Tiffany & Co. Amended and Restated Pension Plan Effective March 30, 2004

Contract Categories: Human Resources › Retirement Agreements
Summary

This agreement outlines the amended and restated pension plan for employees of Tiffany & Co. and its affiliated companies, effective March 30, 2004. It details eligibility, participation, vesting, benefits, contributions, and plan administration. The plan sets out the rights and obligations of both the company and its employees regarding retirement benefits, including how benefits are calculated, who qualifies, and the procedures for making claims. The agreement also addresses plan amendments, asset management, and legal protections for participants.

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EX-10.113 5 y95315exv10w113.txt PENSION PLAN, AMENDED AND RESTATED EXHIBIT 10.113 Tiffany & Co. Report on Form 10-K TIFFANY AND COMPANY PENSION PLAN AMENDED AND RESTATED EFFECTIVE AS OF MARCH 30, 2004 TABLE OF CONTENTS
PAGE ---- SECTION 1 - DEFINITIONS................................................... 1 SECTION 2 - PARTICIPATION................................................. 9 SECTION 3 - LEAVES OF ABSENCE............................................. 11 SECTION 4 - VESTING....................................................... 12 SECTION 5 - BENEFITS...................................................... 14 SECTION 6 - CONTRIBUTIONS................................................. 25 SECTION 7 - ADMINISTRATION OF THE PLAN.................................... 26 SECTION 8 - MANAGEMENT OF ASSETS.......................................... 28 SECTION 9 - CERTAIN RIGHTS AND OBLIGATIONS................................ 29 SECTION 10 - CLAIM PROCEDURES............................................. 31 SECTION 11 - NON-ALIENATION OF BENEFITS................................... 32 SECTION 12 - TOP HEAVY PLAN............................................... 33 SECTION 13 - AMENDMENTS................................................... 35 SECTION 14 - CONSTRUCTION................................................. 36 APPENDIX I................................................................ 37 APPENDIX II............................................................... 38 APPENDIX III.............................................................. 39
TIFFANY AND COMPANY PENSION PLAN ======================================== SECTION 1 - DEFINITIONS ======================================== The following words and phrases as used herein shall have the following meanings unless a different meaning is plainly required by the context: (1) "Plan" Tiffany and Company Pension Plan, as described herein or as from time to time hereafter amended or restated. (2) "Company" Tiffany and Company, a New York corporation, Howard H. Sweet & Son, Inc. (formerly, Tiffco Jewelry and Chain Crafts, Inc.), a Delaware corporation, Judel Products Corp. (formerly, Glassware Acquisition Inc.) a West Virginia corporation, L.S. Wholesale, Inc., a Massachusetts corporation, L.S. Holding (Florida), Inc., a Florida corporation, L.S. Holding (USA), Inc., an Alaska corporation, and L.S. Holding, Inc., a U.S. Virgin Islands corporation, provided, however, that, in the case of a person who is an Employee of Tiffany and Company on his Employment Commencement Date, the term "Company" as used herein with respect to such person shall refer to Tiffany and Company, in the case of a person who is an Employee of Howard H. Sweet & Son, Inc. on his Employment Commencement Date, the term "Company" as used herein with respect to such person shall refer to Howard H. Sweet & Son, Inc., in the case of a person who is an Employee of Judel Products Corp. on his Employment Commencement Date, the term "Company" as used herein with respect to such person shall refer to Judel Products Corp., in the case of a person who is an Employee of L.S. Wholesale, Inc. on his Employment Commencement Date, the term "Company" as used herein with respect to such person shall refer to L.S. Wholesale, Inc., in the case of a person who is an Employee of L.S. Holding (Florida), Inc. on his Employment Commencement Date, the term "Company" as used herein with respect to such person shall refer to L.S. (Florida), Inc., in the case of a person who is an Employee of L.S. Holding (USA), Inc. on his Employment Commencement Date, the term "Company" as used herein with respect to such person shall refer to L.S. Holding (USA), Inc., and in the case of a person who is an Employee of L.S. Holding, Inc. on his Employment Commencement Date, the term "Company" as used herein with respect to such person shall refer to L.S. Holding, Inc. 1 (3) "Board of Directors" Board of Directors of Tiffany and Company. (4) "Pre-ERISA Plan" Tiffany and Company Pension Plan and Trust as in effect through January 31, 1976, incorporating an informal pension plan maintained by the Company prior to February 1, 1968. (5) "Affiliate" Any member of the controlled group of companies of which the Company is a member within the meaning of Section 414(b), (c) and (m) of the Code. (6) "Committee" The Pension Committee as described in Section 7. (7) "Plan Year" Each twelve (12) month period commencing February 1 and ending on or before January 31, 1981, the eleven (11) month period ending December 31, 1981 and each calendar year thereafter. (8) "Employee" Any person employed by the Company or by a United States Affiliate of the Company that has adopted this Plan who receives regular stated compensation from the Company or from such other United States Affiliate of the Company, but excluding employees (a) whose principal place of work is outside the United States and (b) who are paid their Compensation from a foreign bank or bank branch or who are eligible to receive retirement, severance or similar benefits under foreign law or as a result of foreign custom. Notwithstanding any other provision of the Plan, in the case of an Employee who shall transfer from a foreign location to a U.S. location or vice versa, the Committee may, by regulation or otherwise and to the extent it considers advisable, treat service and/or compensation during the period of such transfer, including compensation from and service with an Affiliate, as service and/or compensation with the Company for the purposes of vesting and/or for determining the amount of pension or other benefits which may be payable under the Plan. Based on his stated work schedule an Employee shall be classified as a Regular Employee or a Part-time Employee. A change in status between Part-time Employee and Regular Employee shall be deemed effective for purposes of Subsections (3) and (4) of Section 4 as of the first of the month coincident with or next following the date of such change or, in the case of an Employee who terminates employment and is reemployed in a different status prior to incurring a Break in Service, as of the intervening first day of a Plan Year or, if none, as of the first of the month coincident with or next following the date of termination. If a change in status between Part-time Employee and Regular Employee is deemed effective on other than the first day of a Plan Year and clause (ii) (A) of Subsection 4(3) is applicable to the 2 Employee, he shall not incur a Break in Service with respect to the Plan Year in which the change is deemed effective, and shall for purposes of determining Compensation, Average Final Compensation and Creditable Service be considered to have been a Regular Employee for the entirety of such Plan Year; if such a change in status is deemed effective on other than the first day of a Plan Year and clause (ii) (B) of Subsection 4(3) or Subsection 4(4) is applicable to the Employee, he shall for purposes of determining Compensation, Average Final Compensation and Creditable Service be considered to have been a Part-time Employee for the entirety of the Plan Year in which the change is deemed effective. However, "Employee" shall exclude any individual retained by the Company to perform services for the Company (for either a definite or indefinite duration) and is characterized thereby as a fee-for-service worker or independent contractor or in a similar capacity (rather than in the capacity of an employee), regardless of such individual's status under common law, including, without limitation, any such individual who is or has been determined by a third party, including, without limitation, a government agency or board or court or arbitrator, to be an employee of the Company for any purpose, including, without limitation, for purposes of any employee benefit plan of the Company (including this Plan) or for purposes of federal, state or local tax withholding, employment tax or employment law. (9) "Participant" Any person included as a Participant as provided in Section 2, except an Employee covered by a collective bargaining agreement which expressly excludes members of the collective bargaining unit from the Plan. (10) "Compensation" (i) In the case of an Employee who is not paid on a piecework basis, the actual base salary paid to him for services rendered to the Company (exclusive of amounts attributable to the exercise of employee stock options), including straight time for all hours worked, commissions, bonuses, premiums and incentives; and (ii) in the case of an Employee who is paid on a piecework basis, the actual remuneration paid to him; and (iii) in the case of any Employee shown in the attached Appendix I, the reference to Company for purposes of this Subsection 1(10) only shall also refer to Affiliates of the Company prior to October 15, 1984. For the purposes of determining a Participant's Compensation under the Plan, such calculation shall be made without regard to any deductions from a Participant's earnings for (i) contributions to the Tiffany & Co. Employee Profit Sharing and Retirement Savings Plan, (ii) premium payments under any of the Company's health care plan(s), (iii) allocations to a Dependent Care Spending Account, or (iv) deferrals under the Company's Executive 3 Deferral Plan, which are not includable in the gross income of the Participant for the taxable year in which such contributions, payments, allocations and/or deferrals are made. Compensation taken into account under the Plan shall be limited to the maximum amount of Compensation that may be taken into account under Section 401(a)(17) of the Code, as from time to time adjusted and/or amended. (11) "Average Final Compensation" With respect to an Employee, his average annual Compensation during those five years of his last ten years of Creditable Service in which his compensation was highest. If an Employee has less than five years of Creditable Service or less than five Plan Years in which he accrued Creditable Service, as the case may be, his "Average Final Compensation" shall be computed over all such years. Except in respect of subdivision (b) of Subsection 5(1), "Average Final Compensation" shall reflect those five years of his last ten years of creditable service prior to July 31, 1985 or December 31, 1984, as required by Section 5, in which his compensation was highest. Compensation earned subsequent to July 31, 1985 or December 31, 1984, as required by Section 5, shall not be reflected in this calculation. With respect to the change in the definition of Average Final Compensation under Subsection 1(11) of the Plan effective for Plan Years beginning after December 31, 1994, such change shall not apply to any Compensation earned prior to the effective date of such change. Accordingly, if Compensation for any Plan Year beginning prior to January 1, 1995 is taken into account in calculating Average Final Compensation or for any other purpose under the Plan, Compensation for such Plan Year shall be determined in accordance with the previous definition of Average Final Compensation. In addition, the Accrued Benefit determined in accordance with the new definition of Average Final Compensation shall not be less than the Accrued Benefit determined as of December 31, 1994 under the previous definition. (12) "Creditable Service" The period including fractions of a year rounded up to the next whole month of an Employee's service which is counted as a period of service for vesting purposes under Section 4; provided, however, that in the case of an Employee who accrued Creditable Service hereunder both as a Part-time Employee and also as a Regular Employee, any Plan Year during which he completes at least 1,000 hours of service but less than the standard number of hours of service in the regularly scheduled work weeks for the 4 location at which he is employed shall be counted as the corresponding fraction of a year of Creditable Service; and provided, further, that in the event of a change in status to which clause (ii)(B) of Subsection 4(3) applies, there shall be taken into