CASH BALANCE RETIREMENT PLAN FOR EMPLOYEES OF ASSOCIATED GROCERS, INC.

Exhibit 10.41.3

CASH BALANCE RETIREMENT PLAN FOR EMPLOYEES OF

ASSOCIATED GROCERS, INC.

(formerly known as the Retirement Plan for Employees

of Associated Grocers, Inc.)

AMENDED AND RESTATED

EFFECTIVE

December 31, 2008

TABLE OF CONTENTS

 

 

 

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PREAMBLE

THIS RETIREMENT PLAN (hereinafter referred to as the “Plan” and formerly known as the Retirement Plan for Employees of Associated Grocers, Inc.) was amended and restated effective January 1, 2001, to be a Cash Balance Pension Plan; and

WHEREAS, the Employer established this Plan effective March 17, 1988, to provide retirement benefits to Employees who become covered under the Plan; and

WHEREAS, the Employer amended the Plan effective April 1, 1991; and

WHEREAS, on August 12, 1993, the Employer amended and restated the Plan effective March 17, 1988; and

WHEREAS, the Employer again amended the Plan effective October 1, 1994, to comply with certain tax law changes; and

WHEREAS, the Employer amended and restated the Plan, effective January 1, 2001, to be a Cash Balance Plan - the Accrued Benefits of a Participant prior to January 1, 2001, shall be determined under the Plan formula in effect on December 31, 2000; and

WHEREAS, the Employer amended the Plan, effective January 1, 2003, to comply with the Economic Growth and Tax Relief Reconciliation Act of 2001; and

WHEREAS, the Plan shall be maintained for the exclusive benefit of covered Employees, and is intended to comply with the Code, ERISA, and other applicable law; and

WHEREAS, pursuant to the Agreement to Transfer Plan Sponsorship (“Agreement”), Associated Grocers, Incorporated (“AG”) transferred sponsorship of the Plan to Unified Grocers, Inc. (“Unified”) and Unified assumed sole sponsorship of the Plan, effective September 30, 2007. Effective September 30, 2007, Unified will continue as the sole sponsor of the Plan within the meaning of Section 3(16)(B) of ERISA. The Agreement is hereby incorporated into the Plan by reference; and

WHEREAS, immediately upon the transfer of sponsorship to Unified, Unified has sole authority to take actions under the Plan that AG had immediately prior to the transfer of sponsorship, including the authority to amend or terminate the Plan in accordance with its terms; and

WHEREAS, Unified now desires to amend and restate the Plan to incorporate previous Plan amendments; and

WHEREAS, Unified now desires to freeze the Plan, effective December 31, 2008, such that Participants accrue no further benefits under the Plan and no additional Employees may become Participants in the Plan after December 31, 2008; and

WHEREAS, Unified now desires to merge the Plan with and into the Unified Grocers, Inc. Cash Balance Plan (the “Unified Plan”), effective December 31, 2008.

 

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NOW, THEREFORE, except as otherwise specified herein, (i) Unified does hereby amend and restate the Plan as set forth in the following pages effective December 31, 2008 (unless otherwise stated herein), except that any change required by federal law, including without limitation, amendments to the Code, ERISA, the Age Discrimination in Employment Act and regulations or rulings issued pursuant thereto shall be effective on the latest date on which such change may become effective and comply with such laws; and (ii) Unified does hereby merge the Plan with and into the Unified Plan, effective December 31, 2008. Effective January 1, 2009, the terms and conditions governing the Participants in the Plan shall be as set forth in the Unified Plan, except that the calculation of a Participant’s frozen Accrued Benefit as of December 31, 2008, shall be determined under the terms of this Plan.

SECTION 1

DEFINITIONS

The following terms when used herein shall have the following meaning, unless a different meaning is plainly required by the context. Capitalized terms are used throughout the Plan text for terms defined by this and other sections.

 

1.1	Account Balance

“Account Balance” means the hypothetical account for a Participant that is credited with a pay credit and interest as provided in Section 4.1(b), hereof.

