------------
6.1 In lieu of normal form of payment provided under Section 5.1 or Section 5.2
(provided a Member who is married to a Spouse has obtained his Spouse's
consent as required by Section 5.1), a Member may elect an optional form of
benefit described in this Section 6.1. Any optional form shall be the
Actuarial Equivalent of the normal form provided in Section 5.2.
(a) Ten Year Certain and Life: An actuarially reduced monthly life annuity
payable to the Member at his Retirement Commencement Date and
terminating with the last payment preceding his death, provided that
not less than 120 monthly payments shall be made to him and his
Beneficiary.
(b) Joint and Survivorship Annuity: An actuarially reduced monthly life
annuity payable to the Member at his Retirement Commencement Date and
providing for the continuation of such reduced retirement benefit in an
amount equal to 100%, 75%, 66-2/3% or 50% of such reduced retirement
benefit, to the Contingent Annuitant for as long as the Contingent
Annuitant
38
lives. Under this option, the amount of reduction in the retirement
benefit depends upon the age of the Member and the Contingent Annuitant
at the date the benefit is to commence and the amount of the continuing
payment elected as stated in Appendix A.
(c) Social Security Offset: A Member who retires prior to his Social
Security Retirement Age may elect a retirement benefit, which is the
Actuarial Equivalent of the retirement benefit such Member would
receive as if Social Security Benefits had commenced as of his date of
retirement, so that at the time such Member's old-age benefit under
Title II of the Social Security Act actually becomes payable, he will
receive a reduced amount from the Plan, and the amount of benefits such
Member shall receive both before and after such Social Security benefit
commences shall be approximately equal.
(d) Lump Sum Option: A Member may elect a lump sum form of payment, which
is the Actuarial Equivalent determined in accordance with Section
11.2(b) and Appendix A of the retirement benefit otherwise payable to
him. Distributions of lump sum amounts shall be permitted at any date
which is prior to the Member's
39
Normal Retirement Date only upon the consent of the Member if such Lump
Sum amount exceeds $3500, effective through December 31, 1997, and
$5,000 on and after January 1, 1998, as determined under Section
11.2(b). Payment of a lump sum amount under this section (d) shall
represent a complete discharge of the Plan's liability to such Member.
(e) Two Year Certain Option: Effective for distributions made on or after
April 1, 2002, a Member may elect a two-year certain form of payment.
The first payment shall be equal to one-half the Actuarial Equivalent
lump sum value of the retirement benefit otherwise payable to the
Member at his Retirement Commencement Date. The second payment shall
be paid on the first anniversary of his Retirement Commencement Date
and shall be equal to one-half the Actuarial Equivalent lump sum value
of the retirement benefit otherwise payable to him at his Retirement
Commencement Date increased with interest for the one-year period at
the IRS Interest Rate determined under Appendix A at his Retirement
Commencement Date. For purposes of this Section 6.1(e), Actuarial
Equivalent shall be
40
determined in accordance with Section 11.2(b) and Appendix A.
6.2 The optional benefits, as provided in Section 6.1, are subject to the
following limitations and restrictions:
With respect to all optional retirement benefits provided hereunder,
the Member may elect any one of the options at least 90 days prior to
Deferred, Normal or Earlier Retirement Date and shall be effective on the
Participant's Deferred, Normal or Earlier Retirement Date, by written notice
delivered to the Pension Committee and shall be effective on the date of the
Retirement Commencement Date.
No optional form under Section 6.1 of the Plan shall be payable over a
period exceeding one of the following:
(a) the life of a Member or the joint lives of a Member and his Spouse, or
designated Beneficiary, as the case may be; or
(b) the life expectancy of the Member or joint life expectancy of a Member,
his Spouse or designated Beneficiary, as the case may be. Life
expectancy shall be determined according to Code regulation 1.72-9.
41
Any payments to a Contingent Annuitant or Beneficiary, who is not the
Spouse of the Member, shall be subject to the limitation that the present
value of payments to the Member, calculated as of the appropriate retirement
date, must exceed 50% of the then present value of the total payments to be
made to the Member and his Beneficiary.
6.3 Prior to the distribution of any benefit payable hereunder, if the present
value of such benefit is in excess of $3,500 through December 31, 1997 and
$5,000 on and after January 1, 1998, then such benefit shall not be
distributed before the Member's Normal Retirement date unless the Member
and, if applicable, the Member's Spouse, consent in writing thereto, except
that if such benefit is payable as a Qualified Joint and Survivor Annuity
and is immediately distributable, written consent to the distribution shall
not be required.
42
SECTION VII
-----------
DEATH BENEFITS
--------------
7.1 Pre-Retirement Spouse's Benefit
-------------------------------
(a) If a Member dies in the active service of the Employer after having
satisfied the requirements for Earlier Retirement Date, but prior to
his Normal Retirement Date, and is survived by a Spouse, such Spouse
shall be entitled to receive a monthly benefit for life commencing on
the first day of the month following the date of death of the Member
except that if the present value (as determined under Section 11.2) of
the benefit payable to the Spouse is $3,500 or less though December 31,
1997 or $5,000 or less on and after January 1, 1998, such amount shall
be payable under Section 11.2. The annual amount of such benefit shall
be the greater of the benefit provided in Section (b) or, on and after
August 23, 1984, the benefit provided in Section (c).
(b) If the surviving Spouse is not more than five years younger than the
deceased Member, the benefit shall be 50% of the deceased Member's
Accrued Benefit,
43
computed as if such Member had retired on the day before he died.
If the surviving Spouse is more than five years younger than the
deceased Member, the benefit shall be computed as in the preceding
paragraph and such amount shall be reduced by (i) and, if applicable,
(ii) below:
(i) 1% for each full year in excess of five years up to a maximum of
twenty-five years that the Spouse is younger than the Member; and
(ii) 2% for each full year in excess of twenty-five years that the
Spouse is younger than the Member.
(c) Effective on and after August 23, 1984, in the event of the death of a
Member with a Spouse, who is entitled to receive benefits in accordance
with Section 9.2 or 9.3 (whichever is applicable) and who has not
commenced benefits under the Plan, a survivor annuity shall be payable
to his Spouse for such Spouse's lifetime, with monthly payments
commencing on the first day of the month coincident with or next
following the later of (i) the date of the Member's death, or (ii) the
date the Member would have attained age 55 if he had completed 10 Years
of Credited Service as of his date
44
of death, unless the Spouse elects to defer such payment until the date
the Member would have attained Normal Retirement Date, or in any other
case, the date the Member would have attained age 65. Notwithstanding
the preceding sentence, if the present value (determined under Section
11.2) of the survivor annuity is less than $3,500 effective through
December 31, 1997 or $5,000 on and after January 1, 1998, then the
benefit shall automatically be distributed in a single cash payment as
provided under Section 11.2. The survivor annuity shall be equal to
Member's Accrued Benefit payable as a Qualified Joint and Survivor
Annuity determined as follows:
(i) In the case of a Member who has attained Earliest Retirement Age as
of his death, such Qualified Joint and Survivor Annuity shall be
determined as if the Member had retired on the date of death and
Section 4.2 of the Plan applied.
(ii) In the case of a Member who had not attained Earliest Retirement
Age as of his date of death, such Qualified Joint and Survivor
Annuity shall be determined as if the Member had:
45
(A) separated from service on his date of death or termination of
employment whichever is earlier; and
(B) survived until Earliest Retirement Age and Section 4.2 of the
Plan applied, and;
(C) died on the day following his Earliest Retirement Age.
For the purposes of this section, "Earliest Retirement Age" shall mean
age 55 if a Member had completed 10 Years of Credited Service as of his date
of death or separation from service, whichever occurs first, or in any other
case, age 65.
