Exhibit 10.2


 


THE CALIFORNIA COASTAL COMMUNITIES, INC.


 


RETIREMENT PLAN


 


 


Generally Effective January 1, 1989


(Amended and Restated through December 19, 2001)


 















 


 


TABLE OF CONTENTS


	
  

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE I
  DEFINITIONS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE II
  ELIGIBILITY

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III
  RETIREMENT, TERMINATION, OR DEATH

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV
  FUNDING OF BENEFITS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V
  TRUST AGREEMENT AND TRUST FUND

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI
  CERTAIN LIMITATIONS ON BENEFITS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII
  PLAN ADMINISTRATION

  	
   

  	
   

  
	
   

  	
   

  	
   

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

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX
  TOP-HEAVY PROVISIONS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE X
  GENERAL PROVISIONS

  	
   

  	
   

  
	
   

  	
   

  	
   

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

  	
   

  	
   

  
	
   

  	
   

  	
   

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

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIII
  ADDITIONAL SPECIAL RULES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  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

  	
   

  	
   

  
	
   

  	
   

  	
   

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

  	
   

  	
   

  



 



 i














 


 


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 “GUST” required changes, but benefit accruals under this Plan remain
frozen.






(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 should be read as references to California Coastal
Communities, Inc.


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, continuation of the Signal Companies, Inc. Retirement
Plan.


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


 


 



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(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, and to comply with
Section 7(e)(4) of the Fair Labor Standards Act of 1938, as amended, and
with all applicable provisions of the Employee Retirement Income Security Act
of 1974 as of their effective dates or sooner.


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.


 



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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.  “Actuarial Equivalent”
shall mean the equivalent of a given benefit, or a given amount, payable in
another manner, determined using factors independent of sex, pursuant to the
following actuarial assumptions:


(a)           7.5% interest
(provided that for the purpose of determining the Actuarial Equivalent of
monthly payments that may instead be paid as a lump sum pursuant to Section 3.13,
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


(b)           mortality based on
the 1984 Unisex Pension Table.


(c)           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 in subparagraph (b) above will be set forward 5 years
in the calculation of the Disability Retirement Benefit of such Participant.


SECTION 1.3 OF THE PLAN WAS AMENDED BY AMENDMENT NO.
1, EFFECTIVE AS OF JANUARY 1, 2000, TO READ AS FOLLOWS:


“Actuarial Equivalent.  “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


 



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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.


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


 



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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.


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.


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,


 



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(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.


(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 lump sum 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


 



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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.


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.


 



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(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).


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.


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


 



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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


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


(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.


 



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(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.


(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.



 10














 


 


(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.


(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.


 



 11
 






 



 


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.


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 an individual not otherwise an Employee who, pursuant to an
agreement between an Employer and a leasing organization, has performed, on a
substantially full-time basis for the individual’s initial 12-month period of
performing services for the Employer or for any Plan Year, services of a type
historically performed by employees in the business field of the Employer
unless the individual is covered by a money purchase pension 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 1.26 OF THE PLAN WAS AMENDED BY AMENDMENT NO.
1, EFFECTIVE AS OF JANUARY 1, 1997, TO READ AS FOLLOWS:


“(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).”


 



 12
 






 



 


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


(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


 



 13
 






 



 


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 1.28 (regardless of whether the number of Hours of Service
actually completed in such month exceeds 190).


(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           Key
Employee.  “Key Employee” shall mean
an Employee described in Section 9.1.4 of the Plan and in Section 416
of the Code.


Section 1.35           Maximum
Permissible Amount.  “Maximum
Permissible Amount” means the amount, as adjusted, specified in
Section 6.3.


Section 1.36           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


 



 14
 






 



 


reemployment
within the period specified by such laws for the preservation of his
reemployment rights.


Section 1.37           Minimum
Benefit.  “Minimum Benefit” means the
benefit described in Section 9.6.


Section 1.38           Normal
Retirement Benefit.  “Normal
Retirement Benefit” shall mean the Benefit payable under Section 3.2.


Section 1.39           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 1.40           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 1.41           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 Section  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.


Section 1.42           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.


SECTION 1.42 OF THE PLAN WAS AMENDED BY AMENDMENT NO.
1, EFFECTIVE AS OF JANUARY 1, 1999, BY ADDING THE FOLLOWING SENTENCE:


“Effective January 1, 1999, “Plan” shall mean the
California Coastal Communities, Inc. Retirement Plan, as amended and restated
from time to time.”


Section 1.43           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


 



 15
 






 



 


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


Section 1.45           Predecessor
Plan.  “Predecessor Plan” shall mean
The Signal Companies, Inc. Retirement Plan, as in effect on December 31,
1985.


Section 1.46           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 1.47           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 1.48           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 1.49           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 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 1.50           Spinoff.
 “Spinoff” shall have the meaning
assigned to such term in the Preamble to the Plan.


Section 1.51           Social
Security Retirement Age.  “Social
Security Retirement Age” means:


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


 



 16
 






 



 


(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 1.52           Trust.
 “Trust” shall mean the trust established
pursuant to the Trust Agreement.


Section 1.53           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 1.54           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 1.55           Trustee.
 “Trustee” shall mean the Trustee under
the Trust Agreement.


Section 1.56           Vested
Retirement Benefit.  “Vested
Retirement Benefit” shall have the meaning given in Section 3.10.


Section 1.57           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


 



 17
 






 



 


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.


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 Section
 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


 



 18
 






 



 


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


(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.



 19














 


 


(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).


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.


IN THE JANUARY 1, 1989
RESTATEMENT

SECTION 3.2 WAS AMENDED TO READ AS FOLLOWS


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 provided  in Section
3.10(c) subsections (i) , (ii), (iii) or (iv) below. His Normal Retirement
Benefit 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)           Except
as provided in subsections (c) through (k), his Normal Retirement Benefit shall
be the sum of (i) , (ii) and (iii):



 20
 






 



 


(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.


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


(i)                                     in
the case of a Participant who had his Separation from the Service at the time
he was employed by Air Cruisers Corporation or Signal Landmark, and except as
provided in subsections (d) through (k), be less than the greater of (a)
$20.00 times his Credited Service, or (b) 1% of his Average Final
Compensation multiplied by his Credited Service, or


(ii)                                  in
the case of a Participant who had his Separation from the Service at the time
he was employed by a Company other than one described in (c)(i), and except as
provided in subsections (d) through (k), 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 1.15(a)(i) and
(iii) of this Plan, provided that


(iii)                               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, shall not be less than the greater of his Normal Retirement Benefit
calculated in accordance with subsection (c)(i) or subsection (c)(ii) above.


(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)           The
Normal Retirement Benefit of a Participant specified below shall be adjusted as
follows:


(i)                                     In
the case of a Participant who holds or has held an account in the Garrett
Secured Benefit Account in The Henley Savings and Stock Purchase Plan (the “Savings
Plan”), his Normal Retirement Benefit shall be,



 21
 






 



 


(A)                              in
the case of a Participant who elects pursuant to the Savings Plan to transfer
his entire account balance held in the Garrett Secured Benefit Account to this
Plan, the Normal Retirement Benefit provided hereunder without regard to this
subparagraph (e) and


