Attached files
file | filename |
---|---|
EX-23 - EXHIBIT 23 - TELEFLEX INC | w77123exv23.htm |
EX-21 - EXHIBIT 21 - TELEFLEX INC | w77123exv21.htm |
EX-10.4 - EXHIBIT 10.4 - TELEFLEX INC | w77123exv10w4.htm |
EX-31.1 - EXHIBIT 31.1 - TELEFLEX INC | w77123exv31w1.htm |
EX-31.2 - EXHIBIT 31.2 - TELEFLEX INC | w77123exv31w2.htm |
EX-32.1 - EXHIBIT 32.1 - TELEFLEX INC | w77123exv32w1.htm |
EX-10.3 - EXHIBIT 10.3 - TELEFLEX INC | w77123exv10w3.htm |
EX-32.2 - EXHIBIT 32.2 - TELEFLEX INC | w77123exv32w2.htm |
EX-10.20 - EXHIBIT 10.20 - TELEFLEX INC | w77123exv10w20.htm |
EX-10.22 - EXHIBIT 10.22 - TELEFLEX INC | w77123exv10w22.htm |
EX-10.21 - EXHIBIT 10.21 - TELEFLEX INC | w77123exv10w21.htm |
10-K - FORM 10-K - TELEFLEX INC | w77123e10vk.htm |
Exhibit 10.2
TELEFLEX INCORPORATED
RETIREMENT INCOME PLAN
(As Amended and Restated Effective January 1, 2002)
ARTICLE I. DEFINITIONS |
4 | |||
ARTICLE II. PARTICIPATION |
23 | |||
2.1 Participation |
23 | |||
2.2 Ineligible Employees |
23 | |||
2.3 Time of Participation Excluded Employees |
24 | |||
2.4 Reemployed Individuals |
24 | |||
ARTICLE III. AMOUNT OF RETIREMENT BENEFITS |
25 | |||
3.1 Normal Retirement Benefits |
25 | |||
3.2 Late Retirement Benefits |
29 | |||
3.3 Early Retirement Benefit |
29 | |||
3.4 Disability Retirement Benefit |
30 | |||
3.5 Vested Deferred Retirement Benefit |
31 | |||
3.6 Return of Accumulated Contributions |
32 | |||
3.7 Restoration of Accrued Pension Benefit |
32 | |||
3.8 Minimum Benefit |
33 | |||
3.9 Medicare Part B Reimbursement |
33 | |||
3.10 Transfer of Employment |
34 | |||
3.11 Preservation of Accrued Benefit |
34 | |||
ARTICLE IV. VESTING |
35 | |||
4.1 Rate of Vesting General Rule |
35 | |||
4.2 Full Vesting in Accumulated Contributions |
35 | |||
ARTICLE V. DEATH BENEFITS |
36 | |||
5.1 Death of Vested Participant Before Annuity Starting Date |
36 | |||
5.2 Amount and Time of Payment of Vested Terminated Participants Death Benefit |
36 | |||
5.3 Death of Participant On or After Retirement Date |
36 | |||
5.4 No Other Death Benefits |
37 | |||
5.5 Military Death Benefits |
37 | |||
ARTICLE VI. PAYMENT OF RETIREMENT BENEFITS |
38 | |||
6.1 Annuity Payment Date |
38 | |||
6.2 Normal Form of Retirement Benefit Unmarried Salaried Participants |
38 | |||
6.3 Normal Form of Retirement Benefit Married Salaried Participants |
38 | |||
6.4 Optional Forms of Retirement Benefit Payment |
38 | |||
6.5 Special Optional Form of Retirement Benefit Payments for TRIP Plan
Participants |
39 | |||
6.6 Election of Benefits Notice and Election Procedures |
39 | |||
6.7 Payment of Small Benefits |
41 | |||
6.8 Continued Employment After Normal Retirement Date; Reemployed Participants |
42 | |||
6.9 Required Distributions Code Section 401(a)(9) |
43 | |||
6.10 Eligible Rollover Distributions |
49 | |||
ARTICLE VII. CONTRIBUTIONS |
52 | |||
7.1 Employer Contributions |
52 | |||
7.2 Funding Policy |
52 | |||
7.3 Determination of Contributions |
52 | |||
7.4 Time of Payment of Employer Contributions |
52 | |||
7.5 Return of Employer Contributions |
52 | |||
7.6 Forfeitures |
53 | |||
7.7 Irrevocability |
53 | |||
7.8 Employee Contributions |
53 | |||
7.9 Funding Notice |
53 | |||
7.10 Funding-Based Limits on Benefits and Benefit Accruals |
53 | |||
ARTICLE VIII. ADMINISTRATION |
54 | |||
8.1 Fiduciary Responsibility |
54 | |||
8.2 Appointment and Removal of Committee |
54 | |||
8.3 Compensation and Expenses of Committee and Administrative Committee |
54 | |||
8.4 Committee an Administrative Committee Procedures |
54 | |||
8.5 Plan Interpretation |
55 | |||
8.6 Fiduciary Duties |
55 | |||
8.7 Consultants |
55 | |||
8.8 Method of Handling Plan Funds |
55 | |||
8.9 Delegation and Allocation of Responsibility |
55 | |||
8.10 Other Committee, Administrative Committee and Benefits Group Powers and
Duties |
56 | |||
8.11 Records and Reports |
57 | |||
8.12 Application and Forms for Benefits |
57 | |||
8.13 Authorization of Benefit Payments |
57 | |||
8.14 Unclaimed Accrued Benefit Procedure |
57 | |||
8.15 Individual Statement |
58 | |||
8.16 Parties to Litigation |
58 |
ii
8.17 Use of Alternative Media |
58 | |||
8.18 Personal Data to Benefits Group |
58 | |||
8.19 Address for Notification |
59 | |||
8.20 Notice of Change in Terms |
59 | |||
8.21 Assignment or Alienation |
59 | |||
8.22 Litigation Against the Plan |
59 | |||
8.23 Information Available |
59 | |||
8.24 Presenting Claims for Benefits |
59 | |||
8.25 Claims Review Procedure |
60 | |||
8.26 Disputed Benefits |
61 | |||
8.27 Claims Involving Benefits Related to Disability |
61 | |||
ARTICLE IX. EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION AND MERGER |
63 | |||
9.1 Exclusive Benefit |
63 | |||
9.2 Amendment of the Plan |
63 | |||
9.3 Amendment to Vesting Provisions |
63 | |||
9.4 Merger/Direct Transfers and Elective Transfers |
64 | |||
9.5 Termination of the Plan |
65 | |||
9.6 Full Vesting on Termination |
65 | |||
9.7 Partial Termination |
65 | |||
9.8 Allocation of Assets Upon Termination of Trust Fund |
66 | |||
9.9 Manner of Distribution |
67 | |||
9.10 Overfunding |
67 | |||
ARTICLE X. WITHDRAWAL OF PARTICIPATING EMPLOYER |
68 | |||
10.1 Withdrawal |
68 | |||
10.2 Notice of Withdrawal |
68 | |||
10.3 Withdrawal at Request of Board of Directors |
68 | |||
10.4 Continuation of Plan |
68 | |||
ARTICLE XI. LIMITATIONS ON BENEFITS |
69 | |||
11.1 Limitation on Annual Benefits |
69 | |||
11.2 Benefit Limitations Rules for Certain Highly Compensated Employees |
86 | |||
ARTICLE XII. PROVISIONS RELATING TO TOP-HEAVY PLAN |
87 | |||
12.1 Top-Heavy Requirement |
87 | |||
12.2 Minimum Vesting Requirement |
87 | |||
12.3 Minimum Benefit Requirement |
88 | |||
iii
12.4 Change in Top-Heavy Status |
89 | |||
ARTICLE XIII. VETERANS REEMPLOYMENT RIGHTS |
90 | |||
13.1 USERRA |
90 | |||
13.2 Crediting Service |
90 | |||
13.3 Compensation |
90 | |||
13.4 Qualified Military Service |
91 | |||
13.5 Earnings and Forfeitures |
91 | |||
ARTICLE XIV. MISCELLANEOUS |
92 | |||
14.1 Limited Purpose of Plan |
92 | |||
14.2 Non-alienation |
92 | |||
14.3 Facility of Payment |
92 | |||
14.4 Effect of Return of Benefit Checks |
92 | |||
14.5 Impossibility of Diversion |
92 | |||
14.6 Unclaimed Benefits |
93 | |||
14.7 Construction |
93 | |||
14.8 Governing Law |
93 | |||
14.9 Contingent Effectiveness of Plan Amendment and Restatement |
93 | |||
APPENDIX A PARTICIPATING EMPLOYERS |
A-1 | |||
APPENDIX B ACTUARIAL ASSUMPTIONS |
B-1 | |||
APPENDIX C APPROPRIATE INTEGRATION LEVEL FOR PRE-1998 EMPLOYEES |
C-1 | |||
APPENDIX D APPROPRIATE INTEGRATION LEVEL FOR PARTICIPANTS
OTHER THAN PRE-1998 EMPLOYEES |
D-1 | |||
APPENDIX E TELEFLEX INCORPORATED HOURLY EMPLOYEES PENSION PLAN |
E-1 | |||
APPENDIX F RETIREMENT PLAN FOR SALARIED EMPLOYEES OF ARROW INTERNATIONAL, INC. |
F-1 | |||
APPENDIX G RETIREMENT PLAN FOR HOURLY-RATED EMPLOYEES OF ARROW INTERNATIONAL, INC. |
G-1 | |||
APPENDIX H RETIREMENT PLAN FOR HOURLY RATED EMPLOYEES AT THE BERKS COUNTY, PA LOCATIONS OF ARROW INTERNATIONAL, INC. |
H-1 |
iv
TELEFLEX INCORPORATED
RETIREMENT INCOME PLAN
RETIREMENT INCOME PLAN
(As Amended and Restated Effective January 1, 2002)
Teleflex Incorporated (the Sponsor) hereby amends and restates in its entirety the Teleflex
Incorporated Retirement Income Plan, formerly known as the Teleflex Incorporated Salaried
Employees Pension Plan (the Plan).