account for purposes of the preceding clause, with respect to the Plan Year in which the change in status is effective, forty-five hours of service for each week or partial week of service performed subsequent to the change in status and before the end of such Plan Year. If an Employee becomes re-employed after February 1, 1976, and again becomes a Participant pursuant to Section 2, subject to Subsection 4(5), his service shall be credited as of his Reemployment Commencement Date. For an Employee shown in the attached Appendix I, any period during which the Employee was an employee of an Affiliate of the Company prior to October 15, 1984. (13) "Actuarial Equivalent" A benefit of equivalent value, when computed on the basis of the factors shown in Appendix II. Effective as of January 1, 2000, the single sum value which is the Actuarial Equivalent of any other form of benefit shall in all cases be determined using the Applicable Interest Rate and the Applicable Mortality Table. (14) "Social Security Benefit" The amount of the Participant's anticipated unreduced primary insurance benefit under Title II of the Federal Social Security Act. The benefit shall be computed on the basis of such Act in effect at the earlier of July 31, 1985, or the time he last ceases to be a Participant, and shall consist of that annual amount to which he would upon proper application be entitled at the date of retirement or termination, or at age 65 if later, on the basis of his Compensation as determined under the Plan irrespective of earnings he may be receiving in excess of any limit on earnings for full entitlement to such benefit. When used in connection with the computation of any retirement allowance other than a retirement allowance payable to a Participant who terminates employment at or after age 65, it shall mean the said Social Security Benefit computed on the assumption that the Participant will continue to receive Compensation until age 65 for purposes of Social Security in the same amount as in effect on the date of his retirement or termination. With respect to periods for which the Participant's actual compensation for Social Security purposes is not available, the Social Security Benefit shall be calculated on the assumption that the Participant had compensation for Social Security purposes after 1951, or age 22 if 5 later and prior to his last date of hire or rehire which increased 6 percent each year to his Compensation on such date of hire or rehire. Each Participant shall have the right to have his Social Security Benefit computed on the basis of the Participant's actual salary history as of the earlier of July 31, 1985, or the time he last ceases to be a Participant, instead of estimated compensation. Each Employee shall be provided with written notice of the Employee's right to supply actual salary history and of the financial consequences of failing to supply such history. The notice must be given each time the summary plan description is provided to the Employee and must also be given upon separation from service. The notice must state that the Employee can obtain the actual salary history from the Social Security Administration. If the Participant supplies documentation of his or her actual salary history, the Participant's benefit will be adjusted to the offset based on actual salary history for years previously estimated before separation from service (assuming no post-separation or post-retirement compensation). Such documentation must be supplied within a reasonable period following the later of the date of separation from service (by retirement or otherwise) or the time when the Participant is notified of the benefit to which he is entitled. (15) "Hour of Service" (1) Any hour for which a Regular Employee or a Part-time Employee is directly or indirectly paid or entitled to payment by the Company for the performance of duties, which such hours shall be credited, in the case of a Part-time Employee, for the computation period or periods in which the duties are performed; (2) Any hour for which a Part-time Employee is directly or indirectly paid or entitled to payment by the Company for reasons (such as vacation, sickness or disability) other than for the performance of duties, which such hours shall be credited to the Part-time Employee in accordance with Department of Labor Regulations section 2530.200b-2; and (3) Any hour for which back pay, irrespective of mitigation of damages, has been either awarded or agreed to by the Company in the case of a Part-time Employee, which such hours shall be credited to the Part-time Employee for the computation period or periods to which the award or agreement pertains. Any Employee who is paid on a piecework basis shall be credited with ten Hours of Service for each day on which he would be entitled to credit for one Hour of Service under the foregoing definition. 6 (16) "Employment Commencement Date" Except as provided in Section 2(9) below, in the case of a Regular Employee, the date on which he first performs an Hour of Service. In the case of a Part-time Employee, "Employment Commencement Date" shall mean the first day for which he is entitled to be credited with an Hour of Service under subdivision (1) of Subsection 1(15) above. (17) "Discontinuance of Active Employment Date" In the case of a Regular Employee, the earlier of (i) his retirement or other termination of employment with the Company, or (ii) the first anniversary of the first day of any continuing period of absence from service with the Company, with or without pay, which is neither (A) a leave of absence described in Subsection (1), (2) or (3) of Section 3, nor (B) the result of his retirement or termination. (18) "Break in Service" (1) In the case of a Part-time Employee, a Plan Year in which he fails to complete an Hour of Service, other than a Plan Year during any part of which he is on a leave of absence described in Section 3. In the case of a Regular Employee, a Break in Service shall occur when he fails to perform an Hour of Service within a one-year period beginning on any Discontinuance of Active Employment Date. (2) In addition, and notwithstanding the rules described under subdivision (1) of Subsection 1(18) above, any individual who is absent from the service of the Company on account of pregnancy, birth of a child of such individual, or for purposes of caring for such a child during the period immediately following childbirth or placement for adoption shall be credited, for purposes of this Section, with the Hours of Service for which he would normally have received credit had he not been absent from the service of the Company for one of the reasons described above, up to a maximum of five hundred and one (501) Hours of Service, which hours shall be credited in accordance with Section 202(b)(5) of ERISA, as amended by the Retirement Equity Act of 1984, and related regulations. (19) "Reemployment Commencement Date" In the case of a Regular Employee, the date on which he first performs an Hour of Service following a Break in Service. In the case of a Part-time Employee, "Reemployment Commencement Date" shall mean the first day for which he is entitled to be credited with an Hour of Service under subdivision (1) of Subsection 1(15) following (i) a Break in Service which follows either (A) a Plan Year or other eligibility computation period 7 described in Section 2 in which he is credited with at least an Hour of Service, or (B) a Plan Year during any part of which he is on a leave of absence described in Section 3, or (ii) a Plan Year in which he is credited with no Hours of Service which follows a Reemployment Commencement Date established under clause (i). (20) The masculine pronoun wherever used shall include the feminine. (21) "Code" Internal Revenue Code of 1986, as amended. (22) "Taxable Wage Base" The contribution and benefit base under section 230 of the Federal Social Security Act as in effect in the year in question. (23) "Covered Compensation" The average (without indexing) of the Taxable Wage Bases in effect for each calendar year during the 35-year period ending with the year in which the Participant attains (or will attain) social security retirement age, calculated as provided in Treasury Regulation Section 1.401(1)-1(c)(7). (24) "Accrued Benefit" The amount on a given date of the benefits provided under Subsection 5(1) of the Plan using Average Final Compensation, Covered Compensation and Creditable Service determined as of such date. The Accrued Benefit may be expressed in a form which is the Actuarial Equivalent. (25) "Applicable Interest Rate" For any distribution the annual interest rate on 30-year Treasury securities as specified by the Commissioner of the Internal Revenue Service in revenue rulings, notices or other guidance, published in the Internal Revenue Bulletin, for the third month preceding the first day of the month in which the benefit commencement date occurs. (26) "Applicable Mortality Table" The mortality table based on the prevailing commissioners' standard table (described in section 807(d)(5)(A) of the Code) used to determine reserves for group annuity contracts issued on the date as of which present value is determined (without regard to any other subparagraph of section 807(d)(5) of the Code), that is prescribed by the Commissioner of the Internal Revenue Service in revenue rulings, notices, or other guidance, published in the Internal Revenue Bulletin. 8 SECTION 2 - PARTICIPATION ======================================== (1) Any person who is a Participant as of December 31, 1999 shall remain a Participant in the Plan on January 1, 2000. After December 31, 1999, a Regular Employee shall become a Participant on the first anniversary of his Employment Commencement Date, provided that he is an Employee on such first anniversary. A Part-time Employee shall become a Participant on January 1 or July 1 coincident with or next following the first anniversary of his Employment Commencement Date, provided (i) that he is an Employee on such January 1 or July 1, and (ii) that he completes 1,000 Hours of Service during the one-year period commencing on his Employment Commencement Date. If a person would have become a Participant but for the fact that he was not an Employee on the applicable entry date, he shall nevertheless become a Participant immediately upon his again becoming an Employee, provided he again becomes an Employee prior to incurring a Break in Service. (2) If a Part-time Employee does not complete 1,000 Hours of Service during the one-year period commencing on his Employment Commencement Date, he shall become a Participant immediately following the close of the first Plan Year commencing after his Employment Commencement Date in which he does complete 1,000 Hours of Service, other than a Plan Year in which he has a Reemployment Commencement Date, in which case he shall become a Participant immediately following the close of (i) the one-year period commencing on such Reemployment Commencement Date or (ii) the first Plan Year commencing after such Reemployment Commencement Date, in which he completes 1,000 Hours of Service. (3) A Regular Employee who has become a Participant shall cease to be a Participant on his Discontinuance of Active Employment Date, and a Part-time Employee who has become a Participant shall cease to be a Participant on the date he ceases to be an Employee or, if earlier, on the date on which he incurs a Break in Service. Such a former Participant, unless he ceased to be a Participant as a result of incurring a Break in Service, shall immediately again become a Participant if, prior to incurring a Break in Service, he either (i) performs an Hour of Service as a Regular Employee, or (ii) is entitled to be credited with an Hour of Service under subdivision (1) of Subsection 1(15) as a Part-time Employee. (4) If an Employee who is vested ceases to be a Participant and has a subsequent Reemployment Commencement Date on which he is a Regular Employee, he shall again become a Participant as of his Reemployment Commencement Date if (i) he is an Employee on the first anniversary of such date or, (ii) he is not an Employee on such first anniversary but again becomes an Employee prior to incurring a Break in Service which is subsequent to his Reemployment Commencement Date. If an Employee who is vested ceases to be a Participant and has a subsequent Reemployment Commencement Date on which he is a Part-time Employee, he shall again become a Participant as of his Reemployment Commencement Date if he completes 1,000 Hours of Service during the one-year period commencing on his Reemployment Commencement Date or, if he does not, as of the first day of the first Plan Year commencing after his Reemployment Commencement Date in which he completes 1,000 Hours of Service, other