A former Member who has one Hour of Service on and after January 1,
1976, who has separated from service prior to August 23, 1984, and who has a
vested benefit in accordance with Section 9.2 as of his date of termination,
shall have this Section 7.1(c) apply upon the occasion of his death provided
such former Member had not commenced payment of his vested benefit under the
Plan as of August 23, 1984.
(d) Applicable Provisions on Death - If either (i) a Spouse's benefit shall
have become payable under the provisions of Section 7.1(b) or (c) or
(ii) the benefit shall have become effective under the provisions of
Section V or
46
Section VI, the death benefit, if any, shall be that provided by such
applicable section.
7.2 Military Service
----------------
In the case of the death occurring on or after January 1, 2007, if a
Participant dies while performing qualified military service (as defined in
Code Section 414(u)), the Participant's Beneficiary is entitled to any
additional benefits (other than benefit accruals relating to the period of
qualified military service) provided under the Plan as if the Participant
had resumed employment and then terminated employment on account of death.
Moreover, the Plan will credit the Participant's qualified military service
as service for vesting purposes, as though the Participant had resumed
employment under the Uniformed Services Employment and Reemployment Rights
Act immediately prior to the Participant's death.
47
SECTION VIII
------------
CONTRIBUTIONS
-------------
8.1 The Company, in accordance with the requirements of Code Section 412, shall
make contributions to the Trustee as are actuarially necessary to provide
the retirement benefits under the Plan. Contributions shall be made
conditioned upon their deductibility under Code Section 404. Any
contribution which is made under this Section 8.1 which is determined by an
Actuary to be non-deductible under Code Section 404 shall be returned to the
Employer within the next following one-year period, provided the Actuary
certifies to the non-deductibility of such contribution under Section 404 of
the Code. No contributions will be required of Members.
8.2 The Company reserves the right to reduce, suspend, or discontinue its
contributions for any reason at any time, provided that it shall be
impossible, at any time prior to the satisfaction of all liabilities with
respect to all Members, Spouses, Contingent Annuitants, and Beneficiaries
under the Plan, for any part of the Trust Fund to revert to the Company, or
to be used for, or diverted to, any purpose other than their exclusive
benefit. Any assets remaining in the Trust upon a Plan termination or a
discontinuance of contributions
48
to the Plan, after satisfaction of liabilities with respect to all Members,
Spouses, Contingent Annuitants and Beneficiaries under the Plam, shall
revert to the Company.
49
SECTION IX
----------
TERMINATION OF SERVICE
----------------------
9.1 Before 10 Years of Vesting Service
----------------------------------
(a) A Member whose service with the Company is terminated prior to January
1, 1989, for reasons other than total and permanent disability and
before his Normal or Earlier Retirement Date and before completing at
least 10 years of Vesting Service shall not be entitled to any benefits
under the Plan.
(b) Any forfeitures arising as a result of this Section 9.1 shall be used
to reduce the Company's cost under the Plan.
9.2 With 10 or More Years of Vesting Service
----------------------------------------
(a) A Member, whose service with the Company is terminated after December
31, 1975, but before January 1, 1989, and before his Normal or Earlier
Retirement Date, having completed at least 10 years of Vesting Service,
shall be entitled to his Accrued Benefit as of his date of such
termination with benefits commencing at his Normal Retirement Date.
(b) A Member, who is entitled to a retirement benefit under subparagraph
(a) above, may elect to receive his
50
retirement benefit commencing at an Earlier Retirement Date which shall
be the first day of any specified month subsequent to the date of his
election. In such event,the retirement benefit then payable shall be
equal to the Actuarial Equivalent of the Accrued Benefit which he was
entitled to receive at his Normal Retirement Date.
9.3 Provisions effective on and after January 1, 1989
-------------------------------------------------
(a) A Member whose service with the Employer is terminated for reasons
other than total and permanent disability and before his Normal or
Earlier Retirement Date and before completing at least 5 years of
Vesting Service shall not be entitled to any benefits under the Plan.
Any forfeitures arising as a result of this Section (a) shall be used
to reduce the Company's cost under the Plan.
(b) A Member, whose service with the Employer is terminated before his
Normal or Earlier Retirement Date, having completed at least 5 years of
Vesting Service shall be entitled to his Accrued Benefit as of the date
of such termination with benefits commencing at his Normal Retirement
Date.
51
(c) A Member, who is entitled to a retirement benefit under subparagraph
(b) above, may elect to receive his retirement benefit commencing at an
Earlier Retirement Date provided the Member has satisfied the
provisions of Section 3.2, which shall be the first day of any
specified month subsequent to the date of his election. In such event,
the retirement benefit then payable shall be equal to the Actuarial
Equivalent of the Accrued Benefit which he was entitled to receive at
his Normal Retirement Date.
9.4 Vesting service
---------------
(a) Service Prior to January 1, 1976
--------------------------------
Vesting Service for Plan Years beginning prior to January 1, 1976,
shall be equal to the continuous service recognized under the
provisions of the Plan as in effect prior to January 1, 1976.
(b) Service on and after January 1, 1976
------------------------------------
The computation period for the determination of Vesting Service on and
after January 1, 1976 shall be the Plan Year. An Employee shall accrue
one year of Vesting Service for each Plan Year in which he completed
1,000 Hours of Service. If an Employee has a One Year Break in Service
(commencing on or after January 1, 1976) and
52
is later reemployed, his period of Vesting Service prior to his
Reemployment Commencement Date shall be restored, provided such
Employee completes a Year of Eligibility Service and further provided
that, if such Employee was not vested in accordance with Section 9.2(a)
or 9.3(b) at the time his One Year Break in Service commenced, the
period of his Vesting Service prior to such occurrence shall not be
taken into account if the number of consecutive One Year Breaks in
Service equals or exceeds the greater of a) his aggregate years of
Vesting Service accrued before such One Year Break in Service, or b) on
and after January 1, 1985, five years.
(c) An employee who became a Member on or after January 1, 1985, shall not
accrue Vesting Service for services rendered prior to the Plan Year in
which the Employee's 18th birthday occurs.
(d) Solely for determining the nonforfeitability of any benefit under the
Plan, former Members who terminated employment with the Company for
immediate employment with a Gulf & Western entity (hereinafter called
the "Corporation") because of the sale of certain subsidiaries and
divisions to the Corporation on July
53
25, 1986, shall continue to accrue Vesting Service under this Plan for
so long as they are employed by the Corporation provided such service
conforms to the requirements of Vesting Service set forth in Section
1.36 as if such Vesting Service was performed for the Company, and
further provided that the Corporation provides such timely information
as may be required to determine Vesting Service with respect to such
former Members.
The above paragraph shall not be construed as establishing or
continuing any contract of employment between the Company and former
Members.
54
SECTION X
---------
DISABILITY
----------
10.1 In the event a Member is determined by the Pension Committee to be totally
and permanently disabled according to Section 10.2 and has attained age 45
and completed at least 15 years of Vesting Service, he shall be entitled to
a disability benefit as defined in Section 10.3.
10.2 The Pension Committee shall determine that a Participant is totally and
permanently disabled if the Participant is in receipt of a Social Security
disability benefit.
10.3 The disability benefit shall be equal to the Member's Accrued Benefit at
the date of disability. Such benefit shall be reduced for immediate
payment according to the Actuarial Equivalent early retirement factors of
the Plan. However, if an Employee is below age 55, the Actuarial
Equivalent reduction factor used for immediate payment will not be less
than the factor that would be used as if the Employee was age 55.
10.4 Disability benefits shall be payable in the same manner and form as set
forth in Section V, unless the Member, and if applicable, the Member's
Spouse, consent in accordance with
55
Section 5.1 to receive an optional form of benefit under Section VI.
56
SECTION XI
----------
TIME OF COMMENCEMENT OF PAYMENT
-------------------------------
11.1 Commencement of Payment
-----------------------
Unless a Member elects otherwise, the payment to him of his retirement
benefit shall begin not later than the 60th day after the close of the Plan
Year in which occurs the later of:
(a) the Member's Normal Retirement Date, or
(b) the fifth anniversary of the Member's participation in the Plan, or
(c) the date the Member terminates his service with the Company.