The Sponsor previously amended and restated the Teleflex Incorporated Hourly Employees Pension
Plan and merged it with and into the Plan effective as of December 31, 2008. The Sponsor also
previously merged the Retirement Plan for Hourly Rated Employees at the Berks County, PA Locations
of Arrow International, Inc., the Retirement Plan for Salaried Employees of Arrow International,
Inc., and the Retirement Plan for Hourly-Rated Employees of Arrow International, Inc. with and into
the Plan effective as of August 31, 2008. Except as otherwise provided in an applicable Appendix
or as required by applicable law, no additional benefits shall be accrued under the Plan after
December 31, 2008.
It is intended that this Plan, as amended and restated effective January 1, 2002, together with the
Trust Agreement, will comply with the Economic Growth and Tax Relief Reconciliation Act of 2001
(EGTRRA), the requirements reflected in IRS Notice 2008-108 (the 2008 Cumulative List), the
Pension Protection Act of 2006, as subsequently amended by the Worker, Retiree, and Employer
Recovery Act of 2008, the Heroes Earnings Assistance and Relief Tax Act of 2008, and the other
applicable requirements of Section 401(a) and 501(a) of the Internal Revenue Code of 1986, as
amended.
The provisions of this amended and restated Plan shall apply solely to an Employee who incurs a
Severance from Employment with the Employer on or after the Effective Date. All former Employees,
Participants who incurred a Severance from Employment or whose active participation in the Plan,
the Teleflex Incorporated Hourly Employees Pension Plan, the Retirement Plan for Hourly Rated
Employees at the Berks County, PA Locations of Arrow International, Inc., the Retirement Plan for
Salaried Employees of Arrow International, Inc., or the Retirement Plan for Hourly-Rated Employees
of Arrow International, Inc., as applicable, (collectively the Plans) ceased prior to January 1,
2002, their Spouses, Beneficiaries, and anyone else claiming through them, shall, except as
otherwise expressly provided to the contrary herein or in any prior document for the Plans, have
the amount of their Accrued Benefit, and their right, if any, to receive such benefit, determined
pursuant to the terms and conditions of the Plans as in effect at the time of Severance from
Employment or cessation of active participation. Further, if benefit payments commenced to any
such individual prior to January 1, 2002, the time and manner of payment of such benefits shall,
except as otherwise expressly provided to the contrary herein or in any prior document for the
Plans, be determined pursuant to the terms and conditions of the Plans as in effect at the time
benefits commenced.
All former employees and participants in a plan that is merged with and into the Plan (Merged
Plan) whose employment or active participation in the Merged Plan terminated prior to the date of
such plans merger into this Plan, their Spouses, Beneficiaries, and anyone else claiming through
them shall, except as otherwise expressly provided to the contrary herein or in any prior Merged
Plan document, have the amount of their Accrued Benefit, and their right, if any, to receive such
benefit determined pursuant to the terms and conditions of the applicable Merged Plan as in effect
at the time of Severance from Employment or cessation of active participation. If benefit payments
commenced to any such individual prior to the date such plan merged with
1
and into this Plan, the time and manner of payment of such benefits shall, except as otherwise
expressly provided to the contrary herein or in any prior Merged Plan document, be determined
pursuant to the terms and conditions of the applicable Merged Plan as in effect at the time
benefits commenced.
BACKGROUND INFORMATION
The Teleflex Incorporated Salaried Employees Pension Plan was originally effective as of July 1,
1966. Effective as of January 1, 1998, the Teleflex Incorporated Retirement Income Plan was merged
with and into the Plan and the name of the Plan was changed to the Teleflex Incorporated Retirement
Income Plan. The Plan has been amended from time to time and was most recently amended and
restated effective January 1, 2002 to comply with the requirements reflected in IRS Notice 2007-94
(the 2007 Cumulative List). Prior to the amendment and restatement effective January 1, 2002,
the Plan was last amended and restated effective January 1, 1998 to conform to the Internal
Revenue Code of 1986, as amended by the General Agreement on Tariffs and Trade, the Uniformed
Services Employment and Reemployment Rights Act of 1994, the Small Business Job Protection Act of
1996, the Taxpayer Relief Act of 1997, the IRS Restructuring and Reform Act of 1998, and the
Community Renewal Tax Relief Act of 2000 (collectively referred to as GUST). Following the
amendment and restatement of the Plan to comply with GUST, the Plan was subsequently amended from
time to time to be in good faith compliance with the changes made to the law by the EGTRRA, to
conform to regulations and guidance issued by the Department of Labor (DOL) and Internal Revenue
Service (IRS), to comply with changes made to the required interest rate assumption used for
adjusting distribution calculations as provided in the Pension Funding Equity Act of 2004 (PFEA),
and to reflect design and administrative changes, including an amendment whereby an Employee first
hired by the Employer on or after January 1, 2006 may not become a Participant in the Plan or
accrue benefits under the Plan.
The Sponsor established the Teleflex Incorporated Hourly Employees Pension Plan (Hourly
Employees Plan) effective as of January 1, 1985. The Hourly Employees Plan was amended from
time to time and was amended and restated effective as of June 30, 2001 to comply with GUST.
Following the amendment and restatement of the Hourly Employees Plan to comply with GUST, the
Hourly Employees Plan was subsequently amended from time to time to be in good faith compliance
with the changes made to the law by EGTRRA, to conform to regulations and guidance issued by the
DOL and IRS, to comply with changes made to the required interest rate assumption used for
adjusting distribution calculations as provided in PFEA, and to reflect design and administrative
changes, including an amendment whereby an Employee, other than an Employee who is a member of UAW
Local 644 (Marine Limerick, PA) and who is covered by a collective bargaining agreement between
the Employer and UAW Local 644, first hired by the Employer on or after January 1, 2006 may not
become a Participant in the Plan or accrue benefits under the Plan. The Hourly Employees Plan was
also previously amended to provide that, an Employee who is a member of UAW Local 644 (Marine -
Limerick, PA) and who is covered by a collective bargaining agreement between the Employer and UAW
Local 644, that is first hired by the Employer on or after July 1, 2006 may not become a
Participant in the Plan or accrue benefits under the Plan. The Hourly Employees Plan was merged
with and into the Plan effective as of December 31, 2008.
Arrow International, Inc. (Arrow) adopted the Retirement Plan for Salaried Employees (Arrow
Salaried Plan) effective as of September 1, 1978. The Arrow Salaried Plan was amended from time
to time and was most recently amended and restated effective as of September 1, 2002 to comply with
EGTRRA and the requirements reflected in IRS Notice 2005-101 (the 2005
2
Cumulative List). The Arrow Salaried Plan was subsequently amended to comply with changes made to
the required interest rate assumption used for adjusting distribution calculations as provided in
PFEA, to revise the governance structure of the Plan (in a manner consistent with the Sponsors
acquisition of Arrow on October 1, 2007), and to close participation so that no Employee whose
initial date of hire is on or after October 1, 2007 is eligible to become a Participant in the
Arrow Salaried Plan. The Arrow Salaried Plan was merged with and into the Plan effective as of
August 31, 2008.