 

1.2	Accrued Benefit

“Accrued Benefit” means as of January 1, 2001, the benefit determined by the formula specified in Section 4.1 of this Plan. Benefits accrued on or after January 1, 2001 shall be determined in accordance with the cash balance provisions of this Plan. Benefits accrued prior to January 1, 2001, shall be determined in accordance with the Plan formula in effect on December 31, 2000, such Plan described in Appendix “A” attached hereto. Despite any other provisions of the Plan, effective December 31, 2008, each Participant’s Accrued Benefit shall be frozen.

 

1.3	Actuarially Equivalent/Actuarially Adjusted

Effective for benefits accrued after January 1, 2001, “Actuarially Equivalent,” “Actuarially Adjusted” and, similar terms (for purposes other than determining contributions to the Trust Fund) means that the present value of two payments or series of payments shall be of equal value when computed utilizing GATT interest and mortality assumptions, e.g. 30 year U.S. Treasury interest rate, determined for November of the preceding Plan Year, and GAM 83 Mortality Table on a 50/50 unisex basis. Benefits accrued prior to January 1, 2001 shall be computed utilizing the Plan’s interest and mortality assumption that were in place on December 31, 2000, adjusted only if necessary to comply with changes in the law.

Effective January 1, 2003, and notwithstanding any other Plan provision to the contrary, any reference in the Plan to the GAM 1983 Mortality Table shall be construed as a

 

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reference to the mortality table prescribed in Rev. Rul. 2001-62, as hereinafter updated, modified or changed by applicable notice, rule, regulation or law, such change hereby incorporated by reference.

 

1.4	Affiliated Companies

“Affiliated Companies” means:

 

(a)

the Employer,

 

(b)

any other corporation which is a member of a controlled group of corporations which includes the Employer (as defined in Section 414(b) of the Code),

 

(c)

any other trade or business under common control with the Employer (as defined in Section 414(c) of the Code), or

 

(d)

any other member of an affiliated service group which includes the Employer (as defined in Section 414(m) of the Code).

For purposes of the limitation on benefits in Section 8.2, the determination of whether an entity is an Affiliated Company will be made by modifying Sections 414(b) and (c) of the Code as specified in Section 415(h) of the Code.

 

1.5	Annuity Starting Date

“Annuity Starting Date” means the first day of the first period for which a Plan benefit is payable as an annuity, or any other form.

 

1.6	Beneficiary

“Beneficiary” means the Participant’s surviving spouse or beneficiary designated with spousal consent, if married, or, if none, the Participant’s Estate.

 

1.7	Board of Directors or Board

“Board of Directors” or “Board” means the Board of Directors of the Company.

 

1.8

Code

“Code” means the Internal Revenue Code of 1986, as amended and including all regulations promulgated pursuant thereto.

 

1.9

Company

“Company” means, prior to September 30, 2007, Associated Grocers, Inc., a Washington corporation. On and after September 30, 2007, “Company” means Unified Grocers, Inc.

 

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1.10	Compensation

“Compensation” for any tax year has the meaning set forth in Section 415(c)(3) of the Code and specifically Regulation § 1.415-2(d)(11)(ii). “Compensation” is also referred to in this Plan as “Earnings.” (Sec Plan Section 1.14)

 

1.11	Credited Service

“Credited Service” means all completed years and days of Service (expressed in whole and fractional years) for the Employer commencing on the date the Employee became an Employee and ending on the date the Employee Terminates, excluding Periods of Service forfeited due to a Period of Severance, excluding Periods of Service which are not considered for vesting purposes, and, including periods not in Service due to Temporary Termination. For purposes of this Cash Balance Plan, only Credited Service after January 1, 2001 shall be credited for purposes of determining a Participant’s Accrued Benefit under the cash balance provisions of this Plan as set forth in Paragraph 4.1(b), hereof. Credit Service prior to January 1, 2001, shall be credited for purposes of determining a Participant’s Accrued Benefit pursuant to paragraph 4.1(a) which, in turn, is calculated pursuant to the terms of the Plan in existence on December 31, 2000. Participants shall accrue no additional Credited Service after December 31, 2008.

 

1.12	Dependent Child

“Dependent Child” and similar terms as the context requires means any natural or adopted child of the Participant, or any other child for whom the Participant could claim a federal income tax deduction who was living with the Participant in a parent-child relationship at the time of the Participant’s death.

