Exhibit
10.04


 


THE
CALIFORNIA COASTAL COMMUNITIES, INC.


 


RETIREMENT PLAN


 


 


Generally Effective January 1, 2009


(Amended and Restated through December 31, 2009)


 

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I
  DEFINITIONS

  	
   

  	
  3

  
	
   

  	
   

  	
   

  
	
  ARTICLE II
  ELIGIBILITY

  	
   

  	
  18

  
	
   

  	
   

  	
   

  
	
  ARTICLE III
  RETIREMENT, TERMINATION, OR DEATH

  	
   

  	
  20

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV
  FUNDING OF BENEFITS

  	
   

  	
  36

  
	
   

  	
   

  	
   

  
	
  ARTICLE V
  TRUST AGREEMENT AND TRUST FUND

  	
   

  	
  37

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI
  CERTAIN LIMITATIONS ON BENEFITS

  	
   

  	
  37

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII
  PLAN ADMINISTRATION

  	
   

  	
  38

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII AMENDMENT AND TERMINATION;
  PARTICIPATION AND WITHDRAWAL BY COMPANIES; PLAN MERGERS

  	
   

  	
  42

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX
  TOP-HEAVY PROVISIONS

  	
   

  	
  45

  
	
   

  	
   

  	
   

  
	
  ARTICLE X
  GENERAL PROVISIONS

  	
   

  	
  45

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI SPECIAL PROVISIONS RELATING TO THE
  CUTBACK OF OPERATIONS AT THE HAMPTON LOCATION

  	
   

  	
  49

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII SPECIAL PROVISIONS RELATING TO THE
  CUTBACK OF OPERATIONS AT THE LA JOLLA LOCATION

  	
   

  	
  51

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIII
  ADDITIONAL SPECIAL RULES

  	
   

  	
  52

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIV SPECIAL PROVISIONS RELATING TO
  FORMER PARTICIPANTS IN THE ENGINEERING RESEARCH, INCORPORATED RETIREMENT PLAN
  FOR SALARIED EMPLOYEES AND THE ENGINEERING RESEARCH, INC. HOURLY EMPLOYEES
  PENSION PLAN

  	
   

  	
  55

  
	
   

  	
   

  	
   

  
	
  ARTICLE XV SPECIAL VESTING RULES IN CONNECTION
  WITH CORPORATE OFFICE SHUTDOWN AND COMPANY STREAMLINING

  	
   

  	
  76

  
	
   

  	
   

  	
   

  
	
  APPENDIX I
  LIMITATIONS ON BENEFITS

  	
   

  	
  I-1

  
	
   

  	
   

  	
   

  
	
  APPENDIX II
  DISTRIBUTION PROVISIONS

  	
   

  	
  II-1

  
	
   

  	
   

  	
   

  
	
  APPENDIX III TOP
  HEAVY PROVISIONS

  	
   

  	
  III-1

  



 


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THE CALIFORNIA COASTAL COMMUNITIES,
INC.


 


RETIREMENT PLAN


 


Effective December 31, 1993, the name of the
Bolsa Chica Company Retirement Plan was officially changed to the Koll Real
Estate Group Retirement Plan (the “Plan”) and Plan benefits were frozen.(1) 
Effective January 1, 1999 the Plan was renamed The California Coastal
Communities, Inc. Retirement Plan. 
The Plan has been amended to incorporate certain required changes, but
benefit accruals under this Plan remain frozen.


 


The Bolsa Chica Company Retirement Plan (formerly
known as The Henley Properties Inc. Retirement Plan and, prior to January 1,
1990, known as The Henley Group, Inc. Retirement Plan) was originally
adopted, effective June 1, 1986.


 


In connection with the change of the corporate name of
Henley Properties Inc. to The Bolsa Chica Company and the merger (the “1992
Merger”) of HP Merger Co., a wholly owned subsidiary of The Bolsa Chica
Company (known prior to the 1992 Merger as Henley Properties Inc.), with and
into The Henley Group, Inc., the name of the Plan was changed to The Bolsa
Chica Company Retirement Plan.


 


The Henley Group, Inc. Retirement Plan was
adopted as a pension plan for the benefit of the employees of The Henley Group, Inc.,
a Delaware corporation, effective June 1, 1986, by a resolution of Henley’s
Board of Directors, as a continuation of the Predecessor Plan.  In connection with the distribution as of December 31,
1989 to shareholders of the Company of the stock of a subsidiary of the
Company, the Plan was divided into two Plans, the Company was renamed Henley
Properties Inc. and, effective January 1, 1990, the Plan became known as
The Henley Properties Inc. Retirement Plan.


 


The Plan was adopted as a continuation of and
successor to The Signal Companies, Inc. Retirement Plan (the “Signal
Retirement Plan” or “Predecessor Plan”) for individuals


 


(i)                                     who


 


(A)                              were actively employed on January 1,
1986 by The Henley Group, Inc. (“Henley”) or a business that became a
subsidiary or division of Henley in connection with the distribution by
Allied-Signal Inc. (“Allied-Signal”) to the owners of its common stock of all
of the shares of Henley common stock as of May 27, 1986 (the “Spinoff”);
or


 






(1)                                  Effective September 30, 1993, The
Bolsa Chica Company changed its name to Koll Real Estate Group, Inc.  Consequently, as of September 30, 1993,
all references in this document to the Bolsa Chica Company should be read as
references to the Koll Real Estate Group, Inc.  Effective January 1, 1999 all references
to the Bolsa Chica Company and to Koll Real Estate Group, Inc. should be
read as references to California Coastal Communities, Inc.


 


1

















 


(B)                                were actively employed on January 1,
1986 by a member of the Allied-Signal controlled group of corporations and
became Employees in connection with the Spinoff; and


 


(ii)                                  who participated or were eligible to
participate in the Predecessor Plan on December 31, 1985,


 


subject to a transfer of all assets allocable to such
individuals to the Plan from the Predecessor Plan.  Benefits payable under this Plan shall not
duplicate benefits payable under the Predecessor Plan.


 


The Plan is intended to be tax-exempt and qualified
under the provisions of Section 401 and other applicable provisions of the
Internal Revenue Code of 1986, as amended.


 


Pursuant to Notice 88-131, the Plan was amended to
limit compensation for purposes of computing accrued benefits under the Plan to
$200,000 as of January 1, 1989 (Model Amendment 1), and to prohibit the
additional accrual of benefits for highly compensated participants after May 1,
1989 (Model Amendment 2).


 


The Plan was amended and restated to comply with the
Tax Reform Act of 1986 and Section 401(a)(4) of the Internal Revenue
Code as of January 1, 1989.  The
accrued benefit of highly compensated participants has been retroactively
adjusted to reflect the accrual of benefits after May 1, 1989 in
accordance with the terms of this Amended and Restated plan.


 


The Plan was also amended and restated effective January 1,
1990 in connection with the corporate reorganization described above and to
make certain other changes.  The Plan was
again amended and restated effective August 1, 1992 and again as of the
dates indicated in this document to reflect the name changes described above
and to make certain other changes.


 


Subject to Notice 88-131, the rights and obligations
of each person covered by the Plan who retires or whose employment otherwise
terminates prior to the effective date of any amendment or restatement shall be
determined in accordance with the Plan as in effect as of the date of his
retirement or termination as the case may be.


 


Effective December 31, 1993, benefit accruals
under this Plan were frozen.


 


This Plan document contains changes requested by the
Internal Revenue Service in April and May of 1996 as part of the
determination letter process.  The Plan
document also contains changes made as part of the IRS determination letter
process in 2001, including incorporation into this amended and restated Plan
document of Amendment No. 1, which was executed on December 14, 1999.


 


Effective January 1, 2009, unless otherwise
indicated, this document constitutes an amendment and restatement of the
Plan.  Unless specifically provided to
the contrary in this document, the rights and benefits of a Plan Participant
who ceased to be an Employee before January 1, 2009 will be determined in
accordance with the terms of the Plan on the date on which that Participant
ceased to be an Employee, and in accordance with any provisions of the Plan
that are specifically made effective to that date.


 


2

















 


ARTICLE I


 


DEFINITIONS


 


Section 1.1             General.  Whenever the following terms are used in the
Plan with the first letter capitalized, they shall have the meaning specified
below unless the context clearly indicates to the contrary.


 


Section 1.2             Accrued Benefit.  An Employee’s “Accrued Benefit”
as of his Separation from the Service shall have the meaning given in Section 3.10.


 


Section 1.3             Actuarial Equivalent including Definition of Applicable Interest Rate
and Applicable Mortality Table.  “Actuarial
Equivalent” shall mean the equivalent of a given benefit, or a given amount,
payable in another manner.  Determination
of a Participant’s vested accrued benefit for purposes other than a lump sum
payment shall be based on an interest rate of 7.5% and mortality specified in
the 1984 Unisex Pension Table.


 


In the case of a Participant who has not reached his
Early Retirement Date and who has elected to receive a Disability Retirement
Benefit under Section 3.5, the ages in the table specified above will be
set forward 5 years in the calculation of the Disability Retirement Benefit of
such Participant.


 


For purposes of determining (i) whether the
present value of a Participant’s accrued benefit exceeds $5,000 for purposes of
Section 3.13 and (ii) the amount of a lump sum benefit, the Actuarial
Equivalent shall be calculated using the Applicable Interest Rate
under Section 417(e) of the Code for the second full calendar month
before the date of distribution, and the Applicable Mortality Table
under Section 417(e) of the Code.


 


Notwithstanding any other provision of the Plan to the
contrary, the present value of the accrued lump sum retirement benefit due an
Employee who became a Participant prior to January 1, 2000 shall not be
less than the present value of such Participant’s vested accrued benefit as of December 31,
1999 utilizing an interest rate that is equal to 7.5% (provided the interest
rate used shall be no greater than the immediate or deferred rate, in effect as
of the first day of each Plan Year, whichever is appropriate, used by the
Pension Benefit Guaranty Corporation to determine the present value of a lump
sum distribution upon plan termination) and mortality table specified above for
purposes other than a lump sum payment.


 


Section 1.4             Administrator or Administrative Committee.  “Administrator”
or “Administrative Committee” shall mean the Bolsa Chica Administrative
Committee, appointed in accordance with Article VII.  Effective September 30, 1993, “Administrator”
or “Administrative Committee” means Koll Real Estate Group, Inc., and any
officer of Koll Real Estate Group, Inc. is authorized to act on behalf of
the Administrator or the Administrative Committee.


 


Section 1.5             Aggregate Group.  “Aggregate Group” shall mean
the plan or plans required to be considered with this Plan for purposes of
satisfying the requirements of Section 401(a)(4) and Section 410
of the Code.


 


3

















 


Section 1.6             Anniversary Date.  “Anniversary Date” of a
Participant shall mean the anniversary of the date on which he became an
Employee for the first time or after a Severance from Service Date.


 


Section 1.7             Average Final Compensation.  “Average
Final Compensation” of a Participant shall mean his average monthly
Compensation during the highest sixty consecutive full calendar months during
which he received Compensation as an Employee in his last one hundred twenty
such months.  If he has less than one
hundred twenty such months there shall be substituted the number of such months
he has accumulated.  For purposes of
determining consecutiveness, calendar months other than full calendar months
during which he received Compensation as an Employee shall be ignored.  Subject to Section 1.16(g), Compensation
for any twelve-month period included in the calculation of Average Final
Compensation shall not exceed $200,000, adjusted for changes in the cost of
living as provided in Section 415(d) of the Code.


 


Effective December 31, 1993, the Average Final
Compensation of a Participant shall be calculated for a consecutive monthly
period under Section 1.7 of the Plan ending no later than December 31,
1993, and no Compensation paid or earned after December 31, 1993 shall be
taken into account.  Accordingly, the
Average Final Compensation of each Participant shall be a fixed dollar amount
as of December 31, 1993 which shall not be subsequently adjusted for any
Compensation earned or paid after December 31, 1993.


 


Section 1.8             Beneficiary.  “Beneficiary” shall mean a person properly
designated by a Participant or Former Participant in accordance with the Plan
and the rules, if any, promulgated by the Administrator, to receive Benefits,
solely in accordance with Section 3.6, 3.7 or 3.9, in the event of the
death of the Participant or Former Participant. 
The Plan will not honor waivers or disclaimers of Plan benefits;
provided, however, that the Plan will dispose of a Participant’s benefit as
though a Beneficiary predeceased the Participant if the Administrative
Committee receives from that Beneficiary, no earlier than the day after the
Participant’s death and no later than nine (9) months after the
Participant’s death a disclaimer that purports to satisfy the requirements of
Code Section 2518.


 


Section 1.9             Benefit.  The “Benefit” of a Participant shall mean a
payment payable at the times and over the applicable period specified in Article III.


 


Section 1.10           Board
of Directors.  “Board of Directors” shall mean the Board of
Directors or the Executive Committee of the Board of Directors of Bolsa
Chica.  Effective September 30,
1993, “Board of Directors” shall mean the Board of Directors of Koll Real
Estate Group, Inc.


 


Section 1.11           Bolsa
Chica.  “Bolsa Chica” shall mean The Bolsa Chica
Company, a Delaware corporation, formerly known as Henley Properties Inc.  Effective September 30, 1993, Bolsa
Chica became Koll Real Estate Group, Inc. and, effective September 30,
1993 all references in this Plan to Bolsa Chica should be read as references to
Koll Real Estate Group, Inc.  
Effective January 1, 1999, all references in this Plan to Bolsa
Chica should be read as references to California Coastal Communities, Inc.


 


4

















 


Section 1.12           Code.  “Code”
shall mean the Internal Revenue Code of 1986, as amended.  All citations to sections of the Code are to
such sections as they may from time to time be amended or renumbered.


 


Section 1.13           Commissioner.  “Commissioner”
means the Commissioner of the Internal Revenue Service.


 


Section 1.14           Committee.  “Committee”
shall mean the Administrator or Administrative Committee.


 


Section 1.15           Company;
Companies.  As the context requires, “Company” or “Companies”
shall mean Bolsa Chica (as defined in Section 1.11), any corporation which
adopts the Plan as a whole or as to one or more divisions or classifications in
accordance with Section 8.4, and any successor corporation which continues
the Plan under Section 8.9, acting through their respective officers.


 


Section 1.16           Compensation.


 


(a)           “Compensation” of a Participant for any Plan Year shall
mean


 


(i)                                     his fixed, basic and regularly recurring
straight-time pay which for purposes of this Plan shall include the amount, if
any, by which such pay was voluntarily reduced in accordance with a qualified
cash or deferred arrangement under a qualified savings or thrift plan of any of
the Companies,


 


(ii)                                  any additional shift differential pay,


 


(iii)                               all amounts which an Employee on sick
leave would have received as his fixed, basic and regular recurring
straight-time pay had he not collected sick leave pay during such leave (but
excluding any statutory benefits or insured benefits),


 


(iv)                              payment for overtime hours,


 


(v)                                 commissions or sales, production or
nonincentive bonus payments, and


 


(vi)                              except as provided in subsection, any
annual year-end bonus or incentive compensation award attributable to such Plan
Year (whether or not paid within such Plan Year and whether paid in cash or in
securities), expressed as an average monthly rate of pay for the entire Plan
Year.  For purposes of computing such average
monthly rate of pay, a Participant’s Compensation for an entire Plan Year shall
be divided by the number of months in such Plan Year during which Compensation
was paid for such Plan Year.


 


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(b)           For purposes of the Plan and notwithstanding any other
provision of this Section 1.16, a Participant’s Compensation for an entire
Plan Year shall not exceed $200,000, adjusted for changes in the cost of living
as provided in section 415(d) of the Code.  In determining the Compensation of a
Participant for purposes of this limitation, the rules of
section 414(q)(6) of the Code shall apply, except that in applying
such rules, the term “family” shall include only the spouse of the Participant
and any lineal descendants of the Participant who have not attained age 19
before the close of the year.


 


(c)           “Compensation” shall not include severance payments,
inducement or completion bonuses for periods of overseas or on-location
employment, overseas or on-location differential payments, insurance, long-term
disability pay, any profit sharing payments, any public or private retirement
contributions or benefits, any retainers, any insurance benefits or
Company-paid premiums, payments from any stock option and award plan or any
savings and stock purchase plan or any other special benefits, provided,
however, that recurring overseas bonuses which constitute incentive
compensation awards and are paid on a regular basis shall be included in
Compensation.


 


(d)           “Compensation” shall not include any portion of salary
or any bonus or incentive compensation award the payment of which has been
deferred at the election of the Participant; provided, however, that such
deferred salary, bonus or incentive compensation attributable to a year used to
calculate Average Final Compensation and actually paid in a year used to
calculate Average Final Compensation will be treated as Compensation in the
year paid.


 


(e)           Subject to (f) below, the Compensation of an
Employee who was a participant in the Predecessor Plan on December 31,
1985 and became a Participant in this Plan in connection with the Spinoff of
Henley by Allied-Signal shall include all amounts earned during employment by a
member of the Allied-Signal controlled group of corporations prior to January 1,
1986 that would have been treated as Compensation pursuant to Section 1.14
of the Predecessor Plan.


 


(f)            Notwithstanding the foregoing provisions of Section 1.7
and this Section 1.16, Compensation shall not include any amount earned by
the Participant prior to January 1, 1990 if the Participant’s accrued
benefit under this Plan was transferred to The Henley Group, Inc.
Retirement Plan in connection with the distribution as of December 31,
1989 to shareholders of the Company of the stock of The Henley Group, Inc.
(formerly known as New Henley Inc.) and the division of the Plan into two
Plans.


 


(g)           In addition to other applicable limitations set forth
in the Plan and notwithstanding any other provision of the Plan to the
contrary, for Plan Years beginning on or after January 1, 1994, the annual
Compensation (if any) of each Employee taken into account under the Plan shall
not exceed the OBRA ‘93 annual compensation limit.  The OBRA ‘93 annual Compensation limit is
$150,000, as adjusted by the Commissioner of Internal Revenue for increases in
the cost of living in accordance with Code Section 401(a)(17)(B).  The cost-of-living adjustment in effect for a
calendar year applies to any period not exceeding 12 months, over which
Compensation is determined (“Determination Period”) beginning in that 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.


 


6

















 


For Plan Years beginning on or after January 1,
1994, any reference in this Plan to the limit under Code Section 401(a)(17)
shall mean the OBRA ‘93 annual Compensation limit set forth in this provision.


 


In determining the $150,000 (indexed) limit, the
family aggregation rules of Code Section 414(q)(6) apply, but
the term “family” includes only the spouse of the Participant and any lineal
descendants of the Participant who have not attained age 19 before the close of
the Plan Year.  To the extent required by
applicable Regulations, if the limitation is reached for a family group, then
the limitation amount will be prorated among each member of the family group in
the proportion that each family member’s compensation bears to the total
Compensation of the family group.


 


Notwithstanding any other provision in the Plan, for
purposes of calculating each Section 401(a)(17) Employee’s Accrued Benefit
under this Plan, the Accrued Benefit will be the sum of (a) the Employee’s
Accrued Benefit as of the last day of the last Plan Year beginning before January 1,
1994, frozen in accordance with Regulation 1.401(a)(4)-13, and (b) the
Employee’s Accrued Benefit determined under the benefit formula applicable for
the Plan Year beginning on or after January 1, 1994, as applied to the
Employee’s years of service credited to the Employee for Plan Years beginning
or after January 1, 1994 for purposes of benefit accruals.  A Section 401(a)(17) Employee means an
Employee whose current Accrued Benefit as of a date on or after the first day
of the first Plan Year beginning 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.


 


(h)           “Compensation” shall include any amounts treated as ‘compensation’
under any of the Related Plans with respect to a period when the Participant is
entitled to Credited Service pursuant to Section 1.19(a)(v).


 


(i)            The annual compensation of each Participant shall not
be increased due to EGTRRA, and no cost of living increases shall be in effect
that would result in such an increase.


 


(j)            For purposes of the definitions of “Compensation” in
the Plan, amounts under Code Section 125 include any amounts not available
to a Participant in cash in lieu of group health coverage because the
Participant is unable to certify that he or she has other health coverage.  An amount will be treated as an amount under
Code Section 125 only if the employer does not request or collect
information regarding the Participant’s other health coverage as part of the
enrollment process for the health plan.


 


Section 1.17           Contingent
Annuitant.  “Contingent Annuitant” shall mean a person
properly designated by a Participant or Former Participant to receive benefits,
solely in accordance with Section 3.6 or 3.7 in the event of the
Participant’s death after payment of an annuity hereunder commences.


 


Section 1.18           Covered
Compensation.  “Covered Compensation” means the average
(without indexing) of the Taxable Wage Base (as defined below) in effect for
each calendar year during the 35-year period ending with the calendar year in
which the Participant attains (or will attain) Social Security Retirement
Age.  The Taxable Wage Base in effect for
any year following the year in which the determination is being made will be
assumed to be equal to the Taxable Wage Base in effect for the calendar year in
which the determination is being made. 
The Taxable Wage Base is the contribution and benefit base in effect
under Section 230 of the Social Security Act as of the beginning of the
calendar year.


 


7

















 


Effective December 31, 1993, the Covered
Compensation of each Participant shall be calculated under Section 1.18 of
the Plan as of December 31, 1993. 
For purposes of such calculation, it shall be assumed that the Taxable
Wage Base for each year in the remainder of the 35-year period applicable to
the Participant shall remain at the Taxable Wage Base in effect for that
Participant for the 1993 calendar year. 
Accordingly, the Covered Compensation of each Participant shall be set
at a fixed dollar amount as of December 31, 1993 and shall not be adjusted
for (i) Compensation or other remuneration the Participant may in
fact earn after December 31, 1993 or (ii) any changes in the
Taxable Wage Base for calendar years after the 1993 calendar year.


 


Section 1.19           Credited
Service.


 


(a)           Except as provided in subparagraph (g), (h) or (i) and
consistent with the rules of subparagraphs (b) through (f), the
Credited Service of a Participant means the total number of months (for which
he receives or is entitled to receive Compensation) of an Employee’s latest
period of uninterrupted employment (beginning on the Employee’s employment
commencement date or reemployment commencement date, whichever is applicable)
with the Company (including any business treated as a Company under Section 10.15),
beginning on or after January 1, 1986 and ending on his Severance from
Service Date, but not later than the date he ceases to be eligible to continue
to be a Participant in accordance with Section 2.1(b).  An individual’s Credited Service also shall
include the following periods of time regardless of whether he receives
Compensation therefor from the Company:


 


(i)                                     any period of absence from active
employment with the Company prior to his Normal Retirement Date due to
Disability, provided the Participant has not elected to receive the Disability
Retirement Benefit Payable under Section 3.5;


 


(ii)                                  any period of absence from active
employment with the Company prior to his Normal Retirement Date due to service
in the United States Armed Forces, provided he is reemployed by the Company in
accordance with applicable statutes following his discharge from military
service;


 


(iii)                               any period of absence from active
employment with the Company prior to his Normal Retirement Date due to a
Company directed or authorized leave of absence; and/or


 


8














 


(iv)                              any period of service provided for in
Sections 8.8.2 and 8.8.3 of prior Plan documents.


 


(v)                                 effective for an Employee’s latest period
of uninterrupted employment with the Company beginning on or after January 1,
1990 and ending on the earliest of (1) December 31, 1993, (2) the
Employee’s Separation from the Service, (3) the Employee’s Severance from
Service Date, or (4) the date that the Employee ceases to be eligible to
continue to be a Participant in accordance with Section 2.1(b), any period
prior to the individual becoming an Employee during which the individual is an ‘employee’
earning ‘credited service’ under any of the Related Plans, or would have earned
‘qualified service’ under the Fisher Scientific International Inc. Retirement
Plan, but for the individual’s decision not to participate in said Plan.


 


(b)           In computing the Credited Service of any Employee,
which shall be expressed as years and twelfths thereof, a Participant shall be
credited with a full calendar month of service only if his employment commences
during the first fifteen days of such month, or is terminated after the first
fifteen days of such month.  No Employee
shall receive credit for more than one (1) month of Credited Service for
any one (1) calendar month nor shall he receive credit for more than
twelve (12) months of Credited Service during any Plan Year.


 


(c)           An Employee will be deemed to have voluntarily
terminated his employment if and as of the date any of the following occurs:


 


(i)                                     he fails or refuses to return to work for
the Company promptly after a sick leave or after a Company directed or
authorized leave of absence expires, or after he recovers from disability; or


 


(ii)                                  he leaves the employ of the Company for
service in the Armed Forces of the United States and fails to make application
for reemployment by the Company in accordance with applicable statutes
following his discharge from military service.


 


When an Employee is treated as voluntarily terminated
as a result of any of the causes listed above, his Credited Service will
include the calendar month in which such voluntary termination occurs unless
such voluntary termination occurs during the first fifteen days of such
calendar month.


 


(d)           Continuation of temporary layoff for lack of work for
a period in excess of twelve months shall be considered a discharge effective
as of the expiration of twelve months of the layoff.


 


(e)           If an Employee who has met the requirements for a
Vested Retirement Benefit set forth herein begins a Period of Severance and
subsequently returns to the employ of the Company, his participation in the
Plan shall be reinstated immediately.  He
shall retain his previously accumulated Credited Service and he shall be
credited with additional Credited Service for his continuous eligible employment
with the Company after such return.


 


9

















 


(f)            If a Participant who has not met the requirements for
a Vested Retirement Benefit set forth herein begins a Period of Severance and
subsequently returns to the employ of the Company, his participation in the
Plan shall be reinstated immediately.  If
the total period of time elapsed from the Severance from Service Date to the
effective date of his reemployment is less than the period of his previously
accumulated Vesting Service, he shall retain his previously accumulated
Credited Service and shall be credited with Credited Service under this Plan
for his continuous eligible employment during such new period.  If the total period of time elapsed from his
Severance from Service Date to the effective date of his reemployment equals or
exceeds the greater of five (5) years or his previously accumulated
Vesting Service, he shall forfeit his previously accumulated Credited Service
and shall be credited with Credited Service for his continuous eligible
employment during such new period.


 


(g)           Notwithstanding any other provision of this Section 1.19,
the Credited Service of each Participant


 


(i)                                     who


 


(A)                              was actively employed on January 1,
1986 by Henley or a business that became a subsidiary or division of Henley in
connection with the Spinoff of Henley by Allied-Signal as of May 27, 1986;
or


 


(B)                                was actively employed on January 1,
1986 by a member of the Allied-Signal controlled group of corporations and
became an Employee in connection with the Spinoff; and


 


(ii)                                  who was a participant in the Predecessor
Plan on December 31, 1985


 


shall, subject to the transfer of all assets allocable
to such Employee from the trust under the Predecessor Plan to the Trust Fund,
include all Credited Service under Section 1.16 of the Predecessor
Plan.  Notwithstanding anything herein to
the contrary, for purposes of calculating the Credited Service of any Employee
who is a Participant in the Plan on or after June 1, 1992 and whose
Credited Service is calculated in part by reference to Section 1.16(a) of
The Signal Companies, Inc. Retirement Plan, such Section 1.16(a) of
The Signal Companies, Inc. Retirement Plan shall be modified so as to
provide for the calculation of Credited Service from the participant’s date of
hire.


 


(h)           Except as provided in subsection 1.19(a)(iv) and
(v) of this Plan, the Credited Service of a Participant shall not include
any period of employment with the Company during which such Participant was
excluded from eligibility to participate in the Plan by subsection 2.1 or
during which such Participant was not an Employee.


 


10

















 


(i)            Notwithstanding any other provision of this Section 1.19,
the term “Credited Service” shall not include the Credited Service of a
Participant to the extent such Participant’s accrued benefit under this Plan
was transferred to The Henley Group, Inc. Retirement Plan in connection
with the distribution as of December 31, 1989 to shareholders of the Company
of the stock of The Henley Group, Inc. (formerly known as New Henley Inc.)
and the division of the Plan into two plans.


 


(j)            Effective December 31, 1993, the Credited Service
of each Participant shall, for benefit accrual purposes under the Plan, be fixed
and frozen as of December 31, 1993, and no Credited Service shall, for
benefit accrual purposes, be earned for any service rendered after December 31,
1993.  However, Credited Service may
continue to be earned after December 31, 1993, in accordance with the
provisions of Section 1.19 of the Plan, solely and exclusively for
purposes of the early retirement subsidies available under the Plan as of December 31,
1993 and protected under Internal Revenue Code Section 411(d)(6).