In no event, however, shall a retirement benefit becoming payable under
this Plan commence later than the April 1 following the calendar year in
which the Member attains age 70-1/2.
In the event a Member's benefit otherwise required to commence on the
Member's Normal Retirement Date is delayed because the Pension Committee is
unable to locate the Member or for any other reason, the Pension Committee
shall commence payment within 90 days after the date the Member is located.
Unless the Member elects an optional form of payment in accordance with the
provisions of Section 6.1, payment shall
57
be in the normal (automatic) form as set forth in Section V applicable to
the Member of his Annuity Starting Date. The benefit payable to the Member
as of his Annuity Starting Date shall be in the amount that would have been
payable to the Member if payments had commenced on the Member's Normal
Retirement Date ("retroactive Annuity Starting Date") in the form elected
by the member under the provisions of Section 5.1, 5.2 or 6.1, as
applicable; plus one lump sum payment equal to the sum of the monthly
payments the Member would have received during the period beginning on his
Normal Retirement Date and ending with the month preceding his Annuity
Starting Date, together with interest at the rate of 6.5 percent per annum,
compounded annually. The amount of the monthly payments shall be
determined as of the Member's Normal Retirement Date on the basis of the
single life annuity form of payment. The lump sum shall be paid on or as
soon as practicable following the date the Member's Pension commences.
11.2 Payment of Lump Sum Benefits
----------------------------
Notwithstanding any other provision of the Plan, a Member's benefit shall
be payable in a lump sum payment as follows:
(i) If the present value of the Member's benefit amounts to $1,000 or less
as of his Retirement Commencement Date, a lump sum payment equal to
58
the present value of the benefit shall be made in lieu of all benefits.
(ii) If the present value of the Member's benefit exceeds $1,000 but does
not exceed $5,000, the only form of payment he may elect is a lump sum
payment. He may elect to receive the lump sum payment as soon as
practicable following his termination of employment or as of the first
day of any later month that precedes his Normal Retirement Date.
Spousal consent to the Member's election of the lump sum is not
required.
The present value of the member's benefit and amount of a lump sum payment
payable under this paragraph shall be determined by using the IRS Mortality
Table and the IRS Interest Rate in Appendix A and, in the case of a lump
sum benefit payable prior to a Member's Normal Retirement Date, shall be of
equivalent value to the benefit which would otherwise have been provided
commencing at the Member's Normal Retirement Date. In the event the
present value of a Member's benefit exceeds $1,000 upon an initial
determination as to its present value, the present value of the benefit
shall be redetermined annually as of the first day of each subsequent Plan
Year. The lump sum payment shall be made as soon as practicable
59
following the determination that the amount qualifies for distribution
under this paragraph.
11.3 No portion of the Member's Accrued Benefit may commence to be distributed
under the Plan prior to the Member's Normal Retirement Date unless:
(a) the Member and such Member's Spouse, if applicable, consents in writing
to such distribution within the 90-day period prior to the Retirement
Commencement Date; or
(b) the benefit is provided in accordance with Section 5.1 or 5.2.
Notwithstanding the foregoing, no consent shall be required if the
Member's Accrued Benefit determined in accordance with Section 11.2 is
less than $3,500 for Plan Years ending on or before December 31, 1977
or $5,000 for Plan Years ending on or after January 1, 1998.
Notwithstanding anything in the Plan to the contrary, after having
received any required written explanation of his benefits, a Member may
(with any applicable spousal consent) affirmatively elect to have his
benefit commence sooner than 30 days following his receipt of the
written explanation, provided all of the following requirements are
met:
60
(i) the Pension Committee clearly informs the Member that he has a
period of at least 30 days after receiving the notice to decide
when to have his benefits begin and, if applicable, to choose a
particular optional form of payment;
(ii) the Member affirmatively elects a date for his benefits to begin
and, if applicable, an optional form of payment, after receiving
the written explanation;
(iii) the member is permitted to revoke his election until the later of
his Retirement Commencement Date or seven days following the day he
received the written explanation; and
(iv) payment does not commence less than seven days following the day
after the written explanation is received by the Member.
11.4 Distribution Requirements
-------------------------
Notwithstanding any other provision of this Plan, all distributions from
this Plan shall conform to Section 401(a)(9) of the Code, U.S. Treasury
Department Regulation Sections 1.401(a)(9)-2 through 1.401(a)(9)-9, and the
incidental death benefit requirements of Section 401(a)(9)(G)
61
of the Code. Further, such regulations shall override any plan provision
that is inconsistent with Section 401(a)(9) of the Code. If a Member dies
after the Pension payments have commenced, any payments continuing on to
his spouse or Beneficiary shall be distributed at least as rapidly as under
the method of distribution being used as of the member's date of death.
All distributions shall be subject to the following rules:
(a) Any additional benefits accruing to a Member in a calendar year will be
distributed beginning with the first payment interval ending in the
calendar year immediately following the calendar year in which such
amount accrues.
(b) If the Member's benefit is being distributed in the form of a joint and
survivor annuity for the joint lives of the Member and a non-spouse
beneficiary, annuity payments to be made on or after the Member's
required beginning date to the designated beneficiary after the
Member's death must not at any time exceed the applicable percentage of
the annuity payment for such period that would have been payable to the
Member using the table set forth in Q&A2 of Section 1.401(a)(9)-6T of
62
the U.S. Treasury Department regulations. If the form of distribution
combines a joint and survivor annuity for the joint lives of the Member
and a non-spouse beneficiary and a period certain annuity, the
requirement in the preceding sentence will apply to annuity payments to
be made to the designated beneficiary after the expiration of the
period certain. If the Annuity Starting Date precedes the year in
which the Member reaches age 70, in determining the applicable
percentage, the Member/Beneficiary age difference is reduced by the
number of years that the Member is younger than 70.
(c) If the Member's benefit is being distributed in the form of a period
certain and life annuity option, the period certain may not exceed the
applicable distribution period for the Member under the Uniform
Lifetime Table set forth in Section 1.401(a)(9)-9 of the Treasury
regulations for the calendar year that contains the Annuity Starting
Date. If the Annuity Starting Date precedes the year in which the
Member reaches age 70, the applicable distribution period for the
Member is the distribution period for age 70 under the Uniform Lifetime
Table set forth in Section 1.401(a)(9)-9 of the
63
Treasury regulations plus the excess of 70 over the age of the Member
as of the Member's birthday in the year that contains the Annuity
Starting Date.
(d) For purposes of this Section, the following definitions apply:
(i) Designated Beneficiary. The individual who is designated as the
beneficiary under Section 401(a)(9)of the Code and Section
1.401(a)(9)-4 of the Treasury regulations.
(ii) Distribution calendar year. A calendar year for which a minimum
distribution is required. For distributions beginning before the
Member's death, the first distribution calendar year is the
calendar year immediately preceding the calendar year which
contains the Member's required beginning date.
(iii) Life expectancy. Life expectancy as computed using the Single
Life Table in Section 1.401(a)(9)-9, Q&A1 of the Treasury
Regulations.
(iv) Required beginning date. The date specified in Section 11.1.
64
11.5 Direct Rollover Distribution
----------------------------
(a) Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a distributee's election under this Section, a
distribute may elect, at the time and in the manner prescribed by the
Pension 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.
(b) The following definitions apply to the terms used in this Section 11.5:
(i) "Eligible rollover distribution" means any distribution of all or
any portion of the balance to the credit of the distributee, except
that an eligible rollover distribution does not include:
(A) 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; and
65
(B) any distribution to the extent such distribution is required
under Section 401(a)(9) of the Code.