than a Plan Year in which he has another Reemployment Commencement Date. (5) If any Employee who is not vested ceases to be a Participant and has a subsequent Reemployment Commencement Date, he shall again become a Participant in accordance with the appropriate rule of Subsection (4) for vested Employees, provided that the number of consecutive one-year Breaks in Service did not equal or exceed the greater of 5 or the aggregate number of years of service before such Break in Service. If his prior service does not satisfy the applicable condition of the preceding sentence, his 9 Reemployment Commencement Date will be deemed his Employment Commencement Date for purposes of this Section, and rules of Subsections (1) and (2) hereof will apply. (6) For purposes of this Section 2, in determining whether an Employee shall become a Participant, service with any Affiliate of the Company shall be taken into account, in accordance with the foregoing rules, as if such service had been rendered to the Company and such service shall include service as a leased employee within the meaning of Code Section 414(n) of the Company or an Affiliate. (7) For purposes of this Section 2, William R. Chaney will not be considered a Participant at any time under the provisions of this Plan. (8) Notwithstanding anything herein to the contrary, for purposes of this Section 2, any person who was an employee of Howard H. Sweet & Son, Inc. (formerly Tiffco Jewelry and Chain Crafts, Inc.) on January 27, 1997, shall become a Participant in the Plan as of his or her Employment Commencement Date. (9) Notwithstanding anything herein to the contrary, for the purposes of this Section 2, any person who was an Employee of L.S. Wholesale, Inc., a Massachusetts corporation, L.S. Holding (Florida), Inc., a Florida corporation, L.S. Holding (USA), Inc., an Alaska corporation, or L.S. Holding, Inc., a U.S. Virgin Islands corporation, on October 8, 2002, shall become a Participant in the Plan as of October 8, 2002 and October 8, 2002 shall be deemed the Employment Commencement Date of such a person. 10 SECTION 3 - LEAVES OF ABSENCE ======================================== (1) The Company may authorize an unpaid or paid leave of absence under its standard personnel practices as applied in a uniform and non-discriminatory manner to all Employees similarly situated, provided that the Employee must return to service with the Company within the period of time specified in the authorization. (2) Any Employee who shall be granted a leave of absence for service in the armed forces of the United States or in emergency government service, or pursuant to a leave granted by the Company, shall be deemed to be an Employee during such leave and his Compensation in the last full calendar year of his employment immediately preceding the beginning of such leave shall be deemed to be his annual Compensation for the purposes of the Plan during such leave, provided that such Employee returns to the employ of the Company within the period provided by law for the protection of his reemployment rights following his discharge or release from active duty in such armed forces. (3) The Committee may, under rules uniformly applicable to all Employees similarly situated, include as service and compensation, respectively, for any Participant retiring hereunder, any period or periods of service and the compensation earned during such period or periods, not otherwise creditable or recognized hereunder, rendered or earned in the employment of any Affiliate; provided that the retirement allowance payable on account of such additional period of service shall be reduced by any employer-provided retirement benefit which is payable on account of the same period of service under any retirement plan of such Affiliate. (4) Anything herein contained to the contrary notwithstanding, the Committee may, under rules uniformly applicable to all Employees similarly situated, include as service such other periods of excused absence from employment as it deems appropriate and consistent with Plan objectives. (5) Except as otherwise specifically provided in this Section 3, where the Company authorizes a paid leave of absence which does not require the Employee to return to service with the Company, such Employee shall be deemed to be an Employee during such leave for all purposes under the Plan. 11 SECTION 4 - VESTING ======================================== (1) A person shall be vested if the period of his service equals or exceeds five years computed in accordance with the rules set forth in this section or when he attains normal retirement age as specified in subdivision (a) of Subsection 5(2) hereof. A person shall also be vested if he was (i) an employee of Howard H. Sweet & Son, Inc. (formerly Tiffco Jewelry and Chain Crafts, Inc.) on January 27, 1997, and (ii) a Participant in the Plan as of such date. (2) There shall be counted as periods of service for vesting purposes the sum of the following periods: (a) any period prior to February 1, 1976 during which a person was an Employee, unless such period would have been disregarded in computing service under the rules of the Plan regarding Breaks in Service then applicable, but including any period which was disregarded solely because of the Participant's age; (b) with respect to a Part-time Employee, each Plan Year beginning on or after February 1, 1976 during which such Employee completes 1,000 Hours of Service; (c) with respect to a Regular Employee, each period of his employment with the Employer, beginning on both (i) the later of February 1, 1976 or his Employment Commencement Date and (ii) any Reemployment Commencement Date after February 1, 1976, and ending on his Discontinuance of Active Employment Date next following; (d) with respect to a Regular Employee, the period between any Discontinuance of Active Employment Date and the date on which he next performs an Hour of Service if such date is within one year of such Discontinuance of Active Employment Date; provided, however, that if a Regular Employee's employment is terminated during any absence from service which would not otherwise result in a Discontinuance of Active Employment Date until the first anniversary of the first day thereof, vesting service shall include the period from his discontinuance of Active Employment Date to the date on which he next performs such an Hour of Service only if he next performs such an Hour of Service within one year of the first day of such absence. (e) with respect to an Employee shown in the attached Appendix I, the period during which the Employee was an employee of an Affiliate of the Company prior to October 15, 1984. Notwithstanding the foregoing, in no event shall the number of years of service credited to an Employee under the Plan as in effect on January 1, 1982 be less than the number of such years credited to him under the Plan as in effect on December 31, 1981. (3) For purposes of Subsection (2) above, if a person's status is changed from Part-time Employee to Regular Employee, he shall receive credit, as of the date such change in status is effective, for a period of service consisting of (i) service credited to him under Subsection (2)(a) and (b) for Plan Years prior to the Plan Year in which the change in status is effective, and (ii) the greater of (A) the period beginning on the first day of the Plan Year in which the change in status is effective (or, if later, the first day he was an Employee during such Plan Year) and ending on the date such change in status is effective, or (B) the service which would be taken into account for such period under Subsection (2)(b) on the basis of Hours of Service completed to the date of change. If clause (ii)(A) of the preceding sentence applies, the Employee shall receive credit for service subsequent to the change in status commencing on the first day thereafter on 12 which he is an Employee; if clause (ii)(B) of such sentence applies, he shall only receive credit for service subsequent to the change in status commencing on the day after the last day of the Plan Year in which the change in status is effective. (4) For purposes of Subsection (2) above, if a person's status is changed from Regular Employee to Part-time Employee, he shall receive credit, as of the date such change in status is effective, for (i) a number of years of service equal to the number of 1-year periods of service credited to him under Subsections (2)(a), (c) and (d) as of the date the change in status is effective, and (ii) forty-five Hours of Service for each week or partial week of any fractional part of a year credited to him under such Subsections (2)(a), (c) and (d) as of the date the change in status is effective, such hours to be credited to him for purposes of Subsection 2(b) in the Plan Year in which the change is effective. (5) Notwithstanding anything to the contrary above, if a former Participant again becomes a Participant after incurring a Break in Service, service credited for vesting purposes prior to the date his participation ceased shall be disregarded if (A) his service for vesting purposes on such date is less than five years and (B) if the number of his consecutive one-year Breaks in Service equals or exceeds 5. However, for purposes of this Subsection (5), there shall be no forfeiture of vesting service prior to the date participation ceased if he remains a Participant at all times during those four consecutive Plan Years next following the Plan year in which he again becomes a Participant. (6) Solely for the purposes of calculating vesting service under this Section 4 and not for the purpose of calculating Creditable Service under Subsection 1(12) hereof (except to the extent provided in Section 3 hereof), service with any Affiliate of the Company shall be taken into account as if the term "Company" in the foregoing rules included such Affiliate and service as a leased employee within the meaning of Section 414(n) on the Company or an Affiliate shall also be taken into account, provided that no period of service shall be taken into account hereunder more than once. 13 SECTION 5 - BENEFITS (1) (a) Subject to Subsection 5(3), any person who ceases to be an active Participant after he is vested shall be entitled to an annual retirement allowance, payable in monthly installments commencing at the end of the calendar month immediately following his Month of Retirement, and continuing to and including the last monthly payment in the month of his death, equal to 1 percent of the Participant's Average Final Compensation not in excess of Covered Compensation multiplied by the number of his years, including fractions thereof, of Creditable Service, plus 1-1/2 percent of his Average Final Compensation in excess of Covered Compensation multiplied by the number of his years, including fractions thereof, of Creditable Service. For this subdivision (a) of Subsection 5(1) only, Compensation earned after January 1, 1985, for any Participant or former Participant who works less than a full Plan Year, will equal the Compensation he would have earned if he had worked the full Plan Year. (b) The annual retirement allowance accrued as of December 31, 1984, shall be equal to the excess of (i) 1-3/4 percent of the Participant's Average Final Compensation (determined as of December 31, 1984) multiplied by the number of his years of Creditable Service (determined as of December 31, 1984) up to ten plus 1-1/2 percent of the Participant's Average Final Compensation (determined as of December 31, 1984) multiplied by his remaining years of Creditable Service (determined as of December 31, 1984) over (ii) 1-1/4 percent of the Participant's Social Security Benefit (determined as if the Participant had terminated as of December 31, 1984) multiplied by the number of his years of Creditable Service (determined as of December 31, 1984) completed by him subsequent to the end of the calendar month in which he attained age 25 (for purposes of this clause (ii) of this Subsection 5(1)(b), prorating Creditable Service accrued for the Plan Year in which he attained age 25 if he was then considered a Part-time Employee), up to a maximum of 50 years. (c) In no event shall the annual retirement allowance computed in subdivisions (a) and (b) of this Subsection (5)(1) be less than the annual retirement allowance computed as the excess of (i) 1-3/4 percent of the Participant's Average Final Compensation (determined as of July 31, 1985) multiplied by the number of his years of Creditable Service (determined as of July 31, 1985) up to ten plus 1-1/2 percent of the Participant's Average Final Compensation (determined as of July 31, 1985), multiplied by his remaining years of Creditable Service (determined as of July 31, 1985) over (ii) 1-1/4 percent of the Participant's Social Security Benefit (determined as if the Participant had terminated as of July 31, 1985) multiplied by the number of his years of Creditable Service (determined as of July 31, 1985) completed by him subsequent to the end of the calendar month in which he attained age 25 (for purposes of this clause (ii) of this Subsection 5(1)(c), prorating Creditable Service accrued for the Plan Year in which he attained age 25 if he was then considered a Part-time Employee), up to a maximum of 50 years. (d) In no event shall the annual retirement allowance computed in subdivisions (a) and (b), and subject to a minimum benefit as computed in subdivision (c) of this Subsection (5)(1) be less than $100 multiplied by the number of his years of Creditable Service. In addition, no Participant's Accrued Benefit shall be less than what such Participant had accrued as of the last day of the last Plan Year beginning before January 1, 1989. (2) (a) Normal Retirement - A Participant who has reached the later of (i) his 65th birthday or (ii) the 5th anniversary of his date of hire (normal retirement age hereunder) may retire on a retirement allowance computed in accordance with Subsection 5(1); except that any Participant shall, at his election, be continued in service after age 65. At normal retirement age, all benefits payable under the Plan shall be nonforfeitable. 