Arrow adopted the Retirement Plan for Hourly-Rated Employees of the North Carolina and New Jersey
Plants of Arrow International, Inc. (Arrow Hourly Plan), effective as of September 1, 1976.
Effective as of September 1, 1997, the name of the Arrow Hourly Plan was changed to the Retirement
Plan for Hourly-Rated Employees of Arrow International, Inc. The Arrow Hourly Plan was amended
from time to time and was most recently amended and restated effective as of September 1, 2002 to
comply with EGTRRA and the 2005 Cumulative List. The Arrow Hourly Plan was subsequently amended to
comply with changes made to the required interest rate assumption used for adjusting distribution
calculations as provided in PFEA, to revise the governance structure of the Plan (in a manner
consistent with the Sponsors acquisition of Arrow on October 1, 2007), and to close participation
so that no Employee whose initial date of hire is on or after October 1, 2007 is eligible to become
a Participant in the Arrow Hourly Plan. The Arrow Hourly Plan was merged with and into the Plan
effective as of August 31, 2008.
Arrow adopted the Retirement Plan for Hourly Rated Employees of at the Berks County, PA Locations
of Arrow International, Inc. (Arrow Berks Plan), effective as of September 1, 1975. The Arrow
Berks Plan was amended from time to time and was most recently amended and restated effective as of
September 1, 2002 to comply with EGTRRA and the 2005 Cumulative List. The Arrow Berks Plan was
subsequently amended to comply with changes made to the required interest rate assumption used for
adjusting distribution calculations as provided in PFEA, and to revise the governance structure of
the Plan (in a manner consistent with the Sponsors acquisition of Arrow on October 1, 2007). The
Arrow Berks Plan was merged with and into the Plan effective as of August 31, 2008.
3
ARTICLE
I. DEFINITIONS.
The following words and phrases as used herein have the following meanings unless a different
meaning is plainly required by the context:
1.1 Accrued Benefit means:
1.1.1 The accrued benefit of a Salaried Participant expressed in terms of a monthly single
life annuity (or a single life annuity with payments guaranteed for five years for a Pre-1998
Employee) beginning at his Normal Retirement Date determined under Section 3.1, or his Late
Retirement Date determined under Section 3.2, on the basis of the Participants Credited Service as
a Participant to the date as of which the computation is made.
1.1.2 The accrued benefit of an Hourly Participant is the retirement benefit that a
Participant would receive at his Normal Retirement Date based on the benefit formula set forth in
the applicable Schedule to Appendix E.
1.1.3 The accrued benefit of an Arrow Salaried Participant as of any date is the amount of
annual Benefit (as defined in Appendix F) earned to such date, payable as a single life annuity
beginning at the Participants Normal Retirement Date (or immediately, if the Participant has
passed his Normal Retirement Date), calculated in accordance with Section 5.1 of Appendix F.
1.1.4 The accrued benefit of an Arrow Hourly Participant as of any date is the amount of
annual Benefit (as defined in Appendix G) earned to such date, payable as a single life annuity
beginning at the Participants Normal Retirement Date (or immediately, if the Participant has
passed his Normal Retirement Date), calculated in accordance with Section 5.1 of Appendix G.
1.1.5 The accrued benefit of an Arrow Berks Participant as of any date is the amount of annual
Benefit earned to such date, payable as a single life annuity beginning at the Participants Normal
Retirement Date (or immediately, if the Participant has passed his Normal Retirement Date),
calculated in accordance with Section 5.1 of Appendix H.
For purposes of determining whether the Plan is a Top-Heavy Plan, the Accrued Benefit of a current
Employee shall be determined as if he had a Severance from Employment on the Determination Date.
The actuarial assumptions used to determine the present value of Accrued Benefits for the purpose
of the Top-Heavy test shall be those set forth in Appendix B for Salaried Participants and those
set forth in Appendix E, F, G, or H, as applicable, for other Participants.
Notwithstanding any provision of the Plan to the contrary, except as otherwise provided in an
Appendix or as required by applicable law, no Participant shall accrue any additional benefit under
the Plan after December 31, 2008.
1.2 Accumulated Contributions means the sum of a Salaried Participants
contributions made under the Plan before July 1, 1982, or repaid pursuant to Section 3.7, and
interest credited thereon up to the date benefit payments begin under the Plan. The rates of
interest credited upon such contributions shall be determined by the Committee, provided that the
rate of interest shall not be less than 7%, compounded annually, for each Plan Year prior to
January 1, 1988 and for each Plan Year thereafter, 120% of the Federal mid-term rate as in
4
effect under Section 1274 of the Code for January of the relevant Plan Year, compounded
annually.
1.3 Actuarial Definitions
1.3.1 Actuarial Equivalent or Actuarially Equivalent:
1.3.1.1 For Salaried Participants, shall mean the equivalent actuarial value of
the normal form of benefit for unmarried Participants, as described in Section 6.2,
determined based upon the advice of the Plans enrolled actuary using the factors
and assumptions listed in Appendix B, attached hereto and made a part hereof;
1.3.1.2 For Hourly Participants, shall have the meaning set forth in Appendix
E, attached hereto and made a part hereof;
1.3.1.3 For Arrow Salaried Participants, shall have the meaning set forth in
Appendix F, attached hereto and made a part hereof;
1.3.1.4 For Arrow Hourly Participants, shall have the meaning set forth in
Appendix G, attached hereto and made a part hereof; and
1.3.1.5 For Arrow Berks Participants, shall have the meaning set forth in
Appendix H, attached hereto and made a part hereof.
1.3.2 For purposes of determining the amount of a Participants lump sum distribution or the
present value of a Participants Accrued Benefit, the Actuarial Equivalent of such benefit shall
be calculated using the Applicable Interest Rate and the Applicable Mortality Table.
1.3.2.1 For Plan Years beginning on or after January 1, 2008, or the date
determined by applying the rules of transition under Code Section 417(e) and
Treasury Regulation Section 1.417(e)-1, the Applicable Interest Rate is
the adjusted first, second and third segment rates applied under rules similar to
the rules of Code Section 430(h)(2)(C) (determined without regard to the 24-month
averaging provided under Code Section 430(h)(2)(D)(i)) for the November preceding
the first day of the Plan Year in which the date of the distribution occurs or such
other time as the Secretary of the Treasury may by regulations prescribe. The use
of the segment rates as the Applicable Interest Rate shall be phased in over five
years in accordance with Code Section 417(e)(3)(D)(ii). Effective January 1, 2000
and prior to January 1, 2008, or the date determined by applying the rules of
transition under Code Section 417(e) and Treasury Regulation Section 1.417(e)-1, the
Applicable Interest Rate shall be the average annual rate of interest on
30-year Treasury securities as specified by the Internal Revenue Service determined
each Plan Year using the interest rate in effect for the November of the Plan Year
immediately preceding the first day of the Plan Year.
1.3.2.2 For Plan Years beginning on or after January 1, 2008, the
Applicable Mortality Table shall be the applicable Code Section 417(e)(3)
mortality table. For Plan Years beginning prior to January 1, 2008, the
5
Applicable Mortality Table shall be the mortality table prescribed by
the Internal Revenue Service, which shall be based on the prevailing commissioners
standard table (described in Code §807(d)((5)(A)) used to determine reserves for
group annuity contracts issued on the date as of which a present value is determined
(without regard to any other subparagraph of Code §807(d)(5)) as specified by the
Internal Revenue Service. For distributions with an Annuity Starting Date on or
after December 31, 2002, such Applicable Mortality Table is the mortality table
prescribed in IRS Revenue Ruling 2001-62 (commonly known as the 94 GAR table).
For distributions with an Annuity Starting Date prior to such date, the
Applicable Mortality Table is the mortality table prescribed in IRS
Revenue Ruling 95-6 (commonly known as 83 GAM table).
1.4 Administrative Committee means, effective January 1, 2008, the Financial Benefit
Plans Committee or such other committee appointed by the Committee or the Board of Directors to
oversee the administration of the Plan in accordance with its authority under the benefit plan
governance structure approved by the Compensation Committee of the Board of Directors, as amended
from time to time, or any successor thereto. The Vice President, Global Human Resources
(effective May 1, 2009; prior to May 1, 2009, Vice President of Human Resource Operations) and
employees of the Corporate Benefits Department of the Sponsor (collectively the Benefits Group)
have been appointed to assist in the day-to-day administration of the Plan in accordance with their
authority under the benefit plan governance structure approved by the Compensation Committee of the
Board of Directors, as amended from time to time.
1.5 Aggregation Group means:
1.5.1
A Required Aggregation Group, or
1.5.2
A Permissive Aggregation Group.