 

1.13

Disabled

“Disabled” and similar terms as the context requires means a Participant is entitled to benefits under an Employer-sponsored long-term disability plan, or a long-term disability plan to which the Employer contributes on behalf of the Participant.

 

1.14

Earnings

“Earnings” for each calendar year means amounts received during the calendar year by the Employee from the Employer that are currently includible in gross income for purposes of federal income tax withholding at the source without limitation based on the nature or location of the employment or services performed, plus elective contributions made by the Employer on the Employee’s behalf. “Elective contributions” are amounts excludible from the Employee’s gross income under Code §§ 125, 402(e)(3), 402(h), 403(b), 457(b) or 408(p), 132(f) and contributed by the Employer, at the Employee’s election, to a Code Section 401(k) arrangement, A Simplified Employee Pension, A SIMPLE arrangement, a cafeteria plan, a transportation fringe benefit plan, tax-sheltered annuity, or certain state and local government plan and employee contributions “picked up” by the employer under Code Section 414(h).

 

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Notwithstanding the foregoing, annual Earnings in excess of the limit provided in Code Section 401(a)(17) shall be disregarded; provided, however, that such limit shall be automatically adjusted for future years to the maximum permissible dollar limitation in accordance with Section 401(a)(17)(B) of the Code.

 

1.15	Effective Date

“Effective Date” means December 31, 2008, the date of this Amendment and Restatement.

 

1.16	Eligible Employee

“Eligible Employee” means any Employee, provided, however, the following shall not be considered Eligible Employees for purposes of this Plan: a Leased Employee; an employee covered under a collective bargaining agreement where retirement benefits were the subject of good faith bargaining which does not provide for retirement benefits under this Plan; an employee classified by the Employer as an independent contractor regardless of whether such Employee has a different status as determined by a governmental agency or a court of law; a Temporary Employee, e.g. Employees hired on a full or part-time basis for a specific assignment.

“Leased Employee” means an individual who, pursuant to a leasing agreement between the Employer and any other person, has performed services for the Employer (or for the Employer an any persons related to the Employer within the meaning of Code § 144(a)(3) on a substantially full time basis for at least one year and who performs such services under the primary direction or control of the Employer.

 

1.17

Employee

“Employee” means any person other than a nonresident alien with no U.S. source income, who is employed by the Employer and who is classified by the Employer as a common law employee and any leased employee within the meaning of Code Section 414(n)(2); provided, however, if Leased Employees constitute twenty percent (20%) or less of the Employer’s non-highly compensated work force, the term “Employee” shall not include a Leased Employee who is covered by a plan maintained by the leasing organization which meets the requirements of Code Section 414(n)(5).

 

1.18

Employer

“Employer” means the Company and shall also include any other Affiliated Companies as provided from time to time in appendices to this Plan, who are participating employers pursuant to Section 11.

 

1.19	Employment Commencement Date

“Employment Commencement Date” means the date on which an Employee first completes an Hour of Service for the Employer or an Affiliated Company during the current period of employment.

 

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1.20

ERISA

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, including all regulations promulgated pursuant thereto.

 

1.21	Final Average Monthly Earnings

“Final Average Monthly Earnings” means one twelfth of the highest average annual Earnings received by the Participant during any five consecutive calendar year period. In the event the Participant has less than five consecutive years of employment, the computation period shall be based upon (1) the most recent five years of employment (whether or not consecutive), or (2) the total Period of Service with the Employer, whichever is less.

 

1.22	Hour of Service

“Hour of Service” means each hour for which an Employee is paid or entitled to payment for the performance of duties for the Employer or any Affiliated Company.

 

1.23	Member Corporation

“Member Corporation” means a corporation, which owns stock in Associated Grocers, Inc. and enters into an adoption agreement under the Member Plan, any Affiliated Companies of the Member Corporation, and any other employer participating in the Member Plan.

 

1.24	Member Plan

“Member Plan” means the Retirement Plan for Employees of Associated Grocers, Inc. and Member Corporations, in which the Company suspended benefit accruals as of March 16, 1988 and subsequently terminated its participation, and which still remains in force for several Member Corporations and their employees.