(B)                                in
the case of a Participant who elects pursuant to the Savings Plan not to
transfer his account balance in the Garrett Secured Benefit Account to this
Plan, the Normal Retirement Benefit provided under subparagraph (b) of this
Section 3.2, offset by the value of the account balance not transferred (the “Offset”).
Except in the case of a Participant eligible for a Normal Retirement Benefit
under the Predecessor Plan on December 31, 1983, the Offset shall be
calculated at the earlier of the time the Participant reaches Normal Retirement
Date or the time the Participant has a Separation from the Service (the “Offset
Calculation Date”). Any portion of a Participant’s Garrett Secured Benefit
Account withdrawn prior to the Offset Calculation Date and after
December 31, 1983 shall be disregarded, and for purposes of calculating
the Offset, the Participant’s balance in such account shall be assumed to be
the amount which would have been his balance at the Offset Calculation Date had
no prior withdrawals been made. Solely for purposes of calculating the Offset,
the actuarial assumptions set forth in this paragraph shall apply. The Offset
shall be calculated as follows:  (1)
the portion of the Participant’s account which would have existed as of
December 31, 1983 absent Amendment IV to the Garrett Severance Plan is
treated as earning a 1.75% semi-annual interest rate (the “Assumed Rate”) to
the  Offset Calculation Date (the “Offset
Portion”) and is then subtracted from the Participant’s actual account balance
on the Offset Calculation Date (the result is the “Remainder Amount”); (2)
the Offset Portion, treated as earning the Assumed Rate from the Offset
Calculation Date to Normal Retirement Date, if later and the Remainder Amount,
treated as earning a 7 1/2% annual interest rate from the Offset Calculation
Date to Normal Retirement Date, if later, are added together; (3) the
sum of (1) and (2) is divided by 153.31 and in the case of a Participant eligible
for a Normal Retirement Benefit under the Predecessor Plan on December 31,
1983, the Offset shall be calculated on the basis of the Participant’s Garrett
Secured Benefit Account at the Participant’s Normal Retirement Date, plus the
amount allocated to such Participant’s account by virtue



 22
 






 



 


of Amendment IV to the Garrett Severance Plan, divided by 153.31;


(ii)                                  In
the case of a Participant who was a member of the Equity Group Amended Employee
Retirement Plan (the “Equity Plan”) as of December 31, 1971, whose
contributions to such plan had not been returned pursuant to Article VIII of
the Wheelabrator-Frye Inc. Salaried Employees’ Retirement Plan, the Normal
Retirement Benefit shall be increased by the greater of (a) one-twelfth
of the product of two-thirds percent of his final average earnings, as defined
in the Equity Plan times the number of his years of service under the Equity
Plan or (b) the amount necessary to make his Normal Retirement Benefit
hereunder equal to the benefit he would have received if he had retired in
December 1971.


(f)            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 or Wolverine Tube Corporation, 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.


(g)           In
the case of an Employee other than an Employee of UOP Realty Development
Company or Wolverine Tube Corporation 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.


(h)           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.


(i)            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



 23
 






 



 


Annuity provided under Section 3.7, shall be determined under the
provisions of Section 3.6 or 3.7, respectively.


(j)            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.


BEFORE JANUARY 1, 1989

SECTION 3.2(b) READ AS FOLLOWS


(b)           Notwithstanding (i), (ii), (iii) or
(iv) above, except as provided in subsections (c) through (k), his Normal
Retirement Benefit shall be:


(i)                                     1.5%
of his Average Final Compensation multiplied by his Credited Service, minus;


(ii)                                  1.5%
of his Primary Social Security Benefit multiplied by his Credited Service (not
in excess of 33 1/3 years), provided that;


(iii)                               if
the amount determined under clause (ii) exceeds $60, and if he was a
Participant in the Signal Retirement Plan (as defined in the Predecessor Plan)
on April 1, 1971, the excess over such $60 shall be disregarded.


Before January 1, 1989,
Primary Social Security Benefit was defined in Section 1.42 of the Plan as
follows:  “Primary Social Security
Benefit” means the estimated monthly benefit that a Participant would be
entitled to receive at age 65, under the Social Security Act in effect on the
January 1 coincident with or next preceding the earlier of Separation from the
Service, his Disability or the day preceding his 65th birthday, whichever is
applicable, without regard to whether the Participant receives such benefit and
without regard to any changes made after said January 1. For purposes of the
Plan, such estimated amount shall be determined using the following basis to
determine the Participant’s history of covered earnings:


(a)           the Participant’s average total
compensation for the five full calendar years immediately preceding his Separation
from the Service, Disability or the day preceding his 65th birthday, whichever
is applicable;


(b)           the assumption that earnings for
calendar years preceding the Separation from the Service, Disability or the day
preceding his 65th birthday, whichever is applicable, increase at the same rate
as the Average Per Worker Total Wages as reported by the Social Security
Administration;



 24
 






 



 


(c)           the participant’s earnings for each
year in and subsequent to the calendar year of Separation from the Service or
Disability to the December 31 preceding his 65th birthday are equal to earnings
for the calendar year preceding Separation from the Service;


(d)           estimated using a table of amounts
for varying pay ranges reflecting the foregoing assumptions.


The Participant shall have
the right to supply the Company with his actual salary history, documented in a
manner acceptable to the Administrator, which salary history must be obtained
from the Social Security Administration. If a Participant or his surviving
spouse supplies actual Social Security earnings on a timely basis (in no event
later than 12 months from the last date on which the Participant worked) the
Primary Social Security Benefit will be redetermined using such earnings and
his Benefit will be adjusted accordingly, but only if such redetermination
results in a greater benefit to the Participant. Failure to provide the Company
with a record of actual earnings on a timely basis will entitle the Company to
calculate the offset in the manner described above land may result in an offset
which is greater (and therefore result in a lesser benefit) than an offset
calculated with reference to actual earnings.


IN THE AUGUST 1, 1992 AND
SUBSEQUENT AMENDMENTS AND RESTATEMENTS,

WAS AMENDED TO READ AS FOLLOWS


Section 3.2.            Normal Retirement Benefit.  (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 provided in
Section 3.10(c) subsection (i), (ii), (iii) or (iv) below. His Normal
Retirement Benefit 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



 25
 






 



 


(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


(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.



 26
 






 



 


(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.


(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



 27
 






 



 


(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 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,



 28
 






 



 


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 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



 29















 


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


(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



 30
 








 


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 $3,500 or less, may
elect to receive an immediate lump sum distribution of such remaining accrued
benefit.


SECTION 3.6 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 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,



 31
 








 


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


(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.


(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



 32
 








 


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.


(e)           Each
Participant or Former Participant shall receive from the Committee 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
subsectionmay be made again prior to the expiration of such election period.


SECTION 3.7 OF THE PLAN
WAS AMENDED BY AMENDMENT NO. 1, EFFECTIVE AS

OF JANUARY 1, 1997, BY ADDING A NEW SUBSECTION (g) TO READ AS FOLLOWS:


“(g)         Waiver of Notice.  The Annuity Starting Date for a distribution
in a form other than a Qualified Joint and Survivor Annuity may be less than 30
days after receipt of the written explanation described in subsection (e) above
provided: (a) the Participant has been provided with information that clearly
indicates that the Participant has at least 30 days to consider whether to
waive the Qualified Joint and Survivor Annuity and elect (with spousal consent)
to a form of distribution other than a Qualified Joint and Survivor Annuity;
(b) the Participant is permitted to revoke any affirmative distribution
election at least until the annuity starting date or, if later, at any time
prior to the expiration of the 7-day period that begins the day after the
explanation of the Qualified Joint and Survivor Annuity is provided to the
Participant; and (c) the Annuity Starting Date is a date after the date that
the written explanation was provided to the Participant.”


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



 33
 








 


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 or
Wolverine Tube Corporation 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)           Notwithstanding
the foregoing, the death benefit payable hereunder in respect of any
Participant or Former Participant who was at any time prior to January 1,
1984 a participant in the Retirement Plan for Employees of the Garrett
Corporation and its Participating Subsidiary Companies and had elected to be
covered by the death benefit provisions thereunder shall in no event be less
than the death benefit which would have been payable under such plan if he had
died on December 31, 1983.


(e)           There
shall be paid a death benefit in the case of any Employee of Air Cruisers
Corporation who is a retired Participant who (1) retired on a
Normal or Early Retirement Date, (2) was at least age 55 at the
time of termination, (3) has at least 10 years of Vesting Service
and (4) has not elected to take a death benefit under any other
plan covering former employees of the Garrett Corporation. This death benefit
is equal to $5,000 minus (1) the sum of all medical payments paid
on behalf of such retired Participant or his dependents for treatment or
services because of injury or sickness incurred by such Participant or
dependents after the Participant reached Normal Retirement Date as provided
under any retiree health care benefits provision of any Garrett Corporation
health care plan covering former employees of the Garrett Corporation, and (2) any
life insurance paid on behalf of such retired Participant under the Extended
Death Benefit Clause of the Garrett Corporation Group Life Insurance Plan.