14 (b) Early Retirement - Any Participant who has attained age 60 and has rendered 15 or more years of Creditable Service shall be retired by the Committee on a retirement allowance on the first day of the calendar month next following receipt by the Committee of a written application therefor by the Participant. At the Participant's election, he shall receive a retirement allowance commencing on his retirement which shall be equal to the retirement allowance computed in accordance with 5(1) he would otherwise receive upon attaining age 65, reduced by 1/12th of 5 percent for each month by which the date of his retirement allowance would otherwise have commenced under Subsection 5(1). At the time of retirement pursuant to this subsection (b) on a retirement allowance commencing on his retirement, the Participant may elect to convert the retirement allowance otherwise payable to him into an Actuarial Equivalent of such amount so that, with his Social Security Benefit which, for this purpose, shall be assumed to commence as of either his sixty-second or sixty-fifth birthday, as the Participant elects, the Participant will receive, so far as possible, the same amount each year before and after he commences to receive such Social Security Benefit. (c) Vested Retirement - Payments to any person who ceases to be a Participant on or after February 1, 1976, and is entitled to a retirement allowance pursuant to Subsection 5(1) and to whom subdivisions (a) and (b) of Subsection 5(2) do not apply shall commence on the last day of the calendar month next following the later of (i) the occurrence of his 65th birthday or (ii) receipt by the Committee of a written application therefor; provided that if the proper amount of such payment cannot for any reason be ascertained by such date, a payment retroactive to such date shall be made within sixty days of the earliest date on which it can be ascertained. Such a person may, by written notice to the Committee, elect to have his retirement allowance commence at any time after he has attained age 60 and completed 15 years of Creditable Service and after receipt by the Committee of his application for benefits; provided, however, that payment of such allowance prior to the attainment of age 65 shall be in a reduced amount and shall be the Actuarial Equivalent as of the date payments commence of the retirement allowance computed in accordance with Subsection 5(1) which he would otherwise receive after attaining age 65. (3) Optional Benefits in Lieu of Regular Benefits. (a) Prior to commencement of the payment of a retirement allowance to a Participant, he shall be given a written explanation of the benefits and the options under subdivision (b) hereof pursuant to which he may provide a benefit for his spouse in the event of his death after his retirement. Unless an optional form of benefit is selected pursuant to an election meeting the same requirements as prescribed in Section 5(3)(c), or with respect to former Participants in Section 5(4)(f), within the ninety (90) day period ending on the date benefit payments would commence, a married Participant shall be deemed to have elected to convert his retirement allowance into an Actuarial Equivalent in the form of an annuity for his life with a survivor annuity for the life of his spouse equal to one-half of the amount of the annuity payable during their joint lives. (b) Any Participant may, by written notice made in accordance with the same requirements for former Participants as prescribed in Section 5(4)(f) and filed with the Committee prior to the date of the commencement of his retirement allowance, elect to convert his retirement allowance into the Actuarial Equivalent thereof paying a proportionately reduced retirement allowance during his life, with the provision that after his death an allowance of 50%, 66-2/3%, 75% or 100% of the rate of his reduced allowance, at his designation, shall continue during the life of, and shall be paid to, the beneficiary designated by him at the time of electing the option. The election of an optional benefit may be revoked or changed by the Participant at any time prior to the benefit commencement date; provided, however, that if the Participant or the beneficiary designated under the option dies prior to the date the election of the option becomes effective, the option shall thereby be automatically revoked; and provided, further, that if the designated beneficiary is other than the Participant's spouse, the present value of the payments to be made to such 15 Participant shall be more than 50 percent of the present value of the total payments to be made to the Participant and his beneficiaries. A Participant's designation of a beneficiary other than the Participant's spouse shall not be effective unless (i) the Participant and his spouse have waived the spouse's allowance defined in Subsection 5(4)(d) and the spouse has waived his or her right to be the Participant's beneficiary, (ii) the Participant has no spouse, or (iii) the spouse cannot be located. (c) In the event that a married Participant elects to receive his Plan benefit in a form other than an annuity for his life with a survivor annuity for the life of his spouse, such election shall not take effect unless written consent of the spouse to such election, witnessed by a notary public or a member of the Committee, is on file with the Committee. Such consent shall be irrevocable as to any specific waiver or designation of any beneficiary. (The requirement of spousal consent may be waived by the Committee under certain limited circumstances in accordance with Section 417(a)(2) of the Code and related regulations.) A spousal consent filed with the Committee shall be applicable only with respect to the spouse who has signed such form. (d) A Participant shall be furnished a written explanation of (i) the terms and conditions of the normal form of benefit; (ii) the right of the Participant to make, and the effect of, an election to reject the normal form of benefit, which includes an explanation of the optional forms of benefit and their relative values; (iii) the right of the Participant's spouse, if any, to consent or not to consent to such election; and (iv) the right of the Participant to make, and the effect of, a revocation of such an election. Prior to January 1, 1997, the explanation shall be provided not more than 90 days and not less than 30 days before a Participant's benefit commencement date. After December 31, 1996, the explanation shall be provided not more than 90 days before and no later than 60 days after a Participant's benefit commencement date. Notwithstanding the foregoing, after December 31, 1996, a benefit commencement date which is not at least 30 days after the written explanation described above was provided to the Participant will be permitted if (i) the written explanation explains that the Participant has the right to at least 30 days to consider whether to make an election; (ii) the Participant is permitted to revoke a benefit election at any time until the benefit commencement date, or if later, at any time before the end of the 7-day period beginning on the day after the written explanation is provided to the Participant; and (iii) distribution of benefits does not begin before the date the 7-day period described above expires (which date may be later than the benefit commencement date). (4) Survivorship Benefits. (a) Upon (i) the death of a Participant who has become vested in his Accrued Benefit, as provided in Section 4 of the Plan, (ii) the death of a Participant who has attained normal retirement age as specified in Subdivision (a) of Subsection 5(2), (iii) the death of a former Participant who had attained age 60 and rendered 15 or more years of Creditable Service prior to the date he ceased to be a Participant (but who was not receiving at the time of his death any retirement allowance), or (iv) the death of a former Participant who had not both attained age 60 and rendered 15 or more years of Creditable Service but had become vested in his Accrued Benefit prior to the date he ceased to be a Participant (but who was not receiving at the time of his death any retirement allowance) there shall be payable to the Participant's or former Participant's spouse, if any, a spouse's allowance as provided for in this Section 5(4) below. (b) The amount of the spouse's allowance shall be determined by Section 5(4)(d) below for the spouse of a Participant described in Section 5(4)(a)(i) or (ii) above or for the spouse of a former Participant described in Section 5(4)(a)(iii) above. The amount of the spouse's allowance shall be determined by Section 5(4)(e) below for the spouse of a former Participant described in Section 5(4)(a)(iv) above. 16 (c) The spouse's allowance shall commence as the first day of the calendar month following the month in which the Participant or former Participant died or would have been age 60, whichever is the later, except that the Committee may, under rules uniformly applicable to all Participants and former Participants similarly situated, direct payment commencing on the first day of any earlier calendar month after the Participant's or former Participant's death. (d) If the Committee does not direct early commencement of payment, the spouse's allowance for the spouse of a person described in Section 5(4)(a)(i), (ii) or (iii) above shall be the greater of (i) an allowance for the life of the spouse, payable monthly, which is equal to 20 percent of the Participant's or former Participant's annual rate of compensation at the time of his death or earlier termination of employment, or (ii) an allowance equal to the allowance the spouse would have received if the Participant or former Participant were deemed to have terminated his service on the date of his death (whether or not an earlier termination of service occurred) and elected to receive, based on his Average Final Compensation and years of Creditable Service at his actual date of termination of service with the Company, the maximum retirement allowance payable to him under Subsections 5(1) and 5(2) that would commence at the later of normal retirement age or the date of death, reduced for election of the 100% survivorship option at such deemed termination date, and continuing after his death in the same monthly amount during the life of his spouse. If the Committee does direct early commencement of payment, the spouse's allowance shall be a monthly allowance for the life of the spouse which is the Actuarial Equivalent of the allowance the spouse would otherwise have received pursuant to the preceding sentence. Notwithstanding the foregoing, in no event shall the spouse's allowance be less than the amount the spouse would have received under the terms of the Plan as in effect on December 31, 1984, had the Participant died on that date. (e) If the Committee does not direct early commencement of payment, and unless an optional form of benefit is selected within the election periods pursuant to a qualified election, the spouse's allowance for the spouse of a person described in Section 5(4)(iv) above shall equal the allowance the spouse would have received if the former Participant were deemed to have retired at the normal retirement age and elected to receive, based on his Average Final Compensation and years of Creditable Service at the actual date of termination of service with the Company, a retirement allowance payable to him under