 


Section 1.20           Determination
Date.  “Determination Date” means the date specified
in Section 9.2.


 


Section 1.21           Disability;
Disabled.  “Disability” of a Participant or “Disabled”
when used with reference to a Participant shall mean that he has been found by
the Company employing the Participant, on the basis of competent medical
evidence, before December 31, 1993 and while employed by the Company to be
unable, by reason of a medically determinable physical or mental impairment
which can be expected to result in death or to be of permanent duration, to
engage in the level of gainful activity determined under standards adopted by
such Company for purposes of this Plan. 
The determination by each Company that an employee is “Disabled” for
purposes of this Plan shall be made under standards adopted by each Company and
applied uniformly, which standards may include the Social Security Act
definition of disability, the definition applicable to such Company’s long-term
disability programs, if any, or such other definitions as may be adopted from
time to time by each Company.  Such
determination shall be subject to the approval of the Administrator.


 


Section 1.22           Disability
Retirement Date.  “Disability Retirement Date” of a Participant
shall mean the first day of any month coincident with or following his
Disability, provided the Participant has at least 10 years of Credited Service
at his Disability and elects to retire before age 65.


 


Section 1.23           Early
Commencement Date.  “Early Commencement Date” shall mean the
first day of the month as of which a Participant elects to begin receiving
payments prior to his Normal Retirement Date.


 


Section 1.24           Early
Retirement Benefit.  “Early Retirement Benefit” shall mean the
Benefit payable under Section 3.4.


 


Section 1.25           Early
Retirement Date.  “Early Retirement Date” of a Participant
shall generally mean the first day of the month, so designated by an Employee,
preceding his Normal Retirement Date, and which is coincident with or following
the later of his 55th birthday and his completion of ten (10) years of
Credited Service or such other date as is provided in Section 3.3.


 


11

















 


Section 1.26           Employee.  “Employee”
shall mean any employee of any Company (including any person treated as an
Employee under Section 10.15) excluding


 


(a)           an employee who will not complete 1,000 Hours of
Service during a Plan Year,


 


(b)           a temporary employee, that is, one who is employed by
a Company for the specific purpose of working on a designated project for the
duration of such project, and


 


(c)           a director who is not otherwise an Employee.


 


(d)           a Leased Employee. 
For these purposes a Leased Employee means any person, other than a
common law employee of a Company, who pursuant to an agreement between that
Company and any other person (“leasing organization”) has performed services
for the recipient Company (or for such recipient and one or more related
persons determined in accordance with Code Section 414(n)(6)) on a
substantially full-time basis for a period of at least one (1) year (as
determined in accordance with the applicable provisions of the proposed Income
Tax Regulations section 1.414(n)-1(b)(10)), and such services are performed
under the primary direction or control of the recipient Company, unless such
individual is covered by a money purchase plan maintained by the leasing
organization and meeting the requirements of Code Section 414(n)(5)(B),
and leased employees do not constitute more than 20% of all Non-Highly
Compensated Employees of all Affiliated Companies within the meaning of Code Section 414(n)(5)(C)(ii).


 


Section 1.27           ERISA.  “ERISA”
shall mean the Employee Retirement Income Security Act of 1974, as amended.


 


Section 1.28           Former
Participant.  “Former Participant” shall mean a person who
has Separated from the Service and has become entitled to a Benefit under the
Plan.


 


Section 1.29           Henley.  “Henley”
shall mean the corporate entity known as The Henley Group, Inc. during the
period commencing on May 27, 1986 and ending December 31, 1989.


 


Section 1.30           Henley
Properties.  “Henley Properties” shall mean Henley
Properties Inc., a Delaware corporation known prior to January 1, 1990 as
The Henley Group, Inc. and after the 1992 Merger (as defined in the
preamble) as The Bolsa Chica Company.


 


Section 1.30A       Highly
Compensated Employee.  “Highly Compensated Employee” means (a) any
5% owner during the current Plan Year or the preceding Plan Year (“look back
year”), and (b) any Employee receiving Remuneration within the meaning of
Appendix I of the Plan in the look back year in excess of $80,000, as indexed
pursuant to Code Section 414(q).


 


Section 1.31           Hour
of Service.


 


(a)           “Hour of Service” of an Employee shall mean the
following:


 


12

















 


(i)                                     Each hour for which he is paid or entitled
to payment (as determined under regulations of the Secretary of Labor without
reference to the limitations of Section 1.19) by a Company,


 


(ii)                                  Each hour in or attributable to a period
of time during which he performs no duties (irrespective of whether he has had
a Separation from the Service) due to a vacation, holiday, illness, incapacity
(including pregnancy or disability), layoff, jury duty, military duty or a
leave of absence, for which he is so paid or so entitled to payment; provided,
however, that


 


(A)                              no more than five hundred and one Hours
of Service shall be credited under this paragraph to an Employee on
account of any such period, and


 


(B)                                no such hours shall be credited to an
Employee if attributable to payments made or due under a plan maintained solely
for the purpose of complying with applicable worker’s compensation,
unemployment compensation or disability insurance laws or to a payment which
solely reimburses the Employee for medical or medically related expenses
incurred by him.


 


(iii)                               Each hour for which he is entitled to
back pay, irrespective of mitigation of damages, whether awarded or agreed to
by a Company.


 


(b)           Hours of Service under subsection (a) (ii) and
(a)(iii) shall be calculated in accordance with 29 CFR Section 2530.200b-2(b).  Each Hour of Service shall be attributed to
the Plan Year or initial eligibility year in which it occurs except to the
extent that the Company, in accordance with 29 CFR Section 2530.200b-2(c),
credits such Hour to another computation period under a reasonable method
consistently applied.


 


(c)           Where his Company’s records do not readily permit
determination of an Employee’s actual hours, Hours of Service before 1976 shall
be the product of


 


(i)                                     Forty, and


 


(ii)                                  The number of weeks in which he had an Hour
of Service.


 


(d)           Where his Company’s records or procedures do not
readily permit determination of an Employee’s actual hours, Hours of Service
may be credited under an equivalency method under which an Employee who is
customarily employed for at least thirty (30) hours per week throughout each
Plan Year (except for holidays and vacations) shall be credited with 190 Hours
of Service for each month in which he completes at least one (1) Hour of
Service in accordance with the provisions of this section (regardless of
whether the number of Hours of Service actually completed in such month exceeds
190).


 


13

















 


(e)           Hours of Service shall include hours performed or paid
for by any company, which was then or subsequently became controlled by a
Company.


 


(f)            Notwithstanding any other provision of this Section 1.31,
the Hours of Service of each Employee who became a Participant in connection
with the Spinoff of Henley by Allied-Signal as of May 27, 1986 and who
participated in the Predecessor Plan on December 31, 1985 shall include
all Hours of Service under Section 1.25 of the Predecessor Plan.


 


Section 1.32           Investment
Committee.  “Investment Committee” shall mean the
Investment Committee designated by the Board of Directors to have the
investment responsibilities under the Plan described in Article VII.  Effective September 30, 1993, the Board
of Directors or its delegate shall serve as the Investment Committee.


 


Section 1.33           Insurance
Company.  “Insurance Company” shall mean any insurance
company selected by the Administrator to provide contracts of insurance or
annuity contracts to the Trustee for the purpose of funding benefits under the
Plan.


 


Section 1.34           Marriage.  “Marriage”
(and derivative terms such as “marital,” “married” and “marries”) shall, for
all purposes under this Plan, mean a relationship that is recognized as a
marriage under applicable federal laws.


 


Section 1.35           Military
Leave.  Any Employee who leaves the Company directly
to perform service in the Armed Forces of the United States or the United
States Public Health Service under conditions entitling him to reemployment
rights as provided in the laws of the United States, shall, solely for the
purposes of the Plan and irrespective of whether he is compensated by any
Company during such period of service be presumed an Employee on Military
Leave.  Such presumption shall cease to
apply if such Employee voluntarily resigns from the Company during such period
of service, or if he fails to make application for reemployment within the
period specified by such laws for the preservation of his reemployment
rights.  See, also Section 10.17
(Military Service) of this Plan document.


 


Section 1.36           RESERVED


 


Section 1.37           Normal
Retirement Benefit.  “Normal Retirement Benefit” shall mean the
Benefit payable under Section 3.2.


 


Section 1.38           Normal
Retirement Date.  “Normal Retirement Date” of a Participant or
Former Participant shall mean the first day of the calendar month coincident
with or next following his sixty-fifth birthday, on which date such Participant
or Former Participant shall be entitled to the Normal Retirement Benefit
provided in Section 3.2.


 


Section 1.39           Participant.  “Participant”
shall mean any person included in the Plan as provided in Article II, until
such time as such Participant has a Separation from the Service.


 


Section 1.40           Period
of Severance.  “Period of Severance” shall mean the period
of time commencing on the Severance from Service Date and ending on the date on
which an Employee again performs an Hour of Service within the meaning of 29
CFR § 2530.200b-2(a)(1).  Solely for
the purpose of determining whether a Period of Severance has occurred, in the
case of an Employee who is absent from work for maternity or paternity reasons,
a period of absence of two years or less shall not be taken into account.  An absence from work for maternity or
paternity reasons means an absence (i) by reason of the pregnancy
of the Employee, (ii) by reason of the birth of a child of the
Employee, (iii) by reason of the placement of a child with the
Employee in connection with the adoption of such child by such Employee, or (iv) for
purposes of caring for such child for a period beginning immediately following
such birth or placement.


 


14

















 


Section 1.41           Plan. 
The “Plan” shall mean The Bolsa Chica Company Retirement Plan (formerly
known as the Henley Properties Inc. Retirement Plan and, prior to January 1,
1990, known as The Henley Group, Inc. Retirement Plan), as amended and
restated from time to time.  Effective December 31,
1993, “Plan” shall mean the Koll Real Estate Group Retirement Plan, as amended
and restated from time to time. 
Effective January 1, 1999, “Plan” shall mean the California Coastal
Communities, Inc. Retirement Plan, as amended and restated from time to
time.


 


Section 1.42           Plan
Enrolled Actuary.  The term “Plan Enrolled Actuary” shall mean
that person who is enrolled by the Joint Board for the Enrollment of Actuaries
established under subtitle C of Title III of ERISA and who has been engaged by
the Committee on behalf of all Participants to make and render all necessary
actuarial determinations, statements, opinions, assumptions, reports, and
valuations under the Plan as required by law or requested by the Administrator.


 


Section 1.43           Plan
Year.  “Plan Year” shall mean the calendar year,
including such years preceding the adoption of the Plan.


 


Section 1.44           Predecessor
Plan.  “Predecessor Plan” shall mean The Signal
Companies, Inc. Retirement Plan, as in effect on December 31, 1985.


 


Section 1.45           Related
Plan.  “Related Plan” shall mean the Pneumo Abex
Corporation Retirement Plan, the New Hampshire Oak, Inc. Retirement Plan,
the Wheelabrator Technologies Inc. Retirement Plan and the Fisher Scientific International
Inc. Retirement Plan.


 


Section 1.46           Retirement
Benefit.  “Retirement Benefit” shall mean either the
Early Retirement Benefit, the Normal Retirement Benefit, the Disability
Retirement Benefit or the Optional Retirement Benefit described in Article III.


 


Section 1.47           Separation
from the Service.  “Separation from the Service” of an Employee
shall mean his resignation, treatment as voluntarily terminated, discharge,
Normal Retirement, Disability Retirement or Early Retirement from the Company,
or his death.


 


Section 1.48           Severance
from Service Date.  “Severance from Service Date” shall mean the
earlier of (a) the date on which an Employee quits, retires, is
discharged, dies or is treated as voluntarily terminated, (b) the
date on which an Employee on Military Leave (i) voluntarily resigns
from the Company or (ii) in the case of an Employee on Military
Leave who fails to apply for reemployment, the day next following the last day
of the period specified by the laws of the United States for the preservation
of such Employee’s reemployment rights, (c) the day next following
the date of expiration of a period of educational leave, or (d) the
first anniversary of the first date of a period in which an Employee remains
absent from service (with or without 


 


15

















 


pay) for any reason other than quit, retirement,
discharge, death or voluntary termination, such as vacation, holiday, sickness,
disability, leave of absence or layoff, provided that (e) with the
prior approval of the Company, the Severance from Service Date of an Employee
who receives salary continuation in respect of termination of employment may be
a date no earlier than the first anniversary, and no later than the second
anniversary, of the last date of a period during which salary continuation is
provided.  A one-year period of severance
is a 12 consecutive month period, beginning on the Severance from Service Date,
during which the employee does not perform an hour of service for the employer.


 


Section 1.49           Spinoff.  “Spinoff”
shall have the meaning assigned to such term in the Preamble to the Plan.


 


Section 1.50A       Spouse. 
For all purposes under this Plan, the terms “spouse” and “surviving
spouse” shall mean the individual recognized as an individual’s lawful husband
or lawful wife under applicable federal laws.


 


Section 1.50           Social
Security Retirement Age.  “Social Security Retirement
Age” means:


 


(i)                                     Age 65 with respect to any Employee who
was born before January 1, 1938;


 


(ii)                                  Age 66 with respect to any Employee who
was born after December 31, 1937 and before January 1, 1955; and


 


(iii)                               Age 67 with respect to any Employee who
was born after December 31, 1954.


 


Section 1.51           Trust.  “Trust”
shall mean the trust established pursuant to the Trust Agreement.


 


Section 1.52           Trust
Agreement.  “Trust Agreement” shall mean the trust
agreement under the Plan as it may be amended from time to time, providing for
the investment and administration of the Trust Fund.  By this reference the Trust Agreement is
incorporated herein.


 


Section 1.53           Trust
Fund.  “Trust Fund” shall mean the fund established
under the Trust Agreement by contributions made pursuant to the Plan and from
which any amounts payable under the Plan are to be paid.


 


Section 1.54           Trustee.  “Trustee”
shall mean the Trustee under the Trust Agreement.


 


Section 1.55           Vested
Retirement Benefit.  “Vested Retirement Benefit” shall have the
meaning given in Section 3.10.


 


16

















 


Section 1.56           Vesting
Service.


 


(a)           The Vesting Service of a Participant shall mean the
aggregate number of whole year periods of service after he first became an
Employee and prior to any Period of Severance whether or not such periods of
service were completed consecutively.


 


(b)           The Vesting Service of a Participant shall also
include the following Periods of Severance: 
(i) a Period of Severance which begins as of the date the
Participant quits, is discharged or retires and ends within twelve months of
such date; and (ii) a Period of Severance which begins as of the
date of any absence from service for any reason not described in (i) above
which is then followed by a quit, discharge or retirement and which thereafter
ends within twelve months of the original absence.


 


(c)           The Vesting Service of a nonvested Participant who has
incurred a Period of Severance of one year or more and is subsequently
reemployed shall not include previously earned Vesting Service if, at the time
of such reemployment, the Period of Severance equals or exceeds the greater of
five (5) years or the previously earned Vesting Service (whether or not
consecutive).  For purposes of this
subsection, in the case of an Employee who is absent from work for maternity or
paternity reasons, the 12-consecutive-month period beginning on the first
anniversary of the first date of such absence shall not be counted as part of a
Period of Severance.  An absence from
work for maternity or paternity reasons means an absence (1) by
reason of the pregnancy of the Employee, (2) by reason of a birth
of a child of the Employee, (3) by reason of the placement of a
child with the Employee in connection with the adoption of such child by such
Employee, or (4) for purposes of caring for such child for a period
beginning immediately following such birth or placement.


 


(d)           Notwithstanding any other provision of this Section,
the Vesting Service of each Employee who became a Participant in connection
with the spinoff of Henley by Allied-Signal as of May 27, 1986 and who
participated in the Predecessor Plan on December 31, 1985 shall include
all Vesting Service under Section 1.49 of the Predecessor Plan.


 


(e)           For purposes of this Section, service with any member
of the controlled group of corporations of which the Company is a member
(within the meaning of section 414(b), (c) or (m) of the
Internal Revenue Code) shall be considered service as an Employee.


 


(f)            For purposes of this Section, service from January 1,
1990 through December 31, 1993 that is treated as ‘vesting service’ under
any Related Plan will be considered to be Vesting Service under this Plan.


 


(g)           For purposes of this Section, service of any employee
who is a leased employee to any employer aggregated under Code Section 414(b),
(c), or (m) will be credited whether or not such individual is eligible to
participate in the Plan.


 


17

















 


ARTICLE II


 


ELIGIBILITY


 


Section 2.1             Requirements for Participation.


 


(a)           Any Employee


 


(i)                                     who


 


(A)                              was actively employed on January 1,
1986 by Henley or a business that became a subsidiary or division of Henley in
connection with the Spinoff of Henley by Allied-Signal as of May 27, 1986;
or


 


(B)                                was actively employed on January 1,
1986 by a member of the Allied-Signal controlled group of corporations and
became an Employee in connection with the Spinoff; and


 


(ii)                                  who was a participant in the Predecessor
Plan on December 31, 1985, shall be a Participant in this Plan as of January 1,
1986.


 


(b)           Any Employee who


 


(i)                                     on the first day of any calendar month
after December 1985 an Employee shall become a Plan Participant if he or
she has completed either one three hundred sixty-five day period commencing
with the first day for which he is entitled to be credited with an Hour of
Service within the meaning of 29 CFR § 2530.200b-2(a)(1) upon
employment or reemployment, or one calendar year commencing with or after such
first period, during which three hundred sixty-five day period or year he had
completed one thousand or more Hours of Service as an Employee, and


 


(ii)                                  is not


 


(A)                              an Employee in a division of a Company as
to which the Plan has not been adopted, or a Company as to which the Plan was
adopted only for positions or classifications excluding the Employee, or


 


(B)                                an Employee in a bargaining unit covered
by a collective bargaining agreement in existence on March 4, 1975 (unless
such agreement provided for coverage hereunder of Employees in such unit) or a
bargaining unit which becomes covered by a collective bargaining agreement
after such date, with respect to which retirement benefits were the subject of
good faith bargaining (unless such agreement provides for coverage hereunder of
Employees in such unit), or


 


18














 


(C)                                a citizen of a country other than the
United States and a resident of a country other than the United States, or


 


(D)                               a citizen of a country other than the
United States and an Employee of any Company determined by the Administrator to
be predominantly involved in international operations, unless the Administrator
otherwise determines that such Employee is eligible to participate in this
Plan, on the basis of uniform standards applied in a nondiscriminatory manner
to all Employees similarly situated, shall be eligible to become a
Participant.  Service rendered for a
member of the Allied-Signal controlled group of corporations prior to May 27,
1986 by an Employee who was eligible to become a participant in the Predecessor
Plan on December 31, 1985, became an Employee in connection with the
spinoff of Henley by Allied-Signal and was actively employed on January 1,
1986 by a member of the Allied-Signal controlled group of corporations shall be
considered service as an Employee for purposes of this subsection.


 


(c)           For purposes of determining eligibility to participate
in the Plan under this Section 2.1, service with any member of the
controlled group of corporations of which the Company is a member (within the
meaning of section 414(b), (c) or (m) of the Code) shall be
considered service as an Employee.


 


(d)           Effective January 1, 1990, for purposes of
determining eligibility to participate in the Plan under this Section, service
from January 1, 1990 through December 31, 1993 that is counted toward
eligibility under any Related Plan shall be considered service as an Employee.


 


Section 2.2             Termination of Participation.  A Participant
shall cease to be a Participant on the date on which he is deemed to have
Separated from the Service.  A Former
Participant who returns to the employ of the Company shall be reinstated as a
Participant immediately and his Credited Service and Vesting Service as of such
date shall be calculated in accordance with the rules in Section 1.19
and Section 1.56, respectively.


 


Section 2.3             Forfeitures.  If a Participant has a Separation from the
Service for any reason prior to his acquisition of a Vested Retirement Benefit,
his Accrued Benefit shall be forfeited when his continuous Period of Severance
equals or exceeds the greater of five (5) years or his previously earned
Vesting Service (whether or not completed consecutively).


 


19

















 


Section 2.4             Freeze.  Notwithstanding anything to the contrary in
the Plan, there shall be no new Participants in the Plan after December 31,
1993, and any Employees who would otherwise commence their participation in the
Plan after December 31, 1993 shall not be eligible for such participation
and shall not accrue any retirement or other benefits under the Plan.  Accordingly, the participant group in the
Plan shall be fixed and frozen as of December 31, 1993.


 


ARTICLE III


 


RETIREMENT,
TERMINATION, OR DEATH


 


Section 3.1             Normal Retirement.  A Participant may retire on
his Normal Retirement Date or the first day of any month thereafter.


 


Section 3.2             Normal Retirement Benefit.


 


(a)           A Participant who retires on or after his Normal
Retirement Date shall receive a Normal Retirement Benefit which shall not be
less than the Participant’s Accrued Benefit and shall consist of a monthly
payment commencing on the first day of the month coincident with or next
following the date he retires and ending with the month in which his death
occurs.


 


(b)           Effective January 1, 1990, except as provided in
subsections (c) through (i), his Normal Retirement Benefit shall be the
greater of (A) the sum of (i) , (ii) and (iii), less (iv), and (B) the
sum of (i) , (ii) and (iii) determined without regard to the
Credited Service described in Section 1.19(a)(v) or the Compensation
described in Section 1.16(h):


 


(i)                                     1.1% of his Average Final Compensation up
to Covered Compensation multiplied by his Credited Service (but not more than
35 years);


 


(ii)                                  1.5% of his Average Final Compensation in
excess of Covered Compensation multiplied by his Credited Service (but not more
than 35 years);


 


(iii)                               1.5% of his Average Final Compensation
multiplied by Credited Service in excess of 35 years.


 


(iv)                              His “normal retirement benefit” payable
under any Related Plan which is based on Credited Service described in Section 1.19(a)(v).


 


(c)           A Participant’s Normal Retirement Benefit shall not


 


(i)                                     except as provided in subsections (c) through
(i), be less than 1.25% of his Average Final Compensation multiplied by his
Credited Service; provided, however, that for this purpose Average Final
Compensation shall be computed by taking into account only the Compensation
described in subsections 1.16(a)(i) and (iii) of this Plan, provided
that


 


20

















 


(ii)                                  in the case of a Participant who had his
Separation from the Service at the time he was employed at the La Jolla
facility or the Hampton facility of the Company, be less than the greater of (A) his
Normal Retirement Benefit calculated in accordance with subsection(i) above
or (B) the greater of (1) $20.00 times his Credited Service or (2) 1%
of his Average Final Compensation multiplied by his Credited Service.


 


(d)           Notwithstanding anything in the Plan to the contrary,
in no event shall a Participant’s or Former Participant’s monthly Benefit
payment under Section 3.2, 3.5, 3.4(b) or 3.10 be less than the
largest monthly Benefit payment under Section 3.4(b) to which he
could have become entitled by electing, at any time, Early Retirement under Section 3.3.


 


(e)           In the case of an Employee of a Company who was a
participant on December 31, 1983 in a plan which merged with the
Predecessor Plan on January 1, 1984, the provisions of which plan require
any adjustments for additional benefits, offset benefits, predecessor plan
benefits or, except in the case of UOP Realty Development Company, any amounts
representing employee contributions which are withdrawn by the Participant at
retirement, such adjustments shall be applied in the manner specified in such
plan against the Normal Retirement Benefit provided under subparagraph (b) to
determine the amount payable hereunder to such participant.


 


(f)            In the case of an Employee other than an Employee of
UOP Realty Development Company who was a participant on December 31, 1983
in a plan which merged with the Predecessor Plan on January 1, 1984, who
made employee contributions to any retirement plan or any other pension or
profit sharing plan of any Company which contribution increased the amount of
any retirement benefit payable under such plans, the provisions of such plans
in effect on December 31, 1983 shall govern the timing and manner of the
payment of such contributions or benefits provided, however, that the interest
rate used to accumulate such employee contributions after December 31,
1983 shall in no event be less than the interest rate provided in the
definition of Actuarial Equivalent under this Plan and the accumulated amount
at retirement will be converted to an annuity using the lump sum factor
described in Section 3.8.


 


(g)           The Normal Retirement Benefit of any Participant who
was transferred from a Company described in (c)(i) to a Company described
in (c)(ii) or from a Company described in (c)(ii) to a Company
described in (c)(i) shall be calculated as though the Employee had, at all
times, been employed by his Employer on the date of his Separation from the
Service, provided that in no event will his Normal Retirement Benefit be less
than his Accrued Benefit on the date of any transfer.


 


(h)           The Benefit of a Participant who elects an Optional Retirement
Benefit under Section 3.6 and the Benefit of a Participant who is married
on his Normal or Early Retirement Date and has not elected not to receive the
automatic Statutory Joint and Survivor Annuity provided under Section 3.7,
shall be determined under the provisions of Section 3.6 or 3.7,
respectively.


 


21

















 


(i)            In the case of an Employee who made contributions to
any retirement plan sponsored by UOP, Inc., which merged with the
Predecessor Plan on January 1, 1984, which contributions were not
withdrawn prior to or as of his Normal Retirement Date, the Normal Retirement
Benefit payable under this section shall be increased by the amount of such
contributions accumulated to such date at the interest rate applicable under
the prior plan (but after December 31, 1983, in no event less than the
interest rate specified in the definition of Actuarial Equivalent hereunder)
expressed as the actuarial equivalent of a single life annuity.


 


Section 3.3             Early Retirement.


 


(a)           A Participant may voluntarily retire on his Early
Retirement Date upon written notice to the Administrator designating such
date.  A Participant who undergoes a
Separation from the Service after he has qualified for Early Retirement may
elect to have Benefits commence in accordance with this Section at or
after such Separation, and the designated effective date of such election shall
be his Early Commencement Date.


 


(b)           Notwithstanding the foregoing, any Employee who was
eligible to retire as of December 31, 1985 under the terms of the
Predecessor Plan shall be eligible to retire under this Plan.


 


(c)           Notwithstanding the foregoing, any Employee or former
Employee who was an employee participating on December 31, 1983 in the UOP
Pension Plan, or in any like plan maintained by UOP, Inc. on such date, or
any Employee who would otherwise have become a participant in such a plan upon
completing the applicable eligibility requirements, shall be eligible to retire
on or after his fifty-fifth birthday and the completion of five years of
Vesting Service.


 


(d)           Notwithstanding the foregoing, any Employee or former
Employee who was a Participant on December 31, 1983 in the Signal
Retirement Plan (as defined in the Predecessor Plan) shall be entitled to
retire under this Plan with respect to his Accrued Benefit as of December 31,
1988 at the time and using the reduction factors specified in the Signal
Retirement Plan in effect on such date.


 


Section 3.4             Early Retirement Benefit.


 


(a)           A Participant who retires on his Early Retirement
Date, or Former Participant who at the time of his Separation from the Service
has qualified for Early Retirement, shall receive a benefit which shall be no
less than his Accrued Benefit provided under Section 3.10(c),
appropriately reduced, as provided under Section 3.4(b)(ii) and,
subject to the provisions of Sections 3.6 and 3.7, shall consist of a
monthly payment commencing upon his Early Commencement Date and ending with the
month in which his death occurs.


 


(b)           The amount of each such monthly payment shall, subject
to Section 3.2(d), be an amount determined by reducing


 


22

















 


(i)                                     his Normal Retirement Benefit, computed
under Section 3.2(b) on the basis of his Credited Service completed
prior to his Early Retirement Date plus the number of years and fractional
years from his Separation from the Service to his Normal Retirement Date,
multiplied by a fraction, the numerator of which is his Credited Service and
the denominator of which is his Credited Service plus the number of years and
fractional years from his Separation from the Service to his Normal Retirement
Date, and under Section 3.2(c) on the basis of his Credited
Service completed prior to his Early Retirement Date, by


 


(ii)                                  1/3 of 1% for each of the first 60 months
(if any) by which his Early Commencement Date precedes the first day of the
month coincident with or next following his 60th birthday; provided, however,
that for Participants who attain age 55 in the year 2009 or later, the
reduction factor provided for under this subparagraph (ii) shall be
equal to 1/3 of 1% for each of the first 36 months and 5/12 of 1% for each
additional month up to 24 months (if any) by which his Early Commencement Date
precedes the first day of the month coincident with or next following his 60th
birthday.