(f)            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



 34
 








 


such spouse had such Employee died on December 31, 1983 or the
Death Benefit payable under subparagraph (a).


(g)           In
addition to the Death Benefit payable hereunder, the death benefits provided
under Sections 4.7(a) and 4.7(b)(1) of the Retirement Plan for Employees of the
Garrett Corporation and its Participating Subsidiaries shall continue to be
provided to the extent applicable.


(h)           In
the case of any Employee who has transferred his Garrett Secured Benefit
Account balance to this Plan pursuant to the applicable provisions of the
Savings Plan, the Death Benefit payable hereunder shall in no event be less
than the value of the account so transferred accumulated to the earlier of the
date benefits commence payment or the Participant’s Normal Retirement Date at
the interest rate specified in the definition of Actuarial Equivalent under
this Plan, less any benefits received by the Participant or Beneficiary.


(i)            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.


(j)            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(f)
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



 35
 








 


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 be 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.


(k)           Subject
to the limitation imposed by Section 3.6(b), in the case of the death of any
Participant who formerly participated in the MPB Retirement Plan, the Death
Benefit, if any, payable hereunder to the surviving spouse of such Participant
shall be increased by one-twelfth of the amount of employee contributions plus
interest remaining in the MPB Retirement Plan as of December 31, 1983,
increased by 8.75% interest (or, if greater, the rate specified herein under
the definition of Actuarial Equivalent) from such date to such Participant’s
death, divided by the lump sum factor described in Section 3.8. If no other
Death Benefit is payable hereunder, the amount of the foregoing increase may be
paid as a lump sum with the consent of the surviving spouse. If payment of the
additional annuity benefit is deferred beyond such Participant’s date of death,
the balance at the date of death shall be increased to the actual benefit
commencement date at the rate of interest specified under the definition of
Actuarial Equivalent hereunder and converted to a monthly benefit using an
Actuarial Equivalent conversion factor.


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


IN THE AUGUST 1, 1992 RESTATEMENT 

SECTIONS 3.9(c) THROUGH 3.9(l) WERE REPLACED WITH THE FOLLOWING


(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



 36
 








 


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)
..


(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.



 37
 








 


(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.


(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.



 38
 








 


(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 $3,500.


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)           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.


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



 39














 


 


BEFORE THE JANUARY 1, 1989 RESTATEMENT

READ AS FOLLOWS


(c)           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 on the basis of his Credited Service completed
prior to such Separation but with the amount referred to in Section 3.2(b)(ii)
not to exceed 50% of his Primary Insurance Amount 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.


(d)           Notwithstanding the foregoing:


(i)                                     the
“Accrued Benefit” of any Employee or former Employee who was a Participant in
the Signal Retirement Plan (as defined in the Predecessor Plan) shall not be
less than the amount of such “Accrued Benefit” as of December 31, 1983
determined under the provisions of such plan and the actuarial equivalence
tables specified in such plan in effect on December 31, 1983;


(ii)                                  the
“Accrued Benefit” as of December 31, 1983 of any Employee or former
Employee who was a participant in any plan which merged with the Predecessor
Plan effective January 1, 1984 shall not be less than his “Accrued Benefit”
as of December 31, 1983 determined under the terms of such other plan and,
for Participants eligible to commence benefits on December 31, 1983,
further determined by reference to the actuarial equivalence tables or interest
assumption actually specified in such other plan on December 31, 1983;


(iii)                               the
“Accrued Benefit” as of December 31, 1983 of any Employee or former
Employee who was a participant in the Equity Plan prior to January 1,
1984, shall not be less than the amount of such “Accrued Benefit” as of
December 31, 1983 determined under the terms of the Equity Plan;


(iv)                              the “Accrued
Benefit” of any Employee or former Employee who was a participant in a plan
which merged with the Predecessor Plan on January 1, 1984, shall not be
less than the amount of any employee contributions made by the Employee to such
plan (which contributions were not withdrawn prior to the earlier of his Early
Commencement Date or Normal Retirement Date), expressed as an actuarial
equivalent single life annuity, accumulated to the earlier of his Normal Retirement
Date or Early Commencement 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;



 40
 






 



 


(v)                                 the
“Accrued Benefit” of any Employee who transferred the balance of his account in
the Garrett Secured Benefit Account to this Plan under the provisions of the
Savings Plan shall be the gross accrued benefit prior to the Offset specified
in Section 4.2(e)(i)(b), including the value of the account transferred
accumulated to the earlier of Normal Retirement Date or Early Commencement Date
at the rate specified in such plan, but in no event at a rate less than the
interest rate specified in the definition of Actuarial Equivalent under this
Plan; and


(vi)                              the “Accrued
Benefit” of any Employee or former 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 as of May 27,
1986 shall not be less than his “Accrued Benefit” as of December 31, 1985
determined under the terms of the Predecessor Plan and the actuarial
equivalence factors specified in the Predecessor Plan, subject to a transfer of
all assets allocable to such Participant from the trust under the Predecessor
Plan to the Trust Fund as of January 1, 1986.


(vii)                           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 this Amended and Restated 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.


IN THE AUGUST 1, 1992 RESTATEMENT

WAS REPLACED WITH THE FOLLOWING


(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 the 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



 41
 






 



 


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.


(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).


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.


(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



 42
 






 



 


the suspension be less than the Benefit to which such Participant was
entitled immediately prior to the suspension.


Section 3.12           Direct
Rollover.  Effective for distributions
made on or after January 1, 1993, notwithstanding any provision of this Plan to
the contrary that would otherwise limit a Distributee’s election under this
Plan, 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)           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 section 401(a)(9) of the Code;
and the portion of any distribution that is not includible in gross income
(determined without regard to the exclusion for net unrealized appreciation
with respect to employer securities).


(b)           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. However, in the case of an Eligible Rollover
Distribution to the surviving spouse, an Eligible Retirement Plan is an
individual retirement account or individual retirement annuity.


(c)           A
Distributee includes an Employee or former Employee. In addition, the Employee’s
or former Employee’s surviving spouse and the Employee’s or former Employee’s
spouse or former spouse who is the alternate payee under a Qualified Domestic
Relations Order, as defined in Code section 414(p), are Distributees with
regard to the interest of the spouse or former spouse.


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


Section 3.13           Payment
of Small Amounts.  The Actuarial
Equivalent, if $3,500 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.


(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
$3,500) 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



 43
 






 



 


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 $3,500
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.


SECTION 3.13 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 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.



 44
 






 



 


Section 3.15           Distribution
of Vested Retirement Benefit.  (a)
Notwithstanding anything in the Plan to the contrary, unless otherwise elected
by the Employee in writing, payment of a Vested Retirement Benefit under the
Plan shall commence not later than the sixtieth (60th) day following the last
day of the Plan Year in which occurs the later of his attainment of age 65 or
his termination of employment.


(b)           Payment
of benefits to an Employee under the Plan must commence, regardless of his
election, no later than April 1 of the calendar year following the
calendar year in which he attains age 70-1/2. The first payment required under
this Section 3.15 must be made by the required beginning date, the second
must be made not later than the end of the calendar year in which the required
beginning date occurs and each succeeding payment must be made no later than
the end of each succeeding calendar year.


SECTION 3.15(b) OF THE PLAN WAS AMENDED BY AMENDMENT
NO. 1,

EFFECTIVE AS OF JANUARY 1, 1997, BY ADDING THE FOLLOWING PARAGRAPHS:


“Notwithstanding the above, in the case of an
individual who is not a 5% owner and who attains age seventy and one-half (701⁄2)
on or after January 1, 1999, the benefit of such Participant shall be
distributed, or commence to be distributed, not later than the first day of
April following the later of the calendar year of termination of employment or
the calendar year in which the Participant attains age seventy and one-half
(701⁄2).