(ii) "Eligible retirement plan" means any of the following types of
plans that accept the distributee's eligible rollover distribution:
(A) a qualified plan described in Section 401(a) of the Code;
(B) an annuity plan described in Section 403(a) of the Code;
(C) an individual retirement account or individual retirement
annuity described in Section 408(a) or 408(b) of the Code,
respectively;
(D) an annuity contract described in Section 403(b) of the Code;
(E) an eligible plan under Section 457(b) of the Code which is
maintained by a state, political subdivision of a state, or any
agency or instrumentality of a state or political subdivision
of a state and which agrees to separately account for amounts
66
transferred into such plan from this Plan; and
(F) effective January 1, 2008, a Roth IRA described in Section 408A
of the Code.
(iii) "Distributee" means an employee or former employee, an employee's
or former employee's surviving spouse, and an employee's or former
employee's spouse or former spouse who is an alternate payee under
a qualified domestic relations order as defined in Section 414(p)
of the Code with respect to the interest of such alternate payee);
and
(iv) "Direct Rollover means a payment by the Plan to the eligible
retirement plan specified by the distributee.
(c) Effective for distributions made after December 31, 2009, the term
"Distributee" also includes a Participant's nonspouse beneficiary
designated pursuant to the terms of the Plan. In the case of a
nonspouse beneficiary, a direct rollover may be made only to an
individual retirement account or annuity described in Section 408(a) or
Section 408(b) of the Code ("IRA") that is established on behalf of the
designated
67
beneficiary and that will be treated as an inherited IRA pursuant to
the provisions of Section 402(c)(11) of the Code. Also, in this case,
the determination of any required minimum distribution under Section
401(a)(9) of the Internal Revenue Code that is ineligible for rollover
shall be made in accordance with IRS Notice 2007-7, or any applicable
successor guidance issued by the IRS.
(d) The Member shall be required to represent the Pension Committee that
any recipient plan is (or is intended to be) an eligible retirement
plan and to provide any other reasonable information the Pension
Committee shall require (including the name, address and account
numbers with respect to a recipient plan).
(e) A Member failing to elect the rollover option under this Section 11.5
prior to a Retirement Commencement Date shall be deemed not to have
elected a rollover option.
(f) The Pension Committee may adopt any reasonable procedures to accomplish
the direct rollover, as a trustee to trustee transfer, including
distribution in the form of a restricted check payable to a fund or a
trustee for the benefit of the Member.
68
(g) Amounts eligible for direct rollover may be distributed to a maximum of
three recipient plans.
(h) A Member shall be permitted to divide a distribution in the form of a
percentage or dollar amount to be rolled over to a recipient plan and
the remainder to be received currently by the Member.
69
SECTION XII
-----------
REEMPLOYMENT
------------
12.1 If any retired Member is reemployed by the Company prior to his Normal
Retirement Date, his retirement benefit payments, if any, shall cease; any
election of an optional benefit in effect thereunder shall become void and
the provisions of Section 5.1 hereof shall again become effective. Any
Credited Service to which he was entitled when he retired shall be restored
to him, and upon subsequent retirement, his retirement benefits shall be
redetermined based on his Salary and Credited Service before and after the
period of prior retirement reduced by the Actuarial Equivalent of the
benefits previously received, if any. Such reduction shall not reduce the
benefit payable to the Member to an amount which is less than the benefit
payable to the Member prior to the Member's reemployment.
12.2 If any Member, who received or is receiving a disability benefit under
Section X hereof, is reemployed by the Company prior to his Normal
Retirement Date, any disability benefit payments he was receiving shall
cease and the provisions of Section 5.1 hereof shall again become
effective. Any Vesting Service and Credited Service to which he was
entitled when he
70
became disabled shall be restored to him, and upon subsequent retirement or
termination of service his benefit shall be redetermined based on his
Salary and Credited Service before and after his disability, reduced by the
Actuarial Equivalent of the benefits previously received, if any.
12.3 If a former Member who terminated service after he had earned a vested
interest under Section 9.2(a) or Section 9.3(b) is reemployed he shall
thereupon again become a Member of the Plan. Any Credited Service to which
he was entitled shall be restored to him and upon subsequent retirement or
termination of service his benefit shall be based on his Salary and
Credited Service before and after his initial termination of service
reduced by the Actuarial Equivalent of the benefits previously received, if
any.
12.4 If a former Employee who terminated service in accordance with Section 9.1
or Section 9.3(a) is reemployed, his entitlement to membership and his
prior Vesting Service shall be determined as provided in Section 2.5 and
9.4(a) and (b). Any Credited Service recognized for the period of Vesting
Service restored pursuant to said Section shall also be restored to him.
71
SECTION XIII
------------
LIMITATION OF ASSIGNMENT
------------------------
The benefits payable hereunder to any Member, Spouse, Beneficiary, or
Contingent Annuitant, if any, shall not be assigned, commuted, anticipated,
alienated, sold, transferred, pledged, encumbered or charged, and shall not be
subject by attachment or otherwise to the claims of any creditors of the Member,
Spouse, Beneficiary or Contingent Annuitant.
Notwithstanding the above, the Committee shall direct the Trustees to comply
with a Qualified Domestic Relations Order provided such order does not require a
form of benefit not otherwise provided under the Plan, or require increased
benefits, or require the payment of benefits to an Alternate Payee (as described
below) which are required to be paid to another Alternate Payee under a previous
Qualified Domestic Relations Order. Payments in compliance with a Qualified
Domestic Relations Order may commence, in the case of a Member who has not
separated from service no earlier than the first day of the month coincident
with or next following the date the Member attains "Earliest Retirement Age" as
defined in Section 414(p) of the Code, based on the Actuarial Equivalent of the
Member's Accrued Benefit on the date payments are to begin.
72
For purposes of this Section an Alternate Payee shall mean a Spouse, former
Spouse, child or dependent of the Member who is recognized by a domestic
relations order as having the right to receive all or a portion of, the benefits
payable under the Plan to the Member.
The Pension Committee shall notify each Member and any Alternate Payee of
its receipt of any domestic relations order, the Plan procedures for determining
the qualified statute of such order, and the procedures for the administration
of such distributions.
If the present value of any series of payments meeting the criteria set
forth for Qualified Domestic Relations Orders amounts to $5,000 or less, an
Actuarial Equivalent lump sum payment, determined in the manner described in
Section 5.1, shall be made in lieu of the series of payments.
Notwithstanding the first paragraph of this Section, a Member's benefits
under the Plan shall be offset by the amount the Member is required to pay to
the Plan under the circumstances set forth in Section 401(a)(13)(C) of the Code.
Except as otherwise provided in this Section, no part of the corpus or
income of the funds of the Plan shall be used for, or diverted to, purposes
other than for the exclusive benefit of Members and other persons entitled to
benefits under the Plan and
73
paying Plan expenses not otherwise paid by the Company, before the satisfaction
of all liabilities with respect to them. No person shall have any interest in
or right to any part of the earnings of the funds of the Plan or any right in,
or to, any part of the assets held under the Plan, except as and to the extent
expressly provided in the Plan.
74
SECTION XIV
-----------
LIMITATION OF RIGHTS OF THE EMPLOYEE
------------------------------------
This Plan is a voluntary program on the part of the Company and shall not be
deemed to constitute a contract between an Employer and any Member or to be a
consideration for, or inducement of, employment for any Employee or Member.
Nothing contained in the Plan shall be deemed to give a) a Member the right to
be retained in the service of an Employer or to interfere with the right of an
Employer to discharge or retire the Member, or b) any Member, Spouse, or
Beneficiary any right or claim to any payment under the Plan, except as such
payment may be provided for under the terms of the Plan and then only to the
extent that assets are available in the hands of the Trustee for the making of
such payment.