 

1.25	Participant

“Participant” means an Eligible Employee who qualifies for participation pursuant to Section 2.1 or 2.2. A nonvested Participant shall cease to be a Participant on the date he or she incurs a one-year Period of Severance. A vested Participant shall cease to be a Participant when his or her benefit payments from the Plan are completed.

 

1.26	Period of Service

Effective January 1, 2001 “Period of Service” means the period of time (expressed in years and days) commencing with the Employment Commencement Date and ending on the Severance From Service Date. A Period of Service of 365 days shall equal a one year Period of Service. Non-successive periods are aggregated to determine the Employee’s total Period of Service. For vesting and participation purposes, an Employee’s Period of Service shall also include the following:

 

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(a)

Periods not in Service due to Temporary Termination; and

 

(b)

Periods of Service with an Affiliated Company.

Where the Employer maintains the plan of a predecessor employer, service for such predecessor employer shall be treated as service for the Employer as required by the Code.

Notwithstanding the foregoing, (i) a Participant’s Period of Service credited prior to January 1, 2001, shall be determined in accordance with the Plan in effect as of December 31, 2000; and (ii) a Participant’s Period of Service shall be frozen as of December 31, 2008.

 

1.27	Period of Severance

“Period of Severance” means the period of time (expressed in years and days) commencing at the Severance From Service Date and ending on the date the Employee again performs an Hour of Service for the Employer; provided however, such period shall commence one year later if a male or female Employee is absent due to pregnancy, birth or adoption of a child, or caring for a child immediately following birth or adoption.

 

1.28

Plan

“Plan” means the Retirement Plan for Employees of Associated Grocers, Inc., either in its previous or present form or as amended from time to time. Effective January 1, 2001, the Plan was renamed Cash Balance Retirement Plan for Employees of Associated Grocers, Inc., and “Plan” now means the renamed Plan.

 

1.29	Plan Administrator

“Plan Administrator” means the person or entity designated in Section 10 to administer the Plan.

 

1.30

Plan Year

“Plan Year” means the twelve month period beginning January 1 and ending December 31. For the period October 1, 2000 through December 31, 2000 there existed a short plan year. Prior to October 1, 2000 the Plan Year was the twelve-month period beginning October 1 and ending September 30; such Plan Year governed the Plan as described in Appendix “A,” hereto.

 

1.31	Retirement Committee

“Retirement Committee” means the committee as from time to time constituted and appointed by the Employer to administer the Plan.

 

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1.32

Service

“Service” means periods for which an Employee is paid or entitled to payment for the performance of duties for the Employer or an Affiliated Company.

 

1.33	Severance From Service Date

“Severance From Service Date” means the earlier of the date on which an Employee quits, retires, is discharged or dies, or the first anniversary of absence from work for any other reason; provided however, that a Participant shall not be deemed to have severed from Service during any Period of Service in any branch of the United States Armed Forces if he or she has a right to guaranteed re-employment with the Employer under Section 9 of the Military Selective Act, 38 U.S.C. 2021, and he or she returns to the Employer’s employment within the time specified in 38 U.S.C. 2021 or sixty (60) days thereafter.

 

1.34	Social Security Retirement Age

“Social Security Retirement Age” means age sixty-five if the Participant was born before January 1, 1938, age sixty-six if born after December 31, 1937, but before January 1, 1955, and age sixty-seven if born after December 31, 1954.

 

1.35	Temporarily Terminated

Termination is deemed “Temporary” if the Employee is rehired and in Service within one year of the initial date of absence from work.

 

1.36	Terminated

“Terminated” and other terms derived from “Terminate” as the context requires, such as “Termination,” mean no longer in Service or employed as an Employee with the Employer for reasons of quit, retirement, discharge or death. An Employee shall also be deemed Terminated on the first anniversary of the initial date of absence for any other reason, provided such absence lasted at least twelve months; provided, however, that a Participant shall not be deemed to have Terminated during any Period of Service in any branch of the United States Armed Forces if he or she has a right to guaranteed re-employment with the Employer under Section 9 of the Military Selective Act, 38 U.S.C. 2021, and he or she returns to the Employer’s employment within the time specified in 38 U.S.C. 2021 or sixty days thereafter.