 


(c)           An Employee or former Employee who was a Participant
in the Signal Retirement Plan (as defined in the Predecessor Plan) on December 31,
1983 shall, in addition to the monthly payment provided in subparagraph (b) above,
receive a temporary additional Early Retirement Benefit of $150.00 per month
ending with the earliest of the month in which he dies, the month before his
62nd birthday or the date of eligibility for full or reduced Social Security
benefits.


 


(d)           In the case of an Employee who is eligible to retire
before age fifty-five by virtue of subparagraph (b) or (d) of Section 3.3,
the Early Retirement Benefit payable hereunder shall be further reduced before
age fifty-five by an Actuarial Equivalent reduction factor for the months, if
any, by which his Early Commencement Date precedes the first day of the month
coincident with or next following his fifty-fifth birthday.


 


(e)           In the case of an Employee who made contributions to
any retirement plan sponsored by UOP, Inc., which merged with the
Predecessor Plan on January 1, 1984, which contributions were not
withdrawn prior to or as of his Early Retirement Date, the Early Retirement
Benefit payable under this section shall be increased by the amount of such
contributions accumulated to such date at the interest rate applicable under
the Predecessor Plan (but after December 31, 1983, in no event less than
the interest rate specified in the definition of Actuarial Equivalent
hereunder) expressed as the actuarial equivalent of a single life annuity.


 


Section 3.5             Disability Retirement Benefit.


 


(a)           A Participant who has at least ten years of Credited
Service at his date of Disability, and who retires on his Disability Retirement
Date prior to December 31, 1993, may elect, in a manner prescribed by the
Committee, to receive a Disability Retirement Benefit which 


 


23

















 


shall be no less than his Accrued Benefit,
appropriately reduced, as provided under Section 3.10(c) and, subject
to the provisions of Sections 3.6 and 3.7, shall consist of a monthly
payment on the first day of each calendar month commencing with his Disability
Retirement Date and ending with the month in which his death occurs or, if
earlier, the month in which his Disability ceases.


 


(b)           The amount of each such monthly payment shall be the
greater of (x) the amount computed by reducing (i) his Normal
Retirement Benefit, computed under Section 3.2(b) on the basis of his
Credited Service completed prior to his Disability Retirement Date multiplied
by a fraction, the numerator of which is his Credited Service, and the
denominator of which is his Credited Service plus the number of years and
fractional years from his Disability Retirement Date to his Normal Retirement
Date, by (ii) 1/3 of 1% for each of the first 60 months (if any) by
which his Disability Retirement Date precedes his 60th birthday, provided,
however, that for Participants who attain age 55 in the year 2009 or later, the
reduction factor shall be 1/3 of 1% for each of the first 36 months and 5/12 of
1% for each additional month up to 24 months (if any) by which his Disability
Retirement Date precedes his 60th birthday; and with an Actuarial Equivalent
reduction factor applied for each month in excess of such first 60 months, or (y) the
amount of his Normal Retirement Benefit computed under Section 3.2(c)(i) or
(ii) on the basis of Credited Service completed prior to his Disability
Retirement Date, whichever is applicable to such Participant, reduced by the
amount referred to in (x)(ii) of this Section 3.5(b), but with such
reduction limited to 50%.


 


(c)           If a Former Participant’s Disability ceases and he
thereupon again becomes an Employee his Disability Retirement Benefit shall
cease and he shall resume status as a Participant.  Such Former Participant shall accrue Credited
Service in accordance with the terms of the Plan for any period prior to his
Normal Retirement Date after resuming status as a Participant.  The Normal Retirement Benefit payable to such
Participant on his Normal Retirement Date shall be redetermined by taking into
account total Credited Service including the period of disability,
Compensation, etc. as required by the terms of the Plan and benefits already
paid hereunder.


 


(d)           In the case of an Employee who made contributions to
any retirement plan sponsored by UOP, Inc., which merged with the
Predecessor Plan on January 1, 1984, which contributions were not
withdrawn prior to or as of his Disability Retirement Date, the Disability
Retirement Benefit payable under this section shall be increased by the amount
of such contributions accumulated to such date at the interest rate applicable
under the prior plan (but after December 31, 1983, in no event less than
the interest rate specified in the definition of Actuarial Equivalent
hereunder) expressed as the actuarial equivalent of a single life annuity.


 


Section 3.6             Optional Retirement Benefit.


 


(a)           A Participant or Former Participant entitled to
receive a Normal or Early Retirement Benefit or a Participant who is entitled
to receive a Disability Retirement Benefit, shall generally receive the joint
and survivor annuity provided in Section 3.7 (so long as such Participant
is otherwise described in Section 3.7), unless such Participant elects not
to receive such annuity and elects instead to receive a distribution in a form
specified in subsections (i), (ii), (iii) or (iv) below.  In addition, to be effective, any election
made under this Section 3.6 must be 


 


24

















 


made by the Participant himself, must be in writing on
a form prescribed by the Administrator, must name the Beneficiary if a form of
joint annuity is chosen, must be signed by the Participant and, if required by
the Administrator, by the Participant’s spouse and must be filed with the
Administrator prior to the date his benefits are to commence.  A Participant to whom Section 3.7 does
not apply and who makes no written election under this Section shall
receive a Benefit in accordance with subsection (i) below.  A Participant may elect, in accordance with
the requirements of the Administrator, to receive his Benefit in any one of the
following manners:


 


(i)                                     A Normal, Early or Disability Retirement
Benefit, as the case may be, in the form of a single life annuity,


 


(ii)                                  A reduced monthly Benefit payable during
his Normal, Early or Disability Retirement Benefit period with the provision
that if he dies after his Normal, Early, or Disability Retirement Date, as the
case may be, survived by his properly designated Contingent Annuitant, such
Contingent Annuitant shall receive a monthly Benefit in the same amount (or in
50%, 66 2/3% or 75% of that amount if the Participant shall so elect) until the
first day of the calendar month in which the Contingent Annuitant’s death
occurs provided, however, that if the Contingent Annuitant is
other than the Participant’s spouse, not less than 50% of the actuarial value
of the Participant’s Normal, Early, or Disability Retirement Benefit must be
applied to provide Benefits payable to the Participant during his life under
this subsection.  (This election shall
not take effect if the Contingent Annuitant does not survive until the
commencement of payments under this subsection),


 


(iii)                               An increased retirement benefit payable
during the Participant’s lifetime until age 62, decreased after age 62 by the
expected Social Security Benefit and payable at such reduced rate during the
remainder of the Participant’s life, so as to produce, as nearly as possible, a
level retirement income.  Such benefit
shall be payable, at the Participant’s option, in the form of a life annuity or
a contingent annuity with 50%, 66 2/3%, 75% or 100% payable to the Participant’s
designated Contingent Annuitant in the event of the Participant’s death and
until the first day of the calendar month in which the Contingent Annuitant’s
death occurs, provided, however, that notwithstanding anything to
the contrary in this Plan, effective January 1, 1985, distributions will
be made in accordance with the Regulations under Code Section 401(a)(9),
including the minimum distribution incidental benefit requirement of Code Section 401(a)(9)(G).
(An election of a benefit payable to a Contingent Annuitant pursuant to this
section shall not take effect if the Contingent Annuitant does not survive
until the commencement of payments under this subsection), or


 


25

















 


(iv)                              A reduced retirement benefit payable
during the Participant’s life, with a guarantee that not less than a fixed
number of payments will be made to the Participant or, if the Participant dies
prior to the expiration of such fixed number of years, to the Participant and
the Participant’s Beneficiary, in the aggregate.  The Participant may select a guarantee of 60,
120 or 180 payments.  If a Participant
elects this option, the Participant shall also designate the Beneficiary to
whom monthly payments will be continued if the Participant dies before having
received the fixed number of payments. 
The Participant shall (subject to the consent requirements of this
Section) have the right to change such Beneficiary prior to the Participant’s
annuity starting date upon giving notice in writing to the Administrator.  If a Participant elects this option and dies
in active employment with a Company, the Beneficiary will not be entitled to
any rights or benefits under the Plan, except in accordance with Section 3.9
hereof.


 


(b)           Notwithstanding (i) , (ii), (iii) or (iv) above,
the payment of the Actuarial Equivalent of any stream of payments or of any
annuity paid to Beneficiaries shall be paid pursuant to the requirements of Section 3.15.


 


(c)           A Former Participant entitled to a Normal Retirement
Benefit in a form prescribed in this section or pursuant to Section 3.7
who has previously left the employ of the Company shall be notified of such
entitlement as provided in Section 10.8 of the Plan.


 


(d)           Subject to the foregoing provisions of this Section 3.6
and to the provisions of Section 3.7, a Participant or Former Participant
who (i) made employee contributions to the UOP Pension Plan prior to January 1,
1984, (ii) elects after October 1, 1988 and prior to March 1,
1990 to withdraw all such contributions with accrued interest, and (iii) has
an accrued benefit under the Plan immediately following such withdrawal the
present value of which (determined using the Actuarial Equivalent definition
applicable to small benefit cashouts under Section 3.13) is equal to
$5,000 or less, may elect to receive an immediate lump sum distribution of such
remaining accrued benefit.


 


Section 3.7             Statutory Joint and Survivor Annuity.


 


(a)           Notwithstanding anything in the Plan to the contrary,
the Benefit, if any, of a Participant or Former Participant commencing on his “Annuity
Starting Date” (meaning either the first day of the first period with respect
to which an amount is received as a life annuity; or in the case of a benefit
not payable in the form of an annuity, the first day on which all events have
occurred which entitle the Participant to an annuity) shall be a statutory
joint and survivor annuity which is immediately available, as described in
subsection, if


 


(i)                                     he was married upon his Annuity Starting
Date,


 


(ii)                                  he notified the Administrator in writing
prior to his Annuity Starting Date that he was married, and


 


26

















 


(iii)                               he has not otherwise elected under
subsection.


 


(b)           The joint and survivor annuity of a Participant or
Former Participant shall be a Benefit, reduced as provided in subsection,
consisting of monthly payments to him beginning on his Annuity Starting Date
and ending with the calendar month in which his death occurs with the provision
that, if he dies after his Annuity Starting Date survived by the spouse to whom
he was married on his Annuity Starting Date, such spouse shall receive monthly
payments of fifty percent of such reduced Benefit beginning on the first day of
the calendar month following the month in which the Participant or Former
Participant dies.  Payments to such
Participant’s or Former Participant’s spouse continue until the first day of
the calendar month following the spouse’s death.  For the avoidance of doubt, Participants may
receive a reduced monthly amount during their lifetime and, after their death,
50%, 66-23%, 75% or 100% of that amount will be paid to the Participant’s
spouse or to another named contingent annuitant.


 


(c)           The reduced Benefit payable under this Section to
a Participant or Former Participant during his lifetime shall be at a monthly
rate such that his joint and survivor annuity is the Actuarial Equivalent of
his Disability, Early or Normal Retirement Benefit, as the case may be.


 


(d)           A Participant or Former Participant referred to in
subsection (a) may elect in writing, in the manner prescribed by the
Administrator and with the consent of such Participant’s or Former Participant’s
spouse, if required by the Administrator, not to receive a joint and survivor
annuity (in which case he shall receive his Benefit as otherwise provided in
the Plan).  Such an election must satisfy
the requirements of Section 3.14(b). 
Such an election shall be made not earlier than:


 


(i)                                     90 days before the commencement of the
distribution of any part of an Accrued Benefit under this Plan,


 


and not later than the later of


 


(ii)                                  his Annuity Starting Date, or


 


(iii)                               the ninetieth (90th) day after the
mailing or personal delivery to him of information referred to in
subsection 3.7(e).


 


Such an election may be revoked, or revoked and
re-elected, at any time during the applicable election period described in this
subsection 3.7(d).  A Participant
may request additional information regarding the notices he receives under
subsection 3.7(e).  However, such a
request for additional information must be made within 60 days after the
notices have been mailed or personally delivered.  Should a Participant request additional
information, then the applicable election period described in this
subsection 3.7(d) shall be extended so that it ends 90 days after the
requested additional information has been mailed or personally delivered to the
Participant.  If a Participant (i) has
separated from service, (ii) is entitled to receive or is currently
receiving a Qualified Joint and Survivor Annuity under Code Section 401(a)(11),
and (iii) has not had an election described in this
subsection 3.7(d) made available to him, then the Plan shall provide
to such a Participant an election to receive the balance of his benefits in the
form of an Optional Retirement Benefit, described in Section 3.6.  Such a Participant shall have 90 days after
notice of the election is mailed or personally delivered to him in which to
make the election described in the preceding sentence.  If the Participant has died, then the
election shall be made available to the Participant’s personal
representative.  The balance of the
Participant’s benefits distributed under such an election may be adjusted, if
applicable, for payments previously distributed in the form of a Qualified
Joint and Survivor Annuity.


 


27

















 


(e)           Each Participant or Former Participant shall receive
from the Administrator nontechnical explanations of the availability and
consequences of the election provided hereunder at such time and in such a
manner so as to comply with all Internal Revenue Service Regulations that may
be promulgated in this regard.


 


(f)            During the period described in subsection, a
participant or Former Participant who properly elected thereunder not to
receive a joint and survivor annuity may revoke such election and after any
such revocation, an election under subsection ay be made again prior to the
expiration of such election period.


 


(g)           Notwithstanding the foregoing, a Participant may,
after receiving the written explanation described in subsection (e) above
(“Notice”), affirmatively elect (with spousal consent if necessary) to have his
or her benefit commence (annuity starting date) sooner than 30 days following
receipt of the Notice, provided all of the following 5 requirements are met:


 


(i)                                     The Administrator (or its delegate)
clearly informs the Participant that he or she has a period of at least 30 days
after receiving the Notice to decide when to have his or her benefit begin and,
if applicable, to choose a particular optional form of payment;


 


(ii)                                  The Participant affirmatively elects a
date for benefits to begin and, if applicable, an optional form of payment,
after receiving the Notice;


 


(iii)                               The Participant is permitted to revoke
his or her election until the later of the annuity starting date or 7 days
following the date the Participant received the Notice;


 


(iv)                              The Participant’s annuity starting date
is after the date the Notice is provided (however the annuity starting date may
be before the expiration of the 7-day period referred to in item (v), below and
before the date of the Participant’s affirmative distribution election); and


 


(v)                                 Payment does not commence less than 7
days following the day after the Notice is received by the Participant.


 


28














 


Section 3.8             Actuarial Equivalence.


 


The Participant’s Optional Retirement Benefit under Section 3.6
or the Benefit provided under Section 3.7 shall be the Actuarial
Equivalent of his Normal, Early, or Disability Retirement Benefit, said
Equivalent being computed as of the date payments commence.


 


Section 3.9             Death Benefit - Qualified Preretirement Survivor Annuity.


 


(a)           If a Participant dies after becoming eligible for an
Early Retirement Benefit while he is an Employee (including a Participant who
was so eligible, was Disabled and did not elect to receive a Disability
Retirement Benefit and a Former Participant who was eligible at the time of his
Separation from the Service to receive Early Retirement Benefits, but who
elected to defer his Early Commencement Date beyond such Separation from the
Service), and is survived by a spouse, such spouse shall receive a Benefit
equal to one-half of the amount such Participant would have received (other
than pursuant to Section 3.4(e)) had he retired immediately preceding his
death and had he elected to receive a single life annuity.


 


(b)           Subject to the limitation imposed by Section 3.6(b),
in the event of the death of a Participant who is not survived by a spouse (or
if the spouse dies after Benefits described in subparagraph (a) above
have commenced) but is survived by one or more children of the Participant
under the age of 21, each periodic payment of the Benefit described in
subparagraph (a) above shall be paid in equal shares among all of
such children who are under the age of 21 at the time of such payment, and
shall continue to be paid until the last of such children either attains age 21
or dies.


 


(c)           Notwithstanding the foregoing and subject to the
limitation imposed by Section 3.6(b), in the case of an Employee other
than an Employee of UOP Realty Development Company who was a Participant on December 31,
1983 in a plan which merged with the Predecessor Plan on January 1, 1984,
the Death Benefit payable hereunder to a Participant’s spouse or beneficiary
shall in no event be less than the amount of any employee contributions made to
such plans, accumulated to the earlier of the date benefits commence payment or
the Participant’s Normal Retirement Date, at the interest rate applicable under
the Predecessor Plan (but after December 31, 1983, in no event less than
the interest rate specified in the term Actuarial Equivalent under this Plan),
less any benefits received by the Participant or Beneficiary.


 


(d)           In the case of an Employee who was a participant on December 31,
1983 in a plan which merged with the Predecessor Plan on January 1, 1984
which provided for the payment of a death benefit to the surviving spouse of
any Employee who died after a stated period of service, a Death Benefit shall
be payable hereunder to the surviving spouse of such an Employee in an amount
equal to the greater of the amount which would have been payable to such spouse
had such Employee died on December 31, 1983 or the Death Benefit payable
under subparagraph (a) .


 


29

















 


(e)           In the case of the death of any Employee or former
Employee who made contributions to any retirement plan sponsored by UOP, Inc.
which was merged with the Predecessor Plan on January 1, 1984, and the
death of any and all persons to whom benefits were being paid under Section 3.6
or 3.7 on behalf of the Employee following the Employee’s death, there shall be
paid in a lump sum to the Beneficiary of the Employee the amount of any
contributions made to such plan by the Employee accumulated to the earlier of
the date benefits commence payment or the Employee’s Normal Retirement Date at
the interest rate applicable under such plan, but after December 31, 1983
in no event at a rate less than the interest rate specified in the definition
of Actuarial Equivalent under this Plan, less any benefits paid with respect to
such contributions to the Employee and to such other person or persons under Section 3.6
or 3.7, except that if benefits are payable under Section 3.9(a) following
the Employee’s death, the amount of such contributions accumulated with
interest as provided for above shall be paid to the Employee’s spouse in the
form of an actuarial equivalent life annuity based on such spouse’s age at the
date of death of the Employee unless such spouse shall elect in writing to
receive such contributions in the form of a lump sum payment.


 


(f)            If a Participant who has fulfilled the requirements
for a Vested Retirement Benefit dies before his entire Benefit has been paid to
him and before the earliest date which the Participant could have designated as
his Early Retirement Date, or if a Former Participant who has fulfilled the
requirements for a Vested Retirement Benefit dies before his Benefit commences
payment, his surviving spouse, if any, shall be entitled to receive the greater
of the benefits, if any, described in subsection 3.9(d) above or benefits
having the effect of a Qualified Preretirement Survivor Annuity, as described
below, unless such spouse had not been married to the Participant or Former
Participant for at least one year at the time of his death.  The benefits payable to the spouse of a
Participant (or Former Participant) who dies before the earliest date which the
Participant could have designated as his Early Retirement Date shall commence
with the month in which the Participant would have reached the earliest date
which could have been designated as his Early Retirement Date or the first day
of any month thereafter up to and including the first day of the month next following
the date on which the Participant would have attained age 65, as elected by the
spouse, and shall be equal to one half of the amount which would have been
payable to such Participant if he had (a) separated from service on the
date of death; (b) survived to the earliest date which could have been
designated as his Early Retirement Date or the first day of any month
thereafter, as elected by the spouse and (c) commenced payment on such
date with an immediate straight life annuity. 
The benefit payable to the spouse of a Former Participant who dies after
the earliest date which the Former Participant could have designated as his
Early Commencement Date but before his Benefit commences payment shall commence
with the month following the date of death or the first day of any month
thereafter up to and including the first day of the month next following the
date on which the Participant would have attained age 65, as elected by the
spouse, and shall equal to one half the amount which would have been payable to
such Former Participant if he had commenced payment with an immediate straight
life annuity on the day before such Former Participant’s death or the first day
of any month thereafter up to and including the first day of the month next
following the date on which the Participant would have attained age 65, as
elected by the spouse.


 


(g)           Except as expressly herein provided, no Benefit shall
be payable hereunder upon the death of a Participant or Former Participant.


 


(h)           If the spousal benefit described above is not fully
subsidized, the Participant may waive the spousal benefit described above by
following the procedures described below.


 


30

















 


(i)                                     Notice.  During the
Applicable Period (defined below), the Committee will provide the Participant
with an explanation of the terms and conditions of the spousal benefit, the
Participant’s right to make, and the effect of, an election to waive the
spousal benefit, the rights of the Participant’s spouse to approve such a
waiver, the Participant’s right to revoke such a waiver at any time before the
Participant’s death and the effect of the Participant’s right to revoke such a
waiver.


 


(ii)                                  Procedure.  A Participant’s
waiver of the spousal benefit must be made on a form prepared by, and delivered
to the Committee during the period (“Applicable Period”) that begins with the
first day of the Plan Year in which the Participant attains age 35 and ends
with the death of the Participant; provided, however, if a Participant ceases
to be an Employee before the first day of the Plan Year in which the
Participant attains age 35, this period will begin on the day the Participant
ceases to be an Employee.  A Participant
may revoke such a waiver at any time before the first to occur of the
Participant’s Annuity Starting Date or the Participant’s death by delivering a
subsequent form to the Committee that satisfies the waiver provisions of this
Plan.


 


(iii)                               Spousal Consent. 
The Participant’s surviving spouse must waive any rights to the spousal
benefit in a written document that acknowledges the effect of the waiver, and
that is witnessed by a notary public or, to the extent permitted by the
Company, by a Company representative. 
Spousal consent will be irrevocable; provided, however, that spousal
consent will be deemed to be revoked if the Participant changes his or her
waiver election.


 


(iv)                              Waiver Unnecessary. 
If the Participant is legally separated or abandoned (within the meaning
of local law) and the Participant has a court order to that effect (and there
is no Qualified Domestic Relations Order as defined in Code Section 414(p) that
provides otherwise), or the surviving spouse cannot be located, then the waiver
described in the preceding paragraph need not be filed with the Committee when
a married Participant waives a spousal benefit under this Plan.


 


(v)                                 Effect of Waiver. 
Any waiver by a spouse obtained pursuant to these procedures (or
establishment that the consent of a spouse could not be obtained) will be
effective only with respect to that spouse.


 


(i)            The surviving spouse need not begin receiving a
qualified preretirement survivor annuity prior to the time the Participant
would have attained age 65 except where the present value of the nonforfeitable
benefit does not exceed $5,000.


 


31

















 


Section 3.10           Vested
Retirement Benefit.


 


(a)           Each Participant who has completed five (5) years
of Vesting Service or who has reached his Normal Retirement Date while an
Employee shall be entitled to a Vested Retirement Benefit equal to his Accrued
Benefit.  In the event of his Separation
from the Service prior to his Normal, Early or Disability Retirement Date, a
vested Former Participant shall, upon the earlier of his Normal Retirement Date
or his attainment of age 55 (or applicable earlier retirement age) become
entitled to receive a Normal, Early but with an Actuarial Equivalent early
reduction factor applied or Optional Retirement Benefit as he shall elect (or
in the absence of such election, as determined in the manner of Section 3.2,
3.4 or 3.7), all in an amount equal or Actuarially Equivalent to his Accrued
Benefit payable at age 65.  In addition,
any Employee or former Employee who was a Participant in the Signal Retirement
Plan (as defined in the Predecessor Plan) on December 31, 1983 and who
completes five years of Vesting Service and attains his thirty-fifth birthday,
shall be entitled to a Vested Retirement Benefit equal to his Accrued Benefit
as of such date.  In the event of his
Separation from the Service prior to his Normal, Early, or Disability
Retirement Date, a vested Former Participant shall upon his Normal or Early
Retirement Date become entitled to a Normal, Early but with an Actuarial
Equivalent early reduction factor applied or Optional Retirement Benefit as he
shall elect (or in the absence of such election, as determined in the manner of
Section 3.2, 3.4, or 3.7), all in an amount equal or Actuarially
Equivalent to his Accrued Benefit payable at age 65.


 


(b)           An Employee’s “Accrued Benefit” as of his Separation
from the Service shall be equal to his Normal Retirement Benefit computed under
Section 3.2(b) on the basis of his Credited Service completed prior
to such Separation plus the number of years and fractional years from the date
of such Separation to his Normal Retirement Date, multiplied by a fraction, the
numerator of which is his Credited Service and the denominator of which is his
Credited Service plus the number of years and fractional years from the date of
such Separation to his Normal Retirement Date, and under Section 3.2(c) on
the basis of his Credited Service completed prior to such Separation.


 


(c)           Notwithstanding the foregoing, the “Accrued Benefit”
of a non highly compensated Participant shall not be less than his Accrued
Benefit computed under the terms of the Plan immediately prior to April 30,
1991, the adoption date of a prior amended and restated version of the
Plan.  The “Accrued Benefit” of any
highly compensated Participant shall not be less than his Accrued Benefit on December 31,
1988.  The Accrued Benefit of any person
who becomes a highly compensated person after December 31, 1988 shall not
be less than his Accrued Benefit as of December 31 of the year prior to
the year in which he becomes a highly compensated participant.


 


(d)           An Employee or former Employee who made contributions
to any retirement plan sponsored by UOP, Inc. which was merged with the
Predecessor Plan on January 1, 1984 may, by written election at any time
after Separation from the Service and prior to or as of the date any monthly
benefit first becomes payable hereunder, withdraw such contributions with
interest at the rates specified in Section 3.2(i) above, accumulated
to the end of the calendar month immediately preceding the date of such written
election.


 


32

















 


(e)           If the present value of the Participant’s vested
Accrued Benefit is zero at the time of his Separation from the Service, then
that Participant shall be deemed to have received an immediate distribution of
that vested Accrued Benefit on his Severance from Service Date.


 


(f)            The Accrued Benefit for each Section 401(a)(17)
employee (defined below) under this Plan will be the sum of (i) the
employee’s Accrued Benefit as of December 31, 1993 and (ii) the
employee’s Accrued Benefit (if any) determined under the benefit formula
applicable for a Plan Year beginning on or after January 1, 1994, as
applied to the employee’s years of service (if any) credited to the employee
for Plan Years beginning on or after January 1, 1994 for purposes of
benefit accruals.  A Section 401(a)(17)
employee means an employee whose current Accrued Benefit as of a date on or
after the first day of the first Plan Year beginning 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.


 


(g)           Notwithstanding anything to the contrary in the Plan,
no Participant shall accrue any additional retirement benefits under the Plan
after December 31, 1993, and the Accrued Benefit of each Participant shall
be fixed and frozen on December 31, 1993 on the basis of the Participant’s
Average Final Compensation (through December 31, 1993), years of Credited
Service and Covered Compensation through December 31, 1993.  Accordingly, the Normal Retirement Benefit
under Section 3.2 of the Plan, the Early Retirement Benefit under Section 3.4
of the Plan, the Disability Retirement Benefit under Section 3.5 of the Plan,
and the Vested Retirement Benefit under Section 3.10 of the Plan which
each Participant may have accrued through December 31, 1993 shall be fixed
and frozen in accordance with the principles set out in Section 1.7
(Average Final Compensation), Section 1.19 (Credited Service), and Section 1.18
(Covered Compensation).


 


(h)           If the Plan’s vesting schedule is amended, the vested
percentage of every Employee who is a Participant on the amendment adoption
date or the amendment effective date, whichever is later, may not be less than
the Participant’s vested percentage determined under the Plan without regard to
the amendment.  In addition, if the Plan’s
vesting schedule is amended, each such Participant who has completed 3 Years of
Service and whose vested percentage is determined under the new vesting
schedule may elect to have his or her vested percentage determined under the
old vesting schedule if the old vesting schedule would be more favorable.


 


(i)            An Employee’s right to his or her normal retirement
benefit is nonforfeitable on attainment of age 65.


 


Section 3.11           Suspension
of Benefits.


 


(a)           Payment of any benefit derived from Company
contributions to which a Participant would otherwise be entitled shall be
suspended for any calendar month in which the Participant completes 40 or more
hours of service with the Company or with any member of the controlled group;
provided, however, that individual companies may adopt non-discriminatory
procedures to permit payment of benefits during reemployment.  Any suspension shall be effected in
accordance with Department of Labor Regulations § 2530.203-3 (29 CFR
2530.203-3), as amended, and rules and operational guidelines promulgated
by the Committee consistent with such regulations.