1.6 Annuity Starting Date means for:
1.6.1 A Salaried Participant electing an Early, Normal, Late or Disability Retirement Benefit,
the first day of the first month for which the retiring Salaried Participant receives an annuity
payment,
1.6.2 The surviving Spouse or other Beneficiary of a deceased Salaried Participant who died
having met the requirements for an Early, Normal, Late or Disability Retirement Benefit but who had
not reached his Annuity Starting Date, the first day of the month following the date of the
Salaried Participants death, or
1.6.3 The surviving Spouse of a deceased Salaried Participant who died before having reached
his Earliest Retirement Age, as defined under Section 417 of the Code, but who had a vested
interest in his Accrued Benefit under Section 4.1, the Salaried Participants Earliest Retirement
Age.
The Annuity Starting Date for a Participant other than a Salaried Participant shall have the
meaning set forth in the Appendix applicable to the Participant.
1.7 Arrow Berks Participant means a Participant, as defined in Appendix H, who was a
Participant in the Retirement Plan for Hourly Rated Employees at the Berks County, PA
6
Locations of Arrow International, Inc. (Arrow Berks Plan) prior to the merger of the Arrow
Berks Plan with and into the Plan effective as of August 31, 2008 and/or who is eligible to
participate in the Plan pursuant to Appendix H hereto. The Plan benefit to which an Arrow Berks
Participant is entitled shall be determined in accordance with the Plan and Appendix H hereto. An
individual who is an Arrow Berks Participant and who ceases to be an Employee shall nonetheless
remain an Arrow Berks Participant for purposes of benefit payments only, until all amounts due him
from the Plan have been paid.
1.8 Arrow Hourly Participant means a Participant who was a Participant in the
Retirement Plan for Hourly-Rated Employees of Arrow International, Inc. (Arrow Hourly Plan) prior
to the merger of the Arrow Hourly Plan with and into the Plan effective as of August 31, 2008
and/or who is eligible to participate in the Plan pursuant to Appendix G hereto. The Plan benefit
to which an Arrow Hourly Participant is entitled shall be determined in accordance with the Plan
and Appendix G hereto. An individual who is an Arrow Hourly Participant and who ceases to be an
Employee shall nonetheless remain a Arrow Hourly Participant for purposes of benefit payments only,
until all amounts due him from the Plan have been paid. Notwithstanding any other provision of the
Plan to the contrary, no Employee whose initial date of hire by a Participating Company described
in Appendix G hereto is on or after October 1, 2007, may become an Arrow Hourly Participant or
accrue benefits under the Arrow Hourly Plan or Plan.
1.9 Arrow Salaried Participant means a Participant who was a participant in the
Retirement Plan for Salaried Employees of Arrow International, Inc. (Arrow Salaried Plan) prior
to the merger of the Arrow Salaried with and into the Plan effective as of August 31, 2008 and/or
who is eligible to participate in the Plan pursuant to Appendix F hereto. The Plan benefit to
which an Arrow Salaried Participant is entitled shall be determined in accordance with the Plan and
Appendix F. hereto. An individual who is an Arrow Salaried Participant and who ceases to be an
Employee shall nonetheless remain a Arrow Salaried Participant for purposes of benefit payments
only, until all amounts due him from the Plan have been paid. Notwithstanding any other provision
of the Plan to the contrary, no Employee whose initial date of hire by a Participating Company
described in Appendix F hereto is on or after October 1, 2007, may become an Arrow Salaried
Participant or accrue benefits under the Arrow Salaried Plan or Plan.
1.10 Average Monthly Compensation means the Monthly Compensation of a Salaried
Participant who participated in the TRIP Plan before its merger into the Plan, averaged over the 60
consecutive months that produce the highest average during the 120 month period, or the number of
months as an Employee if less than 120, ending prior to the Salaried Participants retirement date,
date of Severance from Employment, date of death, or December 31, 2008, whichever is applicable.
As used in this Section 1.10, Monthly Compensation means the Compensation (determined under
Section 1.16.1.1) paid to a Salaried Participant in a Plan Year for services rendered to the
Employer divided by the number of full months that the Salaried Participant was employed during the
Plan Year by the Employer, subject to the limits of Code Section 401(a)(17).
Subject to Article XIII, a Salaried Participant on an approved leave of absence shall be deemed to
have received remuneration during his period of absence equal to his basic rate of pay in effect
immediately prior to such absence.
7
1.11 Beneficiary means:
1.11.1 The Participants Spouse,
1.11.2 The person, persons or trust designated by the Participant, with the consent of the
Participants Spouse if the Participant is married, as direct or contingent beneficiary in a manner
prescribed by the Benefits Group, or
1.11.3 If the Participant has no Spouse and has made no effective Beneficiary designation:
1.11.3.1 The Participants estate; and
1.11.3.2 Prior to January 1, 2009, an Hourly Participants children, parents,
brothers or sisters, in that order, and, if none, the Hourly Participants estate.
A married Participant may designate a person, persons or trust other than his Spouse as
Beneficiary, provided that such Spouse consents in writing in a manner prescribed by the
Administrative Committee. The Spouses consent must be witnessed by a notary public or
Administrative Committee representative and must be limited to and acknowledge the specific
non-Spouse Beneficiary(ies) (including any class of Beneficiaries) designated by the Participant.
If the Participant wishes to subsequently change Beneficiary(ies), the consent of the Spouse must
be obtained again. Spousal consent shall not be required if the Participant establishes to the
satisfaction of the Administrative Committee that the consent cannot be obtained because the Spouse
cannot be located or because of such other circumstances as the Secretary of the Treasury may
prescribe by regulations. A subsequent Spouse of a Participant shall not be bound by a consent
executed by any previous Spouse of the Participant.
Any prior designation of a Beneficiary shall be revocable at the election of the Participant at any
time in the manner and form prescribed by the Administrative Committee until the payment
commencement date. The number of revocations shall not be limited. If more than one Beneficiary
is designated by the Participant, such Beneficiaries who survive the Participant shall share
equally in any death benefit unless the Participant indicates to the contrary, in writing. If a
Beneficiary predeceases the Participant, such deceased Beneficiary shall not share in any death
benefit and those Beneficiaries who survive the Participant shall share in any death benefit
equally, or, if different, in the proportions designated by the Participant. A Beneficiarys right
to information or data concerning the Plan does not arise until the Beneficiary first becomes
entitled to receive a benefit under the Plan.
The entry of a decree of divorce shall not automatically revoke a prior written election of a
Participant naming such divorced Spouse as a Beneficiary. Except as provided to the contrary under
a qualified domestic relations order: (i) a Participant may, subsequent to a divorce, designate
someone other than his former Spouse as Beneficiary; and (ii) if a divorced Participant remarries,
the new Spouse shall have all of the rights of a Spouse as set forth herein and any prior written
Beneficiary designation by the Participant shall be automatically revoked and subject to the rights
of the subsequent Spouse. If an alternate payee under a qualified domestic relations order, as
defined in Code Section 414(p), should die before payment of the benefit assigned to the alternate
payee occurs, the portion of the Accrued Benefit assigned to the alternate payee shall revert to
the Participant unless the qualified domestic relations order
8
permits the alternate payee to designate a Beneficiary and a Beneficiary has in fact been
designated to whom the benefit may be paid.
1.12 Board of Directors means the Board of Directors of the Sponsor. Effective
January 1, 2008, Board of Directors means the Board of Directors of the Sponsor or any committee
thereof.
1.13 Break-in-Service means, with respect to Salaried Participants:
1.13.1 For the purpose of Article II, relating to eligibility to participate in the Plan, a 12
consecutive month period, measured from the date an Employee is first credited with an Hour of
Service or any anniversary thereof (or his reemployment commencement date or any anniversary
thereof), within which the Employee is not credited with more than 500 Hours of Service; and
1.13.2 For the purpose of Article IV, relating to vesting, a Plan Year within which an
individual is not credited with more than 500 Hours of Service; provided that any Break-in-Service
occurring during the July 1, 1997 to December 31, 1997 Plan Year shall be disregarded.
Break-in-Service with respect to a Participant other than a Salaried Participant shall have the
meaning set forth in Appendix E, F, G, or H, as applicable to that Participant.
1.14 Code means the Internal Revenue Code of 1986, as amended.
1.15 Committee means the Committee appointed to administer the Plan. Effective
January 1, 2008, the Committee is the Teleflex Incorporated Benefits Policy Committee or any
successor thereto. Effective January 1, 2008, the Committee shall be the Plan Administrator and
Named Fiduciary of the Plan. Prior to January 1, 2008, the Sponsor shall be the Plan Administrator
and Named Fiduciary of the Plan.