Subsection 5(1) and 5(2), reduced for election of the 50% survivorship option at the normal retirement age, and continuing after his death in an amount equal to 50% of the amount that would have been payable to the Participant during his life. If the Committee does direct early commencement of payment, the spouse's allowance shall be a monthly allowance for the life of the spouse which is the Actuarial Equivalent of the allowance the spouse would otherwise receive pursuant to the preceding sentence. Notwithstanding the foregoing, in no event shall the spouse's allowance be less than the amount the spouse would have received under the terms of the plan as in effect on December 31, 1984 had the former Participant died on that date. 17 (5) Restoration to Participation. Anything herein contained to the contrary notwithstanding, if a former Participant who has received or is receiving benefits under this Section 5 again becomes an Employee, (i) any benefits he is receiving shall cease upon his reemployment if he is reemployed as a Regular Employee, or upon his satisfying the participation requirements of Section 2 if he is reemployed as a Part-time Employee, provided that benefits will not be suspended in any calendar month unless the Employee has completed at least 40 hours of service with the company in service recognized under Section 203(a)(3)(B) of ERISA or received payment for any such hours of service performed on each of 8 or more days in such month, (ii) he shall then again become a Participant, and (iii) the Creditable Service which he had when he last ceased to be an Employee shall be restored to him. On his subsequent retirement the benefit payable shall be based on his Compensation and Creditable Service before and after the period of prior retirement, reduced by an amount which is the Actuarial Equivalent of the benefits he received prior to his restoration to participation; provided, however, that such benefit shall not be less than the benefit he was receiving during his prior retirement. If benefit payments have been suspended, payments shall resume no later than the first day of the third calendar month after the calendar month in which the Employee ceases to be employed in ERISA Section 203(a)(3)(B) service. No payment shall be withheld by the Plan pursuant to this section unless the Plan notifies the Employee by personal delivery or first class mail during the first calendar month or payroll period in which the Plan withholds payments that his benefits are suspended. Such notifications shall contain a description of the specific reasons why benefit payments are being suspended, a description of the Plan provision relating to the suspension of payments, a copy of such provisions, and a statement to the effect that applicable Department of Labor regulations may be found in Section 2530.203-3 of the Code of Federal Regulations. In addition, the notice shall inform the Employee of the Plan's procedures for affording a review of the suspension of benefits. Requests for such reviews may be considered in accordance with the claims procedure adopted by the Plan pursuant to Section 503 of ERISA and applicable regulations. (6) Termination of Benefit Payments. Payment of benefits under this Section 5 to a former Participant, his spouse or other beneficiary shall cease with the monthly payment for the month in which such former Participant, spouse or beneficiary dies. (7) Disabled Participants. Anything herein contained to the contrary notwithstanding, any Participant while in receipt of payments under the Company's Short Term Illness Plan, Extended Illness Plan, Short Term Disability Plan or Long Term Disability Plan (collectively, the "Program"), shall be treated as a Participant and shall continue to accrue Creditable Service until he dies, retires, or becomes ineligible for further payments under such Program, and his Compensation in the last full year of his employment shall be deemed to be his annual Compensation for purposes of the Plan during such period. In the event such a Participant dies, retires or becomes ineligible for further payments under such Program and is not restored to active service, any retirement allowance payable on his account under the Plan shall be made on the basis of his age, Average Final Compensation and Creditable Service at the time he died, retired or became ineligible. (8) Maximum Trust Benefits. (a) Any other provision of the Plan to the contrary notwithstanding, the maximum annual benefit under the Plan (exclusive of any benefits derived from the Participant's own contributions and exclusive of any benefits which are not directly related to retirement income benefits) shall, subject to the following provisions of this Section, not exceed the lesser of: (1) $90,000, or (2) 100% of the Participant's average "compensation" (as defined herein) from the Group (as modified pursuant to Section 415(h) of the Code) during the three 18 consecutive calendar years of participation during which his compensation was highest. The applicable maximum described in subsection (a)(1) or (2) above shall apply to a retirement benefit payable in the form of a single life annuity or a Qualified Joint and Survivor Annuity. (b) A benefit not payable in the form of an annual straight life annuity within the meaning of Section 415(b)(2)(A) of the Code shall be adjusted as follows when applying the limits described in subparagraph (a) (1) and (2) above. The benefit is determined in the form of a straight life annuity commencing at the annuity starting date that is actuarially equivalent to the plan benefit. For this purpose, the actuarially equivalent benefit must be the greater of the equivalent annual benefit calculated using the factors set forth in Appendix II of the Plan for the particular form of benefit payable and the equivalent annual benefit calculated using the Applicable 415 Rate and the Applicable Mortality Table. The amount determined under this subparagraph (b) cannot exceed the lesser of (1) the amount determined under subparagraph (c) or (d) below (as applicable), or (2) the amount determined under subparagraph (a) (2) above. (c) In the event that retirement benefits commence under the Plan at or after age 62 but prior to an Participant's Social Security Retirement Age, the $90,000 limitation described in subparagraph (a)(1) above shall be reduced by 5/9 of 1% for each of the first 36 months and by 5/12 of 1% for each of the next 24 months by which such commencement date precedes the Participant's Social Security Retirement Age. If the commencement date is earlier than age 62, the limitation is the actuarial equivalent of the age 62 limitation based on either (1) the factors set forth in Appendix II of the Plan for the particular form of benefit payable at the applicable age or (2) the Applicable Mortality Table and 5%, whichever would yield the lesser limitation. (d) In the event that retirement benefits commence under the Plan after the Participant's attainment of his or her Social Security Retirement Age, the determination as to whether the $90,000 limitation described in subparagraph (a)(1) above has been satisfied shall be made in accordance with guidance issued by the Internal Revenue Service, by increasing such limitation actuarially to the equivalent of $90,000 commencing at such Social Security Retirement Age. The increased limitation shall be based on either (1) the factors set forth in Appendix II of the Plan for the particular form of benefit payable at the applicable age, or (2) the Applicable Mortality Table and 5%, whichever would yield the lesser limitation. (e) If the Participant has fewer than 10 years of Service, the applicable maximum described in subparagraph (a)(2) above shall be multiplied by a fraction of which the numerator is his or her years of Service and the denominator is 10. If the Participant has fewer than 10 years of participation in the Plan, the applicable maximum described in subparagraph (a)(1) above shall be multiplied by a fraction of which the numerator is his or her years of participation and the denominator is 10. The fraction described hereunder shall not be less than 1/10. (f) The $90,000 limitation described in subparagraph (a)(1) above shall be adjusted for increases in the cost of living in accordance with regulations prescribed by the Internal Revenue Service under Section 415(d) of the Code. (g) For purposes of this Section, the following definitions shall apply: (1) "Applicable 415 Rate" means, in the case of a distribution in a form of benefit not subject to Section 417(e) of the Code, 5%, and in the case of a distribution in 19 a form of benefit subject to Section 417(e)(3) of the Code, the Applicable Interest Rate. (2) "Compensation" means compensation as defined in Section 415(c)(3) of the Code and Treas. Reg. sec. 1.415-2(d). (3) "Limitation Year" means the calendar year. (4) "Qualified Joint and Survivor Annuity" means, for purposes of this Section only, an annuity for the life of the Participant with a survivor annuity for the life of his or her Spouse which is not less than one-half of, or greater than, the amount of the annuity payable during the joint lives of the Participant and spouse and which is the actuarial equivalent of a single life annuity for the life of the Participant, as determined in accordance with the factors or assumptions set forth in Appendix II of the Plan. (5) "Social Security Retirement Age" means the social security retirement age as defined in Section 415(b)(8) of the Code. (h) Limitation for Multiple Plans - In any case in which an Employee is a participant in both a tax-qualified defined benefit plan and a tax-qualified defined contribution plan maintained by the Company, the sum of the defined benefit plan fraction and the defined contribution plan fraction for any Plan Year beginning prior to January 1, 2000 shall not exceed 1.0. In the event such sum would otherwise exceed 1.0, the benefit projected under the defined benefit plan will be reduced as necessary so that such sum shall equal 1.0. (1) The defined benefit plan fraction for any Plan Year is a fraction: (a) the numerator of which is the projected annual benefit of the Participant under the Plan (determined as of the close of the Plan Year), and (b) the denominator of which is the lesser of (i) or (ii), as follows: (i) 1.25 multiplied by the defined benefit plan dollar limitation under Subsection (8)(a)(1) in effect for such year, or (ii) 1.4 multiplied by the amount specified under Subsection (8)(a)(2) for such year, (determined as of the close of the Plan Year). (2) The defined contribution plan fraction for any calendar year is a fraction: (a) the numerator of which is the sum of the "annual additions", as defined in Section 415(c) of the Code, to the Participant's account as of the close of the Plan Year, and (b) the denominator of which is the sum of the lesser of (i) or (ii) for such year and each prior Year of Service with the Company: (i) 1.25 multiplied by the defined contribution plan dollar limitation in effect for such year, or (ii) 1.4 multiplied by twenty-five percent (25%) of the Participant's Compensation for such year. (9) Prior Plan Provisions. Anything to the contrary herein notwithstanding, the Accrued Benefit and service credited for vesting purposes of any person who is a Participant on December 31, 1984 and January 1, 1985 for any period of service ending on or before December 31, 1984 shall be no less than the benefit he would have accrued at December 31, 1984 or the vesting service he would have completed at December 31, 1984 under the terms of the Plan as in effect on such date, assuming his credited service and Average Final Compensation were computed on such date. (10) Limitation on Timing of Commencement of Benefit Payments. As required under Sections 401(a)(14) and 401(a)(9) of the Code, the timing of the commencement of payment of benefits under the Plan shall be subject to the following rules: 20 (a) General Rule - Unless the Participant otherwise elects, the payment of benefits under the Plan to a Participant may not be delayed beyond the later of the sixtieth (60th) day after the close of the Plan Year in which the latest of the following events occurs: (1) the Participant's 65th birthday, (2) the tenth (10th) anniversary of the year in which the Participant commenced participation in the Plan, or (3) the Participant's termination of service with the Company. (b) In general, distribution of benefits shall not be made or commence later than April 1 of the calendar year following the calendar year in which the employee attains age 70-1/2. For the purposes of this Section, Participants who are age 70-1/2 or older as of January 1, 1989, and who have not retired shall be deemed to have attained age 70-1/2 on such date. Notwithstanding the