A Participant is treated as a 5-percent owner for
purposes of this section if such Participant is a 5-percent owner as defined in
section 416 of the Code at any time during the plan year ending with or within
the calendar year in which such owner attains age 701⁄2. Once distributions have
begun to a 5-percent owner under this section, they must continue to be
distributed, even if the Participant ceases to be a 5-percent owner in a
subsequent year.


Except with respect to a 5-percent owner, a
Participant’s accrued benefit is actuarially increased to take into account the
period after age 701⁄2 in which the Employee does not receive any benefits under
the Plan.”


(c)           If
benefits shall become payable to an Employee under the Plan for a period
extending beyond his lifetime, (i) such period shall not exceed the life
expectancy of the Employee or if such benefits are payable to the Employee’s
spouse or another individual, the lives or the joint life and last survivor
expectancy of the Employee and such spouse or individual, and (ii) notwithstanding
anything to the contrary in this Plan, 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).


(d)           If benefits shall
become payable upon the death of an Employee prior to his receipt of any
benefits under this Plan, (i) such benefits shall not extend beyond (A) 5
years or (B) if such benefits are payable to the Employee’s spouse
or another individual, the life or life expectancy of such spouse or
individual, and (ii) such benefits shall commence to be paid no



 45
 






 



 


later than one year after the date of the Employee’s death (or such
later date as permitted by applicable law). Notwithstanding the foregoing,
benefits payable to an Employee’s surviving spouse may commence on a date which
is later than the date provided in the preceding sentence, but in no event
later than the date on which the Employee would have attained age 70-1/2. If
any benefits become payable upon the death of an Employee after his pension
commencement date, such benefits will be paid out under a method of
distribution which is at least as rapid as the method which was in effect at
the time of the Employee’s death.


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.


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,



 46
 






 



 


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


Section 6.1             Special
Definitions.  For purposes of this
Article VI, which is effective January 1, 1987, the following capitalized
terms shall have the following respective meanings:


Bolsa Chica Group:
 either (i) the controlled
group of corporations (within the meaning of section 1563(a) of the
Internal Revenue Code, determined without regard to section 1563(a)(4) and
(e)(3)(C) thereof) whose common parent is Bolsa Chica, or (ii) the
group of trades or businesses which are under “common control” (as defined in
section 414(c) of the Internal Revenue Code and regulations prescribed
under said section) whose common parent is Bolsa Chica, determined in either
case by substituting for the phrase “at least 80 percent” each place it appears
in section 1563(a)(1) the phrase “more than 50 percent.” The Bolsa Chica
Group also includes affiliated entities within the meaning of Code Section
414(m).


Defined Contribution Plan:
 any pension, profit-sharing or stock
bonus plan of the Bolsa Chica Group which (a) satisfies the
applicable qualification requirements of the Internal Revenue Code and (b) provides
for an individual account for each participant thereunder and for benefits
based solely on the amount contributed to the participant’s account, and any
income, expenses, gains and losses, and any forfeitures of accounts of other
participants which may be allocated to such participant’s account.


Defined Contribution Plan
Fraction:  a fraction,
the numerator of which is the sum of the Participant’s annual additions as of
the close of the Plan Year under all Defined Contribution Plans (whether or not
terminated), and the denominator of which is the sum of the lesser of the
following amounts determined for such year and for each prior year of service
with the Bolsa Chica Group:


(a)           1.25
times the dollar limitation in effect under Internal Revenue Code section 415(c)(1)(A)
for such year, or



 47
 






 



 


(b)           1.4 times the amount which may be
taken into account under Internal Revenue Code section 415(c)(1)(B).


Defined Benefit Plan:
 any pension plan of the Bolsa Chica
Group which (a) satisfies the applicable qualification requirements
of the Internal Revenue Code and (b) is not a Defined Contribution
Plan.


Defined Benefit Plan
Fraction:  a fraction,
the numerator of which is the sum of the Participant’s projected annual
benefits under all Defined Benefit Plans of the Bolsa Chica Group (whether or
not terminated) and the denominator of which is the lesser of:


(A)                              1.25
times the dollar limitation of Internal Revenue Code section 415(b)(1)(A)
in effect for the Plan Year, or


(B)                                1.4
times the Participant’s average compensation for the three consecutive Plan
Years that produce the highest average.


Aggregate Employee
Contribution:  for any
Participant with respect to any Plan Year, the aggregate of all contributions
other than “rollover amounts” or “rollover contributions” (as such terms are
defined in section 402(a)(5), 403(a)(4), 408(d)(3) or 409(b)(3)(C) of the
Internal Revenue Code) and other than “deductible employee contributions” (as
such term is defined in section 72(o)(5) of the Internal Revenue Code)
made by such Participant for such Plan Year under all Defined Contribution
Plans.


Aggregate Employer
Contribution:  for any
Participant with respect to any Plan Year, the sum of:


(a)           all amounts allocated to the account
of such Participant in respect of forfeitures, and in respect of contributions
made by one or more members of the Bolsa Chica Group under all Defined
Contribution Plans, plus


(b)           the Aggregate Employee Contribution
of such Participant for such Plan Year, plus


(c)           amounts described in
sections 415(l)(1) and 419A(d)(2) of the Code.


Aggregate Annual Benefit:
 for any Participant, the aggregate of
his projected benefits under all Defined Benefit Plans where each such
projected benefit is expressed as a benefit payable annually in the form of a
straight life annuity (with no ancillary benefits) and where benefits
attributable to any participant contributions or rollover contributions (as
defined in sections 402(a)(5), 403(a)(4) and 408(d)(3) of the Internal
Revenue Code) are excluded.


Social Security
Retirement Age:  the
age used as the retirement age under section 216(l) of the Social Security
Act, applying such section without regard to the age increase factor and
as if the early retirement age under section 216(1)(2) of the Social
Security Act were age 62.


Limitation
Year:  the calendar
year.



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Compensation:
 the Participant’s wages, salaries, fees
for professional services, other amounts received for personal services
actually rendered in the course of employment with the Bolsa Chica Group and
any additional items of compensation specified in section l.415-2(d)(l)(i)
of the Treasury Regulations promulgated under Code section 415, but
excluding any amounts which are not includible as compensation under
section 1.415-2(d)(2) of the Treasury Regulations promulgated under Code
section 415.


SECTION 6.1 OF THE
PLAN WAS AMENDED BY AMENDMENT NO. 1,

EFFECTIVE AS OF JANUARY 1, 1997, BY ADDING THE FOLLOWING PARAGRAPH

TO THE DEFINITION OF “COMPENSATION:”


“For Limitation Years
beginning after December 31, 1997, for purposes of applying the limitations of
this section, compensation paid or made available during such Limitation Year
shall include any Elective Deferral (as defined in Code Section 402(g)(3)), and
any amount which is contributed or deferred by the Employer at the election of
the Employee and which is not includible in the gross income of the Employee by
reason of Code Sections 125, 132(f)(4), or 457.”


Section 6.2             Initial
Limitation on Amounts Allocated to Accounts of Defined Contribution Plans.  Notwithstanding any other provision of a
Defined Contribution Plan, the aggregate of all amounts allocated to a
Participant shall not exceed such amount as would cause the Aggregate Employer
Contribution for such Participant with respect to such Plan Year to exceed in
value the lesser of (a) $30,000 (or, if greater, 1/4 of the dollar limitation
referred to in Section 6.3.l(a)(i)), or (b) twenty-five percent (25%)
of such Participant’s compensation (within the meaning of
section 415(c)(3) of the Internal Revenue Code) from the Bolsa Chica Group
for such Plan Year; provided, however, that the $30,000 amount referred to in
the foregoing shall be deemed to be automatically increased (without the
necessity for an amendment of a Defined Contribution Plan) to the full extent
permitted under regulations promulgated from time to time by the Secretary of
the Treasury or his delegate pursuant to section 415(d) of the Internal
Revenue Code.


Section 6.3             Initial
Limitation on Benefits Under Defined Benefit Plans.