 


33

















 


(b)           Subject to Section 1.19, a Participant shall
accrue Credited Service in accordance with the terms of the Plan for any period
for which his benefit payments are suspended. 
The benefit to which a Participant is entitled under the Plan shall be
recomputed as of the first day of the month following the end of the suspension
of benefits by taking into account such additional Credited Service,
Compensation, etc. as required by the terms of the Plan and the benefits
already paid thereunder, but in no event shall the Benefit payable following
the suspension be less than the Benefit to which such Participant was entitled
immediately prior to the suspension.


 


Section 3.12           Direct
Rollover.


 


To the extent administratively practicable, a
Distributee may elect, at the time and in the manner prescribed by the
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 these purposes, the
following definitions apply:


 


(a)           Eligible Rollover Distribution. 
An Eligible Rollover Distribution is 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 any distribution that is one of
a series of substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the Distributee or the
joint lives (or joint life expectancies) of the Distributee and the Distributee’s
Designated Beneficiary, or for a specified period of 10 years or more; any
distribution to the extent that distribution is required under Code Section 401(a)(9);
and the portion of any distribution that is not includible in gross income.


 


(b)           Eligible Retirement Plan. 
An Eligible Retirement Plan is an individual retirement account
described in Code Section 408(a), an individual retirement annuity
described in Code Section 408(b), an annuity plan described in Code Section 403(a),
or a qualified trust described in Code Section 401(a), that accepts the
Distributee’s Eligible Rollover Distribution. 
An Eligible Retirement Plan also includes an annuity contract described
in Code Section 403(b) and an eligible plan under Code Section 457(b) that
is maintained by a state, political subdivision of a state, or any agency or
instrumentality of a state or political subdivision of a state, provided the
plan agrees to separately account for amounts transferred into such plan from
this Plan.  To the extent provided in Section 824
of the Pension Protection Act of 2006, an Eligible Retirement Plan also
includes a Roth IRA.


 


(c)           Distributee. 
A Distributee includes an Employee or former Employee, and such an
Employee’s surviving Spouse or former Spouse who is an alternate payee (under a
Qualified Domestic Relations Order) of such an Employee.


 


(d)           Direct Rollover. 
A Direct Rollover is a payment by the Plan to the Eligible Retirement
Plan specified by the Distributee.


 


34

















 


(e)           Non-Spouse Beneficiary. 
Effective for Eligible Rollover Distributions (as defined above) to
non-Spouse designated beneficiaries for which the Annuity Starting Date (as
defined in Code Section 417(e)) is on or after January 1, 2010, the
following provisions apply:


 


(i)            Direct Rollover.  Pursuant to
procedures established by the Administrative Committee, a Participant’s
non-Spouse designated beneficiary, within the meaning of Code Section 401(a)(9),
may authorize a direct rollover to an individual retirement account or annuity
described in Code Section 408(a) or Code Section 408(b) (collectively
referred to as an “IRA”), that is established on behalf of the designated
beneficiary and that will be treated as an inherited IRS pursuant to the
provisions of Code Section 402(c)(11).


 


(ii)           Required Minimum Distribution. 
The determination of any required minimum distribution within the
meaning of Code Section 401(a)(9) that is ineligible for rollover
will be made in accordance with IRS Notice 2007-7, Q&A 17 and 18.


 


Section 3.13           Payment
of Small Amounts.


 


The Actuarial Equivalent, if $5,000 or less, of any
Accrued Benefit payable in respect of a Participant shall be paid in a lump sum
in lieu of monthly or other periodic payments. 
See update at the end of Appendix II (Distribution Provisions) of
this Plan.


 


(a)           For purposes of determining an employee’s accrued
benefit under the Plan, the Plan may disregard service performed by the
employee with respect to which the employee has received (i) a
distribution of the present value of his entire nonforfeitable benefit if such
distribution was in an amount (not more than $5,000) permitted under
regulations prescribed by the Secretary of the Treasury, or (ii) a
distribution of the present value of the employee’s nonforfeitable benefit
attributable to such service which he elected to receive.  Clause (i) applies only if such
distribution was made on termination of the employee’s participation in the
Plan. Clause (ii) applies only if such distribution was made on
termination of the employee’s participation in the plan or under such other
circumstances as may be provided under regulations prescribed by the Secretary
of the Treasury.


 


(b)           For purposes of determining an employee’s accrued
benefit under the Plan, the Plan will not disregard service as provided in the
preceding paragraph (a) if the employee (i) received a distribution
under paragraph (a) which was less than the present value of the
Participant’s accrued benefit, the employee resumes employment covered under
the Plan, and the employee repays the full amount of such distribution with
interest at the rate determined for purposes of subsection 411(c)(2)(C).  Such repayment must be made (I) in the
case of a withdrawal on account of separation from service, before the earlier of
5 years after the first date on which the employee is subsequently re-employed
by the employer, or the close of the first period of 5 consecutive 1-year
breaks in service commencing after the withdrawal; or (II) in the case of
any other withdrawal, 5 years after the date of the withdrawal.


 


(c)           This Plan precludes the immediate distribution of any
benefit where the present value of the nonforfeitable accrued benefit (taking
into account benefits derived from both employer and employee contributions) is
in excess of $5,000 without the consent of the Participant and, when
applicable, the Participant’s spouse. 
For these purposes, an immediate distribution means the distribution of
any part of the benefit before the later of age 62 or normal retirement age.


 


35

















 


Section 3.14           Special
Election Provisions.


 


(a)           Qualified Preretirement Survivor Annuity coverage
shall be automatically implemented for each Participant upon attainment of his
or her right to a Vested Retirement Benefit or on such other date specified in
the regulations prescribed under Section 417(a) of the Code, and
shall automatically continue until the Participant dies, is divorced, or his
spouse dies.


 


(b)           Notwithstanding any other provision of this Plan, any
election by a Participant or Former Participant of a form of benefit payment
other than that having the effect of a Statutory Joint and Survivor Annuity
described in Section 3.7 shall be effective only if the Participant’s
spouse consents to it in writing, such consent is witnessed by a Plan
representative designated by the Administrator or a notary public, such
election designates a beneficiary (or a form of benefits) which may not be
changed without spousal consent (unless the consent of the spouse expressly
permits designations by the Participant without any requirement of further
consent by the spouse), and the spouse’s consent acknowledges the effect of the
election.  Spousal consent shall not be
required if the Participant establishes to the satisfaction of the Plan
representative that such consent may not be obtained because there is no spouse
or the spouse cannot be located.  Any
consent shall be effective only with respect to the spouse who gave it.


 


Section 3.15           Distribution
of Vested Retirement Benefit.


 


This Section 3.15 has been replaced by Appendix
II (Distribution Provisions).


 


ARTICLE IV



FUNDING OF BENEFITS


 


Section 4.1             Funding Policy and Method.  The
Administrative Committee shall establish a funding policy and method consistent
with the objectives of the Plan and the requirements of ERISA.  Participants shall neither be required nor
permitted to make contributions under the Plan.


 


Section 4.2             Company Contributions.  The Company
shall contribute and pay to the Trustee, to be held and administered in trust,
such amounts at such times as shall be required by the funding policy and
method established pursuant to Section 4.1 and as shall be in accordance
with the rules promulgated by the Administrative Committee pursuant to Section 7.6
in effectuation of such funding policy and method.


 


Section 4.3             Reduction of Company Contributions.  Forfeitures
arising under the Plan from termination of employment, death or for any other
reason shall not be applied to increase the benefits any person would receive
from the Plan prior to termination or the complete discontinuance of Company
contributions thereto, but shall instead be used, to the extent not anticipated
in determining actuarial costs hereunder, to reduce subsequent Company
contributions to the Plan.


 


36

















 


ARTICLE V



TRUST AGREEMENT AND TRUST FUND


 


Section 5.1             Trust Agreement.  Bolsa Chica has entered into a
master trust agreement with the Trustee, providing for the administration of
the Trust Fund, in such form and containing such provisions as Bolsa Chica has
deemed appropriate, including, but not by way of limitation, provisions with
respect to the powers and authority of the Trustee, the right of Bolsa Chica to
discharge or replace the Trustee at any time, the authority of Bolsa Chica to
amend or terminate the master trust agreement and to settle the accounts of the
Trustee on behalf of all persons having an interest in the Trust Fund, and a
provision that it shall be impossible at any time prior to the satisfaction of
all liabilities under the Plan with respect to Participants and their
Beneficiaries for any part of the corpus or income of the Trust Fund to be used
for or diverted to purposes other than for the exclusive benefit of Participants
and their Beneficiaries.  The master
trust agreement shall constitute the Trust Agreement for the Plan and shall be
a part of the Plan, and the rights and duties of any person under the Plan
shall be subject to all applicable terms and provisions of the master trust
agreement.


 


Section 5.2             Trust Fund.  The Trust Fund shall be held by the Trustee,
pursuant to the terms of the master trust agreement, for the exclusive purposes
of providing benefits to Participants and their Beneficiaries and defraying
reasonable expenses of administering the Plan, to the extent such expenses are
not paid by the Company, and no assets of the Plan shall inure to the benefit
of the Company except to the extent permitted by ERISA; provided, however, that
any contribution made as a result of erroneous actuarial calculations will be
returned within one year from the date of contribution to the Company which
made the contribution. No person shall have any interest in or right to any
part of the earnings of the Trust Fund, or any right in, or to, any part of the
assets thereof, except as and to the extent expressly provided in the Plan and
in the master trust agreement.


 


ARTICLE VI



CERTAIN LIMITATIONS ON BENEFITS


 


This Article VI has been replaced by Appendix I
(Limitations on Benefits).


 


37

















 


ARTICLE VII


 


PLAN
ADMINISTRATION


 


Section 7.1             Establishment of the Administrative Committee. 
The general administration of the Plan and the responsibility for
carrying out its provisions shall be placed in the Administrative
Committee.  If the Company is not serving
as the Administrative Committee, the Administrative Committee shall consist of
not less than two nor more than seven persons appointed from time to time by
the Board of Directors to serve at its pleasure. Any member of the
Administrative Committee may resign by delivering his written resignation to
Bolsa Chica and the secretary of the Administrative Committee.  The Administrative Committee shall be the
Plan Administrator (within the meaning of section 3 of ERISA and
section 414(g) of the Internal Revenue Code) with such authority,
responsibilities and obligations as ERISA and the Internal Revenue Code grant
to and impose upon persons so designated. 
For purposes of ERISA, the Administrative Committee shall be a “named
fiduciary” under the Plan.


 


Section 7.2             Establishment of the Investment Committee. 
The responsibility for the formulation of the general investment
practices and policies of the Plan and its related Trust Fund and for effectuating
such practices and policies shall be placed in the Investment Committee.  If the Company is not serving as the
Investment Committee, the Investment Committee shall consist of not less than
three nor more than seven persons appointed from time to time by the Board of
Directors to serve at its pleasure. Any member of the Investment Committee may
resign by delivering his written resignation to Bolsa Chica and the secretary
of the Investment Committee.  For
purposes of ERISA, the Investment Committee shall be a “named fiduciary” under
the Plan.  Effective September 30,
1993, the Board of Directors or its delegate shall serve as the Investment
Committee.


 


Section 7.3             Organization of the Committees.  If the
Company is not serving as the Committee, the members of the Committee shall
elect a chairman from their number, and shall also elect a secretary who may be
but need not be one of the members of the Committee.  No member of a Committee who is also an
Employee receiving regular compensation as such shall receive any compensation
for his services as a member of such Committee. 
No bond or other security shall be required of any member of a Committee
in any jurisdiction.  No member of a
Committee shall, in such capacity, act or participate in any action directly
affecting his own benefits under the Plan other than an action which affects
the benefits of Participants generally.


 


Section 7.4             Powers of the Administrative Committee.  The powers of
the Administrative Committee shall include, but are not limited to, the
following:


 


(a)           appointing such committees with such powers as it
shall determine, including an executive committee to exercise all powers of the
Administrative Committee between meetings of the Administrative Committee;


 


(b)           determining the times and places for holding meetings
of the Administrative Committee and the notice to be given of such meetings;


 


38














 


(c)           employing such agents and assistants, such counsel
(who may be counsel to the Company or to Bolsa Chica) and such clerical,
medical, accounting and actuarial services or advisers as the Administrative
Committee may require in carrying out the provisions of the Plan;


 


(d)           authorizing one or more of their number or any agent
to make any payment, or to execute or deliver any instrument, on behalf of the
Administrative Committee, except that all requisitions for funds from, and
requests, directions, notifications and instructions to the Trustee shall be
signed either by two members of the Administrative Committee or by one member
and the secretary thereof;


 


(e)           fixing and determining the proportion of expenses of
the Plan from time to time to be paid by the Companies and requiring payment
thereof;


 


(f)            establishing one or more subcommittees in each
location at which Bolsa Chica or any of its subsidiaries or affiliates does
business, appointing the members of any such subcommittees, in such number and
for such service as the Administrative Committee shall deem appropriate, and
delegating any power or duty granted to the Administrative Committee by the
Plan to any such subcommittees;


 


(g)           receiving and reviewing reports from the Trustee as to
the financial condition of the Trust Fund, including its receipts and
disbursements;


 


(h)           executing and filing with the appropriate governmental
agencies such registration and other statements, forms, applications,
notifications, and other documents or information as the Administrative
Committee may from time to time deem appropriate in connection with the Plan;


 


(i)            approving the adoption of the Plan by any subsidiary
or affiliate of the Company in accordance with Section 8.4;


 


(j)            amending the Plan to the extent provided in Section 8.1;
and


 


(k)           determining all questions concerning eligibility,
elections, contributions, and benefits under the Plan, construing all terms of
the Plan, including any uncertain terms, and determining all questions
concerning administration of the Plan.


 


Section 7.5             Powers of the Investment Committee.  The powers of
the Investment Committee shall include, but not be limited to, the following:


 


(a)           directing the Trustee, or appointing one or more
investment managers to direct the Trustee, subject to the conditions set forth
in the master trust agreement and in paragraph below, in all matters concerning
the investment of the Trust Fund;


 


(b)           authorizing one or more of their number or any agent
to make any payment, or to execute or deliver any instrument, on behalf of the
Investment Committee, except that if the Company is not serving as the
Investment Committee all requisitions for funds from, and requests, directions,
notifications and instructions to the Trustee shall be signed either by two
members of the Investment Committee or by one member and the secretary thereof;


 


39

















 


(c)           receiving and reviewing reports from the Trustee as to
the financial condition of the Trust Fund, including its receipts and
disbursements;


 


(d)           employing such agents and assistants, such counsel
(who may be counsel to the Company or to Bolsa Chica) and such clerical,
accounting, actuarial and investment services or advisers as the Investment
Committee may require in carrying out its responsibilities under the Plan.


 


Section 7.6             Duties of the Administrative Committee.  The
Administrative Committee shall have the general responsibility for
administering the Plan and carrying out its provisions.  Subject to the limitations of the Plan, the
Administrative Committee from time to time shall establish rules for the
administration of the Plan and the transaction of its business and shall
promulgate such rules as may be necessary to effectuate the funding policy
and method established pursuant to Section 4.1.  If the Company is not serving as the
Administrative Committee, as to all matters of administration, interpretation
and application not reserved to the Company or Bolsa Chica, the determination
of the Administrative Committee as to any disputed question shall be
conclusive.  Any determination made by
the Administrative Committee shall be given deference in the event it is
subject to judicial review and shall be overturned only if it is arbitrary and
capricious.  It shall be the duty of the
Administrative Committee to notify the Trustee in writing of the amount of any
benefit which shall be due to any Participant and in what form and when such
benefit is to be paid.  The
Administrative Committee may at any time or from time to time with respect to a
Defined Benefit Plan (as defined in Section 6.1) require the Trustee by a
written direction to purchase one or more annuities, in specific amounts, in
the names of Participants, their spouses, their contingent annuitants, and/or
their beneficiaries from an insurance company designated by the Administrative
Committee.


 


Section 7.7             Actions by a Committee.  If the
Company is not serving as the Committee, a majority of the members of a
Committee at the time in office shall constitute a quorum for the transaction
of business at any meeting and resolutions or other actions made or taken by a
Committee shall require the affirmative vote of a majority of the members of
such Committee attending a meeting, or by a majority of members in office by
writing without a meeting.


 


Section 7.8             Actuarial Tables and Studies.  The
Administrative Committee shall adopt from time to time such actuarial tables as
may be required in connection with the Plan. 
As an aid to the Administrative Committee in adopting tables and to the
Company in fixing the rates of its contribution payable under a Defined Benefit
Plan (as defined in Section 6.1), the actuary (who shall be enrolled by
the Joint Board for the Enrollment of Actuaries established under ERISA)
designated by the Administrative Committee shall make periodical actuarial
studies in relation to such Defined Benefit Plan, and shall recommend tables to
the Administrative Committee and rates of contribution to the Company.


 


Section 7.9             Accounts.  The Administrative Committee shall maintain
accounts showing the fiscal transactions of the Plan and shall keep in
convenient form such data as may be necessary for the effective operation and
administration and actuarial valuations of the Plan.


 


40

















 


Section 7.10           Discretionary
Action.  The Administrative Committee shall have full
discretionary authority to administer and interpret the Plan, including
discretionary authority to determine eligibility for participation and for
benefits under the Plan and discretionary authority to construe ambiguous terms
and to correct errors.  The Plan
Administrator may delegate its administrative duties.  Any such delegation will carry with it the
full discretionary authority of the Plan Administrator to carry out these
duties.  Any determination by the Plan
Administrator or its delegate will be final and conclusive upon all persons.


 


Section 7.11           Action
Taken in Good Faith.  To the extent permitted by ERISA, the members
of the Committees, the Company, Bolsa Chica, and their officers and directors
shall be entitled to rely upon all tables, valuations, certificates, and
reports, if any, furnished by the actuary described at Section 7.8, upon
all certificates and reports made by any accountant or by the Trustee, upon all
opinions given by any legal counsel selected or approved by a Committee, and
upon all opinions given by any investment adviser selected or approved by the
Investment Committee, and the members of the Committees, the Company, Bolsa
Chica, and their officers and directors shall be fully protected in respect of
any action taken or suffered by them in good faith in reliance upon any such
tables, valuations, certificates, reports, opinions or other advice of any
actuary, accountant, Trustee, investment adviser or legal counsel, and all
action so taken or suffered shall be conclusive upon each of them and upon all
Participants and Employees.


 


Section 7.12           Indemnification. 
To the extent not contrary to ERISA, the Company shall indemnify the
Committees, each member of a Committee and any other director, officer or
employee of an employer who is designated to carry out any responsibilities
under the Plan for any liability, joint and/or several, arising out of or
connected with their duties hereunder, except such liability as may arise from
their gross negligence or willful misconduct.


 


Section 7.13           Claims
Procedure.  See the Plan’s Summary Plan Description, as
amended from time to time, for the Plan’s Claims Procedures.  The Administrative Committee has full
discretionary authority to adjudicate claims.


 


Section 7.14           RESERVED


 


Section 7.15           Responsibilities
of Named Fiduciaries Other than the Committees.  The Trustee
shall have such responsibilities with respect to the operation of the Plan as
are set forth in the master trust agreement. 
Any investment adviser which the Investment Committee may employ
pursuant to Section 7.5 shall have the responsibility to direct the
Trustee in investing and reinvesting the Trust Fund (or that portion thereof
specified by the Investment Committee in the instrument appointing such
adviser) and to report the book value and fair market value of each asset in
the Trust Fund (or such portion thereof) to the Committees periodically, as
such responsibilities may be more fully described in the master trust
agreement.


 


Section 7.16           Allocation
of Responsibilities.  The description of the responsibilities and
powers of the Committees and the description of the responsibilities of the
Trustee contained in the foregoing provisions of this Article VII shall
constitute, for purposes of ERISA, procedures for allocating responsibilities
for the operation and administration of the Plan among named fiduciaries.


 


41

















 


Section 7.17           Designation
of Persons to Carry Out Responsibilities of Named Fiduciaries. 
The Committees, the Trustee and any investment adviser which the
Investment Committee may employ pursuant to Section 7.5 may, except as to
responsibilities involving management and control of assets held in the Trust
Fund, designate one or more other persons to carry out any or all of their
respective responsibilities under the Plan, provided that such designation
shall be made in writing, filed with the Plan’s records and made available for
inspection upon request by any Participant or Beneficiary under the Plan.


 


ARTICLE VIII



AMENDMENT AND TERMINATION; PARTICIPATION AND WITHDRAWAL BY COMPANIES; PLAN
MERGERS


 


Section 8.1             Authority to Amend or Terminate.  Bolsa Chica
reserves the right to terminate, or to modify, alter or amend the Plan or the
Trust Agreement from time to time to any extent that it may, at its sole and
complete discretion, deem advisable including, but without limiting the
generality of the foregoing, any amendment deemed necessary to qualify or to
ensure the continued qualification of the Plan under the Internal Revenue
Code.  The foregoing right shall be
exercised only by action of Bolsa Chica, except that the Administrative
Committee, by a written instrument, duly executed by a majority of its members,
may make (a) any amendment which may be necessary or desirable to ensure
the continued qualification of the Plan and its related trust under the
Internal Revenue Code or which may be necessary to comply with the requirements
of ERISA, or any regulations or interpretations issued by the Department of
Labor or the Internal Revenue Service with respect to the requirements of ERISA
or the Internal Revenue Code, (b) any amendment which is required by the
provisions of any collective bargaining agreement between the Company and its
employees and (c) any other amendment which will not involve an estimated
annual cost under the Plan (determined at the time of the amendment in a manner
consistent with the requirements of ERISA) in excess of $200,000.  No such amendment shall increase the duties
or responsibilities of the Trustee without its consent thereto in writing.  No such amendment shall have the effect of
diverting the whole or any part of the principal or income of the Trust Fund to
purposes other than for the exclusive benefit of Participants and others having
an interest in the Plan, prior to the satisfaction of all liabilities with
respect to them.  Effective September 30,
1993, all amendments will be in writing and will be signed by an officer of
Koll Real Estate Group, Inc. or any successor to Koll Real Estate Group, Inc.
that adopts the Plan.  No such amendment
shall eliminate or reduce Section 411(d)(6) protected benefits that
have already accrued.


 


42

















 


Section 8.2             Effect of Termination.  Upon the
termination or partial termination of a Defined Benefit Plan rights of all
affected Participants to their respective accrued benefits under the Plan shall
be nonforfeitable to the extent then funded. 
Upon the withdrawal from a Defined Benefit Plan of any Company under
circumstances constituting a partial termination of the Plan within the meaning
of section 411(d)(3) of the Code, such rights of all affected
Participants who are Employees of such Company shall likewise be nonforfeitable
to the extent then funded.  In either
such event, the Administrative Committee shall (except as provided in Section 8.3)
direct the Trustee as to the allocation of the applicable assets of the Defined
Benefit Plan, in accordance with the following provisions of this Section 8.2.  After providing for the expenses of the
Defined Benefit Plan, the assets remaining in the account of each Company
withdrawing from the Defined Benefit Plan shall be used and applied for the
benefit of its Employees, former Employees who are Participants, and the
beneficiaries of the foregoing in the manner prescribed by section 4044 of
ERISA (or corresponding provision of any subsequent applicable law in effect at
the time).  The Administrative Committee
may require that the benefits accrued hereunder be paid in cash or in the form
of immediate or deferred annuities or otherwise as it shall determine.  After such allocation has been made, any
residue of such applicable assets of the Defined Benefit Plan may be
distributed to such Company if all liabilities of the Plan with respect to its
Employees, former Employees who are Participants, and the beneficiaries of the
foregoing have been satisfied and the distribution does not contravene any applicable
provisions of law.


 


Whether or not a “partial termination” within the
meaning of this Section 8.2 has occurred in any given situation shall be
determined by the Administrator in light of existing Internal Revenue Service
guidelines and other relevant authorities. 
However, in the event of the disposition of a particular business
operation, or the shutdown thereof, under conditions which do not constitute a “partial
termination”, the Administrator may declare that such disposition or shutdown
shall nevertheless be treated as a “partial termination” for purposes of this
Plan.  Any such declarations shall be
made in a manner which does not discriminate in favor of officers, shareholders
or highly compensated individuals.


 


Section 8.3             RESERVED


 


Section 8.4             Participation by Companies.  The
Administrative Committee or Bolsa Chica may approve the adoption of the Plan by
any subsidiary or affiliate of the Company upon appropriate action by such
subsidiary or affiliate.  In such event,
or if any individuals become Employees of a Company as a result of the
acquisition of all or a part of the assets or business of another company, the
Administrative Committee or Bolsa Chica may, subject to the provisions of ERISA
and the qualification requirements of the Internal Revenue Code, determine to
what extent, if any, credit and benefits shall be granted for previous service
with such subsidiary, affiliate or other company.


 


Section 8.5             Withdrawal of a Company.  Any company
which is a Company may, by appropriate action taken by it, terminate its
participation in the Plan, in which event the applicable provisions of Section 8.2
shall apply; provided, however, that if so directed by the Administrative
Committee, the applicable assets of the Plan shall be segregated by the Trustee
as a separate trust and the Plan shall be continued 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 Bolsa Chica hereunder.


 


43

















 


Section 8.6             Merger with Other Plans.  The Plan
shall not be merged or consolidated with, nor transfer its assets or
liabilities to, any other plan unless each Participant would (if the Plan then
terminated) receive a benefit immediately after the merger, consolidation or
transfer which is equal to or greater than the benefit he would have been
entitled to receive immediately before the merger, consolidation or transfer
(if the plan had then terminated).


 


Section 8.7             Certain Employee Terminations.  The
provisions of this Section 8.7 shall apply whenever, under circumstances
which do not constitute a partial termination of the Plan for purposes of Section 8.2,
the following events occur:


 


(a)           a company other than a member of the Bolsa Chica Group
(as defined in Section 6.1) (such company being hereinafter referred to in
this Section 8.7 as the “Acquiring Company”) purchases or otherwise
acquires some part or all of the assets or business of a Company and


 


(b)           in connection with such purchase or other acquisition,
a group of Participants who are covered by a Defined Benefit Plan or a Defined
Contribution Plan (as defined in Section 6.1) (such Participants being
hereinafter referred to in this Section 8.7 as the “Transferred
Participants”) become employees of the Acquiring Company.


 


In its sole discretion, the Administrative Committee
may determine to vest each such Participant in the full amount of his account
in the case of a Defined Contribution Plan or his accrued benefit in the case
of a Defined Benefit Plan, and distribute his interest in the Trust Fund, as so
determined, in accordance with the appropriate provisions of the Plan.  In the alternative, in the case of a Defined
Contribution Plan, after distribution to each Transferred Participant in such
plan of the vested portion of his account, any remaining balance of the account
of each such Transferred Participant shall be held as a separate account in his
name until such time as the Administrative Committee shall determine, on the
basis of evidence satisfactory to it, either that (i) such
Transferred Participant has completed a period of continuous service with the
Acquiring Company which, when added to his Vesting Service, is equal to five
years or (ii) such Transferred Participant’s employment by the
Acquiring Company has been terminated prior to his completion of such a period
of continuous service.  Subject to the
provisions of such Defined Contribution Plan regarding the manner and time of payment
under the plan, if the Administrative Committee makes the determination
referred to in clause (i) of the preceding sentence with respect to
any such Transferred Participant, the amount held in the separate account in
his name shall thereafter be distributed to him in full; if the Administrative
Committee makes the determination referred to in clause of the preceding
sentence with respect to any such Transferred Participant, the amount
theretofore held in the separate account in his name shall be forfeited as of
the last day of the plan year during which such determination shall have been
made, and the amount so forfeited shall be applied in accordance with the
forfeiture provisions of the Defined Contribution Plan.


 


44

















 


Section 8.8             Suspension of Contributions.  A Company
shall have the right to suspend its contributions to the Plan at any time for a
fixed period of time, and such period shall be extended by subsequent action of
such Company.  Such suspension shall not
automatically become a discontinuance of contributions as under Section 8.2
until the time at which in the opinion of the Plan Enrolled Actuary such
suspension affects the benefits to be paid or made available under the
Plan.  No such suspension shall be
allowed to create an “accumulated funding deficiency” under Section 302(a)(2) of
ERISA, unless the Plan is then terminated under Section 8.2; provided that
in the event of an unintentional creation of an accumulated funding deficiency,
the Companies shall have 90 days after such a deficiency is finally determined
to correct it without such termination. 
In the event of such suspension the Plan shall otherwise remain in full
force and effect.