 

1.37	Trust or Trust Fund

“Trust” or “Trust Fund” means the trust fund into which shall be paid all contributions and from which all benefits shall be paid under this Plan.

 

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1.38

Trustee

“Trustee” means the trustee or trustees, who receive, hold, invest and disburse the assets of the Trust in accordance with the terms and provisions set forth in a trust agreement.

 

1.39	Additional Definitions in Plan

The following terms are defined in the following sections of the Plan:

 

 

 

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SECTION 2

PARTICIPATION

 

2.1	Eligibility for Participation

Each Eligible Employee who was a participant in this Plan on December 31, 2000 shall become a Participant on the Effective Date. Any other Eligible Employee shall become a Participant under this Plan on the, first of the month coinciding with or next following:

 

(a)

attainment of age twenty-one (21); and

 

(b)

completion of a one-year Period of Service; or,

if later, the first of the month coinciding with or next following the date on which he or she becomes an Eligible Employee. Only earnings while a Participant shall be utilized in calculating an Eligible Employee’s Accrued Benefit.

 

(a)

Subject to paragraph b, below, effective upon the transfer of sponsorship of the Plan to Unified on September 30, 2007, the only employees eligible to participate shall be employees of Unified who were hired from AG in connection with the purchase of assets under the Asset Purchase Agreement on or before the close of the 30-day period following the closing of the Asset Purchase Agreement.

 

(b)

The change in eligibility in paragraph a shall not terminate continued participation in and accrual of benefits under the Plan by (i) any employee of AG or (ii) any employee of any of AG’s subsidiaries whose adoption of the. Plan for the benefit of its employees remained in effect through September 30, 2007, who remains employed by AG or such AG subsidiary after Closing, until 15 days after notice of such change that is required under section 204(h) of the Employee Retirement Income Security Act of 1974, as amended, and section 4980F of the Internal Revenue Code has been given.

 

(c)

Despite any other provisions of the Plan, effective after December 31, 2008, no Employee or Eligible Employee shall be eligible to become a Participant.

 

2.2	Reemployment After a Termination

Upon the reemployment of a Terminated former Participant as an Eligible Employee, he or she shall immediately become a Participant.

An Employee who Terminates prior to becoming a Participant and is later reemployed shall become a Participant upon satisfying the requirements of Section 2.1. Periods of Service before and after a Period of Severance shall be aggregated, except that in the event an Employee incurs a one-year Period of Severance, his or her prior Service shall be disregarded following reemployment for purposes of Section 2.1.

 

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2.3	Employees in a Bargaining Unit

An Employee belonging to a collective bargaining unit which has entered into an agreement with the Employer that does not provide for retirement benefits under this Plan, shall not qualify for participation; however, the period of employment shall be included for purposes of determining whether such an Employee is entitled to the Enhanced Formula contained in Section 4.1(b) and for purposes of vesting service, if he or she later becomes an Eligible Employee and a Participant in the Plan, notwithstanding any other provision to the contrary. Any collective bargaining units which have entered into agreements with the Employer that provide for participation in this Plan are listed in an appendix to this Plan. An Employee’s vested Accrued Benefit under Section 4.1(a) of this Plan shall be reduced by the benefit accrued prior to January 1, 2001 payable from a collectively bargained defined benefit plan to which an Employer contributed to the extent of the Participant’s vested interest therein at the Annuity Starting Date.

SECTION 3

RETIREMENT DATES

 

3.1	Normal Retirement Date

The Normal Retirement Date for a Participant shall be the first day of the month coinciding with or next following the later of i) attainment of age sixty-five (65), or ii) completion of five years of participation in the Plan.

 

3.2	Early Retirement Date

Each Participant who attains age fifty-five (55) and completes a ten-year Period of Service may elect, in writing, an Early Retirement Date. Such Early Retirement Date shall be before the Normal Retirement Date and after Termination on the first day of any month coinciding with or following the date the early retirement requirements are met.