75
SECTION XV
----------
AMENDMENT TO OR TERMINATION OF THE PLAN
---------------------------------------
15.1 Amendment
---------
(a) The Board reserves the right to amend the Plan at any time to any
extent that it may, in its sole and complete discretion, deem
advisable, including any amendment deemed necessary to ensure initial
qualification or continued qualification of the Plan under the Code or
any other applicable Federal or State laws.
(b) No such amendment shall increase the duties or responsibilities of the
Trustee without its written consent thereto.
(c) No such amendment shall have the effect of diverting any part of the
principal or income of the Trust Fund for purposes other than the
exclusive benefit of its Members and their Spouses, Contingent
Annuitants and any other designated Beneficiaries, prior to the
satisfaction of all liabilities under the Plan.
(d) Except to the maximum extent permitted or required by the Code or any
other applicable section of the law
76
and the regulations issued thereunder, no amendment or modification
shall be made which would:
(i) retroactively impair any rights to any benefit under the Plan which
any Member, Beneficiary, Spouse or other eligible survivor would
otherwise have been entitled to as of the date of such amendment,
(ii) permit the elimination or reduction of a subsidy or an early
retirement benefit (as defined in Code regulations) prior to the
effective date of such amendment, or
(iii) permit the elimination of an optional form of benefit with
respect to benefits attributable to Vesting Service prior to the
effective date of such amendment. In the case of a retirement type
subsidy, this subsection (iii) shall apply only with respect to a
Member who satisfies (either prior to or subsequent to the
effective date of the amendment) preamendment conditions for such
subsidy. Notwithstanding the preceding, the Accrued Benefit of a
Member, early retirement benefit, retirement-type subsidy, or
optional form of benefit may be
77
reduced to the extent permitted under Section 412(c)(8) of the Code
(as it read before the first day of the 2008 Plan Year), Section
412(d)(2) of the code (as it reads for Plan Years beginning on and
after January 1, 2008), or to the extent permitted under the
Sections 1.411(d)-(3) and 1.411(d)-(4) of the U.S. Treasury
Department regulations.
15.2 Termination
-----------
The Company reserves the right to terminate the Plan in whole or in part at
any time by action of its Board of Directors. Upon complete or partial
termination of the Plan, the nonforfeitable benefits of each Member (or, in
the event of a partial termination, each Member affected by such partial
termination) shall become nonforfeitable as of the date of such
termination. In the event of such termination, after providing for the
expenses of the Plan, the assets of the Plan applicable to Members affected
by such termination shall be used and applied for the satisfaction of all
liabilities under the Plan in the manner prescribed by Section 4044 of the
Act (or corresponding provision of any subsequent applicable law in effect
at the time). The Pension Committee may direct that
78
benefits may be provided by the purchase of annuities, by continuing the
Fund in existence and making provision thereunder for the payment of
retirement benefits or by immediate distribution from the Fund. If, upon
satisfaction of all benefit liabilities under the Plan with respect to
Members, former Members, their Spouses and Beneficiaries, there is a
balance remaining in the Fund, such balance shall be returned to the
Company.
15.3 Amendment Following Change in Control
-------------------------------------
Notwithstanding the provisions of Subsection 15.1(a), the Board of
Directors shall have the right to amend or terminate the Plan at any time;
provided, however, that for a period of three years following a "change in
control" (as such term is defined in Section 15.4), the provisions of the
Plan may not be amended if any amendment would adversely affect the rights,
expectancies or benefits of any Member, Spouse or other designated
Beneficiary provided by the Plan as in effect immediately prior to the
Change in Control.
15.4 Termination Following Change in Control
---------------------------------------
Notwithstanding the preceding provisions of this Section or any other
provision of this Plan, in the event this Plan is terminated within three
years following a "change in
79
control" (as hereinafter defined), the assets of the Plan shall be applied
in accordance with the preceding provisions of this Section 15.2 to satisfy
all liabilities to retired Members, Members, Spouses, Contingent Annuitants
and Beneficiaries. If, after satisfaction of such liabilities, there are
assets remaining in the Plan, such assets shall be applied on a pro rata
basis to increase the benefits to Members who are in active service of the
Company on the date of such termination; provided, however, that if any
portion of an allocation of such assets, when added to any other payments
to any individual who is a "disqualified individual," as such term is
defined in Section 280G(c) of the Code, would result in the imposition of
an excise tax pursuant to Section 4999 of the Code (as determined by the
Trustee), then such allocation shall be reduced until either no portion of
the allocation would result in the imposition of such excise tax or such
allocation is reduced to zero. For purposes hereof, a "change in control"
shall mean:
(a) the acquisition by any corporation, person, or business entity of more
than 20% of the then outstanding voting stock of the Company, other
than through a transaction consented to by the Board of Directors of
the Company prior
80
to such acquisition of more than 20% of such then outstanding voting
stock, and which consent of the Board of Directors of the Company is
contained in a resolution of such Board adopted on a date which is both
prior to such acquisition and subsequent to January 1, 1986, or
(b) the purchase of shares of voting stock of the Company pursuant to a
tender offer or exchange offer which is opposed by a majority of the
members then serving on the Company's Board of Directors.
Notwithstanding, the provisions of Section 15.1(a) hereof, the
foregoing provisions of this paragraph may not be amended, following a
"change in control", without the written consent of a majority, in both
number and interest, of the Members who are in active service with the
Company on the date of such amendment.
81
SECTION XVI
-----------
GOVERNMENTAL RESTRICTIONS
-------------------------
16.1 Limitation Concerning Highly Compensated Employees or Highly Compensated
------------------------------------------------------------------------
Former Employees
----------------
(a) The provisions of this Section shall apply (i) in the event the Plan is
terminated, to any Member who is a highly compensated employee or
highly compensated former employee (as those terms are defined in
Section 414(q) of the Code) of the Company or an Affiliated Employer
and (ii) in any other event, to any Member who is one of the 25 highly
compensated employees or highly compensated former employees of the
Company or Affiliated Employer with the greatest compensation in any
Plan Year. The amount of the annual payments to any one of the Members
to whom this Section applies shall not be greater than an amount equal
to the annual payments that would be made on behalf of the Member
during the year under a single life annuity that is the Actuarial
Equivalent to the sum of the Member's Accrued Benefit and the Member's
other benefits under the Plan.
82
(b) If, (i) after payment of Accrued Benefits or other benefits to any one
of the Members to whom this Section applies, the value of Plan assets
equals or exceeds 110 percent of the value of current liabilities (as
that term is defined in Section 412(l)(7) of the Code) of the Plan,
(ii) the value of the Accrued Benefit and other benefits of any one of
the Members to whom this Section applies is less than one percent of
the value of current liabilities of the Plan, or (iii) the value of the
benefits payable to a Member to whom this Section applies does not
exceed the amount described in Section 411(a)(11)(A) of the Code, the
provisions of paragraph (a) above will not be applicable to the payment
of benefits to such Member.
(c) If any Member to whom this Section applies elects to receive a lump sum
payment in lieu of his Pension and the provisions of paragraph (b)
above are not met with respect to such Member, the Member shall be
entitled to receive his benefit in full provided he shall agree to
repay to the Plan any portion of the lump sum payment which would be
restricted by operation of the provisions of paragraph (a) and shall
provide adequate security to guarantee that repayment.
83
(d) Notwithstanding paragraph (a) of this Section, in the event the Plan is
terminated, the restriction of this Section shall not be applicable if
the benefit payable to any highly compensated employee and any highly
compensated former employee is limited to a benefit that is
nondiscriminatory under Section 401(a)(4) of the Code.
(e) If it should subsequently be determined by statute, court decision
acquiesced in by the Commissioner of Internal Revenue, or ruling by the
Commissioner of Internal Revenue that the provisions of this Section
are no longer necessary to qualify the Plan under the Code, this
Section shall be ineffective without the necessity of further amendment
to the Plan.