foregoing, a Participant who has attained age 70-1/2 either (i) before January 1, 1988, or (ii) after December 31, 1998, and who is not a 5-percent owner (as defined in Section 416(i) of the Code) will not commence payments until his retirement. With respect to Participants who attain age 70-1/2 on or after January 1, 2003, (A) in the case of a 5% owner, a Participant's interest in the Plan must commence distribution no later than the April 1 of the calendar year following the year in which he attains age 70-1/2, and (B) in all other cases, a Participant's interest in the Plan must commence distribution no later than the April 1 of the calendar year following the later of the year in which he (i) attains age 70-1/2 or (ii) retires. In the event a distribution of benefits to a Participant is required to begin under this Subsection before a Participant's actual retirement, such Participant's Accrued Benefit shall be determined as of the December 31 immediately preceding the date such distribution is required to begin. As of each succeeding December 31 prior to the Participant's actual retirement and as of his actual retirement, the Participant's Accrued Benefit shall be recomputed as if each such date were his actual retirement date. However, the amount of any additional Accrued Benefit resulting from such recomputation shall be reduced by the Actuarial Equivalent of the total benefits received by the Participant under the Plan prior to such recomputation. In no event, however, shall the Participant's Accrued Benefit, upon any recomputation hereunder, be less than the greater of (i) such Participant's Accrued Benefit as of December 31, 1994, and (ii) such Participant's Accrued Benefit as of the immediately preceding recomputation. In the event a distribution of benefits to a Participant is not required to begin under this Subsection before the Participant's actual retirement, such Participant's Accrued Benefit shall be determined as of April 1 of the calendar year following the calendar year in which the Participant attains age 70-1/2. As of each succeeding December 31 prior to the Participant's actual retirement and as of his actual retirement, the Participant's Accrued Benefit shall be recomputed as if each such date were his actual retirement date. The amount of Accrued Benefit resulting from such recomputation shall be the greater of (a) the Accrued Benefit computed in accordance with Section 5 (without regard to this Subsection) based on his Average Final Compensation and Creditable Service as of the recomputation date or (b) the Actuarial Equivalent of the Accrued Benefit determined at the immediately preceding recomputation date. In no event, however, shall the Participant's Accrued Benefit, upon any recomputation hereunder, be less than the greater of (i) such Participant's Accrued Benefit as of December 31, 1998, and (ii) such Participant's Accrued Benefit as of the immediately preceding recomputation. For this Section, Actuarial Equivalent amounts shall be determined using (1) the Applicable Interest Rate and (2) the Applicable Mortality Table. 21 (11) Compensation Limit. In addition to other applicable limitations which may be set forth in the Plan and notwithstanding any other contrary provision of the Plan, for Plan Years beginning on or after January 1, 1994, the annual compensation of each employee taken into account under the Plan shall not exceed the annual compensation limit established by the Omnibus Budget Reconciliation Act of 1993 ("OBRA '93"). The annual compensation limit is $150,000, as adjusted by the Commissioner of Internal Revenue for increases in the cost of living in accordance with Section 401(a)(17) of the Code. The cost-of-living adjustment in effect for a calendar year applies to any period, not exceeding 12 months, over which compensation is determined (a "Determination Period") beginning in such calendar year. If a Determination Period consists of fewer than 12 months, the OBRA '93 annual compensation limit will be multiplied by a fraction, the numerator of which is the number of months in the Determination Period, and the denominator of which is 12. For Plan Years beginning on or after January 1, 1994, any reference in this Plan to the limitation under Section 401(a)(17) of the Code shall mean the OBRA '93 annual compensation limit set forth in the provision. If compensation for any prior Determination Period is taken into account in determining a Participant's benefits accruing in the current Plan Year, the compensation for that prior Determination Period is subject to the OBRA '93 annual compensation limit in effect for that prior Determination Period. For this purpose, for Determination Periods beginning before the first day of the first Plan Year beginning on or after January 1, 1994, the OBRA '93 annual compensation limit is $150,000. Notwithstanding any other provision in the Plan, each Section 401(a)(17) Participant's Accrued Benefit under this Plan will be the greater of: (a) such Participant's Accrued Benefit as of the last day of the Plan Year beginning before January 1, 1994, frozen in accordance with Section 1.401(a)(4)-13 of the Code regulations; or (b) such Participant's Accrued Benefit determined with respect to the benefit formula applicable for the Plan Year beginning on or after January 1, 1994, as applied to the Participant's total years of Creditable Service taken into account under the Plan for purposes of benefit accruals. For purposes of this Subsection, a Section 401(a)(17) Participant means a Participant whose current Accrued Benefit as of a date on or after January 1, 1994, is based on Compensation for a year beginning prior to the first day of the first Plan Year beginning on or after January 1, 1994, that exceeded $150,000. (12) Intentionally omitted. (13) Required Cash-outs of Certain Accrued Benefits. If a Participant terminates service and the present value of the vested accrued pension or survivor benefit provided under Subsection 5(2), 5(3), or 5(4) in respect of such Participant is equal to or less than $5,000, the person to whom such benefits would otherwise be paid in monthly installments shall receive a lump-sum distribution of the present value of the entire vested portion of such Accrued Benefit, except that, in the case of a qualified joint and survivor annuity or qualified pre-retirement survivor annuity, as such terms are defined under Code Sections 417(b) and 417(c), respectively, no such lump-sum distribution shall be made after the annuity starting date, as defined under Section 417(f)(2) of the Code. In the event that the present value exceeds $5,000 but as of any January 1, beginning January 1, 2002, such value declines to $5,000 or less, such present value may be distributed as of such January 1. For the purposes of determining the present value of a vested Accrued Benefit under this Subsection in respect of (i) current and future Participants who terminate service with the Company on and after January 1, 1997, and (ii) former Participants who, as of January 1, 1997, have not previously received 22 a mandatory lump-sum distribution and are not currently receiving an annual retirement allowance under the Plan, the interest rate assumption shall be the annual rate of interest on 30-year U.S. Treasury securities in the third month prior to the date of distribution; and the mortality rate assumption shall be based on the GAM 1983 Mortality Table (with mortality rates composed of 50% of the male rates and 50% of the female rates), as such may be amended from time to time. For this Section, effective as of January 1, 2000, Actuarial Equivalent amounts shall be determined using (1) the Applicable Interest Rate and (2) the Applicable Mortality Table. Notwithstanding Subsections 1(12) and 4(5) and any other provision herein to the contrary, if a former Employee who has received a lump-sum distribution of his entire non-forfeitable benefit under the Plan pursuant to this Subsection is re-employed by the Company, he shall be treated as a new Employee and prior service performed by the Employee in respect of such distribution shall be disregarded for purposes of determining his Accrued Benefit under the Plan. (14) Rollover of Eligible Distributions. Notwithstanding any provision in the Plan to the contrary that would otherwise limit a distributee's election under this Section, a distributee 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. For purposes of this Section: (a) "eligible rollover distribution" shall mean 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 (i) any distribution that is one of a series of substantially equal 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 period of ten years or more, (ii) any distribution to the extent such distribution is required under Section 401(a)(9) of the Code, and (iii) the portion of any distribution that is not includible in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities). (b) "eligible retirement plan" shall mean an individual retirement account described in Section 408(a) of the Code, an individual retirement annuity described in Section 408(b) of the Code, an annuity plan described in Section 403(a) of the Code, or an qualified trust described in Section 401(a) of the Code, that accepts the distributee's eligible rollover distribution. However, in the case of an eligible rollover distribution to a surviving spouse, an eligible retirement plan is an individual retirement account or individual retirement annuity. (c) "distributee" shall mean a Participant or former Participant. In addition, the Participant's or former Participant's surviving spouse and the Participant's or former Participant's spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in Section 414(p) of the Code, are distributees with regard to the interest of the spouse or former spouse. (d) "direct rollover" shall mean a payment by the Plan to the eligible retirement plan specified by the distributee. (15) Additional Benefit Amounts for Certain Retirees. With respect to each former Participant in the Plan, or surviving spouse or other designated beneficiary of such former Participant, who in either case is listed by name or social security number in the attached Appendix III, such person shall be paid on a monthly basis, in addition to any monthly benefit such person is otherwise entitled to receive under the terms of the Plan, the amount set opposite such person's name in Appendix III, beginning May 1, 1999, and 23 continuing until such person's death. Thereafter, if such person is a former Participant and shall have made one of the elections described in and in accordance with Section 3(b) hereof and such election is then in effect and has not been revoked, such payments shall continue during the life of, and shall be paid to, such person's surviving spouse or other beneficiary designated in such election until his or her death, provided, however, that, if such election provides for less than 100% of the former Participant's retirement allowance be paid to his or her surviving spouse or other beneficiary after the former Participant's death, the supplemental payments provided for in this Section 5(15) to such surviving spouse or other beneficiary shall be reduced in the same proportion as the former Participant's retirement allowance is adjusted pursuant to such election. (16) Notwithstanding any provision of the Plan to the contrary, contributions, benefits, and service credit with respect to qualified military service will be provided in accordance with Section 414(u) of the Code. 24 SECTION 6 - CONTRIBUTIONS (1) All contributions under the Plan shall be made by the Company, and no contributions shall be required of Participants. The contributions shall be payable at such intervals as may be agreed upon by the Company and the Committee, but at least annually, and shall consist of such contributions as the Board of Directors may deem advisable, but at least an amount sufficient to maintain the Plan on a sound actuarial basis. All contributions shall be transferred by the Company to the Trustee or Trustees to be used in accordance with the Plan, except that such contributions are to revert to the Company, without earnings thereon but reduced by any losses thereon, under the following conditions: (a) In the case of a contribution which is made by the Company by reason of a mistake in fact, such contribution shall be returned to the Company within one (1) year following its payment to the Plan; and (b) If all or a portion of any contribution is determined to be non-deductible under Section 404 of the Code, such contribution, to the extent that it is determined to be non-deductible, shall be returned to the Company within one (1) year following such determination. (2) Forfeitures arising from termination of service, death, or for any other reason shall not be applied to increase the benefits which any person would otherwise receive under the Plan but shall be used to reduce Plan contributions. 