1.16 Compensation
1.16.1 General Rule.
1.16.1.1 Salaried Participants. Compensation means, except as
otherwise provided in this Section 1.16.1.1, remuneration paid to a Salaried
Participant for services rendered to the Employer. Such remuneration shall include
regular or base pay, bonuses, commissions, overtime pay, shift differentials,
double-time pay, adjustments, amounts paid for time missed due to holidays,
vacations, personal days, jury duty, sick leave and funeral leave, short-term
disability pay, payments made as a result of opting out of medical coverage, amounts
deferred under a nonqualified deferred compensation plan, and Elective
Contributions made by the Employer on the Salaried Participants behalf. Elective
Contributions are amounts excludible from the Salaried Participants gross income
under Code Section 402(e)(3) (relating to a Code Section 401(k) arrangement), Code
Section 402(h) (relating to a Simplified Employee Pension), Code Section 125
(relating to a cafeteria plan), Code Section 403(b) (relating to a tax-sheltered
annuity), and Code Section 132(f)(4) (relating to a qualified transportation fringe
benefit plan). Effective January 1, 2009, if Salaried Participants Compensation
under the Plan was not frozen effective for Plan Years beginning after 2008,
Compensation would also include
9
any differential wage payments (as defined in Code Section 3401(h)(2)) from the
Employer, as required by Code Section 414(u)(12), as amended by the Heroes Earnings
Assistance and Relief Tax Act of 2008 (the HEART Act). Compensation does not
include employer contributions to benefit plans, fringe benefits, severance pay,
expense reimbursements, tuition reimbursements, relocation expenses, the taxable
portion of life insurance coverage, car allowances, personal use of employer
aircraft, income recognized on the exercise of a stock option or the vesting of a
restricted stock award, payments received while an Employee from a nonqualified
deferred compensation plan and any other special pay arrangements.
For Plan Years beginning on and after January 1, 2002, amounts referenced under Code
Section 125 include any amounts not available to a Salaried Participant in cash in
lieu of group health coverage because the Salaried Participant is unable to certify
that he has other health coverage. An amount will be treated as an amount under
Code Section 125 only if the Employer does not request or collect information
regarding the Salaried Participants other health coverage as part of the enrollment
process for the health plan. For any self-employed individual Compensation shall
mean earned income, as defined in Code Section 401(c)(2).
For Plan Years beginning on and after January 1, 2008, Compensation shall include
Post-Severance Compensation paid by the later of: (i) two and one-half (21/2) months
(or such other period as extended by subsequent Treasury Regulations or other
published guidance) after Severance from Employment with the Employer; or (ii) the
end of the Plan Year that includes the date of the Salaried Participants Severance
from Employment with the Employer. Post-Severance Compensation means payments
that would have been included in the definition of Compensation if they were paid
prior to the Salaried Participants Severance from Employment and the payments are:
(a) regular Compensation for services during the Salaried Participants regular
working hours, Compensation for services outside the Salaried Participants regular
working hours (such as overtime or shift differential), commissions, bonuses, or
other similar compensation, if the payments would have been paid to the Salaried
Participant if the Salaried Participant had continued in employment with the
Employer; (b) for accrued bona fide sick, vacation or other leave, but only if the
Salaried Participant would have been able to use the leave if employment had
continued; or (c) received by a Salaried Participant pursuant to a nonqualified
unfunded deferred compensation plan, but only if the payment would have been paid to
the Salaried Participant at the same time if the Salaried Participant had continued
in employment with the Employer and only to the extent the payment is includible in
the Salaried Participants gross income. Any payments not described in the
preceding sentence are not considered Post-Severance Compensation if paid after
Severance from Employment, except for payments (1) to an individual who does not
currently perform services for the Employer by reason of Qualified Military Service
(within the meaning of Code Section 414(u)(1)) to the extent these payments do not
exceed the amounts the individual would have received if the individual had
continued to perform services for the Employer; or (2) to any Participant who is
permanently and totally disabled for a fixed or determinable period, as determined
by the Administrative Committee. For purposes of this Section 1.16.1.1,
permanently and totally
10
disabled means that the individual is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment which
can be expected to result in death or which has lasted or can be expected to last
for a continuous period of not less than 12 months.
Back pay, within the meaning of Treasury Regulations Section 1.415(c)-2(g)(8), shall
be treated as Compensation for the Limitation Year to which the back pay relates to
the extent the back pay represents an amount that would otherwise be Compensation.
Salaried Participants Compensation for Plan purposes is frozen for Plan Years
beginning after December 31, 2008.
1.16.1.2 Hourly Participants. Compensation means Limitation
Compensation, as defined in Appendix E.
1.16.1.3 Arrow Salaried Participants. Compensation means Average
Annual Compensation, as defined in Appendix F.
1.16.1.4 Arrow Hourly Participants. Compensation means Average Annual
Compensation, as defined in Appendix G.
1.16.1.5 Arrow Berks Participants. Compensation means Average Annual
Compensation, as defined in Appendix H.
1.16.2 Compensation Limitation. In addition to other applicable limits set forth in
the Plan, the annual Compensation of each Employee taken into account in determining benefit
accruals under the Plan shall not exceed the Compensation Limitation. The Compensation
Limitation for Plan Years beginning after December 31, 2001 is $200,000 and the Compensation
Limitation for Plan Years beginning after December 31, 2008 is $245,000. The Compensation
Limitation shall be adjusted for cost-of-living increases in accordance with Section 401(a)(17)(B)
of the Code. The cost-of-living adjustment in effect for a calendar year applies to annual
Compensation for any period, not exceeding 12 months, over which Compensation is determined (the
Determination Period) that begins with or within such calendar year. If a Determination
Period consists of fewer than 12 months, the Compensation Limitation 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. If Compensation in any prior Determination Period is taken into
account in determining an Employees benefits accruing in the current Plan Year, the Compensation
for that prior Determination Period is subject to the Compensation Limit in effect for that prior
Determination Period. Any increase in the Compensation Limit shall not apply to former Employees.
1.17 Continuous Service means, with respect to Salaried Participants:
1.17.1 For periods ending before July 1, 1982, a period of employment that was Continuous
Service under the terms of the Plan as in effect before July 1, 1982; and
1.17.2 For periods beginning on or after July 1, 1982, a period of employment with the
Employer beginning on the first day of the month in which his date of hire occurs and ending on the
date of his Break-in-Service.
11
1.17.3 The following rules shall also apply in determining a Salaried Participants Continuous
Service for all purposes under the Plan, unless indicated otherwise:
1.17.3.1 If an Employee quits, retires, is discharged, or is placed on
permanent layoff, and within 12 months thereafter returns to service and is credited
with an Hour of Service, his Continuous Service shall be computed as though his
service had not been severed;
1.17.3.2 If an Employee is absent from service and while so absent quits,
retires, is discharged, or is placed on permanent layoff, and within 12 months after
the first date upon which he is absent from service, returns to service and is
credited with an Hour of Service, his Continuous Service shall be computed as though
his service had not been severed;
1.17.3.3 All of an Employees nonsuccessive periods of service, including the
period of service after a Break-in-Service if the Salaried Participant was vested in
his Accrued Benefit or if the Salaried Participant has not incurred five or more
consecutive Breaks in Service, shall be aggregated, and less than full years of
service (whether or not consecutive) shall also be aggregated;
1.17.3.4 An Employee reemployed by the Employer in accordance with Chapter 43
of Title 38 of the United States Code, shall be treated as though he had been
actively performing services for the Employer during such Employees period of
Qualified Military Service (as defined in Section 414(u) (5) of the Code);
1.17.3.5 For purposes of determining whether or not an Employee is eligible to
participate in the Plan, and whether or not benefits under the Plan are vested,
years of Continuous Service shall include periods as a Leased Employee, including
the one-year period on the basis of which the individual is deemed to be a Leased
Employee; and
1.17.3.6 A Participant shall be not credited with any additional years
of Continuous Service after December 31, 2008; provided, however, that, if a
Participant experiences a Severance from Employment pursuant to the 2009 Voluntary
Early Retirement Plan, the Participant shall be credited with two (2) additional
years of Continuous Service.
1.18 Covered Compensation means, with respect to any Salaried Participant, the
average (without indexing) of the contribution and benefit bases in effect under Section 230 of the
Social Security Act for each calendar year in the 35-year period ending with the calendar year in
which the Salaried Participant reaches his Social Security Retirement Age. In determining a
Salaried Participants Covered Compensation for any Plan Year, the contribution and benefit bases
in effect at the beginning of such Plan Year shall be assumed to continue in effect for all
subsequent Plan Years.