 

3.3	Deferred Retirement Date

The Deferred Retirement Date for a Participant who continues working after the Normal Retirement Date shall be the first day of the month coinciding with or next following his or her Termination date; provided, however, the Deferred Retirement Date shall not be later than April 1 following the calendar year in which the Participant attains age seventy and one half (70  ¹ / 2 ) or terminates employment, if later. However, if the Participant is a greater than 5% owner, the Deferred Retirement Date shall not be later than April 1 following the calendar year in which the Participant attains age seventy and one half (70  ¹ / 2 ). Notwithstanding the above, if the Participant attained age seventy and one half (70  ¹ / 2 ) prior to January 1, 1988 and was not a five percent (5%) owner at any time after age sixty-six and one half (66  ¹ / 2 ), the Deferred Retirement Date shall be the first day of the month coinciding with or next following his or her termination date.

 

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3.4	Retirement Date

The Retirement Date for a Participant shall be one of the dates specified in Sections 3.1, 3.2 or 3.3 above, on which benefits are to commence. The Retirement Date for a Participant who Terminates prior to retirement with a vested Accrued Benefit shall be Normal Retirement Date, unless such Participant qualifies for and elects to receive benefits at an Early Retirement Date. Despite the foregoing, with respect to the portion of a Participant’s Accrued Benefit derived from service on or after January 1, 2001, if any, the Retirement Date for a Participant who Terminates prior to retirement with a vested Accrued Benefit shall be any date elected by such Participant to receive benefits after he or she Terminates. Such benefits may be paid in any of the forms provided under Section 5.1.

SECTION 4

RETIREMENT BENEFITS

 

4.1	Accrued Benefit

The Accrued Benefit for any Participant shall equal the amount determined under (a) and (b) below, if the Participant’s Annuity Starting Date occurs on or before August 17, 2006 and before the Participant’s Normal Retirement Date, the Accrued Benefit as of the Participant’s Annuity Starting Date for service on or after January 1, 2001 shall equal the Actuarial Equivalent (assuming no mortality prior to the Participant’s Normal Retirement Date) as of the Annuity Starting Date of the amount determined under (b) below for service on or after January 1, 2001, with interest under (b)(iii) projected to the Participant’s Normal Retirement Date at the rate in effect on the Participant’s Annuity Starting Date. The Accrued Benefit shall be Actuarially Adjusted for the form of payment and Actuarially Adjusted for any prior distribution from the Plan that is not repaid.

 

(a)

A Participant shall be entitled to a benefit based on Credited Service through December 31, 2000 under the terms of the Plan as in existence on December 31, 2000. The form of payment of such benefit shall be the benefit options in effect under the Plan on December 31, 2000. In addition, the Participant shall accrue a benefit based on service on or after January 1, 2001, as set forth in paragraph (b), below.

 

(b)

No credits hereunder shall be provided with respect to Earnings for which the Employer has made a contribution to a Union plan on the Participant’s behalf.

Only Earnings while a Participant shall be utilized in determining an Accrued Benefit. For the first year of participation, Earnings shall be the Participant’s total Earnings for the Plan Year pro-rated by multiplying such Earnings by the quotient obtained from dividing the number of days as a Participant by 365.

 

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For service on or after January 1, 2001, a Participant shall be entitled to a benefit calculated under either the Basic Formula or Enhanced Formula set forth below and credited with Interest, as set forth in subparagraph (iii), below:

 

(i)

Basic Formula . This formula governs all Participants who become participants on or after January 1, 2001. Such a Participant shall receive an Accrued Benefit equal to the sum of the amounts credited to his or her Account Balance, as follows: Such a Participant shall receive credit in such account equal to 2.5% of Earnings (e.g., a “Pay Credit”) for each one year Period of Service after December 31, 2000. Interest shall be credited to such account as specified in subparagraph (iii), below. Such Account Balance shall be expressed in terms of a lump sum which shall be Actuarially Adjusted for a form of payment other than a lump sum.