16.2 Limitations Based on Funded Status of the Plan
----------------------------------------------
Notwithstanding any provision of the Plan to the contrary, the following
provisions shall apply as required by Section 436(d) of the Code effective
for Plan Years beginning on or after January 1, 2008:
(a) In no event shall a Member be entitled to receive an unpredictable
contingent event benefit under the Plan during any period the payment
of such benefit is
84
restricted under the provisions of Section 436(b) of the Code.
(b) In the event the Plan's adjusted funding target attainment percentage
for a Plan Year is less than 60 percent, benefit accruals shall cease
during the period benefit accruals are restricted under the provisions
of Section 436(e) of the Code.
(c) In the event the Plan's adjusted funding target attainment percentage
for a Plan Year falls below the threshold defined under Section
436(d)(1) and/or (3) of the Code, the Trustee shall, as directed by the
Company, cease payment of any prohibited payment during the period
specified in, and to the extent necessary to comply with the provisions
of Section 436(d) of the Code.
(d) In no event shall a prohibited payment be paid during any period the
Company is a debtor in a case under Title 11, United States Code, or
similar federal or state law, to the extent necessary to comply with
the provisions of Section 436(d)(2) of the Code.
(e) In no event shall an amendment that has the effect of increasing
liabilities of the Plan by reason of increases in benefits,
establishment of new benefits,
85
changing the rate of benefit accrual, or changing the rate at which
benefits become nonforfeitable become effective during the period such
amendment would violate the provisions of Section 436(c) of the Code.
(f) For purposes of this Section, the following terms shall have the
following meanings:
i. "Funding target attainment percentage" has the same meaning given
such terms by Section 430(d)(2) of the Code.
ii. "Adjusted funding target attainment percentage" means the funding
target attainment percentage that is determined under subparagraph
(i) above increase by each of the amounts under Section
430(d)(2)(A) and (B) of the Code by the aggregate amount of
purchases of annuities for employees other than highly compensated
employees (as defined in Section 414(q) of the Code) that were made
by the Plan during the preceding two years.
iii. "Unpredictable contingent event benefit" means any benefit
payable solely by reason of:
(A) a plant shutdown (or similar event, as determined by the
Secretary of the
86
Treasury); or
(B) any event other than the attainment of any age, performance of
any service, receipt or derivation of any compensation, or
occurrence of death or disability.
iv. "Prohibited payment" means:
(A) any payment in excess of the monthly amount payable as a single
life annuity (plus any social security supplements described in
the last sentence of Section 411(a)(9) of the Code) to any
Member of Beneficiary whose Retirement Commencement Date occurs
during any period a limitation under subparagraph (b) or (d)
above is in effect;
(B) any payment for the purchase of an irrevocable commitment from
an insurer to pay benefits; or
(C) any other payment specified by the Secretary of the Treasury by
regulations.
87
SECTION XVII
------------
ADMINISTRATION OF THE PLAN
--------------------------
17.1 The general administration of the Plan shall be placed in a Pension
Committee consisting of not less than three nor more than nine persons who
shall be appointed, from time to time, by the Board to serve at the
pleasure of said Board. The members of the Pension Committee shall
collectively be the Plan Administrator and Named Fiduciary, as such terms
are defined under the Act.
17.2 Any person appointed as a member of the Pension Committee shall signify his
acceptance in writing to the Board. Any member of the Pension Committee
may resign by delivering his written resignation to the Board and such
resignation shall become effective upon delivery or any later date
specified therein.
17.3 The members of the Pension Committee will serve without compensation for
services as such, but the Company on an equitable basis shall pay or
reimburse the Pension Committee for all expenses reasonably incurred by the
Pension Committee and shall indemnify the Pension Committee and each member
thereof against all loss, liability and expense occasioned by any act or
omission to act taken or determined upon by it, or
88
him, except any such act or omission which is due to willful misconduct,
fraud or lack of good faith.
17.4 A majority of the members of the Pension Committee, at the time in office,
may do any act which this Plan authorizes or requires the Pension Committee
to do, and the action of such majority of the members expressed from time
to time by a vote at a meeting, or in writing without a meeting, shall
constitute the action of the Pension Committee and shall have the same
effect for all the members at the time in office. The Pension Committee
may, by a writing signed by a majority of its members, delegate to any one
member of the Pension Committee the authority to give certified notice in
writing of any action taken by the Pension Committee and may assign
specific duties and responsibilities to one or more of its members.
17.5 Subject to the limitations of the Plan, the Pension Committee shall
establish rules for the administration of the Plan and the transaction of
its business. The determination of the Pension Committee as to any
questions involving the general administration of the Plan or the proper
interpretation of any of its provisions shall be conclusive.
17.6 The Pension Committee's determination, as to which Employees are eligible
to be Members and of a Member's period of
89
Credited Service and Salary, shall be conclusive. Any discretionary
actions to be taken under this Plan by the Pension Committee with respect
to the classification of Members or benefits shall be uniform in their
nature and applicable to all Members similarly situated and shall be taken
with care, skill, prudence and diligence that a prudent man acting in a
like capacity under circumstances similar to those then prevailing would
use. The Pension Committee shall have complete and discretionary authority
to determine eligibility for benefits, the amount of benefits and to
otherwise interpret and administer the provisions of the Plan. The Pension
Committee may appoint accountants, attorneys, Actuaries or other agents as
it may deem necessary or advisable in order to properly administer and
implement the Plan, and may delegate to such appointees appropriate
ministerial duties consistent with their background and experience, to the
extent that such duties are properly delegable under the Act. The Pension
Committee shall not be liable for any act or omission of such accountant,
attorney, Actuary, or other agent in carrying out their delegated
responsibilities provided that the Pension Committee does not fail to
conduct itself in the manner described above with respect to such
designation of agents and allocation of
90
duties, and provided further, that the Pension Committee does not
(i) knowingly participate in or knowingly undertake to conceal an act or
omission of such agent, knowing that such act or omission is
inconsistent with the requirements of the Plan and of the Act, or
(ii) through a failure to comply with the prudent action described above
enable such agent to commit such an improper act or omission, or
(iii) have knowledge of such improper act or omission on the part of such
agent, and yet fail to make reasonable efforts under the circumstances
to remedy such improper act or omission.
17.7 The Pension Committee shall keep in convenient form such data as may be
necessary for actuarial valuations with respect to the operation and
administration of the Plan and may
(a) adopt standards for use in all actuarial calculations required in
connection with the Plan;
(b) establish the rate of contribution required to maintain the Plan; and
(c) advise the Company of the rate so established.
The Pension Committee shall submit annually to the Board a report showing,
in reasonable summary, the financial condition
91
of the Trust Fund and giving a brief account of the operations of the Plan
for the past year, and any further information which the Board may require.
17.8 The members of the Pension Committee, and the Company and its officers and
directors shall be entitled to rely upon all tables, valuations,
certificates and reports made by any Actuary or accountant so selected, and
upon all opinions given by any legal counsel so selected, and the members
of the Pension Committee shall be fully protected with respect to any
actions taken or suffered by them in good faith in reliance upon such
Actuary, accountant, or counsel, and all action so taken or suffered shall
be conclusive upon each of them and upon all Members, retired Members,
Spouses, Contingent Annuitants and Beneficiaries.
17.9 The Pension Committee shall make all reports and give all notices with
respect to the Plan and the administration thereof which may be required
under the provisions of the Code or of the Act and the regulations
promulgated thereunder.
17.10 Denial of Claims Procedure
--------------------------
Any application for benefits by a Member, his Spouse, or other designated
Beneficiary, submitted to the Pension Committee on appropriate form shall
constitute a claim. In any instance where such claim is denied in whole
or in part by the Pension
92
Committee, their decision shall be submitted in writing to the Member,
Spouse, or Beneficiary, within 90 days following receipt of such claim,
unless special circumstances require additional time, which may be up to
an additional 90 days provided the claimant is notified within the initial
90-day period, setting forth the following:
(a) basis for denial of claim;
(b) plan provision on which denial is based;
(c) description of any additional information required of the Member, his
Spouse, or other Beneficiary;
(d) an explanation of why such information is necessary; and
(e) an explanation of the procedures for reviewing claims under the Plan.