1.19 Credited Service means, with respect to Salaried Participants:
1.19.1 For periods ending before July 1, 1982, a period of employment that was a period of
Credited Service under the terms of the Plan as in effect before July 1, 1982; and
12
1.19.2 For periods beginning on or after July 1, 1982, the period of an Employees Continuous
Service measured from the date he begins to participate in the Plan; provided that Credited Service
shall not include periods of Continuous Service credited under Sections 1.17.3.1 and 1.17.3.2 for a
period of time when a Participant was on a layoff.
1.19.3 Except as provided otherwise in Section 3.1.6, a Salaried Participants Credited
Service under the TRIP Plan through December 31, 1997 shall count as Credited Service under this
Plan.
1.19.4 Notwithstanding any provision of the Plan to the contrary, the following individuals
shall receive no additional Credited Service for benefit accrual purposes for any period of
employment after January 31, 2004, provided that service for periods of employment after such date
shall continue to be credited for eligibility and vesting purposes:
1.19.4.1 Employees of Weck Surgical employed at Research Triangle Park, North
Carolina;
1.19.4.2 Salaried Exempt and Salaried Non-Exempt Employees of TFX Medical
employed at Jaffrey, New Hampshire; and
1.19.4.3 Sales Representatives of Pilling Surgical employed at Horsham,
Pennsylvania who were hired on or after December 23, 1993 and before March 28, 1997.
1.19.5 Notwithstanding any provision of the Plan to the contrary, except as otherwise provided
in Section 1.17.3.6, no Participant shall receive additional Credited Service for benefit accrual
purposes for any period of employment after December 31, 2008.
1.20 Defined Benefit Plan means any employee pension plan maintained by the
Employer that is qualified under Section 401(a) of the Code and is not a Defined Contribution Plan.
1.21 Defined Contribution Plan means an employee pension plan maintained by the
Employer that is qualified under Section 401(a) of the Code and provides for an individual account
for each Participant and for benefits based solely on the amount contributed to the Participants
account, and any income, expenses, gains and losses, and any forfeitures from accounts of other
Participants that may be allocated to such Participants account.
1.22 Determination Date means:
1.22.1 If the Plan is not included in an Aggregation Group, the last day of the preceding Plan
Year; or
1.22.2 If the Plan is included in an Aggregation Group, the Determination Date as determined
under Section 1.22.1 that falls within the same calendar year of each other plan included in such
Aggregation Group.
1.23 Early Retirement Date means the last day of any month coincident with or
following a Salaried Participants reaching age 60, but not age 65, and after he has been credited
with 10 years of Continuous Service. If a Salaried Participant experiences a Severance from
Employment pursuant to the 2009 Voluntary Early Retirement Plan, the Participant shall be
13
credited with two (2) additional years of age and the requirement that the Salaried
Participant be credited with 10 years of Continuous Service in order to reach an Early Retirement
Date is not applicable. The Early Retirement Date, if applicable, for an Hourly Participant,
Arrow Salaried Participant, Arrow Hourly Participant, or an Arrow Berks Participant is set forth in
Appendix E, F, G, or H hereto, respectively.
1.24 Effective Date means January 1, 2002, except where otherwise provided herein or
as required by applicable legislation. The original effective date of the Plan was July 1, 1966.
With respect to any Participating Employer adopting the Plan after the Effective Date, the
Effective Date shall be the date of adoption unless another date is specified.
1.25 Employee means, except as otherwise defined in an Appendix hereto:
1.25.1 An individual who is employed by the Employer and whose earnings are reported on a Form
W-2;
1.25.2 An individual who is not employed by an Employer but is required to be treated as a
Leased Employee (as defined in Section 2.2.5); provided that if the total number of Leased
Employees constitutes 20% or less of the Employers non-highly compensated work force, within the
meaning of Section 414(a)(5)(c)(ii) of the Code, the term Employee shall not include those Leased
Employees covered by a safe harbor plan described in Section 414(n)(5)(i) of the Code; and
1.25.3 When required by context under Section 1.32 for purposes of crediting Hours of Service,
a former Employee.
The term Employee shall not include any individual providing services to an Employer as an
independent contractor. An individual excluded from participation by reason of independent
contractor or Leased Employee status, if determined by the Employer, a court, a governmental
agency, or in accordance with law to be a common law employee of the Employer, shall be
recharacterized as an Employee under the Plan as of the date of such determination, unless an
earlier date is necessary to preserve the tax qualified status of the Plan. Notwithstanding such
general recharacterization, such person shall not be considered an eligible Employee for purposes
of Plan participation, except and to the extent necessary to preserve the tax qualified status of
the Plan.
Effective January 1, 2009, to the extent the Plan is not frozen, any individual in Qualified
Military Service (as defined in Code Section 414(u)) who is receiving differential wage payments
(as defined in Code Section 3401(h)(2)) from the Employer shall be treated as an Employee of the
Employer solely for purposes of providing contributions, benefits and service credit with respect
to such Qualified Military Service, as applicable. Notwithstanding the foregoing, except as
otherwise provided in an applicable Appendix or required by applicable law, nothing in this
provision shall be interpreted to require any benefit accruals under this Plan after December 31,
2008.
1.26 Employer means the Sponsor and Participating Employers. If the Employer is a
member of a group of Related Employers, the term Employer includes the Related Employers for
purposes of crediting Hours of Service, applying the participation test of Code Section 401(a)(26)
and the coverage test of Code Section 410(b), determining Years of Service and Breaks in Service,
applying the limitations of Section 11.1, applying the Top Heavy rules of Article XII, the
definitions of Employee, Highly Compensated Employee, and Leased Employee,
14
and for any other purpose as required by the Code or by the Plan. However, only the Sponsor
and Participating Employers may contribute to the Plan and only eligible Employees employed by the
Sponsor or a Participating Employer are eligible to participate in this Plan. Unless otherwise
provided, service with a Related Employer prior to the date that it either adopted the Plan or
became a Related Employer shall not be counted for any purpose under the Plan.
1.27 ERISA means the Employee Retirement Income Security Act of 1974, as amended.
1.28 Five-Percent Owner means any Employee who owns (or is considered as owning
within the meaning of Section 318 of the Code) more than 5% of the outstanding stock of the
Employer, or stock possessing more than 5% of the total combined voting power of all stock of any
Employer. For purposes of this Section 1.28, Section 318(a)(2)(C) of the Code shall be applied by
substituting 5% for 50% each time it appears therein.
1.29 Former Key Employee means an Employee who is a Non-Key Employee with respect to
the Plan for the Plan Year if such Employee was a Key Employee with respect to the Plan for any
prior Plan Year.
1.30 Fund means the assets and all income, gains and losses thereon held by the
Trustee under the trust agreement for the exclusive benefit of Participants, their surviving
Spouses, and their Beneficiaries.
1.31 Highly Compensated Employee means any Employee who:
1.31.1 Was a Five-Percent Owner at any time during the Plan Year or the preceding Plan Year;
or
1.31.2 For the preceding Plan Year:
1.31.2.1 Received more than $85,000 ($110,000 for the Plan Year beginning
January 1, 2009) in Compensation from the Employer (or such higher amount as
adjusted pursuant to Code Section 414(q)(1)); and
1.31.2.2 If the Employer elects, was in the top-paid group of employees (within
the meaning of Code Section 414(q)(4)) for such preceding year.
Highly Compensated Employees also include highly compensated former Employees. A highly
compensated former Employee includes any Employee who has had a Severance from Employment (or was
deemed to have a Severance from Employment) prior to the current or preceding Plan Year, performs
no Service for the Employer during such Plan Year, and was a highly compensated active Employee for
either the severance year or any Plan Year ending on or after the Employees 55th birthday in
accordance with the rules for determining Highly Compensated Employee status in effect for that
determination year and in accordance with applicable Treasury Regulations and IRS Notice 97-45.
For purposes of this Section, Compensation means Compensation as defined in Section 11.1.1.2, and
Related Employers shall be treated as a single employer with the Employer. The determination of
who is Highly Compensated shall be made in accordance with Code Section 414(q) and the Treasury
Regulations promulgated thereunder.