Section 6.3.1          Initial Limitation on Benefits.
 (a) Notwithstanding any other provision
in a Defined Benefit Plan, a Participant’s benefit under such Defined Benefit
Plan, assuming payment in the form of a single life annuity commencing on his
normal retirement date, as of the end of any Plan Year shall not exceed in
value an amount which would cause his Aggregate Annual Benefit as of the end of
such Plan Year to exceed the smallest of the following (the “Maximum
Permissible Amount”):


(i)                                     $90,000;
or


(ii)                                  100% of the
Participant’s average annual compensation during the period of consecutive
calendar years (not more than three (3))



 49
 






 



 


during which
such Participant both was an active participant in one or more Defined Benefit
Plans and had the greatest aggregate compensation from the Bolsa Chica Group;


provided, however, that
the amount set forth in clause (i) above shall be deemed to be
automatically increased (without the necessity for an amendment of a Defined
Benefit Plan) to the full extent permitted under regulations promulgated from
time to time by the Secretary of the Treasury or his delegate pursuant to
section 415(d) of the Internal Revenue Code. Notwithstanding the
foregoing, (1) in the case of a Participant who has completed less
than 10 years of participation in a Defined Benefit Plan, his Aggregate Annual
Benefit shall not be deemed to exceed the limitation specified in (i) above as
of the end of any Limitation Year unless it also exceeds the product of the
amount determined under (i) above multiplied by a fraction, the numerator of which
is his number of years (or parts thereof) of participation in a Defined Benefit
Plan and the denominator of which is 10, (2) in the case of a
Participant who has completed less than 10 years of service with one or more
members of the Bolsa Chica Group, his Aggregate Annual Benefit shall not be
deemed to exceed the limitation specified in (ii) above as of the end of any
Limitation Year unless it also exceeds the product of the amount determined
under (ii) above multiplied by a fraction, the numerator of which is his number
of years (or parts thereof) of service with one or more members of the Bolsa
Chica Group and the denominator of which is 10, and (3) in the case
of a Participant who has at no time been a participant in a Defined
Contribution Plan, his Aggregate Annual Benefit shall be deemed not to exceed
the limitations specified in (i) and (ii) as of the end of any Limitation Year
unless it also exceeds $10,000 as of the end of such Limitation Year or as of
the end of any prior Limitation Year and, if such Participant has completed
less than 10 years of service with one or more members of the Bolsa Chica
Group, the $10,000 limitation shall be reduced to the product obtained by
multiplying $10,000 by a fraction, the numerator of which is the Participant’s
years (or parts thereof) of service with one or more members of the Bolsa Chica
Group and the denominator of which is 10. The fractions referred to in
clauses (1) and (2) of the preceding sentence shall in no event be less
than one-tenth (1/10) and the limitations referred to in the preceding sentence
shall be applied separately with respect to each benefit increase under the
Plan, but only to the extent specified in regulations promulgated by the
Secretary of the Treasury or his delegate pursuant to section 415(b)(5)(D)
of the Code. For purposes of this Section 6.3, survivor benefits payable
to a Participant’s spouse under a joint and survivor form of retirement income
shall not be taken into account except to the extent that the annual rate of
such survivor benefits exceeds the annual rate of the benefits payable as such
retirement income during the joint lives of the Participant and his spouse.


Section 6.3.2          Certain Actuarial Adjustments.


(a)           If
the annual benefit of the Participant begins before the Participant’s Social
Security Retirement Age, but on or after age 62, the defined benefit dollar
limitation will be determined as follows:


(1)           Age 65.  If a Participant’s social security retirement
age is 65, the dollar limitation for benefits commencing on or after age 62 is
determined by reducing the defined benefit dollar limitation by 5/9 of 1% for
each month by which benefits commence before the month in which the Participant
attains age 65.



 50














 


 


(2)           Greater
than Age 65.  If a Participant’s
social security retirement age is greater than age 65, the dollar limitation
for benefits beginning on or after age 62 is determined by reducing the defined
benefit dollar limitation by 5/9 of 1% for each of the first 36 months and 5/12
of 1% for each additional month (up to 24 months) by which benefits begin
before the month of the Participant’s social security retirement age.


(b)           If
the annual benefit of a Participant begins before age 62, the defined benefit dollar
limitation will be the actuarial equivalent of an annual benefit beginning at
age 62, as determined above, reduced for each month by which benefits begin
before the month in which the Participant attains age 62. To determine
actuarial equivalence, the interest rate assumption is the greater of
the rate specified in the Plan’s definition of Actuarial Equivalent, or 5%. Any
decrease in the defined benefit dollar limitation determined in accordance with
this provision shall not reflect the mortality decrement to the extent that
benefits will not be forfeited upon the death of the Participant.


(c)           If
the annual benefit of a Participant begins after the Participant’s social
security retirement age, the defined benefit dollar limitation is increased so
that it is the actuarial equivalent of an annual benefit beginning at the
Participant’s social security retirement age. To determine actuarial
equivalence, the interest rate assumption used will be the lesser of the
rate specified in the Plan’s definition of Actuarial Equivalent or 5%.


(d)           If the benefit the
Participant would otherwise accrue in a limitation year would produce an annual
benefit in excess of the maximum permissible amount, the rate of the
Participant’s benefit accrual will be reduced so that the annual benefit will
equal the maximum permissible amount. For a participant in one or more defined
benefit plans of the Bolsa Chica Group as of the first day of the first
limitation year beginning after December 31, 1986, the application of the
limits of this Article VIII will not cause the maximum permissible amount under
all such defined benefit plans to be less than the individual’s current accrued
benefit (defined below). The preceding sentence applies only if the defined
benefit plans met the requirements of Code Section 415, for all limitation
years beginning before May 6, 1986. A Participant’s current accrued
benefit is the Participant’s accrued benefit, determined as if the Participant
had separated from service at the close of the last limitation year beginning
before January 1, 1987, expressed as an annual benefit. In determining a
Participant’s current accrued benefit, changes in the terms and conditions of
the plan after May 5, 1986 and cost of living adjustments after
May 5, 1986 are disregarded.



 51
 






 



 


Section 6.4             Limitation
Applicable to Certain Persons Under Defined Benefit Plans.


Section 6.4.1          Limitation
on Early Terminations.  In the event
of termination of the Plan, the benefit of any “Highly Compensated Employee”
and/or “Former Highly Compensated Employee” (both within the meaning of Code
Section 414(g) and applicable regulations thereunder) shall be limited to
a benefit that is nondiscriminatory under Code Section 401(a)(4).


Section 6.4.2          Restricted
Benefits.  In the event of
termination of this Plan, the provisions of this Section 6.4 shall apply
to restrict the annual benefit under the Plan to any Participant or former
Participant who is among the twenty-five (25) highest paid Highly Compensated
Employees and/or Former Highly Compensated Employees (including an Employee who
is not presently a Participant but who may later become a Participant) to the
following amount:  the payments that
would be made to such Employee under a single life annuity that is the
Actuarial Equivalent of the sum of the Employee’s Accrued Benefit and the
Employee’s “other benefits” under the Plan, within the meaning of the
regulations under Code Section 411(d)(2), including any periodic income,
any withdrawal values payable to a living Employee and any death benefits not
provided for by insurance on the Employee’s life.


Section 6.4.3          Unrestricted
Benefits.  Notwithstanding the
foregoing, the restrictions of this Section 6 shall not apply to any
Employee described in Section 6.4.2 if:


(a)           after
payment of all “other benefits” under the Plan referred to in
Section 6.4.2, the value of Plan assets equals or exceeds one hundred ten
percent (110%) of the value of current liabilities as defined in Code
Section 412(1)(7); or


(b)           the
value of the “other benefits” under the Plan referred to in Section 6.4.2
for such Employee is less than one percent (1%) of the value of current
liabilities, within the meaning of Code Section 412(1)(7).


Section 6.4.4          Discontinuance
of This Section.  The provisions of
Section 6.4.1 through 6.4.4 shall be null and void without amendment to
the Plan in the event that by ruling of the Commissioner of Internal Revenue
the limitations herein set forth are no longer necessary to prevent the
prohibited discrimination that may occur in the event of an early termination
of the Plan.