 


Section 8.9             Consolidation or Merger of Bolsa Chica.  In the event
of the consolidation or merger of Bolsa Chica with or into any other
corporation, or the sale by Bolsa Chica of substantially all of its assets, the
resulting successor may continue the Plan by adopting the same by resolution of
its board of directors and by executing a proper supplemental agreement to the
master trust agreement with the Trustee.


 


If within ninety days from the effective date of such
consolidation, merger or sale of assets, such new corporation does not adopt
the Plan, the rights of all affected Participants to their respective accrued
benefits under the Plan shall be nonforfeitable to the extent funded as of the
effective date of such consolidation, merger or sale of assets.


 


ARTICLE IX



TOP-HEAVY PROVISIONS


 


See Appendix III for the Plan’s Top-Heavy Provisions.


 


ARTICLE X


 


GENERAL PROVISIONS


 


Section 10.1           Administration. 
Effective September 30, 1993, Koll Real Estate Group, Inc. or
any successor to Koll Real Estate Group, Inc. that adopts this Plan will
serve as the Administrator.


 


Section 10.2           Source
of Payment.  Benefits under this Plan shall be payable out
of the Trust Fund or, in the case of a Defined Benefit Plan (as defined in Section 6.1),
through the use of annuity contracts purchased with assets of the Trust Fund,
and neither Bolsa Chica, nor any Company shall have any obligation,
responsibility or liability to make any direct payment of benefits due under
the Plan.  Neither Bolsa Chica, nor any
Company nor the Trustee makes any guarantee to Participants against the loss or
depreciation in value of the Trust Fund or guarantees the payment of any
benefits hereunder.  No person shall have
any right under the Plan with respect to the Trust Fund, or against the
Trustee, Bolsa Chica, or any Company, except as specifically provided herein or
in ERISA.


 


45

















 


Section 10.3           Payment
of Expenses.  All expenses that shall arise in connection
with the administration of this Plan and the master trust agreement, including,
but not limited to, the compensation of the Trustee and of any actuary,
accountant, counsel, investment adviser, other expert or other person who shall
be employed by a Committee in connection with the administration or investment
thereof, shall be paid from the Trust Fund or by the Companies; provided, however,
that no person who is employed full-time by any Company shall receive any
compensation from the Plan except for reimbursement of expenses properly and
actually incurred.


 


Section 10.4           No
Right to Employment.  Nothing herein contained shall be deemed to
give an Employee the right to be retained in the service of his employer or to
interfere with the rights of his employer to discharge him at any time.


 


Section 10.5           Inalienability
of Benefits.  Except as may be otherwise provided by
applicable law or pursuant to a qualified domestic relations order as defined
in section 414(p) of the Internal Revenue Code, benefits provided
under this Plan shall not, prior to the actual receipt thereof by the person
entitled thereto, be subject in any manner to anticipation, assignment,
alienation, sale, transfer, pledge, encumbrance, charge, attachment,
garnishment, execution, levy or other legal or equitable process, whether
voluntary or involuntary, and any attempt to anticipate, assign, alienate,
sell, transfer, pledge, encumber, charge, attach, garnish, execute or levy upon
or otherwise dispose of any right to benefits hereunder shall be void.  The Fund shall not in any manner be liable
for, or subject to, the debts, contracts, liabilities, engagements or torts of
any person entitled to benefits hereunder.


 


Section 10.6           Return
of Company Contributions.  Contributions by the Company
are expressly conditioned upon the (i) initial qualification of the Plan
under section 401 of the Internal Revenue Code of 1986, as amended, and (ii) deductibility
of such contributions under section 404 of the Internal Revenue Code of
1986, as amended.  Contributions shall be
returned to the Company within one year after (a) the date of denial of
the initial qualification of the Plan, (b) the disallowance of a
deduction, but only to the extent the deduction is disallowed, or (c) the
payment of a contribution by mistake of fact.


 


Section 10.7           Payment
Due an Incompetent.  If the Administrative Committee determines
that any person to whom a payment is due hereunder is unable to care for his
affairs because of physical or mental disability or because he is under 18
years of age, it shall have the authority to cause payments becoming due to
such person to be made to another for his benefit, without responsibility of
the Administrative Committee or the Trustee to see to the application of such
payments, and any payment made pursuant to such authority shall, to the extent
thereof, operate as a complete discharge of the obligations of the Company, the
Administrative Committee, the Trustee and the Trust Fund.


 


Section 10.8           Missing
Recipients.  In the event any amount shall become payable
hereunder to a Participant, retired Participant, contingent annuitant,
Beneficiary or the legal representative of any of the foregoing and if after
written notice from the Administrative Committee sent by registered mail to
such person’s last known address as shown in the Administrative Committee’s
records and such other due diligence as the Administrative Committee deems appropriate,
such person or his personal representative shall not have 


 


46

















 


presented himself to the Administrative Committee
within five years after the mailing of such notice, then the Administrative
Committee may determine that such person’s interest in the Plan has terminated
and the amounts otherwise payable shall be forfeited and shall be reapplied in
accordance with Article IV of the Plan; provided, however, that if such
person presents himself after the expiration of the aforesaid period and
provides proper identification satisfactory to the Administrative Committee,
then such person’s forfeited benefit shall be reinstated and benefits
determined in accordance with Article III shall commence to be paid.  Unless required by law, in no event shall
benefits under the Plan be paid retroactively for the period during which such
benefits were payable but unclaimed.


 


Section 10.9           Errors
in Payment.  If any error shall result in the payment to
any Participant or other person of more or less than he would have received but
for such error, the Administrative Committee shall be authorized to correct
such error and to adjust the payments as far as possible in such manner that
the actuarial equivalent of the benefits to which such Participant or other
person was correctly entitled shall be paid. 
In the event of an overpayment, the Plan may pursue other lawful means
of recovering such overpayment.


 


Section 10.10         Multiple
Defined Benefit Plans.  Notwithstanding Section 8.8.3,
in the event a group of Employees who are Participants in a Defined Benefit
Plan (as defined in Section 6.1) shall become covered by another Defined
Benefit Plan established by the Bolsa Chica Group (as defined in Section 6.1),
the Company may authorize the Administrative Committee to direct the Trustee to
pay over and deliver to the trustee of such other plan such of the assets of
the original Defined Benefit Plan as the Administrative Committee may
determine, but in no event shall the assets so transferred exceed that
proportion of the original Defined Benefit Plan’s assets which the actuarially
determined liability for the accrued benefit credited to the Employees of such
group (on a termination basis) bears to the liability for all accrued benefits
thereunder (on a termination basis).


 


Section 10.11         Notices,
etc.


 


(a)           By Employee.  Wherever
provision is made in the Plan for the filing of any notice, application,
election or designation, such action shall, except where expressly provided
herein to the contrary, be evidenced by the execution of such form, and on such
notice, as the Administrative Committee may specify for the purpose and shall
be effective upon receipt unless the Plan otherwise provides.


 


(b)           To Employee.  Any
communication, statement, or notice addressed to any Employee or claimant at
his latest post office address as filed with the Company or the Administrative
Committee will, on deposit in the United States mail with postage prepaid, be
binding upon such Employee or claimant for all purposes of the Plan and,
Subject to Section 10.8, neither the Trustee nor the Company shall be
obligated to undertake a search to ascertain the whereabouts of any Employee or
claimant.


 


Section 10.12         Multiple
Capacities.  Any person or group of persons may serve in
more than one fiduciary capacity with respect to the Plan.


 


47

















 


Section 10.13         Severability. 
In case any provisions of this Plan shall be held illegal or invalid for
any reason, the illegality or invalidity shall not affect the remaining
provisions of the Plan, but shall be fully severable, and the Plan shall be
construed and enforced as if the illegal or invalid provisions had never been
inserted in the Plan.


 


Section 10.14         Construction. 
The Plan shall be construed and enforced according to the laws of the
State of California (without regard to its choice of law principles) except to
the extent otherwise required by ERISA or necessary for qualification under the
Internal Revenue Code.  Headings of
Articles, Sections and Subsections herein contained are included solely for
convenience of reference, and if there be any conflict between such headings
and the text hereof, the text shall control. 
It is intended that the Plan in all respects conform to and be
administered and interpreted in a manner consistent with the requirements of
ERISA and the requirements for qualification under the Internal Revenue
Code.  Accordingly, any provision
required to be included herein, in order that the Plan so conform, shall be
deemed to be included in the Plan, whether or not expressly set forth.


 


Section 10.15         Special
Transitional Rules in Connection with the Spinoff. 
It is the intent of the following transitional rules that this Plan
be interpreted as assuring the uninterrupted continuation of the provisions of
the Predecessor Plan for Employees of the Company who were or would have been
eligible to participate in such plan before the Spinoff.  (Nevertheless, the Company reserves the right
to amend this Plan as provided herein so long as no such amendment adversely
affects benefits accrued by such Employees prior to the effective date of
amendment.)  Therefore, subject to the
exclusions set forth in Section 1.26, the term “Employee” as used in this
Plan shall include any person who was employed during the period from January 1,
1986 through May 27, 1986 by Henley or a business that became a division
or subsidiary of Henley in connection with the Spinoff.  The term “Company”, as used in this Plan
shall include, for periods prior to the effective date of the Spinoff, Henley
and any business that became a subsidiary or division of Henley in connection
with the Spinoff that was previously a Company within the meaning of Section 1.14
of the Predecessor Plan.  In addition, subject
to the transfer of sufficient assets under section 414(1) of the Code
from the trust under the Predecessor Plan to the Trust Fund, the accrued
benefit under this Plan as of January 1, 1986 of each Employee of the
Company who was a Participant in the Predecessor Plan on December 31, 1985
shall be equal to his accrued benefit, on a termination basis, determined as of
such date under the provisions of the Predecessor Plan as then in effect.


 


Section 10.16         Additional
Special Transitional Rule in Connection with Spinoffs of Henley and The
Fisher Scientific Group Inc.


 


(a)           Any Employee who was a participant in the Predecessor
Plan on December 31, 1985 and transferred to employment with the Company
directly from employment by Allied-Signal or its subsidiaries on or before June 1,
1987 shall, subject to the transfer as of January 1, 1986 of all assets
allocable to such Employee from the trust under the Predecessor Plan to the
Trust Fund, be deemed for all purposes under the Plan to have commenced
employment with the Company as of January 1, 1986.


 


48














 


(b)           Any Employee who was a participant in the Predecessor
Plan on December 31, 1985 and transferred to employment with The Fisher
Scientific Group Inc., directly from employment with Allied-Signal or its
subsidiaries on or before June 1, 1987 shall, subject to the transfer as
of January 1, 1986 of all assets allocable to such Employee from the trust
under the Predecessor Plan to the Trust Fund, be deemed for all purposes under
the Plan to have commenced employment with the Company as of January 1,
1986.


 


Section 10.17       Military
Service.  Notwithstanding any provision in this Plan to
the contrary, contributions, benefits and service credit with respect to
qualified military service will be provided to the extent required by Code Section 414(u).  If a Participant dies on or after January 1,
2007, while performing qualified military service (as defined in Code Section 414(u)),
the survivors of that Participant are entitled, to the extent required by Code Section 401(a)(37),
to any additional benefits (other than benefit accruals relating to the period
of qualified military service) provided under the Plan had the Participant
resumed and then terminated employment on account of death.


 


ARTICLE XI



SPECIAL PROVISIONS RELATING TO THE CUTBACK OF OPERATIONS AT THE HAMPTON
LOCATION


 


Section 11.1          Applicability. 
The provisions of this Article XI shall be applicable to each
Participant or Former Participant in the Plan (a) who was actively
employed on December 31, 1985 in the Signal Engineered Products Group, (b) whose
regular place of employment on or after December 31, 1985 was the Hampton
office of the Company, regardless of whether such Participant may thereafter be
transferred to another location, and (c) who, on or before July 1,
1986, agreed to a date for the involuntary termination of his employment in
connection with the Allied-Signal Inc. Streamlining Program.  The Participants and Former Participants to
whom this Article XI is applicable shall hereinafter be referred to as “Hampton
Participants.”


 


Section 11.2          Full
Vesting.  Notwithstanding any other provision of the
Plan, each Participant or Former Participant (a) who was actively employed
on December 31, 1985 in the Signal Engineered Products Group and (b) whose
regular place of employment on or after December 31, 1985 was the Hampton
office of the Company, regardless of whether such Participant may thereafter be
transferred to another location, shall be fully vested in his Accrued Benefit.


 


Section 11.3          Special
Rules Pertaining to Hampton Participants Electing to Receive Periodic
Salary Continuation Payments.  In the case
of any Hampton Participant who elects, in connection with the Allied-Signal
Inc. Streamlining Program and in accordance with procedures established by the
Administrator, to receive periodic salary continuation payments rather than
lump-sum salary continuation payments, the following rules shall apply:


 


(a)           no such Hampton Participant shall be deemed to have
Separated from the Service until the last day of the final period to which his
or her periodic salary continuation payments relate (which date shall, for the
purpose of this Article, be referred to hereinafter as his or her “Severance
from Service Date”); and


 


49

















 


(b)           the Compensation of each such Hampton Participant
shall, for all purposes under the Plan, be deemed to include such periodic
salary continuation payments.


 


Section 11.4          Special
Rules Pertaining to Hampton Participants Electing to Receive Salary
Continuation.  In the case of any Hampton Participant who is
not, as of his Severance from Service Date, eligible to receive the immediate
payment of any Early or Normal Retirement Benefit under the Plan and who, in
connection with the Allied-Signal Inc. Streamlining Program and in accordance
with procedures established by the Administrator, elects to receive periodic or
lump-sum salary continuation, the following rules shall apply:


 


(a)           if such Hampton Participant’s Severance from Service
Date, determined in accordance with Section 12.3(a) or in accordance
with the other provisions of the Plan, whichever is applicable, is less than or
equal to two years before the earliest date that such Hampton Participant could
have designated as his Early Commencement Date under the Plan, such Hampton Participant,
for the purpose of determining his Credited Service (and for no other purpose
under the Plan), shall be deemed to remain an Employee of the Company until the
earlier of (i) his death and (ii) the earliest date that could
have been designated as his Early Commencement Date; and


 


(b)           if such Hampton Participant’s Severance from Service
Date, determined in accordance with Section 12.3(a) or in accordance
with the other provisions of the Plan, whichever is applicable, is less than or
equal to three years before the earliest date on which such Hampton Participant
would have been eligible to receive an unreduced Retirement Benefit, such
Hampton Participant shall, for the purpose of determining his Credited Service
(and for no other purpose under the Plan), be deemed to remain an Employee of
the Company until the earlier of (i) his death and (ii) the
earliest date on which he would have been eligible to receive an unreduced
Retirement Benefit.


 


Section 11.5          Special
Rules Pertaining to Hampton Participants Electing to Receive “5+5”
Benefits.  In the case of any Hampton Participant who is
eligible for and elects, in accordance with procedures established by the
Administrator, to receive “5+5” benefits rather than periodic or lump-sum
salary continuation, the following rules shall apply upon such Hampton
Participant’s Separation from the Service:


 


(a)           notwithstanding any other provision of this Plan, five
years shall be added to such Hampton Participant’s Credited Service under the
Plan; and


 


(b)           five years shall be added to such Hampton Participant’s
age, solely for the purposes of (i) the determination of eligibility for
Early or Normal Retirement Benefits under the Plan and (ii) the
determination of the amount, if any, of applicable early reduction factors.


 


Section 11.6          Additional
Special Rule Pertaining to Hampton Participants. 
Notwithstanding any other provision of the Plan, the Benefits of Hampton
Participants shall not be reduced to cover the cost of Qualified Preretirement
Survivor Annuity coverage.


 


50

















 


ARTICLE XII



SPECIAL PROVISIONS RELATING TO THE CUTBACK OF OPERATIONS AT THE LA JOLLA
LOCATION


 


Section 12.1          Applicability. 
The provisions of this Article XII shall be applicable to each
Participant or Former Participant in the Plan (a) who was actively
employed on September 30, 1985 by any member of the controlled group of
corporations of which Allied-Signal Inc. was a member on the date immediately
preceding the Spinoff and (b) whose regular place of employment on or
after June 30, 1985 was the La Jolla office of the Company, regardless of
whether such Participant may thereafter be transferred to another
location.  The Participants to whom this Article XII
is applicable shall hereinafter be referred to as “La Jolla Participants.”


 


Section 12.2          Full
Vesting.  Notwithstanding any other provision of the
Plan, each La Jolla Participant shall be fully vested in his Accrued Benefit.


 


Section 12.3          Special
Rules Pertaining to La Jolla Participants Electing to Receive Periodic
Salary Continuation Payments.  In the case
of any La Jolla Participant who, in connection with the cutback of operations
at the La Jolla location, elects, in accordance with procedures established by
the Administrator, to receive periodic salary continuation payments rather than
a lump-sum salary continuation payment, the following rules shall apply:


 


(a)           no such La Jolla Participant shall be deemed to have
Separated from the Service until the last day of the final period to which his
or her periodic salary continuation payments relate (which date shall, for the
purpose of this Article, be referred to hereinafter as his or her “Severance
from Service Date”); and


 


(b)           the Compensation of such La Jolla Participant shall,
for all purposes under the Plan, be deemed to include such periodic salary
continuation payments.


 


Section 12.4          Special
Rules Pertaining to La Jolla Participants Electing to Receive Salary
Continuation.  In the case of any La Jolla Participant who
is not, as of his Severance from Service Date, eligible to receive the
immediate payment of any Early or Normal Retirement Benefit under the Plan and
who, in connection with the cutback of operations at the La Jolla location,
elects, in accordance with procedures established by the Administrator, to
receive periodic or lump-sum salary continuation, the following rules shall
apply:


 


(a)           if such La Jolla Participant’s Severance from Service
Date, determined in accordance with Section 12.3(a) or in accordance
with the other provisions of the Plan, whichever is applicable, is less than or
equal to two years before the earliest date that such La Jolla Participant
could have designated as his Early Commencement Date under the Plan, such La
Jolla Participant, for the purpose of determining his Credited Service (and for
no other purpose under the Plan), shall be deemed to remain an Employee of the
Company until the earlier of (i) his death and (ii) the
earliest date that could have been designated as his Early Commencement Date;


 


51

















 


(b)           if such La Jolla Participant’s Severance from Service
Date, determined in accordance with Section 12.3(a) or in accordance
with the other provisions of the Plan, whichever is applicable, is less than or
equal to three years before the earliest date on which such La Jolla
Participant would have been eligible to receive an unreduced Retirement
Benefit, such La Jolla Participant shall, for the purpose of determining his
Credited Service (and for no other purpose under the Plan), be deemed to remain
an Employee of the Company until the earlier of (i) his death and (ii) the
earliest date on which he would have been eligible to receive an unreduced
Retirement Benefit.


 


Section 12.5          Special
Rules Pertaining to La Jolla Participants Electing to Receive “5+5”
Benefits.  In the case of any La Jolla Participant who,
in connection with the cutback of operations at the La Jolla location, elects,
in accordance with procedures established by the Administrator, to receive “5+5”
benefits rather than periodic or lump-sum salary continuation, the following rules shall
apply upon such La Jolla Participant’s Separation from the Service:


 


(a)           notwithstanding any other provision of this Plan, five
years shall be added to such La Jolla Participant’s Credited Service under the
Plan; and


 


(b)           five years shall be added to such La Jolla Participant’s
age, solely for the purposes of (i) the determination of eligibility for
Early or Normal Retirement Benefits under the Plan and (ii) the
determination of the amount, if any, of applicable early reduction factors.


 


Section 12.6          Special Rule Pertaining to the
Calculation of Normal Retirement Benefits. 
Solely for the purpose of calculating Normal Retirement Benefits payable
under the Plan to La Jolla Participants, the term “April 1, 1971”
appearing in subsection 3.2(b)(iii) of the Plan (prior to its January 1,
1989 amendment and restatement) shall be deemed to read “July 1, 1971.”


 


ARTICLE XIII



ADDITIONAL SPECIAL RULES


 


Section 13.1          Special
Rules for Employees of Schweizer Dipple, Inc.


 


For purposes of determining the Vesting Service of any
person who was an active employee of Schweizer Dipple, Inc. on July 1,
1984, and for determining his or her eligibility for benefits under the Plan
(including eligibility for early retirement or disability benefits), but not
for purposes of determining the amount of such benefits, periods beginning at
the later of such employee’s actual commencement of employment with Schweizer
Dipple, Inc. or June 16, 1978 shall be taken into account.  For purposes of determining the amount of any
benefit under the Plan, Credited Service shall not include periods prior to July 1,
1984.


 


Section 13.2          Special
Rules for Certain Employees of Signal Capital Corporation.


 


(a)           The following rules shall apply to each person
who (i) was actively employed by Equilease Corporation on December 31,
1987, (ii) was a member of the Pension Plan for Salaried Employees
of Equilease and Prestolite Wire (the “Equilease Plan”) on December 31,
1987, (iii) was actively employed by Equilease Corporation on January 1,
1987, and (iv) became an employee of Signal Capital Corporation as
of January 1, 1988.  The persons
described in the foregoing sentence shall hereinafter be referred to as “Transferred
Equilease Employees.”


 


52

















 


(b)           Each Transferred Equilease Employee shall be a
Participant in this Plan as of January 1, 1988.


 


(c)           The Credited Service of each Transferred Equilease
Employee shall include all of such Transferred Equilease Employee’s credited
service as of December 31, 1987 under Section 1.14 of the Equilease
Plan.


 


(d)           The Vesting Service of each Transferred Equilease
Employee shall include all of such Transferred Equilease Employee’s eligibility
service as of December 31, 1987 under Section 1.17 of the Equilease
Plan.


 


(e)           The benefit of a Transferred Equilease Employee shall
be calculated in the manner set forth in Section 8.8.3 of this Plan, to
the extent that such Transferred Equilease Employee is entitled to receive a
benefit from the Equilease Plan.  The
foregoing sentence shall not apply if all assets allocable to such employee are
transferred from the trust under the Equilease Plan to the Trust Fund prior to
the calculation of such Transferred Equilease Employee’s benefit hereunder.


 


(f)            Subject to the transfer of all assets allocable to a
Transferred Equilease Employee from the trust under the Equilease Plan to the
Trust Fund, such Transferred Equilease Plan to the Trust Fund, such Transferred
Equilease Employee shall be entitled to a minimum vested benefit under this
Plan equal or equivalent to his accrued benefit as of December 31, 1987
under the Equilease Plan, determined as of such date under the provisions of
the Equilease Plan as then in effect and shall be entitled to the payment of
such benefit in accordance with the provisions of the Equilease Plan as in
effect on December 31, 1987.  No
Transferred Equilease Employee shall be entitled to receive any other benefit
except in accordance with the terms of this Plan.


 


(g)           No benefit payable pursuant to this Section 13.2
shall duplicate any benefit payable under the Equilease Plan.


 


Section 13.3          Special
Rules Applicable to Certain Former Employees of Equilease Corporation.


 


(a)           The following rules shall apply to each Person
who was (i) a retired member or terminated vested member of the Pension
Plan for Salaried Employees of Equilease and Prestolite Wire (the “Equilease
Plan”) on December 31, 1987, or who (ii) was a member of the
Equilease Plan on December 31, 1987, is not a Transferred Equilease
Employee described in the preceding section and was as of January 1, 1988
a “commuter” employee at the Hampton facility of the Company or receiving
salary continuation in connection with the shutdown of Equilease Corporation’s
operations.  The persons described in the
foregoing sentence shall hereinafter be referred to as “Former Equilease
Employees”.


 


53

















 


(b)           Subject to the transfer from the trust under the
Equilease Plan to the Trust Fund of all Equilease Plan assets allocable to the
Former Equilease Employees,


 


(i)            each retired Former Equilease Employee
shall receive from the Plan the benefit to which he was entitled as of December 31,
1987 under the terms of the Equilease Plan as in effect on that date, payable
in accordance with the terms of the Equilease Plan as in effect on that date,


 


(ii)           each terminated vested Former Equilease
Employee shall be entitled to receive from the Plan a benefit equal or
actuarially equivalent to his accrued benefit as of December 31, 1987
under the Equilease Plan, payable in accordance with the terms of the Equilease
Plan as in effect on that date, and


 


(iii)          the benefit under the Plan of each Former
Equilease Employee who continues to work at the Hampton location as a “commuter”
employee or receives salary continuation shall be calculated and payable in
accordance with the terms of the Equilease Plan as in effect on December 31,
1987, including credited service under section 1.14 of the Equilease Plan for
periods of “commuter” employment and salary continuation.


 


(c)           No benefit payable pursuant to this Section 13.3
shall duplicate any benefit payable under the Equilease Plan.


 


Section 13.4          Additional
Special Rules Applicable to Certain Employees of Signal Capital
Corporation.


 


(a)           The rules set forth in this subsection 13.4(a) shall
apply to each Employee of Signal Capital Corporation who became an Employee in
connection with the December 12, 1985 acquisition of assets of First City
Financial Corporation (“FCFC Employees”). 
For purposes of determining each FCFC Employee’s eligibility to
participate, Credited Service and Vesting Service under the Plan, periods of
employment prior to January 1, 1986 with FCFC or with any member of the
controlled group of corporations of which FCFC was a member at the time of such
employment shall be taken into account.


 


(b)           The rules set forth in this subsection 13.4(b) shall
apply to each Employee of Signal Capital Corporation who became an Employee in
connection with the May 22, 1986 acquisition of assets of First
Asset-Based Lending (“FABL Employees”). 
For purposes of determining each FABL Employee’s  Vesting Service and eligibility to
participate in the Plan, periods of employment prior to May 22, 1986 with
FABL, but not periods of service with First National Bank and Trust Company of
Oklahoma City or First Oklahoma Bank Corporation, Inc., shall be taken
into account.


 


54

















 


ARTICLE XIV


 


SPECIAL PROVISIONS
RELATING TO FORMER PARTICIPANTS IN THE ENGINEERING RESEARCH, INCORPORATED
RETIREMENT PLAN FOR SALARIED EMPLOYEES AND THE ENGINEERING RESEARCH, INC.
HOURLY EMPLOYEES PENSION PLAN


 


Section 14.1         General.


 


(a)           Effective January 1, 1984, Engineering Research,
Incorporated (“ERI”) established the Engineering Research, Incorporated
Retirement Plan for Salaried Employees (the “ERI Salaried Plan”) to provide
retirement benefits for salaried employees of ERI.  The Engineering Research, Inc. Hourly
Employees Pension Plan (the “ERI Hourly Plan” and, together with the ERI
Salaried Plan, the “ERI Plans”) was established effective January 1, 1984
to provide retirement benefits for certain hourly employees of ERI.  On February 27, 1987, substantially all
of the assets of ERI were sold to Babcock and Wilcox (“B&W”).  In connection with the sale, benefit accruals
under the ERI Plans were frozen as of February 27, 1987, and offers of
employment were made to plan participants by B&W.  Effective December 31, 1988, the ERI
Plans were merged with this Plan, and participants in the ERI Plans became
participants in this Plan for the limited purpose of receiving their benefits
accrued under the ERI Plans.  Subject to
this Plan’s provisions of general applicability (including such provisions that
are legally required), former participants in the ERI Salaried Plan (“ERI
Salaried Participants”) and former participants in the ERI Hourly Plan (“ERI
Hourly Participants” and, together with ERI Salaried  Participants, “ERI Participants”) shall be entitled
to benefits under this Plan only as set forth in this Article XIV, unless
any such ERI Participant qualifies for participation in the Plan other than
pursuant to this Article XIV. 
Except as otherwise provided in this Article XIV, the rights and
obligations of each person covered by an ERI Plan who retired, or whose
employment was otherwise terminated prior to December 31, 1988, shall be
governed by the applicable provisions of the ERI Plans as in effect on such
person’s retirement or termination date. 
Effective January 1, 1990, all assets allocable to the benefits of
ERI Participants were transferred to the trust established under The Henley
Group, Inc. Retirement Plan.  No
benefits under this Plan shall duplicate benefits payable under that plan.


 


(b)           For purposes of this Article XIV, unless
otherwise indicated, the term “Company” shall mean the Company as defined in Section 1.14,
ERI, B&W and their respective affiliates required to be treated as under
common control with such entities pursuant to section 414(b),(c),(m) or
(o) of the Code.