15
1.32 Hour of Service means, except as otherwise set forth in an Appendix hereto,
with respect to employment with the Employer:
1.32.1 Each hour for which the Employer, either directly or indirectly, pays an Employee, or
for which the Employee is entitled to payment for the performance of duties for the Employer. The
Plan shall credit Hours of Service under this Section 1.32.1 to the Employee for the computation
period in which the Employee performs the duties, irrespective of when paid;
1.32.2 Each hour for which the Employer, either directly or indirectly, pays an Employee, or
for which the Employee is entitled to payment (irrespectively of whether the employment
relationship is terminated), for reasons other than the performance of duties during a computation
period, such as leaves of absence, vacation, holiday, sick leave, illness, incapacity (including
disability), layoff, jury duty or military duty. There shall be excluded from the foregoing those
periods during which payments are made or due under a plan maintained solely for the purpose of
complying with applicable workers compensation, unemployment compensation, or disability insurance
laws. An Hour of Service shall not be credited where an employee is being reimbursed solely for
medical or medically related expenses. The Plan shall not credit more than 501 Hours of Service
under this Section 1.32.2 to an Employee on account of any single continuous period during which
the Employee does not perform any duties (whether or not such period occurs during a single
computation period). The Plan shall credit Hours of Service under this Section 1.32.2 in
accordance with the rules of paragraphs (b) and (c) of Department of Labor Regulations Section
2530.200b-2, which the Plan, by this reference, specifically incorporates in full within this
Section 1.32.2; and
1.32.3 Each hour for back pay, irrespective of mitigation of damages, to which the Employer
has agreed or for which the Employee has received an award. The Plan shall credit Hours of Service
under this Section 1.32.3 to the Employee for the computation period(s) to which the award or the
agreement pertains rather than for the computation period in which the award, agreement or payment
is made.
The Plan shall not credit an Hour of Service under more than one of the above paragraphs. A
computation period for purposes of this Section 1.32 is the Plan Year, Continuous Service period,
Break-in-Service period or other period, as determined under the Plan provision for which the Plan
is measuring an Employees Hours of Service. The Benefits Group will resolve any ambiguity with
respect to the crediting of an Hour of Service in favor of the Employee.
Except as otherwise provided in an Appendix to the Plan, the Plan shall credit every Employee with
Hours of Service on the basis of the actual method; provided that with respect to an Employee for
whom hours of employment are not normally recorded, the Plan may, in accordance with rules applied
in a uniform and nondiscriminatory manner, elect to credit Hours of Service using one or more of
the following equivalencies:
16
Basis upon Which Records | Credit Granted to Individual | |||
Are Maintained | For Period | |||
Shift | actual hours for full shift | |||
Day | 10 Hours of Service | |||
Week | 45 Hours of Service | |||
Semi-monthly period | 95 Hours of Service | |||
Month | 190 Hours of Service |
For purposes of this Plan, the actual method means the determination of Hours of Service from
records of hours worked and hours for which the Employer makes payment or for which payment is due
from the Employer.
Hours of Service will be credited for employment with other members of a group of Related Employers
of which the Employer is a member. Hours of Service will also be credited for any individual
considered an Employee for purposes of this Plan to the extent required under Code Sections 414(n)
or 414(o) and the Treasury Regulations promulgated thereunder.
Solely for purposes of determining whether the Employee incurs a Break-in-Service under any
provision of this Plan, the Plan shall credit Hours of Service during an Employees unpaid absence
period due to maternity or paternity leave. The Plan shall consider an Employee on maternity or
paternity leave if the Employees absence is due to the Employees pregnancy, the birth of the
Employees child, the placement with the Employee of an adopted child, or the care of the
Employees child immediately following the childs birth or placement. The Plan shall credit only
the number (up to five hundred one (501) Hours of Service) necessary to prevent an Employees
Break-in-Service. The Plan shall credit all Hours of Service described in this paragraph to the
computation period in which the absence period begins or, if the Employee does not need these Hours
of Service to prevent a Break-in-Service in the computation period in which his absence period
begins, the Plan shall credit these Hours of Service to the immediately following computation
period. Further, if required by the Family and Medical Leave Act, time on a leave of absence,
whether or not paid, shall count in determining service and Hours of Service.
1.33 Hourly Participant means a Participant who was a participant in the Teleflex
Incorporated Hourly Employees Pension Plan (Hourly Employees Plan) prior to the merger of the
Hourly Employees Plan with and into the Plan effective as of December 31, 2008 and/or who is
eligible to participate in the Plan pursuant to Appendix E hereto. The Plan benefit to which an
Hourly Participant is entitled shall be determined in accordance with the Plan and Appendix E
hereto. An individual who is an Hourly Participant and who ceases to be an Employee shall
nonetheless remain an Hourly Participant for purposes of benefit payments only, until all amounts
due him from the Plan have been paid. Notwithstanding any other provision of the Plan to the
contrary, no Employee whose initial date of hire is on or after January 1, 2006 (July 1, 2006 with
respect to an Employee who is a member of UAW Local 644 (Marine Limerick, PA) and who is covered
by a collective bargaining agreement between the Employer and UAW Local 644), may become an Hourly
Participant or accrue benefits under the
Hourly Employees Plan or Plan. Except as otherwise provided in Appendix E, no Hourly
Participant shall accrue an additional benefit under the Plan after December 31, 2008.
17
1.34 Investment Manager means person or organization who is appointed to direct the
investment of all or part of the Fund, and who is either registered in good standing as an
Investment Adviser under the Investment Advisers Act of 1940, a bank (as defined in the Investment
Advisers Act of 1940), or an insurance company qualified to perform investment management services
under the laws of more than one state of the United States, and who has acknowledged in writing
that he or it is a fiduciary with respect to the Plan.
1.35 Key Employee means any Employee or former Employee (whether living or deceased)
who, at any time during the Plan Year that includes the Determination Date, is (or was):
1.35.1 An officer of the Employer having annual compensation greater than $130,000 (as
adjusted under Section 416(i)(1) of the Code for Plan Years beginning after December 31, 2002);
1.35.2 A Five-Percent Owner; or
1.35.3 A one-percent owner of the Employer having annual compensation of more than $150,000.
For this purpose, annual compensation means compensation within the meaning of Section 415(c)(3) of
the Code. The determination of who is a Key Employee shall be made in accordance with Section
416(i)(1) of the Code and applicable Treasury Regulations and other guidance of general
applicability issued thereunder.
For purposes of determining ownership in the Employer under this Section, the employer aggregation
rules of Sections 414(b), 414(c) and 414(m) of the Code shall not apply.
1.36 Late Retirement Date means the actual date of retirement of a Participant who
remains employed by an Employer after reaching Normal Retirement Date.
1.37 Limitation Year means the Plan Year.
1.38 Monthly Plan Compensation means, prior to January 1, 1998, a Salaried
Participants monthly rate of base earnings for each Plan Year effective as of the May 1 preceding
the beginning of such Plan Year, including amounts the Salaried Participant elects to have his
Employer or an Employer that is not a Related Employer contribute to a cash or deferred
arrangement, but excluding overtime pay, bonuses, employer contributions to or payments under this
or any other employee benefit plan to which the Employer contributes, and like forms of additional
compensation; provided, however, that if a Salaried Participant is compensated at a weekly rate,
his monthly rate shall be deemed to be 4-1/3 times his weekly rate. A Salaried Participants rate
of base earnings on any May 1 during a period of absence that does not interrupt his Continuous
Service or Credited Service shall be deemed to be equal to his rate as of the May 1 next preceding
the beginning of such period of absence.
Effective January 1, 1998, Monthly Plan Compensation means the Compensation paid to a Salaried
Participant in a Plan Year for services rendered to an Employer divided by the number of full
months that the Salaried Participant was employed during the Plan Year by the Employer, subject to
the limits of Section 401(a)(17) of the Code.
1.39 Non-Key Employee means a Participant in the Plan (including a Beneficiary of
such Participant) who is not a Key Employee with respect to the Plan for the Plan Year.
18
1.40 Normal Retirement Age means, except as otherwise provided in an Appendix
hereto, age 65. Notwithstanding the foregoing, the Normal Retirement Age of a Salaried Participant
who is employed by an Employer as a pilot shall be age 60. If a Participant experiences a
Severance from Employment pursuant to the 2009 Voluntary Early Retirement Plan, the Participant
shall be credited with two (2) additional years of age for all Plan purposes.
1.41 Normal Retirement Date means, except as otherwise provided in an Appendix
hereto, the last day of the month in which a Participant reaches age 65. Notwithstanding the
foregoing, the Normal Retirement Date of a Salaried Participant who is employed by an Employer as a
pilot shall be the last day of the month in which the Salaried Participant reaches age 60.
1.42 Participant means a Salaried Participant, Hourly Participant, Arrow Salaried
Participant, Arrow Hourly Participant, and an Arrow Berks Participant.
1.43 Participating Employer means any subsidiary or affiliated organization of the
Sponsor electing the participate in the Plan with the consent of the Committee. A list of such
Participating Employers applicable to Salaried Participants is set forth in Appendix A, attached
hereto and made a part hereof, as it may be updated from time to time.
1.44 Permissive Aggregation Group means:
1.44.1 Each plan of the Employer included in a Required Aggregation Group; and
1.44.2 Each other plan of the Employer if the group of plans consisting of such plan and the
plan or plans described in Section 1.44.1, when considered as a single plan, meets the requirements
of Sections 401(a)(4) and 410 of the Code.