Upon receipt of denial of a claim by the Member, Spouse, Contingent
Annuitant, or Beneficiary, an appeal requesting further review may be
submitted to the Pension Committee within 60 days following receipt of
such denial. Upon receipt of a request for review, the Pension Committee
will meet and render a decision within 60 days following the receipt of an
appeal unless special circumstances exist which may permit an extension of
time, in which case a decision shall be made as soon as possible after the
60-day period, but may in no event be extended beyond 120 days following
receipt of appeal. The
93
Pension Committee's ultimate decision shall be submitted to the Member,
Spouse, or Beneficiary in writing, setting forth the specific reasons for
the decision and specific references to the provisions of the Plan on
which the decision is based.
17.11 Facility of Payment
-------------------
If the Pension Committee shall find that a Member or other person entitled
to a benefit is unable to care for his affairs because of illness or
accident or because he is a minor, the Pension Committee may direct that
any benefit due him, unless claim shall have been made for the benefit by
a duly appointed legal representative, be paid to his spouse, a child, a
parent or other blood relative, or to a person with whom he resides. Any
payment so made shall be a complete discharge of the liabilities of the
Plan for that benefit.
Furthermore, if the Pension Committee receives on behalf of a Member a
power of attorney with respect to such Member valid under state law, the
Pension Committee shall comply with the instructions of the named attorney
to the extent that the Pension Committee would comply with such
instructions if given by the Member and such instructions are consistent
with the power of attorney.
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SECTION XVIII
-------------
TRUST AGREEMENT
---------------
18.1 As a part of this Plan the Company has entered into a Trust Agreement under
which the Trustee shall receive the contribution of the Company under this
Plan to the Trust Fund on behalf of the Members and shall hold, invest and
distribute such fund in accordance with the terms and provisions of the
Plan and the Trust Agreement.
18.2 The Company intends that this shall be a permanent Plan for the exclusive
benefit of its Members and expects to contribute to the Trust Fund the
amounts which will provide in full the benefits payable under the Plan.
The Company may rely upon the estimates made by the Pension Committee of
the amount of contributions needed to fund the Plan in accordance with the
requirements of Section 412 of the Code. Neither the Company, the Pension
Committee, nor the Trustee shall be liable under the Plan if the Trust Fund
should be insufficient to provide for the payment of such benefits. Such
benefits are to be payable from the Trust Fund only and to the extent that
such Trust Fund shall suffice therefore.
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SECTION XIX
-----------
TOP HEAVY PROVISIONS
--------------------
19.1 Definitions
-----------
The following words and phrases in this Section XIX shall have the
following meanings, unless the context clearly indicates otherwise.
(a) Key Employee - Members, retired and former Members, Spouses,
Beneficiaries and Contingent Annuitants who during the current Plan
Year or any of the four preceding Plan Years are considered "Key
Employees" under Code Section 416(i) and regulations issued thereunder.
(b) Participant - A Member or former Member of a plan included within the
aggregation group set forth in Section 19.2. On and after January 1,
1985, the term "Participant" shall not include an individual who has
not performed services for the Company within a five-year period ending
on a Determination Date.
(c) Determination Date - December 31, 1983, and each subsequent December
31st thereafter.
(d) Top Heavy Year - Any Plan Year in which the Plan is determined to be
Top Heavy under subsection 19.2.
96
(e) Effective Date - January 1, 1984.
19.2 Top-Heavy Plan Defined
----------------------
(a) Plan Aggregation
All defined benefit plans and defined contribution plans maintained by
the Company or an Affiliated Employer shall be aggregated (Aggregate
Group of Plans) for purposes of this Section 19.2 as if all Employees
included in the Aggregate Group were Employees of the Company. The
Required Aggregation Group of the Company includes each plan of the
Aggregate Group in which a Key Employee participates and each other
plan of the Company which enables any plan in which a Key Employee
participates to meet the requirements of Section 401(a)(4) or 410 of
the Code. The Permissive Aggregation Group shall consist of plans of
the Aggregate Group that are in a Required Aggregation Group plus one
or more plans that are not part of a Required Aggregation Group, but
that satisfy the requirements of Sections 401(a)(4) and 410 of the Code
when considered together with a Required Aggregation Group. The
Company shall determine on each Determination Date as to whether the
Required
97
Aggregation Group or Permissive Aggregation Group is to be applied to
Top Heavy determination.
(b) Determination of Top Heavy
This Plan shall be a Top Heavy Plan with respect to any Plan Year
starting on or after the Effective Date of this Section XIX only if on
the Determination Date applicable to such Plan Year the sum of:
(i) The present value of Accrued Benefits for Key Employees, as
determined under the provisions of this Section applicable to
Defined Benefit Plans for all such plans included within the
Required Aggregation Group or the Permissive Aggregation Group, and
(ii) The aggregate of the account balances of Key Employees (as
adjusted under the provisions of this Article applicable to Defined
Contribution Plans), under all such plans included within the
Required Aggregation Group or the permissive Aggregation Group;
exceeds 60% of a similar sum determined for all Participants in
such Required or Permissive Aggregation Groups.
(c) Adjustments to the Present Value of Accrued Benefits for Defined
Benefit Plans.
98
For any defined benefit plan included within the Required or
Permissive Aggregation Group, the present value of Accrued Benefits of
any Participant shall be increased to reflect any distribution from the
Plan with respect to such Participant during the five-year period
ending on the Determination Date.
Solely for purposes of determining if the Plan, or any other plan
included in a Required Aggregation Group of which this Plan is a part,
is top heavy (within the meaning of Section 416(g) of the Code) the
Accrued Benefit of an Employee other than a Key Employee shall be
determined under the method, if any, that uniformly applies for accrual
purposes under all Plans maintained by the Employer, or if there is no
such method, as if such benefit accrued not more rapidly than the
slowest accrual rate permitted under the fractional accrual rate of
Code Section 411(1)(c).
(d) Adjustment to the Value of Account Balance for Defined Contribution
Plans.
For any defined contribution plan included within the Aggregate
Group, the total Account Balances shall be increased to reflect the
value of any distributions made to a Participant by the Plan during the
five-year
99
period ending on the Determination Date and reduced to eliminate the
value of any rollover contributions included in such participant's
Account Balances made after December 31, 1983, provided such rollover
contribution is initiated by the Participant and not made from an
Aggregate Group Plan. In addition, Account Balances of participants
shall be reduced by the portion of such balances attributable to
qualified voluntary employee contributions made pursuant to Section 219
of the Internal Revenue Code.
(e) Adjustment for Prior Key Employees.
Employee in prior Plan Years who is not a Key Employee with respect to a current
Plan Year shall be excluded entirely in computing the percentage in Section
19.2.
(f) Present value of Accrued Benefits for Defined Benefit Plans shall be
determined, for the purposes of Section 19.2(2)(a), according to the
1984 - UP Mortality Table and a 7-1/2% interest rate.
19.3 Minimum Benefit
---------------
For any Top Heavy Plan Year, the following provisions will apply.
100
(a) Notwithstanding the provisions of Section 4.1, for each non-Key
Employee covered under this Plan and a defined contribution plan, if
the Company maintains a defined contribution plan and, if minimum
benefits as defined by Code Section 416(c) and subsequent IRS
regulations are provided such that the requirements of Code Section
416(f) are satisfied for such Plan Year, then no minimum benefits will
be provided under this Plan for that Plan Year.
(b) If the conditions under paragraph (a) above are not met with respect to
any Plan Year during which the Plan is a Top Heavy Plan, the Accrued
Benefit, derived from Company contributions, of a Member who is not a
Key Employee shall not be less than 2% of such Member's Average
Compensation multiplied by his Years of Service (not to exceed ten
years).