25 SECTION 7 - ADMINISTRATION OF THE PLAN (1) The general administration of the Plan shall be the responsibility of a Pension Committee of no less than three members appointed from time to time by the Board of Directors to serve at the pleasure of the Board of Directors. The Committee is designated as the named fiduciary within the meaning of Section 402(a) of the Employee Retirement Income Security Act of 1974. (2) Any Employee appointed a member of the Committee shall serve without compensation with respect to his services on the Committee. Any member of the Committee may resign by delivering his written resignation to the Board of Directors. (3) The Board of Directors shall appoint one of the members of the Committee as Chairman. The Secretary, who need not be one of the members of the Committee, shall be designated by the Committee. (4) The administrative expenses of the Plan shall be paid by the Company. (5) The Committee shall designate bank depositories and shall delegate authority in connection therewith. It may delegate any portion of its authority to designated individuals or committees, and may retain legal counsel, auditors, actuaries and consultants and obtain clerical, accounting and other services, all as it deems necessary in carrying out the provisions of the Plan. (6) The Committee may act at a meeting or in writing without a meeting. Meetings shall be held upon such notice, at such places and at such times as the Committee may from time to time determine. A majority of the member of the Committee shall constitute a quorum for the transaction of business. All actions taken by the Committee shall be by the vote of a majority of the members of the Committee, including actions in writing taken without a meeting. (7) The Committee from time to time may establish rules for the administration of the Plan and the transaction of its business. All rules and decisions of the Committee shall be uniformly and consistently applied to all Participants who are similarly situated. When making a determination or calculation, the Committee shall be entitled to rely upon information furnished to it by a Participant, the Company, the legal counsel of the Company or the Trustee of the Plan trust. The interpretation and construction of any provision of the Plan by a majority of the members of the Committee shall be final and conclusive. (8) The Committee shall adopt from time to time interest assumptions, service tables, mortality tables and such other data, procedures and methods as may be necessary or desirable for use in all actuarial calculations required in connection with the Plan. As an aid to the Committee, the actuary designated by the Committee shall make annual actuarial valuations of the assets and liabilities, actual and contingent, of the Plan, and shall certify to the Committee the tables which he would recommend for use by the Committee. (9) The Committee shall establish and cause to be maintained a funding standard account and such other and additional accounts as it deems necessary for the proper administration of the Plan. It shall keep or cause to be kept in convenient form such data as may be necessary for actuarial valuations of the assets and liabilities of the Plan. The Committee shall prepare or cause to be prepared annually a report showing in reasonable detail the assets and liabilities of the Plan and giving a brief account of the operation of the Plan for the past year, and recommending the amount of the Company's contribution to the Plan for the ensuing year. Such report shall be submitted to the Board of Directors and shall be filed in the office of the Secretary of the Committee. 26 (10) In addition to the foregoing, the Committee shall have such duties and powers as may be necessary to discharge its duties hereunder, including, but not by way of limitation, the following: (a) to construe and interpret the Plan, decide all questions of eligibility and determine the amount, manner and time of payment of any benefits hereunder; (b) to prescribe procedures to be followed by Participants or other beneficiaries filing applications for benefits; (c) to prepare and distribute in such manner as the Committee determines to be appropriate, information explaining the Plan; (d) to receive from the Company and from Participants such information as shall be necessary for the proper administration of the Plan; (e) to furnish the Company, upon request, such annual reports with respect to the administration of the Plan as are reasonable and appropriate; (f) to receive, review and keep on file (as it deems convenient or proper) reports of the financial condition, and of the receipts and disbursements, of the Plan trust from the Trustee; and (g) to appoint or employ individuals to assist in the administration of the Plan and any other agents it deems advisable, including legal and actuarial counsel. The Committee shall have no power to add to, subtract from or modify any of the terms of the Plan, or to change or add to any benefits provided by the Plan, or to waive or fail to apply any requirements for eligibility for a benefit under the Plan. (11) The Committee shall issue directions to the Trustee concerning all benefits which are to be paid from the Plan trust pursuant to the provisions of the Plan. (12) The Committee may require a Participant or other beneficiary to complete and file with the Committee an application for a benefit and all other forms approved by the Committee, and to furnish all pertinent information requested by the Committee. The Committee may rely upon all such information so furnished it, including the Participant's or other beneficiary's current mailing address. (13) The Committee and the individual members thereof shall be indemnified by the Company and not from the Plan trust against any and all liabilities arising by reason of any act or failure to act made in good faith pursuant to the provisions of the Plan, including expenses reasonably incurred in the defense of any claim relating thereto. (14) In the event of an error in administering the Plan, including, without limitation, as to eligibility, participation or Creditable Service of any Participant, or as to the amount of payments made or to be made to a Participant or other beneficiary, the Committee may take any action, including making such contributions or payments or demanding such refunds or repayments it deems appropriate, to place the Participant or other beneficiary as nearly as possible in the position he would have been in had there been no error. 27 SECTION 8 - MANAGEMENT OF ASSETS (1) All assets of the Plan shall be held as a special trust for use in connection with the Plan and providing the benefits and paying the expenses of the Plan, and no part of the corpus or income shall be used for or diverted to purposes other than for the exclusive benefit of Participants, retired Participants and their beneficiaries under the Plan prior to the satisfaction of all liabilities with respect to such Participants, retired Participants and their beneficiaries under the Plan. No person shall have any interest in or right to any part of the earnings of the trust, or any right in, or to, or under the trust or any part of the assets thereof, except as and to the extent expressly provided in the Plan and trust agreement. (2) The Trustee or Trustees shall be appointed from time to time by the Committee by appropriate instrument with such powers, duties, rights and obligations as the Committee shall approve. The Committee may remove any Trustee at any time, upon reasonable notice, and upon such removal or upon the resignation of any Trustee the Committee shall designate a successor Trustee or Trustees. (3) The Committee shall determine the manner in which the funds of the Plan shall be disbursed but subject to the provisions of the trust instrument under which the assets of the Plan are held. (4) The Committee shall have the power to appoint one or more investment managers, within the meaning of Section 3(38) of the Employee Retirement Income Security Act of 1974, to manage (including the power to acquire and dispose of) any assets of the Plan which have been transferred to any Trustee or a specified portion thereof. In the event that the Committee shall appoint such investment managers, each such investment manager shall be solely responsible for the management and control of the assets to which he or it is appointed. 28 SECTION 9 - CERTAIN RIGHTS AND OBLIGATIONS (1) It is the intention of the Company to continue the Plan and make its contributions regularly each year, but the Company, by action of its Board of Directors, may for any reason terminate or partially terminate the Plan. If all liabilities to or on account of the Participants, retired Participants and their beneficiaries have been satisfied or provided for in full and there is an amount remaining due to erroneous actuarial computations during the previous life of the Plan (within the meaning of the regulations under the Internal Revenue Code), then and not otherwise the Company shall be entitled to receive such remaining amount. (2) The establishment of the Plan shall not be construed as conferring any legal rights upon any Employee or any person for a continuation of employment nor shall it interfere with the right of the Company to discharge any Employee and to treat him without regard to the effect which such treatment might have upon him as a Participant in the Plan. (3) Any rulings made or acts taken under the Plan by the Board of Directors or by the Committee with respect to classification of Employees, contributions, or benefits shall be uniform in their nature and applicable to all those persons similarly situated. No ruling shall be made or act taken which shall be discriminatory under the provisions of the Internal Revenue Code. (4) The provisions of this Subsection (4) shall apply to any one of the 25 highest paid Employees of the Company on any "Commencement Date" whose anticipated retirement allowance provided under the Plan at normal retirement date exceeds $1,500 per annum. "Commencement Date" shall mean the effective date of any amendment to the Plan which increases the benefits. In the event that during the first 10 years following a "Commencement Date" the Plan is terminated, the amount of the retirement allowance provided under the Plan for any one of the aforesaid Employees shall not be greater than the amount of allowance that can be provided by the largest of the following amounts: (a) $20,000, or (b) 20% of the first $50,000 of the Participant's "Annual Compensation", multiplied by the number of years and fractions thereof since the "Commencement Date" in which the full current costs have been met. As used in this paragraph, "Annual Compensation" means average compensation during the five calendar years (or the Participant's period of employment if less than five years) immediately preceding the date of termination of the Plan or immediately preceding the date of commencement of retirement benefits under the Plan, if earlier. The foregoing conditions shall not restrict the current payment of full retirement benefits called for by the Plan for any Participant or beneficiary who has retired while the Plan is in full effect and its full current costs have been met. In the event that the present value of Plan assets as of the date of termination of the Plan, calculated utilizing Pension Benefit Guaranty Corporation assumptions as of the date of termination, equals or exceeds the present value of the total Accrued Benefits for all Participants (whether or not nonforfeitable), Subsection (4) shall not be applicable to restrict the Accrued Benefits payable to the twenty-five (25) highest paid Employees. This Subsection (4) is included in this Plan to conform to the requirements of Treasury Regulations Section 1.401-4(c) and shall cease to be effective at such time as the provisions of Treasury Regulations Section 1.401-4(c) or any substitute therefor are no longer effective or applicable. (5) If any company is now or hereafter becomes an Affiliate of the Company, the Board of Directors may include the employees of such Affiliate in the participation in the Plan upon appropriate action by such 29 company necessary to adopt the Plan. In such event, or if any persons become Employees of the Company as the result of merger or consolidation or as the result of acquisition of all or part of the assets or business of another company, the Board of Directors shall determine to what extent, if any, credit and benefits shall be granted for previous service with such Affiliate, but subject to the continued qualification