Section 6.4.5          Additional
Limitation.  After the Aggregate
Employer Contribution to be made and the Aggregate Annual Benefit to be paid
with respect to a Participant for a Plan Year has been determined in accordance
with the applicable provisions of all Defined Contribution Plans and Defined
Benefit Plans in which such Participant is a participant, the following sum
shall be computed as of the end of such Plan Year:


(a)           the
Defined Contribution Plan Fraction determined for the Plan Year and giving
effect to all prior plan years under any Defined Contribution Plan; plus


(b)           the Defined Benefit
Plan Fraction determined for the Plan Year and giving effect to the Participant’s
benefits under all Defined Benefit Plans.



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If the foregoing sum exceeds
1.0 after the determination of the Maximum Permissible Amount thereunder
(including limitations prescribed for compliance with section 415(e) of
the Internal Revenue Code), the aggregate of all amounts allocated to such
Participant’s accounts in any Defined Contribution Plan for such Plan Year
shall be reduced until such sum does not exceed 1.0.


SECTION
6.4.5 OF THE PLAN WAS AMENDED BY AMENDMENT NO. 1,

EFFECTIVE AS OF JANUARY 1, 1999, BY ADDING THE FOLLOWING SENTENCE:


“For Limitation Years
beginning after December 31, 1999, the additional limitation as prescribed in
this section shall not apply.”


Section 6.4.6          Pre-1983
Predecessor Plan Benefit.  In the
case of an individual who was a Participant of the Predecessor Plan (or in any
plan which merged with the Predecessor Plan effective January 1, 1984) on
or before January 1, 1983, the Maximum Permissible Amount for such
individual shall not be less than the individual’s Retirement Benefit under
such Plan (or such other plan) as of January 1, 1983. The preceding
sentence applies only if the applicable plan met the requirements of
section 415 of the Code, as in effect on July 1, 1982, for all Plan
Years beginning prior to January 1, 1983.


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



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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;


(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



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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 paragraphbelow, 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;


(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



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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.


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.



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Section 7.13           Claims
Procedure.  Claims relating to
benefits under the Plan shall be filed with the Administrative Committee on
such forms as it shall prescribe and make available on request. The
Administrative Committee shall notify the claimant of its decision within 90
days of such filing, unless it determines that more time is needed, in which
case the Administrative Committee shall notify the claimant of the reason for
the delay and notify the claimant of its decision within 180 days of the filing
of the claim. In the event a claim is denied, written notice thereof shall be
mailed or delivered to the claimant, specifically setting forth the reasons for
the denial, citing the relevant provisions of the Plan and, if appropriate,
explaining how the claimant can perfect his claim.


Section 7.14           Claims
Review Procedure.  Any person whose
claim filed pursuant to Section 7.13 has been denied may request the
Administrative Committee to give further consideration to his claim. A form for
making such a request shall be prescribed by the Administrative Committee and
furnished by the secretary of the Administrative Committee upon request. A
claimant seeking such review shall complete and file such form, together with a
statement of his position, with the Administrative Committee no later than 90
days after the mailing or delivery of the written notice of denial provided for
in Section 7.13. Pursuant to its discretionary authority to administer and
interpret the Plan and to determine eligibility for benefits under the terms of
the Plan, no later than 60 days after the filing of such claim, the Administrative
Committee shall inform the claimant in writing of its decision regarding his
claim and the specific reason therefor. Any such decision of the Administrative
Committee shall be binding upon the claimant.


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.


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.



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ARTICLE VIII


AMENDMENT
AND TERMINATION; PARTICIPATION AND

WITHDRAWAL BY COMPANIES; PLAN MERGERS


Section 8.1             Authority
to Amend or Terminate.  Bolsa Chica
hopes and expects to continue the Plan indefinitely but 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.


Section 8.2             Effect
of Termination.


(a)           Defined Benefit Plan.
 Upon the termination or partial
termination of a Defined Benefit Plan (as defined in Section 6.1), the
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



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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.


(b)           Defined
Contribution Plan.  Upon the
termination or partial termination of a Defined Contribution Plan (as defined
in Section 6.1) or upon the complete discontinuance of contributions by a
Company under a Defined Contribution Plan, the value of each affected
Participant’s account shall be fully vested in him. The assets of the Trust
Fund relating to such Defined Contribution Plan shall thereupon or thereafter
be distributed to such persons in accordance with the terms of such Defined
Contribution Plan, or in such other manner, not inconsistent with the
requirements of any applicable law or regulation, as the Company may in its
sole discretion determine.


Section 8.3             Trust
Fund Continuation.  If a Defined
Benefit Plan or a Defined Contribution Plan is terminated but the
Administrative Committee determines that the Trust Fund shall be continued
pursuant to its terms and the provisions of this Section 8.3, no further
contributions will thereafter be made by the Company, the rights of all
Participants to their accrued benefits under the Plan shall be nonforfeitable
to the extent then funded, but the Trust Fund shall be administered as though
the Plan were otherwise in full force and effect, except that no further
benefits will accrue after the date of termination. If the Trust Fund is
subsequently terminated, the Trust Fund shall then be allocated and disbursed
in accordance with the provisions of Section 8.2.


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



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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.


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 clauseof 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.



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THE JANUARY 1, 1989
RESTATEMENT CONTAINED

THE FOLLOWING SECTION 8.8


Section 8.8             Employee
Transfers.


Section 8.8.1          Transfer to a Non-Participating
Company.  In the event an Employee is
transferred to employment of a member of Henley Properties (as defined in
Section 6.1) other than a Participating Company (such company hereinafter
referred to as a “Non-Participating Company”), such Employee shall not be
deemed to have terminated his employment with the Participating Company or to
have retired for purposes of the Plan until the date as of which his employment
with the last Non-Participating Company shall terminate. The Employee’s service
for the purpose of eligibility for early retirement and vesting shall include
service with the Non-Participating Company as if his period of employment with
such Non-Participating Company were a period of employment with the
Participating Company.


Section 8.8.2          Transfer from a Non-Participating
Company.


In the event an employee
of a Non-Participating Company is transferred to the employment of a
Participating Company and becomes an Employee under the Plan, his service for
the purpose of eligibility for early retirement and vesting, shall be
determined under the applicable provisions of the Plan as if his period of
employment with the Non-Participating Company were a period of employment with
the Participating Company. Such Employee shall be entitled to participate in
the Plan on the first day of the month coincident with or next following the
date of such transfer of employment assuming his period of employment with the
Non-Participating Company is sufficient to meet the Plan’s participation
requirement.


In addition to the
foregoing, if the Employee was participating in a Defined Benefit Plan of a
Non-Participating Company at the time of transfer, the Employee’s period of
employment with the Non-Participating Company shall be included as a period of
employment with the Participating Company under this Plan for the purpose of
determining the amount of Employee’s benefit under this Plan, except that (i)
the benefit calculated under the provisions of this Plan shall be offset by the
amount of the benefit payable under the other plan, calculated under the terms
of the other plan as of the time of transfer, and (ii) if the separate benefits
payable to the Employee under the terms of each plan (and based solely on the
service credited under each such plan) exceed the benefit payable hereunder,
the Employee shall receive such separate benefits from each plan on such terms
and in the manner provided in each plan.


Section 8.8.3          Transfers Between Defined Benefit
Plans of a Participating Company.


In the event an employee
who is participating in another Defined Benefit Plan of a Participating Company
is transferred to a job classification which entitles the employee to become an
Employee under this Plan, his period of employment with the Participating
Company under the other Defined Benefit Plan shall be included as a period of
employment under this Plan for all purposes under this Plan, except that (i)
the benefit calculated under the provisions of this Plan shall be offset by the
amount of the benefit payable under the other plan based upon the Employee’s
service as of the time of transfer, and (ii) if the separate benefits payable
to the Employee under the terms of each plan (based solely on the service
credited under each such



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plan) exceeds the benefit
payable hereunder, the Employee shall receive such separate benefits from each
plan on the terms and in the manner provided in each plan.