 


Section 14.2          Participation. 
A person who was a participant or former participant in either ERI Plan
on December 31, 1988 shall become an ERI Participant in this Plan for
purposes of receiving the benefits described in this Article, effective December 31,
1988.


 


Section 14.3          ERI
Salaried Participants.


 


55

















 


Section 14.3.1      Continuous Service.


 


(a)           The Continuous Service of an ERI Salaried Participant
shall for purposes of this Article XIV be the sum of his Pre-February 28,
1987 Service and his Post-February 27, 1987 Service.


 


(b)           Pre-February 28, 1987 Service. 
The Pre-February 28, 1987 Service of an ERI Salaried Participant
shall be equal to his Continuous Service accrued under Section IX(1) of
the ERI Salaried Plan as of February 27, 1987.


 


(c)           Post-February 27, 1987 Service. 
The Post-February 27, 1987 Service of an ERI Salaried Participant
shall consist of such ERI Salaried Participant’s service with the Company after
February 27, 1987 until such service is interrupted by (i) Discharge
for cause, (ii) quitting by the employee or (iii) retirement.  If an ERI Salaried Participant’s service is
terminated and such Participant is subsequently rehired by the Company, the duration
of service up to such termination will be reinstated.


 


Periods of absence from work, other than those which
break continuity of service as provided in the preceding paragraph, will be
counted in determining length of continuous service except when the total
period of absence of an ERI Salaried Participant in any consecutive twelve (12)
month period exceeds twelve (12) months.


 


Section 14.3.2      Retirement.


 


(a)           An ERI Salaried Participant who is employed by the
Company, upon attaining the age of 65 years, or at any time thereafter, may
request retirement, and will be retired.


 


(b)           An ERI Salaried Participant with 10 or more years of
Continuous Service who is employed by the Company, upon attaining the age of 60
years, or at any time thereafter, may request retirement, and will be retired.


 


(c)           An ERI Salaried Participant not eligible for a pension
under Section 14.3.2(a), (b) or (d) hereof, whose employment is
to be terminated, shall be entitled to elect to be pensioned on the first of
the month following such termination provided:


 


(i)            the ERI Salaried Participant’s age and
number of years of Continuous Service, when added together, equal or exceed 80;
or


 


(ii)           the ERI Salaried Participant has
completed at least 15 years of Continuous Service and would have been eligible
for a pension under Section 14.3.2(a), (b) or (e) within the
next 10 years if employment with the Company had continued.


 


(d)           Notwithstanding any other provisions of the Plan, an
ERI Salaried Participant upon attaining the age of 65 years shall, prior to
actual retirement or termination of employment, begin receiving pension
benefits under this Article XIV on the first of the month following
attainment of such age.


 


56

















 


(e)           Regardless of age, any ERI Salaried Participant with
at least 10 years of Continuous Service who shall have become permanently
incapacitated through some unavoidable cause while employed by the Company will
be retired.


 


An ERI Salaried Participant shall be “permanently
incapacitated” only if (i) the ERI Salaried Participant has been
totally disabled by bodily injury or disease while actively employed so that
the ERI Salaried Participant cannot regularly engage in any substantial,
full-time activity for compensation or profit, (ii) such disability
shall have continued for at least three consecutive months, and (iii) in
the opinion of a licensed practicing physician, such disability will be
continuous throughout the ERI Salaried Participant’s life.


 


For the purposes of retirement with pension under this
Plan, incapacity shall not be deemed to have resulted from an unavoidable cause
if such incapacity is occasioned by self-inflicted injury, or as a result of
participating in a criminal activity.


 


A pension because of permanent incapacity under clause
of this Section 14.3.2 shall continue only so long as the pensioner shall
be permanently incapacitated, and the Administrator may require an individual
pensioned under this clause to submit to a medical examination at any
reasonable time by a licensed practicing physician.


 


A pensioner will be conclusively presumed to be
regularly engaged in substantial, full-time activity for compensation or
profit, and therefore no longer permanently incapacitated, if the pensioner
engages in any activity for compensation or profit from which the pensioner
derives income, the annual amount of which, together with the amount of any
pension received from the Company, exceeds the annual compensation the ERI
Salaried Participant would presently receive if the employee were still
employed on the job held at the time the employee was disabled.


 


Section 14.3.3      Amount and Payment of Pension.


 


Subject to the provisions of Section 14.3.2(d) regarding
commencement of benefits, an ERI Salaried Participant meeting the eligibility
requirements will be entitled to receive a pension each month beginning with
the month following that in which retirement takes place and ending with the
month in which the ERI Salaried Participant dies.  The amount of such pension will be determined
as follows:


 


(a)           If an ERI Salaried Participant is retired under the
provisions of Section 14.3.2(a) or (d), or is entitled to pension
benefits under the provisions of Section 14.3.2(d), the ERI Salaried
Participant’s pension shall be equal to the greater of (i) or (ii) below:


 


(i)            1.1% of the average monthly pay received
during the highest paid five of the last ten calendar years of employment with
ERI (ending on or before February 27, 1987) multiplied by his number of
years of Pre-February 28, 1987 Service;


 


(ii)           $100.00.


 


57

















 


If it will result in a higher pension, however, an ERI
Salaried Participant whose Pre-February 27, 1987 Service ceased to accrue
before December 31 of any calendar year will, for the purpose of
determining such average monthly pay, be given the benefit of earnings in the
year such service ceased in lieu of earnings during an equivalent portion of
the earliest of such highest paid five years, provided that no amounts
earned after February 27, 1987 shall be taken into account.


 


(b)           If an ERI Salaried Participant is retired under the
provisions of Section 14.3.2(b) or (c), the ERI Salaried Participant’s
pension will be calculated in accordance with the formula set forth in Section 14.3.3(a) above,
and then reduced by 5/9 of 1% for each of the first 60 months by which the
pension commencement date precedes the calendar month following the ERI
Salaried Participant’s 65th birthday, plus 5/18 of 1% for each additional month
by which the pension commencement date precedes the calendar month following
the ERI Salaried Participant’s 65th birthday.


 


(c)           Any amount paid to or on behalf of any pensioner as
reimbursement for loss of earnings resulting from occupational injury or
disease for which the Company (which term for purposes of this subsection
14.3.3(c) shall mean the Company as defined in Section 1.14, ERI, and
their respective affiliates required to be treated as under common control with
them pursuant to section 414(b), (c), (m) or (o) of the Code) is
liable, whether pursuant to Workmen’s Compensation or occupational disease
laws, or arising otherwise from the statutory or common law (except fixed
statutory payment for the permanent total or partial loss of one or any bodily
member, and except for payments for medical expenses) and any disability
payment in the nature of a pension under any Federal or State law shall be
deducted from or charged against the amount of any pension payable under this Section 14.3.3.  However, Social Security payments and
allowances for disabilities incurred in the military service of the United
States will not be so deducted or charged.


 


(d)           The Administrator shall pay in a lump sum any pension
having a present value of $5,000 or less. 
The lump sum payment to an ERI Salaried Participant will be the monthly
pension payable at the later of age 65 or pension commencement age multiplied
by the factor from Column A for the age of the ERI Salaried Participant when
the lump sum benefit will be paid.  The
lump sum payment to an ERI Salaried Participant’s surviving spouse will be the
spouse’s monthly pension multiplied by the factor from Column B for the age of
the spouse at the date the spouse’s pension will commence, and further
multiplied by the ratio of the factor in Column A for the age of the spouse at
the ERI Salaried Participant’s death to the factor in Column A for the age of
the spouse at the date the spouse’s pension will commence (or age 65 if age 65
is earlier than such commencement age).


 


58














 


	
  Age

  	
   

  	
  Column A

  	
   

  	
  Column B

  	
   

  	
  Age

  	
   

  	
  Column A

  	
   

  	
  Column B

  	
   

  
	
  75 &
  over

  	
   

  	
  77

  	
   

  	
  77

  	
   

  	
  54

  	
   

  	
  43

  	
   

  	
  134

  	
   

  
	
  74

  	
   

  	
  80

  	
   

  	
  80

  	
   

  	
  53

  	
   

  	
  41

  	
   

  	
  140

  	
   

  
	
  73

  	
   

  	
  82

  	
   

  	
  82

  	
   

  	
  52

  	
   

  	
  38

  	
   

  	
  141

  	
   

  
	
  72

  	
   

  	
  85

  	
   

  	
  85

  	
   

  	
  51

  	
   

  	
  36

  	
   

  	
  145

  	
   

  
	
  71

  	
   

  	
  87

  	
   

  	
  87

  	
   

  	
  50

  	
   

  	
  33

  	
   

  	
  145

  	
   

  
	
  70

  	
   

  	
  90

  	
   

  	
  90

  	
   

  	
  49

  	
   

  	
  32

  	
   

  	
  152

  	
   

  
	
  69

  	
   

  	
  92

  	
   

  	
  92

  	
   

  	
  48

  	
   

  	
  31

  	
   

  	
  159

  	
   

  
	
  68

  	
   

  	
  95

  	
   

  	
  95

  	
   

  	
  47

  	
   

  	
  29

  	
   

  	
  161

  	
   

  
	
  67

  	
   

  	
  97

  	
   

  	
  97

  	
   

  	
  46

  	
   

  	
  28

  	
   

  	
  167

  	
   

  
	
  66

  	
   

  	
  99

  	
   

  	
  99

  	
   

  	
  45

  	
   

  	
  27

  	
   

  	
  173

  	
   

  
	
  65

  	
   

  	
  102

  	
   

  	
  102

  	
   

  	
  44

  	
   

  	
  26

  	
   

  	
  178

  	
   

  
	
  64

  	
   

  	
  93

  	
   

  	
  105

  	
   

  	
  43

  	
   

  	
  25

  	
   

  	
  183

  	
   

  
	
  63

  	
   

  	
  85

  	
   

  	
  107

  	
   

  	
  42

  	
   

  	
  24

  	
   

  	
  188

  	
   

  
	
  62

  	
   

  	
  78

  	
   

  	
  110

  	
   

  	
  41

  	
   

  	
  23

  	
   

  	
  192

  	
   

  
	
  61

  	
   

  	
  72

  	
   

  	
  113

  	
   

  	
  40

  	
   

  	
  22

  	
   

  	
  195

  	
   

  
	
  60

  	
   

  	
  66

  	
   

  	
  115

  	
   

  	
  39

  	
   

  	
  21

  	
   

  	
  198

  	
   

  
	
  59

  	
   

  	
  61

  	
   

  	
  118

  	
   

  	
  38

  	
   

  	
  20

  	
   

  	
  200

  	
   

  
	
  58

  	
   

  	
  56

  	
   

  	
  120

  	
   

  	
  37

  	
   

  	
  19

  	
   

  	
  202

  	
   

  
	
  57

  	
   

  	
  53

  	
   

  	
  125

  	
   

  	
  36

  	
   

  	
  19

  	
   

  	
  214

  	
   

  
	
  56

  	
   

  	
  49

  	
   

  	
  127

  	
   

  	
  35 & under

  	
   

  	
  18

  	
   

  	
  214

  	
   

  
	
  55

  	
   

  	
  46

  	
   

  	
  131

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


Notwithstanding the foregoing, the above table will
not be used if a greater lump sum payment is derived by using the UP-1984
Mortality Table, with an interest rate that is not greater than the immediate
or deferred rate used by the Pension Benefit Guaranty Corporation to determine
the present value of a lump sum distribution upon plan termination.  The rate(s) used shall be the rate(s) in
effect on the January 1 of the year in which the Annuity Starting Date
occurs.  No distribution may be made
under this Section 14.3.3(d) after the Annuity Starting Date unless
the ERI Salaried Participant and the ERI Salaried Participant’s spouse (or
where the ERI Salaried Participant has died, the surviving spouse) consents in
a notarized writing to such distribution.


 


(e)           The payment of benefits under this Section 14.3.3
shall be subject to the requirements of Section 3.16 of the Plan.


 


Section 14.3.4        Vested Right to Deferred Pension.


 


Effective February 27, 1987, the accrued benefit
as of such date of each employee covered by the ERI Salaried Plan became 100%
vested.  Any other ERI Salaried
Participant shall acquire a right to a deferred pension if such ERI Salaried Participant’s
employment is terminated, and the ERI Salaried Participant is not retired under
any of the provisions of Section 14.3.2 hereof, provided such ERI Salaried
Participant has attained age 65 or has 10 years or more of Continuous Service
immediately prior to such termination, or has 9 years of Continuous Service and
is employed by the Company for at least 1,000 hours in the tenth year of such
service immediately prior to such termination (provided that, in the
case of an ERI Salaried Participant with one or more Hours of Service after December 31,
1988, the numbers 5 and 4 shall be substituted for the numbers 10 and 9 in
the foregoing sentence).


 


59

















 


For purposes of this provision, a year shall mean any
12-month period, commencing on an ERI Salaried Participant’s date of hire and
during which the ERI Salaried Participant continues to be employed by the
employer and shall include for vesting and eligibility purposes only all
periods of absence for up to one year, provided the ERI Salaried Participant
resumes participation under the Plan; fractional portions of a year, whether or
not consecutive, shall be aggregated; an hour of employment shall mean an hour
for which a person was directly or indirectly paid, or entitled to payment, by
the employer for the performance of duties; and employment with any employer
during or prior to the time such employer is controlled by the Company shall be
deemed to be employment with the Company.


 


An ERI Salaried Participant so entitled to a deferred
pension will receive pension payments for each month beginning with the month
following that in which the ERI Salaried Participant attains age 65 and ending
with the month in which the pensioner dies. 
If a joint and survivor option is in effect, however, in accordance with
Section 14.3.6 the payments provided for by such option will be continued
during the life of a surviving spouse.


 


Subject to Section 14.3.3(c), each monthly
pension payment will be an amount to be determined by applying the formula set
forth in Section 14.3.3(a)(i) hereof, using as a basis the number of
years of the ERI Salaried Participant’s Continuous Service at the earlier of
the time of termination of employment and February 27, 1987.


 


An ERI Salaried Participant so entitled to a deferred
pension may elect to have pension payments begin any month after the employee
has attained age 55, in which case the amount of monthly pension, determined as
provided in the preceding paragraph of this Section 14.3.4, shall be
reduced by 5/9 of 1% for each of the first 60 months by which such pension
commencement date precedes the calendar month following the ERI Salaried
Participant’s 65th birthday, plus 5/18 of 1% for each additional month by which
the pension commencement date precedes the calendar month following the ERI
Salaried Participant’s 65th birthday.


 


Section 14.3.5        Social Security Option.


 


Subject to the spousal consent provisions of Section 14.3.6,
an ERI Salaried Participant retiring under the provisions of Section 14.3.2(b) or
(c) hereof before the ERI Salaried Participant first becomes eligible to
receive Social Security payments may elect to receive a retirement income
providing larger monthly payments, in lieu of the retirement income otherwise
payable upon early retirement, until the date the ERI Salaried Participant
first becomes eligible to receive Social Security payments; thereafter, the
monthly payments shall be reduced by the approximate amount of the ERI Salaried
Participant’s monthly Social Security benefit. 
Insofar as practical, therefore, a level total retirement income will be
available for the participant.  This
option is not available, however, if an option is elected by the ERI Salaried
Participant under the provisions of Section 14.3.6.  Such larger payments shall equal such
retirement income otherwise payable plus the following percentage of such
approximate amount of the ERI Salaried Participant’s monthly Social Security
benefit:


 


60

















 


	
  Number of years until the

  ERI Salaried Participant first becomes

  eligible to receive Social Security payments

  	
   

  	
  Level

  Income

  Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  0

  	
   

  	
  100

  	
  %

  	
   

  
	
  1

  	
   

  	
  89

  	
  %

  	
   

  
	
  2

  	
   

  	
  80

  	
  %

  	
   

  
	
  3

  	
   

  	
  71

  	
  %

  	
   

  
	
  4

  	
   

  	
  64

  	
  %

  	
   

  
	
  5

  	
   

  	
  57

  	
  %

  	
   

  



 


	
  Number of years until the

  ERI Salaried Participant first becomes

  eligible to receive Social Security payments

  	
   

  	
  Level

  Income

  Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6

  	
   

  	
  52

  	
  %

  	
   

  
	
  7

  	
   

  	
  47

  	
  %

  	
   

  
	
  8

  	
   

  	
  42

  	
  %

  	
   

  
	
  9

  	
   

  	
  38

  	
  %

  	
   

  
	
  10

  	
   

  	
  34

  	
  %

  	
   

  
	
  11

  	
   

  	
  31

  	
  %

  	
   

  
	
  12

  	
   

  	
  28

  	
  %

  	
   

  
	
  13

  	
   

  	
  26

  	
  %

  	
   

  
	
  14

  	
   

  	
  24

  	
  %

  	
   

  
	
  15 or more

  	
   

  	
  21

  	
  %

  	
   

  
	
  (interpolate for
  fractional years)

  	
   

  	
   

  	
   

  	
   

  



 


If, however, such larger monthly payments, as
determined above, are smaller than such approximate amount of the employee’s
Social Security benefit, such larger monthly payments shall instead equal the
monthly pension otherwise payable divided by the complement of the applicable
level income percentage.


 


Section 14.3.6       Joint and Survivor Options.


 


(a)           Pre-retirement Survivor Annuity. 
The provisions of this Section shall apply to any ERI Salaried
Participant who is credited with at least one Hour of Service on or after August 23,
1984, and such other ERI Salaried Participants as have elected coverage in
accordance with Article VIII(1)(e) of the ERI Salaried Plan.  If an ERI Salaried Participant dies after the
date on which the ERI Salaried Participant is vested in accordance with the
first paragraph of Section 14.3.4 and before retiring, or a retired ERI
Salaried Participant who has not elected otherwise dies prior to the
commencement of benefits, the spouse of such ERI Salaried Participant shall be
entitled to pension payments in the form of a Pre-retirement Survivor Annuity
in accordance with the following provisions:


 


61

















 


(i)                                     If the ERI Salaried Participant dies
after becoming eligible for early retirement under Section 14.3.2(b) or
(c), the spouse will receive pension payments for each month beginning with the
month following the month in which the ERI Salaried Participant’s death
occurs.  If the ERI Salaried Participant
dies before becoming eligible for early retirement, the spouse will receive
pension payments beginning with the first of the month coinciding with or next
following the ERI Salaried Participant’s earliest retirement age, unless the
spouse elects a later date.


 


(ii)                                  The monthly pension payment to the spouse
shall be an amount to be determined (A) by applying the formula set
forth in Section 14.3.3(a) hereof (or a predecessor section of the
ERI Salaried Plan), as in effect at the time of the ERI Salaried Participant’s
death or earlier termination, using as a basis the number of years of the ERI
Salaried Participant’s Pre-February 27, 1987 Service, (B) reduced
by 5/9 of 1% for each of the first 60 months by which the commencement date of
pension payments to the spouse precedes the calendar month following the ERI Salaried
Participant’s 65th birthday, plus 5/18 of 1% for each additional month by which
the commencement date precedes the calendar month following the ERI Salaried
Participant’s 65th birthday, (C) reduced to reflect the amount the
spouse would receive as though an Option II (as defined below) form of pension
payments had been elected to take effect at the date of commencement of pension
payments to the spouse, and (D) reduced further by any coverage
factors applicable under Section 14.3.6(v).


 


(iii)                               Terminated ERI Salaried Participants
entitled to a deferred pension may waive a Pre-retirement Survivor Annuity in
writing at any time after the date of separation.  The waiver must be consented to by the
employee’s spouse, and the spouse’s consent must acknowledge the effect of such
rejection and must be witnessed by a notary public.  A revocation of a prior waiver may be made by
the ERI Salaried Participant without the consent of the spouse at any time
before the commencement of benefits.  The
number of revocations shall not be limited.


 


(iv)                              The Administrator shall provide each
terminated ERI Salaried Participant entitled to a deferred pension with a
written explanation of the Pre-retirement Survivor Annuity in such terms and in
such manner as would be comparable to the explanation provided for meeting the
requirements applicable to Joint and Survivor Annuity specified in Section 14.3.6(b).


 


62

















 


(v)                                 The monthly pension payable to a
terminated ERI Salaried Participant will be reduced for the Pre-retirement
Survivor Annuity coverage by the appropriate factor from the table below
multiplied by the number of full years the coverage has been in effect after December 31,
1984.


 


	
   

  	
   

  	
  Reduction for Each Full

  Year of Coverage After

  Termination of Employment

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Prior to Age 65

  	
   

  	
  .3%

  	
   

  
	
  After Age 65

  	
   

  	
  None

  	
   

  



 


(b)           Joint and Survivor Option. 
Subject to the conditions hereinafter set forth in Section 14.3.6(b)(ii),
if an ERI Salaried Participant shall be married at the beginning of the
calendar month in which pension payments are to commence under the Plan, and
unless the ERI Salaried Participant otherwise elects, the amount of each such
pension payment which would otherwise be payable shall be reduced; and if the
spouse shall survive the ERI Salaried Participant, a pension shall be payable
under the Plan to the spouse during such spouse’s remaining lifetime after the
ERI Salaried Participant’s death in an amount equal to 50% of the ERI Salaried
Participant’s reduced pension payment in accordance with Option II.


 


(i)                                     Every ERI Salaried Participant who is
married when benefits are to commence will receive a written explanation of:


 


(A)                              The terms and conditions of the Joint and
Survivor Option form of benefit;


 


(B)                                The ERI Salaried Participant’s right to
make, and the effect of, an election to waive the Joint and Survivor Option
form of benefit;


 


(C)                                The rights of an ERI Salaried Participant’s
spouse; and


 


(D)                               The right to make, and the effect of, a
revocation of a previous election to waive the Joint and Survivor Option.


 


An ERI Salaried Participant may elect in writing, at
any time during the 90-day period ending on the Annuity Starting Date, to
reject the Joint and Survivor Option form of benefit and receive the normal
form or an optional form of benefit. 
Such rejection must be accompanied by written spousal consent which
acknowledges the effect of the election and is witnessed by a notary
public.  Any rejection of the Joint and
Survivor Option form of benefit may be cancelled by written election at any
time prior to the date that benefits commence.


 


63

















 


(ii)                                  If an ERI Salaried Participant wishes to
have pension payments made to his spouse following his death in excess of that
provided in the first paragraph of Section 14.3.6(b) above, the ERI
Salaried Participant may so elect prior to retirement.  An ERI Salaried Participant who makes such an
election will receive a reduced pension during the ERI Salaried Participant’s
lifetime after retirement, and following the ERI Salaried Participant’s death
the same level of pension (Option I), or one-half of it (Option II), or
three-fourths of it (Option III), as the ERI Salaried Participant specified
when the election was made, will be continued to the ERI Salaried Participant’s
spouse during such spouse’s remaining life.


 


The pension of an ERI Salaried Participant electing
Option I, II or III shall be reduced 19%, 11% or 15%, respectively, plus
an additional reduction of 0.500%, 0.250% or 0.375%, respectively, for each
full year in excess of three by which the ERI Salaried Participant’s birthdate
precedes the spouse’s birthdate, to a maximum reduction (after 20 such excess
years) of 29%, 16% or 22.5%, respectively; or minus 0.500%, 0.250% or 0.375%, respectively,
for each full year in excess of three by which the spouse’s birthdate precedes
the ERI Salaried Participant’s birthdate, to a minimum net reduction (after 10
such excess years) of 14%, 8.5% or 11.25%, respectively.


 


(iii)                               If an ERI Salaried Participant chooses to
elect an option, written notice must be given to the Administrator, and the
employee must furnish proof of the spouse’s age.


 


(iv)                              If an ERI Salaried Participant or the ERI
Salaried Participant’s spouse dies before the option has become effective, the
option is automatically cancelled.


 


(v)                                 If the ERI Salaried Participant’s spouse
dies after the option has become effective and after the ERI Salaried
Participant has retired, the pension payments to the ERI Salaried Participant
will remain unchanged.


 


(vi)                              An option may be cancelled or modified by
the ERI Salaried Participant before the ERI Salaried Participant retires, by
written notice filed with the Administrator.


 


(vii)                           An ERI Salaried Participant who acquires
a vested interest in a pension under the provisions of Section 14.3.4 may
elect a joint and survivor option in the same manner and under the same terms
and conditions as an ERI Salaried Participant who is pensioned immediately upon
termination of employment.  For this
purpose, the vestee’s retirement date will be deemed to be the first date the
vestee is entitled to receive deferred pension payments under Section 14.3.4.


 


64

















 


Section 14.3.7       Computation of Average Monthly Pay.


 


In computing an employee’s average monthly pay for the
purposes of Section 14.3.3 hereof, the total compensation the employee
received during the applicable period (ending on or before February 27,
1987) shall be divided by 60.  However,
if during the applicable period, a calendar month or more of absence shall have
occurred which does not break the continuity of service and in respect to which
absence the employee received no compensation from the Company, the number 60
shall be reduced by the number of full calendar months of such absence.


 


Section 14.3.8       Employment of Pensioners.


 


An ERI Salaried Participant receiving early retirement
benefits under the Plan, who is reemployed by the Company (as defined in Section 1.14
and including for this purpose all entities required to be treated as under
common control with such Company under sections 414(b), (c), (m) and (o) of
the Code) prior to attaining age 65 or 40 or more hours in any calendar month
after commencement of such benefits and who has received the notice required by
29 Code of Federal Regulations Section 2530.203-3(b)(4), will have the
pension permanently suspended during such reemployment.  Upon termination of such reemployment, or if
sooner, attainment of age 65, the ERI Salaried Participant’s monthly pension
will be recomputed so as to give effect to the additional service and the
compensation received during such reemployment to the extent such service and
compensation are required to be taken into account for benefit accrual purposes
under Plan provisions other than this Article XIV.  The pension of such reemployed pensioner will
be reduced by 0.9% of the sum of the early retirement benefits previously
received.  If such recomputed pension
exceeds that paid immediately prior to such reemployment, the employee shall be
entitled to receive the monthly pension as so recomputed.  Notwithstanding the two preceding sentences,
in no event will the monthly pension payable upon recommencement be less than
that previously paid.”


 


Section 14.4          ERI
Hourly Participants.


 


Section 14.4.1       Credited Service and Eligibility Service.


 


(a)           Credited Service.  The Credited
Service of an ERI Hourly Participant shall for purposes of this Article XIV
be equal to his Credited Service under the ERI Hourly Plan as of February 27,
1987.


 


(b)           Eligibility Service.  The
Eligibility Service of an ERI Hourly Participant shall for purposes of this Article XIV
be the sum of his Pre-February 28, 1987 Eligibility Service and his Post-February 27,
1987 Eligibility Service.  If at the date
of an Employee’s retirement or termination of employment with the Company, his
Eligibility Service is less than his Credited Service with the Company, his
Eligibility Service shall be deemed to equal his Credited Service.


 


(i)                                     Pre-February 28, 1987 Eligibility Service. 
The Pre-February 28, 1987 Eligibility Service of an ERI Hourly
Participant shall be equal to his Eligibility Service accrued under Article VI(3) of
the ERI Hourly Plan as of February 27, 1987.


 


65

















 


(ii)                                  Post-February 27, 1987 Eligibility
Service.  The Post-February 27, 1987 Eligibility
Service of an ERI Hourly Participant shall be computed for each ERI Hourly
Participant on the basis of total hours compensated by the Company during each
calendar year, with one year of Eligibility Service being recognized for each
calendar year in which the ERI Hourly Participant receives compensation for
1,000 hours or more (including as compensated hours the hours referred to in
subsections 2(b) through 2(f) of Article VI of the ERI Hourly
Plan as in effect on December 31, 1988, in accordance with subsection 2(g) of
such Article VI).  No proportionate
or partial credits shall be given for the purpose of computing Eligibility
Service.  Hours of pay at premium rates
shall be computed as straight-time hours.


 


Section 14.4.2       Requirements for Retirement Pensions and Deferred
Vested Pensions.


 


(a)           For purposes of this Section 14.4, the term “Pension”
shall mean a series of uniform monthly payments payable to an ERI Hourly Participant,
the first such payment to be made as of the beginning of the month following
the last day of employment immediately prior to retirement, or such other date
specified for that purpose, and the last payment to be made as of the beginning
of the month in which the death of the ERI Hourly Participant occurs, or in
which the Disability (as defined in Section 14.4.7) ends or, in the case
of an Early Retirement Pension payable pursuant to Section 14.4.3(b) in
which reemployment occurs prior to Normal Retirement Date.