(c) For purposes of this Section, the following definitions are applicable:
(i) Years of Service shall be the Member's Years of Vesting Service,
except that the following Years of Vesting Service shall be
disregarded:
(A) Any Plan Year during which the Plan was not a Top Heavy Plan;
and
101
(B) Any Plan Year beginning before 1984.
(ii) Average Compensation shall be the Member's Compensation from the
Company during that period of five consecutive Top Heavy Plan Years
(or actual Top Heavy Plan Years, if less than five) which produce
the highest average.
(iii) Accrued Benefit shall be an annual benefit payable in the form of
a single life annuity (with no ancillary benefits) and beginning at
Normal Retirement Date.
19.4 Vesting
-------
(a) An active Member in a Top Heavy Plan shall have a nonforfeitable
interest in his Accrued Benefit derived from Company contributions as
provided under the following schedule:
Years of Nonforfeitable
Vesting Service Percentage
--------------- --------------
Less than 2 0%
2 20%
3 40%
4 60%
5 or more 100%
Accrued Benefit, for the purposes of this subsection, shall include
that portion of Accrued Benefits which the Member earned during all
prior Plan Years, whether or not
102
the Plan was a Top Heavy Plan during such prior Plan Years.
(b) If a Member has completed fewer than three Years of Vesting Service on
or before the last day of the most recent Plan Year for which the Plan
was a Top Heavy Plan, the vesting provisions of Section 19.4(a) shall
continue to be applicable to the portion of his Accrued Benefit
determined as of the last day of the Plan Year in which the Plan was a
Top Heavy Plan, and Section 9.2(a) shall again be applicable with
respect to the remaining portion of his Accrued Benefit; provided,
however, that in no event shall the vested percentage of such remaining
portion be less than the percentage determined under the above as of
the last day of the most recent Plan Year for which the Plan was a Top
Heavy Plan.
19.5 Notwithstanding anything in this Section XIX to the contrary, the following
provisions shall apply for Plan Years beginning on or after January 1,
2002, for purposes of determining whether the Plan is Top Heavy and whether
it satisfies the minimum benefit requirements of Section 416(c) of the
Code.
(a) Key employee. Key employee means any employee or former employee
(including any deceased employee) who at any time during the Plan Year
that includes the
103
determination date was an officer of the Company having annual
compensation greater than $130,000 (as adjusted under Section 416(i)(1)
of the Code for Plan Years beginning after December 31, 2002), a
5-percent owner of the Company, or a 1-percent owner of the Company
having annual compensation of more than $150,000. For this purpose,
annual compensation means compensation within the meaning of Section
415(c)(3) of the Code. The determination of who is a Key Employee will
be made in accordance with Section 416(i)(1) of the Code and the
applicable regulations and other guidance of general applicability
issued thereunder.
(b) Determination of present values and amounts. This Subsection (b) shall
apply for purposes of determining the present values of Employee's
accrued benefits as of the determination date.
(i) Distributions during year ending on the determination date. The
present values of an Employee's accrued benefit of the
determination date shall be increased by the distributions made
with respect to the Employee under the Plan and any plan aggregated
with the Plan under Section
104
416(g)(2) of the Code during the 1-year period ending on the
determination date. The preceding sentence shall also apply to
distributions under a terminated plan which, had it not been
terminated, would have been aggregated with the Plan under Section
416(g)(2)(A)(i) of the Code. In the case of a distribution made
for a reason other than separation from service, death, or
disability, this provision shall be applied by substituting "5-year
period" for "1-year period."
(ii) Employees not performing services during year ending on the
determination date. The accrued benefit of any individual who has
not performed services for the Company during the 1-year period
ending on the determination date shall not be taken into account.
(c) Minimum benefits.
(i) Matching contributions. For purposes of satisfying the minimum
benefit requirements of Section 416(c)(1) of the Code and the Plan,
in determining years of service with the Company, any service with
the Company shall be disregarded to the extent such service occurs
during a Plan Year
105
when the Plan benefits (within the meaning of Section 410(b) of the
Code) no Key Employee or former Key Employee.
106
SECTION XX
----------
MISCELLANEOUS
-------------
20.1 Effect of Plan Merger
---------------------
In the event of a merger or consolidation of the Plan with any other plan
or a transfer of assets or liabilities of the Plan to any other plan or a
transfer of assets or liabilities of any other plan to the Plan, each
Member (if the Plan or the plan to which assets or liabilities have been
transferred then terminated) shall be entitled to 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 the Plan or the
plan from which the transfer to the Plan was made had been terminated. No
transfer of assets or liabilities shall be made from the Plan to another
plan which does not have a provision similar to this Section 20.1.
Notwithstanding the preceding provisions of Section 20.1 or any other
provision of this Plan, in the event of any such merger, consolidation or
transfer of assets or liabilities which is effected within three years
following a "change in control" (as defined in Section 15.4), the accrued
benefit of each Member who is in active service of the Company
107
on the date of such merger, consolidation or transfer of assets or
liabilities, other than any person who is a "disqualified individual," as
such term is defined in Section 280G(c) of the Code, shall be increased in
accordance with the provisions of Section 15.2 such that any excess, as of
the date of any such transaction, of the fair market value of the assets of
the Plan over the present value of accrued benefits hereunder (determined
as if the Plan had terminated immediately prior to such transaction) is
exhausted. Notwithstanding the provisions of Section 15.1(a) hereof, the
foregoing provisions of this paragraph may not be amended, following a
"change in control", without the written consent of a majority, in both
number and interest, of the Members who are in active service with the
Company on the date of such amendment.
20.2 Construction
------------
This Plan shall be administered, construed and enforced according to the
Act and, to the extent not preempted by the Act, the laws of the State of
New York.
108
The foregoing constitutes the Retirement Pension Plan, as amended,
restated and adopted by Trans-Lux Corporation for its employees and the
employees of its designated subsidiaries, effective January 1, 2011.
IN WITNESS WHEREOF, the proper officer of Trans-Lux Corporation has caused
this Plan to be executed this 28th day of January, 2011.
---- -------
TRANS-LUX CORPORATION
/s/ Angela D. Toppi
------------------------
Executive Vice President
ATTEST: /s/ Witness
----------------
109
APPENDIX A
Option Factors
--------------
The following option factors shall be used in determining actuarial equivalency:
(a) IRS Interest Rate means, with respect to determining the amount of a
benefit with a Retirement Commencement Date on or after January 1,
2008, the interest rate prescribed under Section 417(e)(3)(C) of the
Code (as it reads effective on and after the first day of the 2008 Plan
Year) as in effect the second full calendar month preceding the
applicable Stability Period.
"IRS Mortality Table" means, with respect to determining the amount of
a benefit with a Retirement Commencement Date on or after January 1,
2008, the mortality table prescribed under Section 417(e)(3)(b) of the
Code (as it reads effective on and after the first day of the 2008 Plan
Year).
"Stability Period" means the calendar year in which the Retirement
Commencement Date for a distribution occurs.
(b) Early Retirement Factors are based on the following table (factors are
interpolated to reflect an
110
employee's attained age expressed in years and completed months).
AGE EARLY RETIREMENT FACTOR
--- -----------------------
65 1.00
64 .94
63 .88
62 .82
61 .76
60 .70
59 .67
58 .64
57 .61
56 .58
55 .55
(c) All options approved by the Pension Committee, including the qualified
joint and survivor annuity, the 100%, 75%, 66-2/3%, and 50% joint and
survivor annuities, 10-year certain annuity and Social Security
leveling option are based on an interest rate of 6.5%, compounded
annually, and the 94 Group Annuity Reserve mortality table projected to
2002, scale AA, as prescribed by Revenue Ruling 2001-62.
111