THE PRECEDING SECTION 8.8
WAS DELETED

IN THE AUGUST 1, 1992 RESTATEMENT

AND THE PLAN WAS RENUMBERED TO READ AS FOLLOWS


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


Section 9.1             Certain Top-Heavy Plans.


(a)           Defined
Benefit Plans.  If, for any Plan
Year, the sum of the present values of the Basic Accrued Benefits of all
Participants in a Defined Benefit Plan (as defined in Section 6.1) who are
“Key Employees” of the Company exceeds 60 percent of the sum of the present
values of the Basic Accrued Benefits of all Participants in such Defined
Benefit Plan and the Defined Benefit Plan satisfies the other requirements of
section 416 or any other successor section of the Internal Revenue
Code, then the Defined Benefit Plan will be a “Top-Heavy Plan,” as such term is
defined in section 416(g) of the Internal Revenue Code and the limitations
specified in this Article IX and in section 416 of the Internal
Revenue Code shall apply to the Defined Benefit Plan for such Plan Year.



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(b)           Defined
Contribution Plan.  If, for any Plan
Year, the sum of the accounts of all Participants in a Defined Contribution
Plan (as defined in Section 6.1), who are “Key Employees” exceeds 60
percent of the sum of the accounts of all Participants in such Defined
Contribution Plan and the Defined Contribution Plan satisfies the other
requirements of section 416 or any other successor section of the
Internal Revenue Code, then the Defined Contribution Plan will be a “Top-Heavy
Plan,” as such term is defined in section 416(g) of the Internal Revenue
Code and the limitations specified in this Article IX and in
section 416 of the Internal Revenue Code shall apply to the Defined
Contribution Plan for such Plan Year.


(c)           Benefits
Excluded.  For purposes of
determining whether either a Defined Benefit Plan or a Defined Contribution
Plan is a Top-Heavy Plan, for Plan Years beginning after December 31,
1984, the Basic Accrued Benefit of an Employee who has not performed any
service for the Company at any time during the five (5) year period ending on
the Determination Date shall be excluded.


(d)           Key
Employee Defined.  For purposes of
this Article IX, a “Key Employee” of the Company is an Employee who (a) is
an officer of the Company having an annual compensation greater than 50 percent
of the amount in effect under Internal Revenue Code section 415(b)(1)(A)
for any Plan Year, (b) is among the 10 employee-shareholders of the
Company whose interests are both the largest and are greater than 1/2% and who
have annual compensation from the Company greater than the amount in effect
under Internal Revenue Code Section 415(c)(1)(A) for any Plan Year, (c) owns
a five percent (5%) or greater interest in the Company, or owns a one percent
(1%) or greater interest in the Company and receives annual compensation of
more than $150,000 or more, or (d) was an employee named in any one
of the above categories within any one of the preceding four (4) Plan Years.
The term Key Employee also includes a beneficiary of a deceased Participant to
the extent that the Participant would have been considered a Key Employee.


Section 9.2             Determination Date.  For each Plan Year to which Section 9.1
applies, the determination of the value of a Participant’s Basic Accrued
Benefit in a Defined Benefit Plan or a Participant’s accounts in a Defined
Contribution Plan shall be made on the last day of the preceding Plan Year, or
on such other dates as the Secretary of the Treasury may, by regulations,
prescribe. The Determination Date is also the valuation date.


Section 9.3             Calculation of Benefits.


(a)           Defined
Benefit Plans.  For purposes of
calculating the value of a Participant’s basic Accrued Benefit, solely for
purposes of Section 9.1.1, a Participant’s Basic Accrued Benefit as of the
Determination Date shall include (a) all accumulated employer and all
nondeductible Employee contributions, but shall not include any deductible
Employee contributions, (b) the sum of all amounts distributed to
the Participant during the five (5) years preceding the Determination Date, and
(c) any additional amounts as the Secretary of the Treasury may, by
regulations, prescribe; provided, however, that any amounts contributed as
rollover contributions (as defined in section 402(a)(5), 403(a)(4),
408(d)(3), or 409(b)(3)(C) of the Internal Revenue Code) shall not be included
in (a) above, except as the Code or regulations thereunder may require.



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(b)           Defined
Contribution Plans.  For purposes of
calculating the value of a Participant’s accounts solely for purposes of
Subsection 9.1.2, a Participant’s accounts on the Determination Date shall
include:


(i)                                     the
value of the accounts on such date;


(ii)                                  the
sum of all accounts distributed to such Participant during the five (5) years
preceding the Determination Date; and


(iii)                               any
additional amounts as the Secretary of the Treasury may, by regulations,
prescribe;


provided, however, that
any amounts contributed as rollover contributions (as defined in
section 402(a)(5), 403(a)(4), 408(d)(3), or 409(b)(3)(C) of the Internal
Revenue Code) shall not be included in (a) above, except as the Code or
regulations thereunder may require.


Section 9.4             Aggregation Rules.


(a)           Required
Aggregation.  If, on the
Determination Date, any member of the controlled group of corporations (“Controlled
Group”) within the meaning of Code Section 414 of which the Company is a member
maintains one or more other plans which must be considered with this Plan for
purposes of satisfying the requirements of section 401(a)(4) and
section 410 of the Internal Revenue Code (the “Aggregate Group”), then any
valuation made pursuant to Section 9.1 shall treat the Aggregate Group as
one plan. The Aggregate Group shall also include each plan maintained by a
member of the Controlled Group in which a Key Employee participates. The
Aggregate Group shall include each terminated plan of the Controlled Group if
it was maintained within the last five (5) years ending on the Determination
Date for the Plan Year in question and would, but for the fact it is
terminated, be part of a required aggregation group for such Plan Year. If, for
a Plan Year, the Aggregate Group, considered as one plan, is a Top-Heavy Plan,
then each plan in the Aggregate Group shall be a Top-Heavy Plan.


(b)           Permissive
Aggregation.  If, on the
Determination Date, any member of the Controlled Group maintains one or more
plans which are not required to be considered together for purposes of
satisfying the requirements above, the Company may treat the plans as one plan
for purposes of the valuation of benefits under Section 9.1. No plan
aggregated with another plan or plans at the election of the Company shall be
deemed a Top-Heavy Plan solely by virtue of such election.


Section 9.5             Special Vesting.  For any Plan Year in which the Plan is
Top-Heavy under Section 9.1, the vesting provisions specified in
Section 3.10 shall be inapplicable for such Plan Year, and a Participant’s
right to receive benefits under this Plan shall become vested in accordance
with the following table:




	
  Years of Vesting Service

  	
   

  	
   

  	
  Vesting Percentage

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  less than 2

  	
   

  	
   

  	
  0

  	
   

  
	
  2

  	
   

  	
   

  	
  20

  	
   

  
	
  3

  	
   

  	
   

  	
  40

  	
   

  
	
  4

  	
   

  	
   

  	
  60

  	
   

  
	
  5 or more

  	
   

  	
   

  	
  100

  	
   

  
						






 



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Section 9.6             Minimum Benefit.


(a)           Defined
Benefit Plan.  For any Plan Year in
which a Defined Benefit Plan (as defined in Section 6.1) is a Top-Heavy
Plan under subsection 9.1, a Participant who is not a “Key Employee” must
accrue a minimum benefit, expressed as a single life annuity commencing at
normal retirement age, which is no less than the “Applicable Percentage” of the
Participant’s “Average Compensation” for the “Testing Period.” For purposes of
this subsection 9.6.1, (1) the Applicable Percentage is the
lesser of (a) 2 percent for each year of a Participant’s Vesting Service
(excluding years beginning before January 1, 1984 and years in which the
Plan was not a Top-Heavy Plan under subsection 9.1.1) or (b) 20
percent; (2) a Participant’s Average Compensation is calculated on
the basis of a period of not more than 5 consecutive years during which a
Participant received his highest aggregate Compensation from the Company; and (3) the
Testing Period shall include all Plan Years except (i) Plan Years beginning
before January 1, 1984, or (ii) Plan Years beginning after the
close of the last Plan Year in which the Defined Benefit Plan was a Top-Heavy
Plan under subsection 9.1.1. For purposes of this subsection 9.6.1,
the minimum benefit for a Top-Heavy Defined Benefit Plan shall be calculated in
accordance with regulations, now or hereinafter promulgated, under
section 416 of the Internal Revenue Code. If both defined contribution and
defined benefit plans exist, appropriate minimum contributions will be provided
in each plan.