 


(b)           An ERI Hourly Participant shall be considered as
retired under the Plan and as becoming a retired or disabled ERI Hourly
Participant entitled to a Pension, upon termination of employment, provided
such retirement occurs while the ERI Hourly Participant is employed by the
Company and:


 


(i)                                     after the first date he has attained age
65 (for purposes of this Section 14.4, his Normal Retirement Date), or


 


(ii)                                  after age 60 but prior to age 65 and
after 10 years of Eligibility Service, provided that if he retires at his
option he shall be eligible for an Early Retirement Pension as provided in Section 14.4.3(b)(i) (provided
that, if an ERI Hourly Participant is discharged for cause, he shall be deemed
to have retired at his option), or


 


(iii)                               after age 60 but prior to age 65 and
after 10 years of Eligibility Service, provided that if he retires at the
option of B&W and under mutually satisfactory conditions he shall be
eligible for an Early Retirement Pension as provided in Section 14.4.3(b)(ii),
or


 


(iv)                              after 10 years of Eligibility Service in
the event termination is caused by Disability and the ERI Hourly Participant is
so disabled prior to reaching age 65.


 


66

















 


(c)           Notwithstanding any other provisions of the Plan, an
ERI Hourly Participant whose employment terminates, and (i) who (A) became
vested in his accrued benefit effective February 27, 1987 pursuant to Article XIII
of the ERI Hourly Plan or (B) at the time of such termination shall
have 10 or more years of Eligibility Service (5 or more years of Eligibility
Service in the case of an ERI Hourly Participant with one or more Hours of
Service after December 31, 1988), and (ii) who shall not be eligible
for or receiving any other pension under the Plan based (in whole or in part)
on Credited Service prior to the date of such termination, shall be entitled to
a Deferred Vested Pension as provided in Section 14.4.3(d) of the
Plan.


 


(d)           Notwithstanding any other provisions of the Plan, an
ERI Hourly Participant or surviving spouse entitled to receive a Pension may,
for personal reasons and without disclosure thereof, request the Administrator
in writing to suspend for any period payment of all or any part of such Pension
otherwise payable to him hereunder.  The
Administrator, on receipt of such request, shall authorize such suspension, in
which event the ERI Hourly Participant shall be deemed to have forfeited all
rights to the amount of pension so suspended, but shall retain the right to
have the full Pension otherwise payable to him hereunder reinstated as to
future monthly payments upon written notice to the Administrator of his desire
to revoke his prior request for a suspension under this paragraph.  Any suspension requested hereunder by an ERI
Hourly Participant or benefits payable to him under the Plan shall not affect
benefits payable under any survivorship election he has made or is deemed to
have made under the Plan.


 


(e)           Payment of benefits will, unless the ERI Hourly
Participant elects a later date, begin not later than the later of (i) sixty
days after the close of the Plan Year in which the ERI Hourly Participant
attains the earlier of age 65 or the Normal Retirement Date or (ii) sixty
days after the end of the Plan Year in which the ERI Hourly Participant’s
employment terminates.  The payment of
benefits shall be further subject to Section 3.16.


 


(f)            Notwithstanding any other provisions of the Plan an
ERI Hourly Participant, upon attaining the age of 65, shall, prior to
retirement or termination of employment, begin receiving a Pension on the first
of the month following attainment of such age.


 


Section 14.4.3       Retirement and Other Benefits.


 


(a)           Normal Retirement Pension. 
The amount of the monthly Pension payable out of the Trust to an ERI Hourly
Participant upon or after reaching age 65 under the conditions of Section 14.4.2(b) of
the Plan, and who shall make application therefor, or to an ERI Hourly
Participant entitled to a Pension in accordance with Section 14.4.2(f),
shall be a life income benefit equal to $10.00 multiplied by the number of his
years of Credited Service (the “Normal Retirement Pension”).


 


Subject to Section 14.4.2(f), the monthly Normal
Retirement Pension payable from the Trust shall become payable to the ERI
Hourly Participant, if he then shall be living, on the first day of the first
month after (i) his employment shall have terminated, and (ii) he
shall have filed an application for such Pension; and shall be payable on the
first day of each month thereafter during his lifetime.


 


67

















 


Upon attainment of his Normal Retirement Date, the
rights of an ERI Hourly Participant to his benefits under this Section shall
be nonforfeitable.


 


(b)           Early Retirement Pension.


 


(i)                                     The amount of the monthly Pension payable
out of the Trust to an Employee who shall retire at his option under the
conditions of Section 14.4.2(b)(ii) of the Plan, and who shall make
application therefor, shall be one of the following as the ERI Hourly
Participant shall elect:


 


(A)                              A deferred life income benefit, at age 65
determined in accordance with Section 14.4.3(a), based upon his Credited
Service, or


 


(B)                                An immediate life income benefit
commencing at Early Retirement in an amount equal to the deferred benefit provided
for in (A) above, reduced by a percentage equal to 5/9 of 1%
multiplied by the number of months from the date the ERI Hourly Participant’s
Pension originally commenced to attainment of age 65.


 


(ii)                                  The amount of the monthly Pension payable
out of the Trust to an ERI Hourly Participant who shall retire under the
conditions of Section 14.4.2(b)(iii) of the Plan shall be:


 


(A)                              A life income benefit in an amount equal
to $10.00 for each year of his Credited Service, and


 


(B)                                A Temporary Benefit in an amount equal to
$10.00 for each year of his Credited Service (not to exceed a total of
$250.00); provided, however, that for any month after the retired ERI Hourly
Participant attains age 65 or becomes Eligible For an Unreduced Social Security
Benefit, whichever occurs first, the Temporary Benefit shall not be payable.


 


For the purpose of subsection (i) above, a
retired ERI Hourly Participant shall be considered as being Eligible For an
Unreduced Social Security Benefit even though he does not qualify for, or
loses, such payments through failure to make application therefor, entering
into covered employment, or other act or failure to act.  An ERI Hourly Participant discharged for
cause after such ERI Hourly Participant has attained age 60 but before age 65, and
who has met the requirements set forth in Section 14.4.2(c)(i) shall
be entitled only to the benefits provided under Section 14.4.3(b)(i) of
the Plan.


 


68














 


(iii)                               The monthly Early Retirement Pension
shall become payable to the retired ERI Hourly Participant, if he then shall be
living, on the first day of the first month after (A) he shall have
become eligible for such Pension and (B) he shall have filed application
for such Pension; and shall be payable on the first day of each month
thereafter during his lifetime or until he shall be reemployed prior to his
Normal Retirement Date by the Company (as defined in Section 14.4.3(e)).


 


(c)           Disability Retirement Pension. 
The monthly Pension payable out of the Trust to an ERI Hourly
Participant who shall retire and be eligible for a Pension under the provisions
of Section 14.4.2(b)(iv) of the Plan shall be:


 


(i)                                     A life income benefit in an amount equal
to $10.00 for each year of his Credited Service, and


 


(ii)                                  A Temporary Benefit in an amount equal to
$10.00 for each year of his Credited Service (not to exceed a total of
$250.00); provided, however, that for any month after the retired ERI Hourly
Participant attains age 65 or becomes Eligible For an Unreduced Social Security
Benefit, whichever occurs first, the Temporary Benefit shall not be payable.


 


For the purposes of this Section, a retired ERI Hourly
Participant shall be considered as being Eligible For an Unreduced Social
Security Benefit by reason of disability even though he does not qualify for,
or loses, such payments through failure to make application therefor or other
act or failure to act.


 


The monthly Disability Retirement Pension payable from
the Trust shall become payable to the retired ERI Hourly Participant, if he
then shall be living, on the first day of the first month after (A) he
shall have filed an application for such Pension, and (B) his
Disability Retirement shall have commenced, and (C) at least 26
weeks have elapsed since the date upon which his Disability commenced, and
shall be payable on the first day of each month thereafter until, but not
including, the month after (1) his Disability Retirement shall end,
or (2) he shall attain age 65, or (3) he shall die,
whichever first shall occur.


 


When a retired ERI Hourly Participant receiving a
Disability Retirement Pension shall reach age 65 or the qualifying age for an
unreduced insurance benefit by reason of age under the Federal Social Security
Act, he thereafter, if eligible, shall receive a Normal Retirement Pension in
accordance with the provisions of Section 14.4.3(a) and shall no
longer be considered to be on Disability Retirement.


 


(d)           Deferred Vested Pension.  The monthly
Pension payable out of the Trust to an ERI Hourly Participant who shall
terminate employment and be eligible for a Deferred Vested Pension under the
provisions of Section 14.4.2(c) of the Plan shall be a life income
benefit equal to $10.00 multiplied by the number of his years of Credited
Service.


 


69

















 


The monthly Pension shall become payable to such ERI
Hourly Participant, if he shall then be living, on the first day of the month
after (i) his 65th birthday and (ii) he shall have filed an
application for such Pension; and shall be payable on the first day of each
month thereafter during his lifetime, provided, however, that such ERI Hourly
Participant may elect a monthly Pension commencing on the first day of any
month after he shall have reached his 60th birthday and before he shall have
reached his 65th birthday, in which event his monthly Pension shall (A) be
in an amount equal to the Pension payable at age 65 reduced by a percentage
equal to 5/9 of 1% multiplied by the number of months from the date his Pension
is to commence to the first day of the month following his 65th birthday and (B) be
payable on the first day of each month thereafter during his lifetime or until
he shall be reemployed prior to his Normal Retirement Date by the Company (as
defined in Section 14.4.3(e)).


 


(e)           Reemployment.  If an ERI
Hourly Participant receiving an Early Retirement Pension shall be reemployed
prior to his Normal Retirement Date by the Company (which term, for purposes of
this Section 14.4.3(e), shall mean the Company as defined in Section 1.14
and all entities required to be treated as under common control with such
Company pursuant to section 414(b)(c)(m) or (o) of the Code) for
40 or more hours in any calendar month, and has been given the notice required
by 29 Code of Federal Regulations Section 2530.203-3(b)(4), his Pension
shall be cancelled.  Upon his subsequent
retirement, or if sooner, attainment of age 65, his Pension shall be based on
the total of his Credited Service; provided, however, that if an ERI Hourly
Participant eligible for a Normal Retirement Pension or a Pension in accordance
with Section 14.4.2(f) shall previously have been retired on an Early
Retirement Pension under the conditions of Section 14.4.2(b)(ii) and
then returned to employment, his monthly Normal Retirement Pension or Pension
payable in accordance with Section 14.4.2(f), if applicable, payable from
the Trust shall be reduced by 8/10 of 1% of the sum of the Early Retirement
Benefit payments he shall have received but not to exceed 25% of the monthly
Pension payable prior to such reduction.


 


If the Disability Retirement Pension of a retired ERI
Hourly Participant shall cease without loss of seniority, and provided he shall
not have subsequently incurred a break in his seniority, he shall be credited
upon subsequent Retirement, or if sooner, attainment of age 65, with the
Credited Service and Eligibility Service he had at the time his Disability
Retirement commenced and shall also receive credit for Eligibility Service
accumulated during the period of reemployment.


 


An ERI Hourly Participant who previously terminated
employment and was eligible for a Deferred Vested Pension, and who again
becomes an ERI Hourly Participant, prior to his application for such Pension,
shall receive credit for Credited Service and Eligibility Service accumulated
at the time of such termination and shall also receive credit for Eligibility
Service accumulated during the period of reemployment.  Upon subsequent retirement, or if sooner,
attainment of age 65, such ERI Hourly Participant’s eligibility for retirement
and the amount of monthly Pension shall be determined on the basis of his total
Credited Service.


 


70

















 


(f)            Survivorship Option.


 


(i)                                     In lieu of the applicable Life Income
Benefit provided in subsections (a) through (d) of this Section 14.4.3
(but not any Temporary Benefit ceasing at or before age 65), an ERI Hourly
Participant who retires or has attained his Normal Retirement Date, or an ERI
Hourly Participant whose employment was terminated and is entitled to a
Deferred Vested Pension, shall automatically be deemed to have elected a
reduced monthly benefit during his lifetime with the provision that, following
his death, a monthly survivor’s benefit shall be payable to his designated
spouse during the further lifetime of the spouse.


 


(ii)                                  The automatic election shall be deemed to
be made on the following date, whichever is applicable:  (A) for a person retiring on
Normal Retirement Pension, Early Retirement Pension, or Disability Retirement
Pension, the date on which his employment with the Company terminates; or (B) for
an ERI Hourly Participant who has attained his Normal Retirement Date, his
Normal Retirement Date or January 1, 1984, whichever is later; or (C) for
an ERI Hourly Participant who is entitled to a Deferred Vested Pension, the
first day of the first month after he reaches age 65 or if earlier, the first
day of the first month he receives a Deferred Vested Pension.  The automatic election provided in this
subsection shall be applicable only with respect to a spouse to whom the ERI
Hourly Participant is married at the date of election and has been married for
at least one year prior to that date; provided, however, that an ERI Hourly
Participant married at the date of election, but for less than one year, shall
be deemed to have elected the survivorship option to become effective on the
first day of the month following the month in which the ERI Hourly Participant
has been married one year, or if later, the first day of the month for which
his first benefit under the Plan is payable.


 


An ERI Hourly Participant may prevent the automatic
election provided in this subsection by specific written rejection accompanied
by written spousal consent which has been witnessed by a notary public and
executed in whatever form and manner may be prescribed for this purpose and
before the time such election would be deemed to be made, in which event he
shall be entitled to the applicable life income benefit provided in Section 14.4.3(a),
(b), (c) or (d) without the reduction provided in subsection 14.4.3(f) (iii) below;
provided, however, that said rejection may be cancelled by the ERI Hourly
Participant by written action at any time prior to the date his benefits are to
commence.  The notice and waiver
provisions of Section 3.7(d) and (e) shall apply to such
rejections.


 


(iii)                               The amount of the reduced monthly benefit
payable to a retired ERI Hourly Participant (including for purposes of this Section an
ERI Hourly Participant entitled to a Deferred Vested Pension and an ERI Hourly
Participant entitled to a Pension pursuant to Section 14.4.2(f)) under
this Section 14.4.3(f), shall be determined by reducing the amount of the
applicable life income benefit by a percentage, determined as hereinafter
provided, of the life income benefit that would have been payable to the
retired ERI Hourly Participant if he had rejected a survivorship option.  The percentage to be used shall be ten
percent (10%) if the ERI Hourly Participant’s age and his spouse’s age are the
same (the age of each determined as being the age at his or her birthday
nearest the date on which the first payment of such ERI Hourly Participant’s
benefit shall be payable).  Such percentage
shall be decreased by 1/2 of 1% for each year up to twenty (20) years that the
spouse’s age exceeds the ERI Hourly Participant’s age and shall be increased by
1/2 of 1% for each year that the spouse’s age is less than the ERI Hourly
Participant’s age.


 


71

















 


The reductions provided in this subsection shall be
made in all monthly benefits payable to the retired ERI Hourly Participant.


 


(iv)                              The amount of the monthly survivor’s
benefit payable to the surviving spouse of a retired ERI Hourly Participant for
whom the survivorship option hereunder is effective shall be fifty percent
(50%) of the amount of the monthly life income benefit that was or would have
been payable to the retired Employee after the reduction provided in (iii) above.


 


(g)           Special Pre-Retirement Survivor Option.


 


(i)                                     The following Special Pre-Retirement
Option shall be deemed to have been elected automatically by an Employee who (A) has
seniority on or after January 1, 1984 and has met the vesting requirements
of Section 14.4.2(c) or (B) terminates employment and is
eligible for a Deferred Vested Pension under Section 14.4.3(d).  The Special Pre-Retirement Survivor Option
shall also be provided in respect of ERI Hourly Participants who elected such
coverage pursuant to Article V, Section 7(a) of the ERI Hourly
Plan.


 


An ERI Hourly Participant may prevent this automatic
election by a specific written rejection accompanied by written spousal consent
which has been witnessed by a notary public. 
Any rejection may be revoked at any time, or a subsequent rejection made
at any time prior to commencement of benefits. 
Anything to the contrary notwithstanding, no rejection may be made until
the Employee has attained age 35.


 


(ii)                                  Under this Special Pre-Retirement
Survivor Option, a reduced monthly Pension will be payable to the ERI Hourly
Participant upon his subsequent retirement under the Plan, commencement of a
Deferred Vested Benefit or commencement of a Pension pursuant to Section 14.4.2(f) (and
the survivor’s benefit available pursuant to Section 14.4.3(f) shall
be determined by reference to such reduced monthly Pension), in return for
which a survivor’s benefit shall be payable to the ERI Hourly Participant’s
spouse but only in the event of his death prior to his retirement, commencement
of Deferred Vested Benefits, or commencement of a Pension pursuant to Section 14.4.2(f) (whichever
is applicable) while the option is in effect. 
The survivor’s benefit shall not commence prior to the date the ERI
Hourly Participant would have attained age 60. 
The amount of the spouse’s survivor’s benefit shall be equal to 50% of
the life income benefit, if any, to which the ERI Hourly Participant would have
been entitled if he had retired under Section 14.4.3(a), (b)(i)(B) or
(d) on the day preceding his death but not prior to age 60 with the
survivorship option set forth in Section 14.4.3(f) in effect.


 


72

















 


(iii)                               The reduction in the monthly Pension
payable to an ERI Hourly Participant will be determined by multiplying the
appropriate factor from the table below by the number of months the coverage
has been in effect:


 


	
  Age of

  Employee

  	
   

  	
  Reduction for Each Complete
  Month of

  Coverage While in Active Service or

  with Seniority Status

  	
   

  	
  Reduction for Each Complete
  Month of

  Coverage While Not in Active Service Nor

  with Seniority Status

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Under 65

  	
   

  	
  .0002083 (.02083%)

  	
   

  	
  .00025 (.025%)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Over 65

  	
   

  	
  None

  	
   

  	
  None

  	
   

  



 


(h)           Special Lump Sum Payment. 
An ERI Hourly Participant or a surviving spouse who is entitled to a
monthly benefit under this Section 14.4.3 shall be paid the actuarial
equivalent of said benefit as a single lump sum in lieu of such monthly
benefit, provided the lump sum is less than $5,000.  In the case of an ERI Hourly Participant, the
benefit described herein shall be the monthly pension payable at the later of
age 65 or pension commencement age.  For
purposes of this section, the actuarial equivalent shall be calculated using
the Applicable Interest Rate under Section 417(e) of the Code for the
second full calendar month before the date of distribution, and the Applicable
Mortality Table under Section 417(e) of the Code.  Notwithstanding the preceding sentence, the
present value of the accrued lump sum retirement benefit due an Employee who is
entitled to a monthly benefit under this Section 14.4.3 shall not be less
than the present value of such Participant’s vested accrued benefit as of December 31,
1999 utilizing an interest rate that is not greater than the immediate or
deferred rate, in effect on January 1 of the year in which the Annuity
Starting Date occurs, used by the Pension Benefit Guaranty Corporation to
determine the present value of a lump sum distribution upon plan termination)
and the UP-1984 Mortality Table.  The
surviving spouse of an ERI Hourly Participant who, pursuant to Sections 14.4.3(f) and
(g), is automatically deemed to have elected survivor benefits, shall consent
in a notarized writing to any such lump sum payment.


 


(i)            Other Benefits.  No benefits
are payable under the Plan upon the death of an ERI Hourly Participant, except
pursuant to valid election of an option pursuant to Section 14.4.3(g), or
as otherwise provided under Section 14.4.3(f).  No benefits are payable under the Plan upon
termination of employment of an ERI Hourly Participant who does not satisfy any
of the eligibility requirements set forth in Section 14.4.2.


 


73

















 


SECTION 14.4.3 OF THE PLAN WAS AMENDED BY
AMENDMENT NO. 1, EFFECTIVE AS OF JANUARY 1, 1998, BY SUBSTITUTING THE NUMBER “$5,000”
FOR THE NUMBER “$3,500” WHEREVER THE LATTER APPEARS THEREIN.


 


Section 14.4.4       Loss of Credited Service and Eligibility Service.


 


An ERI Hourly Participant will lose all Credited
Service and Eligibility Service for purposes of this Plan (and if reemployed,
shall be considered a new employee for the purposes of this Plan):


 


(a)           If before becoming entitled to a Pension benefit under
the Plan, he quits, is discharged or released, of if his seniority is broken
for any other reason, and


 


(b)           If he receives compensation from the Company for less
than 500 hours (computed as set forth in Section 2 of Article IV of
the ERI Plan as in effect on December 31, 1988) in the calendar year when
such quit, discharge, release, or loss of seniority occurs or in the next
following calendar year.  Any such
occurrence is hereinafter referred to as a “Break in Service.”  If an ERI Hourly Participant referred to in
subparagraph (a) above is reemployed prior to incurring a “Break in
Service,” no loss of Credited Service or Eligibility Service will be deemed to
have occurred.


 


Notwithstanding the
foregoing, however:


 


(c)           An ERI Hourly Participant retired under the Plan who
again becomes entitled to accrue Eligibility Service will have his Credited
Service and Eligibility Service at the time of original retirement reinstated;
and


 


(d)           If an ERI Hourly Participant has a Break in Service
and is subsequently reemployed by the Company and earns not less than one year
of Eligibility Service, the Eligibility Service and Credited Service he had
when the Break in Service occurred shall be restored to him.


 


Section 14.4.5       Social Security Benefit.


 


In determining benefits under the Plan, the Social
Security Benefit shall be assumed to be the amount applicable to any month for
which a benefit is payable under this Plan to an ERI Hourly Participant under
the Old Age and Disability Insurance provisions of the Federal Social Security
Act, as from time to time amended, for the benefit of the ERI Hourly
Participant, excluding payments for wives and dependents.


 


An ERI Hourly Participant shall be deemed to be
eligible for a Social Security Benefit even though the ERI Hourly Participant
either does not apply for, or loses part or all of such payments through delay
in applying for them, by entering into covered employment or otherwise.


 


74

















 


Section 14.4.6       Integrated Benefits.


 


(a)           Notwithstanding any other provisions of the Plan, in
determining the portion of the benefit payable out of the Trust Fund to any ERI
Hourly Participant, a deduction shall be made unless waived by the Company
(which term for purposes of this Section 14.4.6 shall mean the Company as
defined in Section 1.14 and any entity required to be treated as under
common control with such Company pursuant to sections 414(b), (c), (m) or (o) of
the Code), equivalent to all or any part of any of the following benefits
payable to such ERI Hourly Participant by reason of any law of the United
States, or any political subdivision thereof, which has been or shall be
enacted, provided that such deductions shall be to the extent that such
benefits have been provided by premiums, taxes, or other payments paid by or at
the expense of the Company:


 


(i)                                     Workers’ Compensation (except fixed
statutory payments for the loss of any bodily member).


 


(ii)                                  Disability benefits (other than those
payable on the basis of “need,” because of military service, or under the
Federal Social Security Act).


 


(b)           Notwithstanding any other provisions of the Plan, in
determining the retirement benefit payable out of the Trust Fund to any ERI
Hourly Participant, no benefit shall be payable for any month for which the
retired ERI Hourly Participant is receiving weekly accident or sickness
benefits under any plan to which the Company shall have contributed; for any
month for which the retired ERI Hourly Participant is receiving such accident
or sickness benefits for part of the month, a proportionate amount of the
monthly retirement benefit otherwise payable shall be paid for that part of the
month for which the retired ERI Hourly Participant receives no such accident or
sickness benefits.


 


(c)           Any lump sum payment of integrated Benefits payable to
an ERI Hourly Participant shall be pro-rated on a monthly basis from the date
of payment thereof and no Pension shall be payable until said sum as thus
pro-rated is exhausted.


 


Section 14.4.7        Disability.


 


(a)           An ERI Hourly Participant shall be deemed to be
totally and permanently disabled when, on the basis of satisfactory medical
evidence, he is found to be totally and presumably permanently prevented from
engaging in gainful occupation or employment for wage or profit as a result of
a physical or mental condition either occupational or nonoccupational in cause.


 


(b)           Any disabled retired ERI Hourly Participant may be
required to submit to medical examination, at any time during retirement prior
to age 65, but not more often than semi-annually, to determine whether he is
eligible for continuance of the Disability Retirement Pension.  If on the basis of such examination, it is
found that he is no longer disabled, or if he engages in gainful employment,
except for purposes of rehabilitation as determined by the Board, his
Disability Retirement Pension will cease. 
In the event the disabled retired ERI Hourly Participant refuses to
submit to medical examination, his Pension will be discontinued until he
submits to examination.


 


75

















 


ARTICLE XV


 


SPECIAL VESTING
RULES IN CONNECTION

WITH CORPORATE OFFICE SHUTDOWN

AND COMPANY STREAMLINING


 


Notwithstanding any other provision of this Plan, (a) each
Participant who was actively employed at the Henley Properties corporate office
in La Jolla, California as of March 30, 1990 and whose employment is
terminated by Henley Properties in connection with the shutdown of that office,
and (b) each Participant whose employment with Signal Landmark is
terminated in connection with the streamlining of that company’s operations,
shall be fully vested in his Accrued Benefit.


 


IN WITNESS WHEREOF, the Plan is executed this 21st day of December,
2009.


 


 


	
   

  	
  CALIFORNIA
  COASTAL COMMUNITIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ S.G. Sciutto

  



 


76

















 


APPENDIX
I


 


LIMITATIONS
ON BENEFITS


 


This Appendix applies to a Participant’s Accrued
Benefit derived from Employer contributions in Limitation Years (as defined
below) beginning on or after January 1, 2008, except as otherwise
provided.  The application of the
provisions of this Appendix will not cause the Maximum Permissible Benefit (as
defined below) for any Participant to be less than the Participant’s accrued
benefit under all the defined benefit plans of the Employer or a Previous
Employer as of the end of the last Limitation Year beginning before January 1,
2008, under provisions of the plans that were both adopted and in effect before
April 5, 2007. Effective December 31, 1993, benefit accruals under
this Plan were frozen.  Consequently,
this Appendix is to apply prospectively, only, to benefits (if any) accrued
under the Plan after the date (if ever) that benefit accruals under the Plan
cease to be frozen.  No benefits under
this frozen Plan will be increased as a result of the EGTRRA increase in the
limitations of Code Section 415(b). 
Similarly, the annual Remuneration of each participant shall not be
increased due to EGTRRA, and no cost of living increases shall be in effect
that would result in such an increase.


 


1.01         General Rule. 
The Annual Benefit otherwise payable to a Participant under the Plan at
any time will not exceed the Maximum Permissible Benefit.  If the benefit the Participant would
otherwise accrue in a Limitation Year would produce an Annual Benefit in excess
of the Maximum Permissible Benefit, the benefit will be limited (or the rate of
accrual reduced) to a benefit that does not exceed the Maximum Permissible
Benefit.  If the Participant is, or has
ever been, a participant in another qualified defined benefit plan (without
regard to whether the plan has been terminated) maintained by the Employer or a
Previous Employer, the sum of the Participant’s Annual Benefits from all such
plans may not exceed the Maximum Permissible Benefit.


 


1.02         Annual Benefit means a benefit payable annually in the
form of a straight life annuity.  Except
as provided below, where a benefit is payable in a form other than a straight
life annuity, the benefit will be adjusted to an actuarially equivalent
straight life annuity that begins at the same time as such other form of
benefit and is payable on the first day of each month, before applying the
limitations of this Appendix.  For a
Participant who has or will have distributions commencing at more than one
Annuity Starting Date, the Annual Benefit will be determined as of each such
Annuity Starting Date (and will satisfy the limitations of this Appendix as of
each such date), actuarially adjusting for past and future distributions of
benefits commencing at the other Annuity Starting Dates.  For this purpose, the determination of
whether a new Annuity Starting Date has occurred will be made without regard to
Regulation 1.401(a)-20, Q&A 10(d), and with regard to Regulations
1.415(b)-1(b)(1)(iii)(B) and (C).