 

(ii)

Enhanced Formula . A Participant who was a participant in this Plan as of December 31, 2000, shall receive a credit to his or her Account Balance for each one year Period of Service after December 31, 2000, and through December 31, 2015, based on the following schedule

 

If an Employee terminates employment after December 31, 2000, and returns to service after at least a one (1) year Period of Severance, such Employee shall no longer be eligible for an enhanced credit and the remainder of such Employee’s service shall be credited under subparagraph (i), above. Interest shall be credited to such account as specified in subparagraph (iii), below. Pay Credits after December 31, 2015 shall be at the basic rate set forth in subparagraph (i), above. Such Account Balance shall be expressed in terms of a lump sum which shall be actuarially adjusted for a form of payment other than a lump sum.

 

(iii)

Credited Interest . All Participants will be credited with interest based on a thirty (30) year U.S. Treasury Bond Rate. In the event that subsequent events or regulations make it impermissible to utilize such Bond Rate, the interest rate shall be the annual rate of change of the Consumer Price Index, CPI-U as reported by the Department of Labor, increased by three (3) percentage points. The interest rate shall be determined for November preceding the beginning of the Plan Year. The interest rate so determined shall be applied to a Participant’s beginning of Plan Year Account Balance, but such amount shall not be credited to the Participant’s Account Balance until the last day of the Plan Year. Provided however, in the Plan Year that a Participant terminates and either elects a distribution or is

 

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involuntarily cashed out, the Participant’s Pay Credit and interest credit (which shall be prorated based on days of participation in the calendar year over 365) shall be determined and credited to the Participant’s Account Balance as of the date of such termination. The interest rate will be credited for each Plan Year or portion of a Plan Year (pro-rated based on days of participation in the calendar year over 365) until the Participant receives a distribution, whether or not the Participant is still employed by the Employer.

 

(c)

Despite any other provisions of the Plan, no Participant shall receive any Pay Credits or Credited Interest after December 31, 2008, the intent being that each Participant’s Accrued Benefit shall be frozen as of December 31, 2008.

 

4.2	Normal Retirement Benefit

A Participant’s normal Retirement Benefit shall equal his or her vested Accrued Benefit, such Accrued Benefit being determined in accordance with Section 4.1 as of the date of Termination, and then adjusted for form of payment.

 

4.3	Early Retirement Benefit

A Participant’s Early Retirement Benefit, after January 1, 2001, shall equal his or her vested Accrued Benefit determined under Section 4.1(b) as of the date of Termination, and then adjusted for the form of payment. A Participant’s Early Retirement Benefit based on service prior to January 1, 2001, shall be determined under the terms of the Plan in existence on December 31, 2000, as adjusted as required by law.

 

4.4	Deferred Retirement Benefit

A Participant’s Deferred Retirement Benefit shall equal his or her vested Accrued Benefit as of the date of Termination, and then adjusted for form of payment. Service and Earnings beyond the Normal Retirement Date shall be taken into consideration. In no event shall the benefit provided under this paragraph be less than the retirement benefit to which the Participant would have been entitled if he or she had actually retired on the Normal Retirement Date.

In the event a Participant continues working after the date benefits are required to commence following age 70 pursuant to Section 10.6, the Deferred Retirement Benefit shall be recalculated and adjusted annually.

 

4.5	Reemployment After Retirement

Upon reemployment, a retired Participant shall continue to receive his or her benefits hereunder, if any, without a suspension due to such re-employment. At the Participant’s subsequent retirement, benefits payable shall be based on his or her Pay Credit(s) and interest determined under Section 4.1(b) and credited after such Participant’s date of re-employment.

 

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4.6	Benefits For Terminated Participants

Benefits other than death benefits under Section 6 of the Plan shall be determined and paid in accordance with the provisions of the Plan in effect on the Participant’s most recent date of Termination of employment. Death benefits under Section 6 of the Plan shall be determined and paid in accordance with the provisions of the Plan in effect on the Participant’s date of death.

 

4.7	Qualified Military Service

Notwithstanding any provision of this Plan to the contrary, the Plan will provide contributions, benefits and Service Credit with respect to Qualified Military Service in accordance with Code § 414(u).