(b)           Defined
Contribution Plan.  For any Plan Year
in which a Defined Contribution Plan (as defined in Section 6.1) is
Top-Heavy under subsection 9.1.2, the amount of Company contribution for
any Employee who has met the participation requirements of the Plan and who is
not a Key Employee shall be at least equal to the lesser of (a) 3 percent of
such Employee’s compensation (as defined in section 415 of the Code), or (b) the
percentage of such compensation contributed as a Company contribution for the
Key Employee for whom such percentage is the highest for the Plan Year.


Section 9.7             Limitation on Benefits to an
Employee.  Subject to the exception
provided below, if, for any Plan Year, this Plan is a Top-Heavy Plan under
Section 9.1, then the overall limitation imposed by section 415(e) of
the Internal Revenue Code in the case of an Employee who is a Participant in
both a Defined Benefit Plan and a Defined Contribution Plan shall be applied by
substituting “1.0” for “1.25” in paragraphs (2)(B) and (3)(B) of
section 415(e) of the Code as the overall limitation.


(a)           Exception.
 The change in the 415(e) limitation
specified in Section 9.7 above shall not be applicable to a Plan for a
Plan Year in which the Plan is a Top-Heavy Plan if, with respect to any Plan
within the Aggregate Group, (a) the sum of the present values of the Basic
Accrued Benefits of all Participants who are Key Employees of any Defined
Benefit Plan or the sum of the account balances of all Participants who are Key
Employees of any Defined Contribution Plan does not exceed 90 percent of a
similar sum for all Participants of such plans, and (b) either, in
the case of a Defined Contribution Plan, the minimum contribution described in
subsection 9.6.2 above is increased to 4 percent or, in the case of a
Defined Benefit Plan, the Applicable Percentage described in Section 9.6.1
above is modified by replacing “three percent



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(3%)” for “two percent (2%)” and by replacing “twenty percent (20%),
increased by one (1) percentage point (but not by more than ten (10)) for each
Plan Year in which a plan is a Top-Heavy Plan” for “twenty percent (20%)”.


Section 9.8             Discontinuance of This Article.
 In the event that it shall be determined
by the Commissioner that the provisions of this Article IX are no longer
necessary to qualify the Plan under the Internal Revenue Code, this
Article shall thereupon be void without the necessity of further amendment
of the Plan.


Section 9.9             Incorporation by Reference.  Code Section 416(g)(3)(B) regarding
distributions from terminated plans and Code Section 416(g)(4)(B) regarding key
employees who are no longer key employees are hereby incorporated by reference
into this Plan.


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.


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



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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
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.



 67
 






 



 


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.


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 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



 68
 






 



 


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.


(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.


ARTICLE X OF THE PLAN WAS
AMENDED BY AMENDMENT NO. 1, EFFECTIVE AS OF DECEMBER 12, 1994, BY ADDING A NEW
SECTION 10.17, TO READ AS FOLLOWS:


“Notwithstanding any provision of this Plan to the contrary,
contributions, benefits and service credit with respect to qualified military
service will be provided in accordance with Section 414(u) of the Code.”



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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


(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



 70














 


 


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.


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.



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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;


(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



 72
 






 



 


(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.”


(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



 73
 






 



 


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”.


(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



 74
 






 



 


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.


BEFORE ITS JANUARY 1,
1989 RESTATEMENT

THE PLAN CONTAINED THE FOLLOWING SECTIONS 13.6 and 13.7


Section 13.6           IRS
Notice 99-131 [sic] Model Amendment 1. 
In addition to other applicable limitations which may be set forth in
the Plan and notwithstanding any other contrary provisions of the Plan,
compensation taken into account under the Plan shall not exceed $200,000,
adjusted for changes in the cost of living as provided in section 415(d) of
the Internal Revenue Code, for the purpose of calculating a Plan participant’s
accrued benefit (including the right to any optional benefit provided under the
Plan) for any plan year commencing after December 31, 1988.  However, the accrued benefit determined in
accordance with this provision shall not be less than the accrued benefit
determined on May 1, 1989, without regard to this provision.


Notwithstanding
the preceding sentence, the accrued benefit of any plan participant who is a
highly compensated employee, within the meaning of section 414(q)d of the
Code, is reduced to the extent a benefit has accrued with respect to
compensation in excess of $200,000 during the 1989 plan year before the later
of the adoption or effective date of this provision.


Section 13.7           IRS
Notice 88-141 [sic] Model Amendment 2. 
Notwithstanding any other contrary provision of the Plan in calculating
the accrued benefit (including the right to any optional benefit provided under
the Plan) of any plan participant who is a highly compensated employee within
the meaning of section 414(q) of the Internal Revenue Code, such highly
compensated employee shall accrue no additional benefit under the Plan on or
after May 1, 1989,



 75
 






 



 


to the extent that such additional benefit
accrual exceeds the benefit which would otherwise accrue in accordance with the
terms of the Plan as subsequently amended to comply with those qualification
requirements described in Income Tax Regulations section 1.401(b)-1(b)(2)(ii) (TRA
‘86).


This provision
shall be effective until the last day by which the Plan may be amended
retroactively to comply with TRA ‘96 [sic] for its first plan year beginning in
1989 in order to remain qualified under the Code and shall be effective for
such period if any only if the subsequent Plan amendment to comply with TRA ‘86
is made on or before the last day by which the Plan may be amended
retroactively to comply with TRA ‘86 for its first plan year commencing in 1989
in order to remain qualified under the Code.


In addition, the
benefit accrued by any highly compensated employee, within the meaning of section 414(q)
of the Code, shall in no event exceed the benefit accrual provided during the
1989 plan year with respect to such participant under the terms of the Plan as
subsequently amended to comply with the terms of TRA ‘96 [sic].  However, such highly compensated employee’s
benefit shall not be less than what that participant had accrued as of the last
day of the last plan year beginning before January 1, 1989.


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,



 76
 






 



 


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


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.



 77
 






 



 


(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.


(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 clauseof 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.



 78
 






 



 


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.


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.



 79
 






 



 


(d)           The
Administrator shall pay in a lump sum any pension having a present value of
$3,500 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).



 80














 


 


	
  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 



 81
 






 



 


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).


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 



 82
 






 



 


payable plus the following percentage of such
approximate amount of the ERI Salaried Participant’s monthly Social Security
benefit:


	
  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

  (interpolate for fractional years)

  	
   

  	
  21

  	
  %

  



 


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:



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(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).


(v)           The
monthly pension payable to a terminated ERI Salaried Participant will be
reduced for the Pre-retirement Survivor Annuity 



 84
 






 



 


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.


(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 



 85
 






 



 


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.


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 



 86
 






 



 


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.


(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 



 87
 






 



 


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.


(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 



 88
 






 



 


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.


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



 89
 






 



 


(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.


(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 



 90
 






 



 


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.


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



 91














 


 


(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.


(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



 92
 






 



 


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



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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.


The reductions provided
in this subsectionshall 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



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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.


(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 $3,500. 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 determining the actuarial equivalent, the UP-1984
Mortality Table shall be used, 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. 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.


SECTION 14.4.3(h) OF THE
PLAN WAS AMENDED BY AMENDMENT NO. 1,

EFFECTIVE AS OF JANUARY 1, 2000, BY REPLACING THE THIRD AND FOURTH

SENTENCES WITH THE FOLLOWING:


“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.



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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.”


(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.


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



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(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.


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.



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(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.


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, 2001.


	
  

  	
  CALIFORNIA
  COASTAL COMMUNITIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  //s// R J Pacini

  	
   

  



 



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