 


(a)           Actuarial Adjustment.  No actuarial
adjustment to the benefit will be made for (i) survivor benefits payable
to a surviving Spouse under a qualified joint and survivor annuity to the
extent such benefits would not be payable if the Participant’s benefit were
paid in another form; (ii) benefits that are not directly related to
retirement benefits (such as a qualified disability benefit, preretirement
incidental death benefits, and post-retirement medical benefits); or (iii) the
inclusion in the form of benefit of an automatic benefit increase feature; provided
the form of benefit is not subject to Code Section 417(e)(3) and
would otherwise satisfy the limitations of this Appendix, and the amount
payable under the form of benefit in any Limitation Year will not exceed the
limits of this Appendix applicable at the Annuity Starting Date, as increased
in subsequent years pursuant to Code Section 415(d).  For this purpose, an automatic benefit
increase feature is included in a form of benefit if the form of benefit
provides for automatic, periodic increases to the benefits paid in that form.


 


I-1

















 


(b)           Determination.  The
determination of the Annual Benefit will take into account social security
supplements described in Code Section 411(a)(9) and benefits transferred
from another defined benefit plan, other than transfers of distributable
benefits pursuant to Regulation 1.411(d)-4, Q&A-3(c), but will disregard
benefits attributable to Employee Contributions or rollover contributions.


 


(c)           Actuarial Equivalence.  The
determination of actuarial equivalence of forms of benefit other than a
straight life annuity will be made in accordance with paragraph (1) or
paragraph (2), below:


 


(1)           Benefit Forms Not Subject to Code Section 417(e)(3). 
For Limitation Years beginning on or after January 1, 2008, the
actuarially equivalent straight life annuity is equal to the greater of (1) the
annual amount of the straight life annuity (if any) payable to the Participant
under the Plan commencing at the same Annuity Starting Date as the Participant’s
form of benefit; and (2) the annual amount of the straight life annuity
commencing at the same Annuity Starting Date that has the same actuarial
present value as the Participant’s form of benefit, computed using a 5 percent
interest rate assumption and the Applicable Mortality Table for that Annuity
Starting Date.


 


(2)           Benefit Forms Subject to Code Section 417(e)(3). 
If the Annuity Starting Date of the Participant’s form of benefit is in
a Plan Year beginning after 2005, the actuarially equivalent straight life
annuity is equal to the greatest of (I) the annual amount of the straight
life annuity commencing at the same Annuity Starting Date that has the same
actuarial present value as the Participant’s form of benefit, computed using an
8% interest rate and the 1983 Unisex Group Annuity Mortality Table set back one
year; (II) the annual amount of the straight life annuity commencing at
the same Annuity Starting Date that has the same actuarial present value as the
Participant’s form of benefit, computed using a 5.5 percent interest rate
assumption and the Applicable Mortality Table; and (III) the annual amount
of the straight life annuity commencing at the same Annuity Starting Date that
has the same actuarial present value as the Participant’s form of benefit,
computed using the Applicable Interest Rate and the Applicable Mortality Table,
divided by 1.05.


 


1.03         Remuneration for a Limitation Year, for purposes of this Appendix, is the
compensation (within the meaning of Code Section 415(c)(3)) actually paid
or made available during such Limitation Year. 
Remuneration for a Limitation Year will include amounts earned but not
paid during the Limitation Year solely because of the timing of pay periods and
pay dates, provided the amounts are paid during the first few weeks of the next
Limitation Year.  For Limitation Years
beginning on or after January 1, 2008, Remuneration for a Limitation Year
also will include compensation paid by the later of 2 1/2 months after an employee’s termination of employment
or the end of the Limitation Year that includes the date of the employee’s
termination of employment, if:


 


I-2














 


(a)           Regular.  The payment
is regular compensation and, absent termination of employment, the payments
would have been paid to the employee while the employee continued in employment
with the Employer; or,


 


(b)           Leave.  The payment
is for unused accrued bona fide sick, vacation or other leave that the employee
would have been able to use if employment had continued; or


 


(c)           Nonqualified Plan.  The payment
is received by the employee pursuant to a nonqualified unfunded deferred
compensation plan and would have been paid at the same time if employment had
continued, but only to the extent includible in gross income.


 


(d)           Exclusions.  Any payments
not described above will not be considered Remuneration if paid after
termination of employment, even if paid by the later of 2 1/2 months after the date of termination of
employment or the end of the Limitation Year that includes the date of
termination of employment, except, (a) if an individual who does not
currently perform services for the Employer by reason of qualified military
service (within the meaning of Code Section 414(u)(1)) to the extent these
payments do not exceed the amounts the individual would have received if the
individual had continued to perform services for the Employer rather than
entering qualified military service; or (b) if compensation paid to a
Participant who is permanently and totally disabled, as defined in Code Section 22(e)(3),
provided salary continuation applies to all Participants who are permanently
and totally disabled for a fixed or determinable period, or the Participant was
not a Highly Compensated Employee immediately before becoming disabled.


 


(e)           Back Pay.  Back pay,
within the meaning of Regulation 1.415(c)-2(g)(8), will be treated as
Remuneration for the Limitation Year to which the back pay relates to the
extent the back pay represents compensation that would otherwise be included
under this definition.


 


(f)            Deferrals.  For
Limitation Years beginning after December 31, 1997, Remuneration paid or
made available during such Limitation Year includes amounts that would
otherwise be included in Remuneration but for an election under Code Sections
125(a), 402(e)(3), 402(h)(1)(B), 402(k), or 457(b).


 


(g)           Transportation Fringe.  For
Limitation Years beginning after December 31, 2000, Remuneration also
includes elective amounts that are not includible in the gross income of the
employee by reason of Code Section 132(f)(4).


 


(h)           Deemed Remuneration.  For
Limitation Years beginning after December 31, 2001, Remuneration includes
deemed Code Section 125 compensation. 
Deemed Code Section 125 compensation is an amount that is
excludable under Code Section 106 that is not available to a Participant
in cash in lieu of group health coverage under a Code Section 125
arrangement solely because the Participant is unable to certify that he or she
has other health coverage.  Amounts are
deemed Code Section 125 compensation only if the Employer does not request
or otherwise collect information regarding the Participant’s other health
coverage as part of the enrollment process for the health plan.


 


I-3

















 


1.04         Defined Benefit Remuneration Limitation means 100 percent of a Participant’s
High Three-Year Average Remuneration, payable in the form of a straight life
annuity.


 


(a)           Automatic Adjustment.  In the case
of a Participant who has had a termination of employment, the Defined Benefit
Remuneration Limitation applicable to the Participant in any Limitation Year
beginning after the date of termination of employment will not be automatically
adjusted.


 


(b)           Rehire.  In the case
of a Participant who is rehired after a termination of employment, the Defined
Benefit Remuneration Limitation is the greater of 100 percent of the
Participant’s High Three-Year Average Remuneration, as determined prior to the
termination of employment, or 100 percent of the Participant’s High Three-Year
Average Remuneration, as determined after the termination of employment.


 


1.05         Defined Benefit Dollar Limitation. 
Effective for Limitation Years ending after December 31, 2001, the
Defined Benefit Dollar Limitation is $160,000, automatically adjusted under
Code Section 415(d), effective January 1 of each year and available
in the form of a straight life annuity. 
In the case of a Participant who has had a termination of employment,
the Defined Benefit Dollar Limitation applicable to the Participant in any
Limitation Year beginning after the date of termination of employment will not
be automatically adjusted pursuant to Code Section 415(d).


 


1.06         Employer means, for purposes of this Appendix, the Company and
its Affiliated Companies determined with the adjustment required by Code Section 415(h).


 


1.07         High Three-Year Average Remuneration means the average Remuneration for the
three consecutive years of service (or, if the Participant has less than three
consecutive years of service, the Participant’s longest consecutive period of
service, including fractions of years, but not less than one year) with the
Employer that produces the highest average. 
A year of service with the Employer is the 12-consecutive month period
defined below, in this Appendix.  In the
case of a Participant who is rehired by the Employer after a termination of
employment, the Participant’s High Three-Year Average Remuneration will be
calculated by excluding all years for which the Participant performs no
services for and receives no Remuneration from the Employer (the break period)
and by treating the years immediately preceding and following the break period
as consecutive.  To the extent required
by applicable law, a Participant’s Remuneration for a year of service will not
include Remuneration in excess of the limitation under Code Section 401(a)(17)
that is in effect for the calendar year in which such year of service begins.


 


1.08         Limitation Year means the calendar year.


 


1.09         Maximum Permissible Benefit means the lesser of the Defined Benefit
Dollar Limitation or the Defined Benefit Remuneration Limitation (both adjusted
where required, as provided below).


 


I-4

















 


(a)           Adjustment for Less Than 10 Years of Participation or
Service.  If the Participant has less than 10 years of
participation in the Plan, the Defined Benefit Dollar Limitation will be
multiplied by a fraction — (i) the numerator of which is the number of
years (or part thereof, but not less than one year) of participation in the
Plan, and (ii) the denominator of which is 10.  In the case of a Participant who has less
than ten Years of Service with the Employer, the Defined Benefit Remuneration
Limitation will be multiplied by a fraction — (i) the numerator of which
is the number of Years (or part thereof, but not less than one year) of Service
with the Employer, and (ii) the denominator of which is 10.  The Defined Benefit Dollar Limitation will be
adjusted if the Annuity Starting Date of the Participant’s benefit is before
age 62 or after age 65.


 


(b)           Adjustment of Defined Benefit Dollar Limitation for
Benefit Commencement Before Age 62.


 


(1)           Plan Does Not Have Immediately Commencing Straight
Life Annuity Payable at Both Age 62 and the Age of Benefit Commencement. 
If the Annuity Starting Date for the Participant’s benefit is prior to
age 62 and occurs in a Limitation Year beginning on or after January 1,
2008, and the Plan does not have an immediately commencing straight life
annuity payable at both age 62 and the age of benefit commencement, the Defined
Benefit Dollar Limitation for the Participant’s Annuity Starting Date is the
annual amount of a benefit payable in the form of a straight life annuity
commencing at the Participant’s Annuity Starting Date that is the actuarial
equivalent of the Defined Benefit Dollar Limitation (adjusted for years of
participation less than 10, if required) with actuarial equivalence computed
using a 5 percent interest rate assumption and the Applicable Mortality Table
for the Annuity Starting Date (and expressing the Participant’s age based on
completed calendar months as of the Annuity Starting Date).


 


(2)           Plan Has Immediately Commencing Straight Life Annuity
Payable at Both Age 62 and the Age of Benefit Commencement. 
If the Annuity Starting Date for the Participant’s benefit is prior to
age 62 and occurs in a Limitation Year beginning on or after January 1,
2008, and the Plan has an immediately commencing straight life annuity payable
at both age 62 and the age of benefit commencement, the Defined Benefit Dollar
Limitation for the Participant’s Annuity Starting Date is the lesser of the
limitation determined under paragraph (1), immediately above, and the Defined
Benefit Dollar Limitation (adjusted for years of participation less than 10, if
required) multiplied by the ratio of the annual amount of the immediately
commencing straight life annuity under the Plan at the Participant’s Annuity
Starting Date to the annual amount of the immediately commencing straight life
annuity under the Plan at age 62, both determined without applying the
limitations of this Appendix.


 


(c)           Adjustment of Defined Benefit Dollar Limitation for
Benefit Commencement After Age 65.


 


(1)           Plan Does Not Have Immediately Commencing Straight
Life Annuity Payable at Both Age 65 and the Age of Benefit Commencement. 
If the Annuity Starting Date for the Participant’s benefit is after age
65 and occurs in a Limitation Year beginning on or after January 1, 2008,
and the Plan does not have an immediately commencing straight life annuity
payable at both age 65 and the age of benefit commencement, the Defined Benefit
Dollar Limitation at the Participant’s Annuity Starting Date is the annual
amount of a benefit payable in the form of a straight life annuity commencing
at the Participant’s Annuity Starting Date that is the actuarial equivalent of
the Defined Benefit Dollar Limitation (adjusted for years of participation less
than 10, if required), with actuarial equivalence computed using a 5 percent
interest rate assumption and the Applicable Mortality Table for that Annuity
Starting Date (and expressing the Participant’s age based on completed calendar
months as of the Annuity Starting Date).


 


I-5

















 


(2)           Plan Has Immediately Commencing Straight Life Annuity
Payable at Both Age 65 and the Age of Benefit Commencement. 
If the Annuity Starting Date for the Participant’s benefit is after age
65 and occurs in a Limitation Year beginning on or after January 1, 2008,
and the Plan has an immediately commencing straight life annuity payable at
both age 65 and the age of benefit commencement, the Defined Benefit Dollar
Limitation at the Participant’s Annuity Starting Date is the lesser of the
limitation determined in paragraph (1), immediately above, and the Defined
Benefit Dollar Limitation (adjusted for years of participation less than 10, if
required) multiplied by the ratio of the annual amount of the adjusted
immediately commencing straight life annuity under the Plan at the Participant’s
Annuity Starting Date to the annual amount of the adjusted immediately
commencing straight life annuity under the Plan at age 65, both determined
without applying the limitations of this Appendix.  For this purpose, the adjusted immediately
commencing straight life annuity under the Plan at the Participant’s Annuity
Starting Date is the annual amount of such annuity payable to the Participant,
computed disregarding the Participant’s accruals after age 65 but including
actuarial adjustments even if those actuarial adjustments are used to offset
accruals; and the adjusted immediately commencing straight life annuity under
the Plan at age 65 is the annual amount of such annuity that would be payable
under the Plan to a hypothetical Participant who is age 65 and has the same
accrued benefit as the Participant.


 


(d)           No Adjustment. 
Notwithstanding (b) or (c) immediately above, no adjustment
will be made to the Defined Benefit Dollar Limitation to reflect the
probability of a Participant’s death between the Annuity Starting Date and age
62, or between age 65 and the Annuity Starting Date, as applicable, if benefits
are not forfeited upon the death of the Participant prior to the Annuity
Starting Date.  To the extent benefits
are forfeited upon death before the Annuity Starting Date, such an adjustment
will be made.  For this purpose, no forfeiture
will be treated as occurring upon the Participant’s death if the Plan does not
charge Participants for providing a qualified preretirement survivor annuity,
as defined in Code Section 417(c) upon the Participant’s death.


 


(e)           Minimum Benefit Permitted. 
Notwithstanding anything in this Appendix to the contrary, the benefit
otherwise accrued or payable to a Participant under this Plan will be deemed
not to exceed the Maximum Permissible Benefit if:


 


(1)           $10,000.  The
retirement benefits payable for a Limitation Year under any form of benefit
with respect to such Participant under this Plan and under all other defined
benefit plans (without regard to whether a plan has been terminated) ever
maintained by the Employer do not exceed $10,000 multiplied by a fraction — (I) the
numerator of which is the Participant’s number of Years (or part thereof, but
not less than one year) of Service (not to exceed 10) with the Employer, and (II) the
denominator of which is 10; and


 


(2)           No Defined Contribution Plan.  The
Employer (or a Previous Employer) has not at any time maintained a defined
contribution plan in which the Participant participated (for this purpose,
mandatory Employee Contributions under a defined benefit plan, individual
medical accounts under § Code Section 401(h), and accounts for
postretirement medical benefits established under § 419A(d)(1) are not
considered a separate defined contribution plan).


 


I-6

















 


1.10         Previous Employer. 
For purposes of this Appendix, if the Employer maintains a plan that
provides a benefit the Participant accrued while performing services for a
former Employer, the former Employer is a Previous Employer with respect to the
Participant in the plan.  A former entity
that antedates the Employer is also a Previous Employer with respect to a
Participant if, under the facts and circumstances, the Employer constitutes a
continuation of all or a portion of the trade or business of the former entity.


 


1.11         Year of Participation. 
The Participant will be credited with a Year of Participation (computed
to fractional parts of a year) for each accrual computation period for which
the following conditions are met:  (1) the
Participant is credited with at least the number of hours of service (or period
of service) for benefit accrual purposes, required under the terms of the plan
in order to accrue a benefit for the accrual computation period, and (2) the
Participant is included as a Participant under the eligibility provisions of
the plan for at least one day of the accrual computation period.  If these two conditions are met, the portion
of a year of participation credited to the Participant will equal the amount of
benefit accrual service credited to the Participant for such accrual
computation period.  A Participant who is
permanently and totally disabled within the meaning of Code Section 415(c)(3)(C)(i) for
an accrual computation period will receive a Year of Participation with respect
to that period.  In no event will more
than one Year of Participation be credited for any 12-month period.


 


1.12         Year of Service.  For
purposes of determining a Participant’s High Three-Year Average Remuneration,
the Participant will be credited with a Year of Service (computed to fractional
parts of a year) for each accrual computation period for which the Participant
is credited with at least the number of hours of service (or period of service)
for benefit accrual purposes, required under the terms of the Plan in order to
accrue a benefit for the accrual computation period, taking into account only
service with the Employer or a Previous Employer.


 


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APPENDIX
II


 


DISTRIBUTION
PROVISIONS


 


2.01         Incorporation by Reference of 401(a)(9) Regulations. 
Distributions from the Plan will be made in accordance with Regulations
(currently including 1.401(a)(9)-1 through 1.401(a)(9)-9) under Code Section 401(a)(9),
which include the minimum distribution incidental benefit requirement of Code Section 401(a)(9)(G)The
provisions of this Appendix override any distribution options in the Plan that
are inconsistent with Code Section 401(a)(9).


 


2.02         401(a)(9) Deferral Limitations for
Participants.  Notwithstanding anything to the contrary in
this Plan, a Participant may not defer commencement of his or her benefits past
his or her Required Beginning Date.  A
Participant’s Required Beginning Date is April 1 of the calendar year
following the later of (i) the calendar year in which the Participant
attains age 70-1/2, or (ii) the calendar year in which the Participant has
a severance from employment with all Affiliated Companies; provided, however,
that the Required Beginning Date of a Participant who is a 5% owner will be
determined without regard to clause (ii).


 


2.03         Time and Manner of Distribution.


 


(a)           Payment Period.  As of the
first Distribution Calendar Year (defined below), distributions, if not made in
a single sum, will be made over one of the following periods (or a combination
thereof):  (1) the life of the
Participant, (2) the life of the Participant and a Designated Beneficiary
(defined below), (3) a period certain not extending beyond the life
expectancy of the Participant, or (4) a period certain not extending
beyond the joint and last survivor expectancy of the Participant and a
Designated Beneficiary.  If a Participant
dies after distributions begin (as described below), the remaining portion of
that Participant’s benefit will continue to be distributed at least as rapidly
as under the method of distribution in effect before the Participant’s death.


 


(b)           Death of Participant Before Distributions Begin. 
If the Participant dies before distributions begin, the Participant’s
entire interest will be distributed, or begin to be distributed, no later than
as follows:


 


(1)           Spouse is Sole Beneficiary. 
If the Participant’s surviving Spouse is the Participant’s sole
Designated Beneficiary, then, except as provided in the Plan, distributions to
the surviving Spouse will begin by December 31 of the calendar year
immediately following the calendar year in which the Participant died, or by December 31
of the calendar year in which the Participant would have attained age 70-1/2,
if later.  If the surviving Spouse is
eligible to receive a single sum cash payment, the surviving Spouse must make
this election by the earlier of the date that payments are required to begin
under the preceding sentence or December 31 of the calendar year that
contains the fifth anniversary of the Participant’s death.


 


(2)           Spouse is not Sole Beneficiary. 
If the Participant’s surviving Spouse is not the Participant’s sole
Designated Beneficiary, then, except as provided in the Plan, distributions to
the Designated Beneficiary will begin by December 31 of the calendar year
immediately following the calendar year in which the Participant died unless
the Designated Beneficiary properly elects, before the date that annuity
payments are to begin, to receive a single sum cash payment.


 


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(3)           No Designated Beneficiary. 
If there is no Designated Beneficiary as of September 30 of the
calendar year following the calendar year of the Participant’s death, the
Participant’s entire interest (if any) will be distributed by December 31
of the calendar year containing the fifth anniversary of the Participant’s
death.


 


(4)           Death of  Spouse. 
If the Participant’s surviving Spouse is the Participant’s sole
Designated Beneficiary and the surviving Spouse dies after the Participant but
before distributions to the surviving Spouse are required to begin, this Section 2.03(b) other
than 2.03(b)(1), will apply as if the surviving Spouse were the Participant.


 


For purposes of this Section 2.03 and Section 2.05,
unless 2.03(b)(4) applies, distributions are considered to begin on the
Participant’s Required Beginning Date. 
If Section 2.03(b)(4) applies, distributions are considered to
begin on the date distributions are required to begin to the surviving Spouse
under Section 2.03(b)(1)).  If
annuity payments irrevocably commence to the Participant before the Participant’s
Required Beginning Date (or to the Participant’s surviving Spouse before the
date distributions are required to begin to the surviving Spouse under Section 2.03(b)(1)),
the date distributions are considered to begin is the date distributions
actually commence.  In any event, if a
Spouse or a non-Spouse Beneficiary elects a single sum cash payment, that cash
payment must be made before December 31 of the calendar year that contains
the fifth anniversary of the Participant’s death.


 


2.04         Requirements For Joint Life Annuities
Where the Beneficiary Is Not the Participant’s Spouse. 
If the Participant’s interest is being distributed in the form of a
Joint and Survivor Annuity for the joint lives of the Participant and a
non-Spouse Beneficiary, annuity payments to be made on or after the Participant’s
Required Beginning Date to the Designated Beneficiary after the Participant’s
death must not at any time exceed the applicable percentage of the annuity
payment for such period that would have been payable to the Participant using
the table set forth in Regulation 1.401(a)(9)-6, Q&A 2(c)(2), in the manner
described in Q&A 2(c)(1), to determine the applicable percentage.


 


2.05         Definitions.


 


(a)           Designated Beneficiary.  The
individual who is designated as the Beneficiary and is the Designated
Beneficiary under Code Section 401(a)(9) and applicable Regulations.


 


(b)           Distribution Calendar Year. 
A calendar year for which a minimum distribution is required.  For distributions beginning before the
Participant’s death, the first Distribution Calendar Year is the calendar year
immediately preceding the calendar year that contains the Participant’s
Required Beginning Date.  For
distributions beginning after the Participant’s death, the first Distribution
Calendar Year is the calendar year in which distributions are required to begin
pursuant to Section 2.03(b).


 


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(c)           Life Expectancy.  Life
expectancy means life expectancy as computed by use of the Single Life Table in
Regulation 1.401(a)(9)-9, Q&A-1.


 


(d)           Required Beginning Date.  The date
specified in Section 3.15(b) of the Plan.


 


2.06         TEFRA 242(b) Election. 
If a Participant made a written election, prior to January 1, 1984,
to defer commencement of his or her distribution in a manner consistent with
the Tax Equity and Fiscal Responsibility Act of 1982, such an election will be
honored.


 


2.07         Limitation of Benefits for 25 Highest
Paid Employees.  To the extent required by law, benefits paid
from this Plan to the 25 highest paid Employees are subject to the provisions
of Regulation 1.401(a)(4)-5(b).


 


2.08         Annuity Contracts. 
Annuity contracts purchased and distributed under the Plan shall satisfy
requirements of the Retirement Equity Act.


 


2.09         Timing.  Subject to
Regulation 1.411(a)-11(c)(7) and the provisions of this Plan, benefits to
a Participant shall become distributable no later than 60 days after the last
to occur of (a) the last day of the Plan Year in which the Participant
attains age 65, (b) the last day of the Plan Year in which the Participant
separates from employment with all Affiliated Companies, or (c) the 10th
anniversary of the last day of the Plan Year in which the Participant commenced
participation in the Plan.


 


2.10         Small Benefits. 
Since July 1, 2000, no mandatory distributions within the meaning
of Q&A 2 of IRS Notice 2005-5 have been, or will be, paid from this frozen
Plan because all remaining Plan benefits exceed $5,000.


 


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APPENDIX
III


 


TOP HEAVY
PROVISIONS


 


If the Plan became top heavy, certain Employees would
receive vesting credit and benefits as described in this Appendix.


 


3.01         Definitions. 
For purposes of this Appendix:


 


(a)           “Determination Date” means, in the case of the
first Plan Year, the last day of that Plan Year or, in the case of any other
Plan Year, the last day of the preceding Plan Year.  When more than one plan is aggregated, the
determination of whether the plans are Top-Heavy will be made at a time
consistent with Regulations.


 


(b)           “Employer” includes the Company and its Affiliated
Companies.


 


(c)           “Key Employee” means any Employee or former
Employee who at any time during the Plan Year containing the Determination Date
was either:  (1) an officer having
annual Remuneration greater than $130,000 (as adjusted under Code §416(i)); (2) a
5% owner of the Employer; or (3) a 1% owner of the Employer having annual
Remuneration of more than $150,000.


 


For purposes of this
definition, no more than 50 Employees (or, if less than 50, either 3 Employees
or 10% of all Employees, whichever is greater) shall be treated as
officers.  For purposes of determining
the number of officers taken into account, Employees described in Code Section 414(q)(8) are
excluded.  In addition, for purposes of
determining ownership percentages, the constructive ownership rules of
Code Section 318 shall apply as provided by Code Section 416(i)(1)(B).  If 2 Employees have the same interest in the
Employer, the Employee having greater annual Remuneration from the Employer
will be treated as having a larger interest. 
For purposes of determining 5% and 1% owners, neither the aggregation rules nor
the rules of subsections (b), (c), and (m) of Code Section 414
apply.  Inherited benefits will retain
the character of the benefits of the Employee who performed services for the
Employer.


 


(d)           “Non-Key Employee” means any Employee who is
not a Key Employee.


 


(e)           “Permissive Aggregation Group” means any other
plans that the Employer in its discretion, elects to aggregate with the
Required Aggregation Group; provided that the resulting group of plans
satisfies Code Sections 401(a)(4) and 410.


 


(f)            “Required Aggregation Group” means (i) each
plan of the Employer in which a Key Employee participates (regardless of
whether the Plan has terminated), and (ii) each other plan of the Employer
which enables any plan described in clause (i) to meet the requirements of
Code Sections 401(a)(4) or 410.


 


(g)           “Top-Heavy” means a plan in which, as of the
Determination Date, the Top-Heavy Ratio exceeds 60%.


 


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(h)           “Top-Heavy Ratio” means for the Plan or the
Required Aggregation Group or Permissive Aggregation Group, as applicable, the
fraction, the numerator of which is the sum of the account balances under the
aggregated defined contribution plans of all Key Employees as of the
Determination Date, including any part of any account balance distributed in
the 1-year period ending on the Determination Date, and the present value of
accrued benefits, including any part of any accrued benefit distributed in the
1-year period ending on the Determination Date, under the aggregated defined
benefit plans of all Key Employees as of the Determination Date, and the
denominator of which is the sum of all account balances, including any part of
any account balance distributed in the 1-year period ending on the
Determination Date, under the aggregated defined contribution plans for all
Participants and the present value of accrued benefits under the defined
benefit plans, including any part of any accrued benefit distributed in the
1-year period ending on the Determination Date, for all Participants as of the
Determination Date.  If a distribution
was made for a reason other than separation from service, death, or disability,
“5-year period” is substituted for “1-year period” in this paragraph.


 


(1)           The accrued benefit of a Participant other than a Key
Employee shall be determined under the method, if any, that uniformly applies
for accrual purposes under all defined benefit plans maintained by the
Employer, or if no such method exists, as if such benefit accrued not more
rapidly than the slowest accrual rate permitted under the fractional rule of
Code Section 411(b)(1)(C).


 


(2)           The accrued benefit for a defined contribution plan
will be determined on the most recent valuation date within a 12-month period
ending on the Determination Date.  The
accrued benefit for a defined benefit plan will be determined on the valuation
date used for computing plan costs for minimum funding.


 


(3)           No accrued benefit for any Participant or Beneficiary
will be taken into account for purposes of calculating the Top-Heavy Ratio with
respect to a Participant who is not a Key Employee with respect to the Plan
Year in question, but who was a Key Employee with respect to a prior Plan Year,
or an Employee who has performed no services for any Affiliated Company within
the 1-year period ending with the Determination Date, unless that Employee is
reemployed after such 1-year period.


 


3.02         Minimum Benefit Requirement. 
To the extent required by Code Section 416, in any Plan Year in
which the Plan is Top-Heavy, non-key employees who are covered by this Plan and
also covered by a defined contribution plan sponsored by the Employer will
receive at least a 5% minimum contribution under the defined contribution plan.


 


3.03         Minimum Vesting Requirements. 
All participants are 100% vested.


 


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