of the trust for the Plan as tax exempt under the Internal Revenue Code. Any such Affiliate may terminate its participation in the Plan upon appropriate action by it, in which event the funds of the Plan held on account of Participants in the employ of such company not yet retired, after provision in full for all Participants who have retired from the employ of such company, shall be determined by the Committee on the basis of actuarial valuation, and shall be applied as provided in Section 9(1), in the manner there provided if the Plan should be terminated, or shall be segregated by the Trustee as a separate trust, pursuant to certification to the Trustee by the Committee continuing the Plan as a separate Plan for the employees of such company under which the Board of Directors of such company shall succeed to all the powers and duties of the Board of Directors, including the appointment of members of the Committee. (6) The Plan shall not be merged no consolidated with, nor shall there be a transfer of any of its assets or liabilities to, any other plan, unless each Participant, former Participant or beneficiary shall (if the resulting plan were then terminated) 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 had then been terminated). (7) Upon the Plan's termination or partial termination, the rights of all affected Employees to benefits accrued to the date of such termination or discontinuance, to the extent then funded, shall be nonforfeitable. (8) Where a Participant or beneficiary is receiving benefits under the Plan, or where a Participant has been separated from service and has nonforfeitable rights to benefits under the Plan, such benefits will not be decreased because of an increase in the benefit levels or wage payments under Title II of the Social Security Act, if such increase takes place after the later of (a) the last day of the Participant's service with Company or (b) September 2, 1974. (9) Unless otherwise specifically provided herein, the terms of the Plan in effect at the date an Employee's service terminates shall determine his rights and benefits thereafter. 30 SECTION 10 - CLAIM PROCEDURES ======================================== (1) Every claim for benefits under the Plan shall be in writing directed to the Committee or its designee. (2) Each claim filed shall be passed upon by the Committee within a reasonable time from its receipt. If a claim is denied in whole or in part the claimant shall be given written notice of the denial in language calculated to be understood by the claimant, which notice shall: (i) specify the reason or reasons for the denial; (ii) specify the Plan provisions giving rise to the denial; and (iii) describe any further information or documentation necessary for the claim to be honored and explain why such documentation or information is necessary, and explain the Plan's review procedure. (3) Upon the written request of any claimant whose claim has been denied in whole or in part, the Committee shall make a full and fair review of the claim and furnish the claimant with a written decision concerning it. 31 SECTION 11 - NON-ALIENATION OF BENEFITS ======================================== (1) No benefit under the Plan shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge. Any attempt so to anticipate, alienate, sell, transfer, assign, pledge, encumber or charge the same shall be void; nor shall any such benefit be in any manner liable for or subject to the debts, contracts, liabilities, engagements or torts of the person entitled to such benefit, unless the assignment of such benefit or right is pursuant to a "qualified domestic relations order" as defined at Section 206(d)(3)(B)(i) of ERISA, as amended by the Retirement Equity Act of 1984, and related regulations. (2) If any person entitled to a benefit under the Plan becomes bankrupt or attempts to anticipate, alienate, sell, transfer, assign, pledge, encumber or charge any benefit under the Plan except as specifically provided herein, then such benefit shall, in the discretion of the Committee, cease and determine. In that event the Committee shall hold or apply the same for the benefit of such person, his spouse, children, or other dependents, or any of them in such manner and in such proportion as the Committee may deem proper. (3) Effective for judgments, orders and decrees issued, and settlement agreements entered into, on and after August 5, 1997, notwithstanding anything herein to the contrary, however, a Participant's benefit in the Plan may be reduced to satisfy liabilities of the Participant to the Plan due to (i) the Participant being convicted of committing a crime involving the Plan, (ii) a civil judgment (or consent order or decree) entered by a court in an action brought in connection with a violation of the fiduciary provisions of ERISA, or (iii) a settlement agreement between the Secretary of Labor or the Pension Benefit Guaranty Corporation and the Participant in connection with a violation of the fiduciary provisions. Any such reduction shall be consistent with the provisions of Sections 401(a)(13)(C) and (D) of the Code in all respects, including the provisions regarding the Participant's spouse. 32 SECTION 12 - TOP HEAVY PLAN ======================================== (1) Precedence of Section. Anything in this Plan to the contrary notwithstanding, the provisions of this Section 12 shall supercede and take precedence over any other provisions of the Plan for any Plan Year in which the Plan is determined to be a Top Heavy Plan as determined under Section 12(3). (2) Definitions. For purposes of determining whether the Plan is a Top Heavy Plan, as determined under Section 12(3) below, for any Plan Year commencing on or after January 1, 1984, the following terms, wherever capitalized, shall have the meanings set forth below: (a) Accrued Benefit - "Accrued Benefit" means the benefit accrued by a Participant under Section 5 of the Plan. (b) Determination Date - "Determination Date" means the date on which the Plan is tested to determine if it is a Top Heavy Plan, which date shall be the last day of the Plan Year preceding the Plan Year for which the determination is being made. (c) Key Employee - "Key Employee" means an Employee who, at any time during the current Plan Year or any of the four (4) preceding Plan Years, is or was: (1) Officer - An officer of the Company (but not more than the lesser of: (a) fifty (50) Employees, or (b) the greater of three (3) or ten percent of the Employees of the Company shall be considered officers for this purposes) whose annual Compensation is at least $45,000 or such greater amount as may be recognized for increase in the cost of living in accordance with Code Section 416(i)(1)(A)(i), or (2) Employee Owner - One (1) of the ten (10) Employees owning the largest interests in the Company provided that his annual Compensation is at least $30,000 or such greater amount as may be recognized for increases in the cost of living in accordance with Code Section 416(i)(1)(A)(ii) (for purposes of this Section 12(2)(c)(2), if two (2) Employees have the same interest in the Company, the Employee with the greater annual Compensation shall be treated as having a larger interest), or (3) Five Percent Shareholder - An Employee who is an owner of five percent (5%) or more of the Company, or (4) Highly Compensated Shareholder - An Employee who is an owner of one percent (1%) or more of the Company and who has annual Compensation from the Company in excess of $150,000. (d) Former Key Employee - "Former Key Employee" means a Participant in the Plan who, at any time during the four (4) preceding Plan Years, was a Key Employee but who is not a Key Employee in the current Plan Year or who terminated his service with the Company in one of the four (4) preceding Plan Years and was not a Key Employee in the Plan Year in which he terminated. (e) Non-Key Employee - "Non-Key Employee" means a Participant in the Plan who, at any time during the current Plan Year, is neither a Key Employee nor a Former Key Employee. 33 (f) Top Heavy Plan - "Top Heavy Plan" means a Plan which is determined to be a Top Heavy Plan for a Plan Year, as described in Section 12(3). (3) Determination of Top Heavy Plan Status. With respect to each Plan Year commencing on or after January 1, 1984, a calculation shall be made as of the applicable Determination Date to determine if the Plan is a Top Heavy Plan for such Plan Year. A Plan shall be considered to be a Top Heavy Plan for a Plan Year if the aggregate present value of the Accrued Benefit of Key Employees (excluding Former Key Employees) under the Plan exceeds sixty percent (60%) of the aggregate present value of the Accrued Benefit of all Key Employees (excluding Former Key Employees) and all Non-Key Employees under the Plan, determined as of the Determination Date. In making such determination, the Accrued Benefit of all individuals who were not employed by the Company during the five (5) year period ending on the Determination Date shall be excluded. In determining if the Plan is a Top Heavy Plan, it shall be aggregated with each other plan of the Company and/or a related organization in the required aggregation group as defined at Section 416(g)(2)(A)(i) of the Code and may be aggregated with any other plans of the Company and/or a related organization in the permissive aggregation group as defined at Section 416(g)(2)(A)(ii) of the Code. (4) Intentionally omitted. (5) Vesting in Top Heavy Plan Year. With respect to any Plan Year for which the Plan is determined to be a Top Heavy Plan, each Participant's accrued retirement allowance benefit shall vest in accordance with the following vesting schedule, in lieu of the vesting provisions described in Section 4:
Years of Service Vesting Percentage ---------------- ------------------ Less than 2 0% 2 but less than 3 20% 3 but less than 4 40% 4 but less than 5 60% 5 but less than 6 80% 6 or more 100%
(6) Minimum Benefit Under Top Heavy Plan. Anything in Section 5 to the contrary notwithstanding, if the Plan is determined to be a Top Heavy Plan for any Plan Year commencing on or after January 1, 1984, in no event shall the annual retirement allowance payable to a Participant in the form and manner and at the time specified in Section 5 be less than: (a) 2.0% of the Participant's average Compensation for the five (5) consecutive year period in which his Compensation from the Company was the highest, multiplied by; (b) the number of Plan Years for which the Plan is determined to be a Top Heavy Plan, but in no event more than ten (10) such Plan Years. (7) Maximum Limitation Under Top Heavy Plan. With respect to any Plan Year for which the Plan is determined to be a Top Heavy Plan, a 1.0 limitation shall be substituted for the 1.25 limitations at Subsection (8)(c)(1)(b)(i) and (8)(c)(2)(b)(i) of Section 5. 34 SECTION 13 - AMENDMENTS ======================================== The Board of Directors may, at any time and from time to time, modify or amend in whole or in part any or all of the provisions of the Plan; provided that no such modification or amendment shall make it possible for any part of the assets of the Plan to be used for, or diverted to, purposes other than for the exclusive benefit of Participants, former Participants and their beneficiaries under the Plan prior to the satisfaction of all Plan liabilities to them. 35 SECTION 14 - CONSTRUCTION ======================================== The Plan shall be construed, regulated and administered under the laws of the State of New York and the United States. 36 APPENDIX I ======================================== The following employees have prior service with a former affiliate of the Company and will be granted full Vesting and Creditable Service. Thomas Andruskevich Cecelia Arbore Lawrence Burns Daniel DelVechio Michael Eiring Rachelle Epstein Warren Feld James Fernandez Joan Freeman Michael Kowalski Deborah Kramm David Robertson Mary J. Robertson John Schaedel Audrey Scotland Dale Strohl Charles Zacharias 37 APPENDIX II ======================================== The factors to be used in determining the actuarial equivalence between two alternative forms of pension are as follows: Interest rate - 8.00% Mortality - The rates of mortality resulting from a 50% /50% average of the male and female mortality rates of the George B. Buck 1979 Mortality Table. 38 APPENDIX III ========================================
NAME OR SOCIAL SECURITY NUMBER AMOUNT ------------------------------ ------ ###-##-#### $50.00 ###-##-#### $66.95 ###-##-#### $25.00 ###-##-#### $508.00 ###-##-#### $932.10 ###-##-#### $116.69 ###-##-#### $50.00 ###-##-#### $50.00 ###-##-#### $50.00 ###-##-#### $50.00 ###-##-#### $50.00 ###-##-#### $50.00 ###-##-#### $50.00 ###-##-#### $150.00 ###-##-#### $50.00 ###-##-#### $87.66
39