SECTION 5

FORMS OF PAYMENT

 

5.1	Forms of Payment

The following forms of benefit payments are available under this Plan at the election of the Participant, with spousal consent, if married:

 

(a)

Lump Sum Payment

Benefits accrued after January 1, 2001 under the Cash Balance provision of this Plan, Section 4.1(b) shall, at the election of the Participant and with spousal consent, if the Participant is married, be payable as a single lump sum payment. Benefits accrued prior to January 1, 2001, are not eligible for a lump sum payment, except in the case of an involuntary cash-out.

 

(b)

Whole Life Annuity

A Whole Life Annuity shall be payable monthly from the Retirement Date to the first of the month preceding death. The amount of the monthly benefit shall equal the monthly Normal, Early or Deferred Retirement Benefit, whichever applies. A Whole Life Annuity shall be the normal form of benefit to a single Participant, absent a contrary election.

 

(c)

Joint and Survivor Annuity

A reduced Joint and Survivor Annuity shall be payable monthly to a retired Participant from the Retirement Date to the first of the month preceding death. Following the Participant’s death, a retirement benefit equal to fifty percent (50%) or one hundred percent (100%) of the reduced amount payable to the retired Participant shall be payable for life to the Participant’s spouse, if living at the time of the Participant’s death. A Participant may elect which percentage shall be payable to the Participant’s spouse. A fifty percent (50%) Joint and Survivor

 

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Annuity shall be the normal form of benefit to a married Participant, absent an election, with spousal consent, to the contrary.

If the spouse dies after the Participant’s retirement income begins, the Participant’s payments will be in the same reduced amount as is otherwise payable under the Joint and Survivor Annuity. If the spouse dies prior to the date as of which the Participant’s retirement income begins, any election of a form of benefit under this Section 5.1(b) shall be automatically canceled. If the Participant dies prior to the date as of which his or her retirement income is to begin, the spouse shall not be entitled to receive any payments under this Section 5.1(b). However, a spouse may be entitled to a benefit under Section 6.

The monthly benefit payable under a fifty percent Joint and Survivor Annuity shall be equal to ninety percent (90%) of the Participant’s Accrued Benefit payable in the form of a Whole Life Annuity. If the spouse is younger than the Participant, four tenths of one percent (0.4%) will be subtracted from the ninety percent reduction factor for each year younger. If the spouse is older than the Participant, four tenths of one percent (0.4%) will be added to the ninety percent reduction factor for each year older, provided, in no event will the applicable reduction factor exceed one hundred percent (100%). Fractional years will be rounded to the nearest whole year.

The monthly benefit payable under a 100 one hundred percent (100%) Joint and Survivor Annuity shall be equal to eighty-two percent (82%) of the Participant’s Accrued Benefit payable in the form of a Whole Life Annuity. If the spouse is younger than the Participant, seven tenths of one percent (0.7%) will be subtracted from the eighty-two percent reduction factor for each year younger. If the spouse is older than the participant, seven tenths of one percent (0.7%) will be added to the eighty-two percent reduction factor for each year older, provided, in no event will the applicable reduction factor exceed one hundred percent (100%). Fractional years will be rounded to the nearest whole year.

 

5.2	Automatic Form of Benefit

Unless a Participant elects otherwise, benefits shall be paid as provided below:

 

(a)

Married Participants

Any Participant who is married on his or her Annuity Starting Date shall automatically be deemed to have elected the fifty percent (50%) Joint and Survivor Annuity option, effective as of such date, with his or her spouse on the Annuity Starting Date as the joint annuitant (the “Statutory Joint and Survivor Annuity Option”).

The Retirement Committee shall furnish each married Participant with a written explanation of the terms and conditions of the Joint and Survivor Annuity Options as required under Code § 417(a)(3) and any other form of payment within a reasonable period (at least thirty days (unless such period is waived by the

 

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Participant with spousal consent) but not more than ninety days) before the Annuity Starting Date. A married Participant may reject the Statutory Joint and Survivor Annuity Option and elect another form of payment or revoke an election, by filing a written notice with the Retirement Committee within ninety (90) days prior to his or her Annuity Starting Date. Such initial notice, or subsequent change, must specify the form of payment elected, acknowledge the effect of the election, and must be signed by the Participant’s spouse. The spouse’s signature must be notarized or witnessed by a Plan representative.

 

(b)

Unmarried Participant