1.45 Plan means the Teleflex Incorporated Retirement Income Plan as set forth in
this document and the related trust agreement pursuant to which the Trust is maintained.
1.46 Plan Year means the 12-month period ending each December 31.
1.47 Pre-1998 Employee means an individual who was an Employee on December 31, 1997
and was either a Salaried Participant on such date or who was eligible on such date to become a
Salaried Participant once the requirements of Section 2.1 were met.
1.48 Qualified Joint and Survivor Annuity means an annuity for the life of the
Participant followed immediately thereafter by a survivor annuity for the life of his Spouse. The
survivor annuity shall be 50% of the amount of the annuity payable during the joint lives of the
Participant and his Spouse. The amount payable under the Qualified Joint and Survivor Annuity
shall in any event be the Actuarial Equivalent of the Participants Accrued Benefit payable in the
normal form of benefit for an unmarried Participant (normal form with respect to an Hourly
Participant). If, pursuant to a qualified domestic relations order described in Code Section
414(p), more than one individual is a designated Spouse, the amount of the survivor annuity payable
under this Section 1.48 shall not exceed the amount that would be paid if there were only one
surviving Spouse.
1.49 Related Employers means a controlled group of corporations (as defined in Code
Section 414(b)), trades or business (whether or not incorporated) which are under
19
common control (as defined in Code Section 414(c)), or an affiliated service group (as defined in Code Sections
414(m) and (o)).
1.50 Required Aggregation Group means:
1.50.1 Each plan of the Employer in which a Key Employee participated (regardless of whether
such plan has been terminated) during the five Plan Years ending on the Determination Date; and
1.50.2 Each other plan of the Employer that enables any plan described in Section 1.50.1 to
meet the requirements of Section 401(a)(4) or Section 410 of the Code, including any such plan
terminated within the five-year period ending on the Determination Date.
1.51 Required Beginning Date means April 1 of the calendar year following the later
of:
1.51.1 The calendar year in which the Participant reaches age 701/2; or
1.51.2 The calendar year in which the Participant has a Severance from Employment; provided,
that this Section 1.51.2 shall not apply in the case of a Participant who is a Five-Percent Owner
with respect to the Plan Year ending with the calendar year in which the Participant attains age
701/2.
1.52 Salaried Participant means an Employee who has met the eligibility requirements
of Article II and has begun to participate in the Plan. An individual who is a Salaried
Participant and who ceases to be an Employee shall nonetheless remain a Salaried Participant for
purposes of benefit payments only, until all amounts due him from the Plan have been paid.
Notwithstanding any other provision of the Plan to the contrary, no Employee whose initial date of
hire is on or after January 1, 2006, may become a Salaried Participant in the Plan or accrue
benefits under the Plan. Further, except as otherwise provided in the Plan, no Salaried
Participant shall accrue an additional benefit under the Plan after December 31, 2008.
1.53 Severance from Employment means an Employees separation from service with the
Employer such that the Employee no longer has an employment relationship with the Employer.
1.54 Social Security Retirement Age means the age used as the retirement age under
Section 216(l) of the Social Security Act, except that such Section shall be applied without regard
to the age increase factor, and as if the early retirement age under Section 216(l)(2) of such Act
were 62.
1.55 Sponsor means Teleflex Incorporated.
1.56 Spouse means, except as otherwise provided in an Appendix hereto, a
Participants lawful spouse at his Annuity Starting Date or Required Beginning Date or, if earlier,
his date of death; provided that a former Spouse shall be treated as the Spouse or surviving Spouse
to the extent provided under a qualified domestic relations order. To the extent that the Plan
treats a former Spouse of a Participant as the Spouse of such Participant for purposes of
Sections 401(a)(11) and 417 of the Code pursuant to a qualified domestic relations order, the
20
actual Spouse of such Participant shall not be treated as the Spouse of such Participant for such
purposes.
1.57 Total and Permanent Disability means, except as otherwise provided in an
Appendix hereto, a medically determinable disability of a permanent nature such that the
Participant is entitled to and receiving disability benefits under the Social Security Act or under
the Employers long-term salary continuation program.
1.58 Top-Heavy-Group means an Aggregation Group in which, as of the Determination
Date, the sum of:
1.58.1 The aggregate of the Account Balances of Key Employees under all Defined Contribution
Plans included in such Aggregation Group; and
1.58.2 The aggregate of the present value of cumulative accrued benefits for Key Employees
under all Defined Benefit Plans included in such Aggregation Group, exceeds 60% of the sum of such
aggregates determined for all Employees.
1.59 Top-Heavy Plan means, for a Plan Year, the Plan if the Top Heavy ratio as of
the Determination Date exceeds sixty percent (60%). The Top Heavy ratio is a fraction, the
numerator of which is the sum of the present value of Accrued Benefits of all Key Employees as of
the Determination Date and the contributions due as of the Determination Date, and the denominator
of which is a similar sum determined for all Employees. The Administrative Committee shall
calculate the Top Heavy ratio without regard to the Accrued Benefit of any Non-Key Employee who was
formerly a Key Employee. The Administrative Committee shall calculate the Top Heavy ratio by
disregarding the Accrued Benefit (including distributions, if any, of the Accrued Benefit) of an
individual who has not received credit for at least one Hour of Service with an Employer during the
one-year period ending on the Determination Date in such calculation. In addition, the
Administrative Committee shall calculate the Top Heavy ratio by including any part of any Accrued
Benefit distributed by reason of Severance from Employment, death or Total and Permanent Disability
(Disability with respect to Hourly Participants) in the one-year period ending on the Determination
Date and, for all other events, the five-year period ending on the Determination Date. The
Administrative Committee shall determine the present value of Accrued Benefits as of the most
recent valuation date for computing minimum funding costs falling within the twelve month period
ending on the Determination Date, whether or not the actuary performs a valuation that year, except
as Code Section 416 and the Treasury Regulations require for the first and second Plan Year of the
Plan. The Administrative Committee shall calculate the Top Heavy ratio, including the extent to
which it must take into account distributions, rollovers, and transfers, in accordance with Code
Section 416 and the Treasury Regulations thereunder.
If the Employer maintains other qualified plans (including a simplified employee pension plan), the
Plan is Top Heavy only if it is part of the Required Aggregation Group, and the Top Heavy ratio for
both the Required Aggregation Group and the Permissive Aggregation Group exceeds sixty percent
(60%). The Administrative Committee shall calculate the Top Heavy ratio in the same manner as
required by the first paragraph of this Section, taking into account all plans within the
Aggregation Group. To the extent the Administrative Committee must take into account distributions
to a Participant, the Administrative Committee shall include distributions from a terminated plan
that would have been part of the Required Aggregation Group if it were in existence on the
Determination Date. The Administrative Committee shall calculate the
present value of accrued benefits and the other amounts the Administrative Committee must
21
take into
account under qualified plans included within the group in accordance with the terms of those
plans, Code Section 416 and the Treasury Regulations thereunder. If an aggregated plan does not
have a valuation date coinciding with the Determination Date, the Administrative Committee shall
value the accrued benefits or accounts in the aggregated plan as of the most recent valuation date
falling within the twelve-month period ending on the Determination Date except as required by Code
Section 416 and applicable Treasury Regulations. The Administrative Committee shall calculate the
Top Heavy ratio with reference to the Determination Dates that fall within the same calendar year.
The accrued benefit of a Participant other than a Key Employee shall be determined under the
method, if any, that uniformly applies for accrual purposes under all defined benefit plans
maintained by the Employer; or if there is no such method, then as if such benefit accrued not more
rapidly than the slowest accrual rate permitted under the fractional rule of Code Section
411(b)(1)(C).
For purposes of valuing Accrued Benefits under the Plan and accrued benefits under any other
defined benefit plan taken into account in the Top Heavy ratio, the Administrative Committee shall
use the actuarial assumptions stated in Section 1.3.
1.60 TRIP Plan means the plan formerly known as the Teleflex Incorporated
Retirement Income Plan, that was merged into the Plan effective January 1, 1998.
1.61 Treasury Regulations means regulations promulgated under the Code by the
Secretary of the Treasury.
1.62 Trust means the legal entity created by the trust agreement between the Sponsor
and the Trustee, fixing the rights and liabilities with respect to controlling and managing the
Fund for the purposes of the Plan.
1.63 Trustee means the trustee or any successor trustee or trustees hereafter
designated by the Board of Directors and named in the trust agreement or any amendment thereto.
22
ARTICLE II. PARTICIPATION.
The provisions of this Article II apply only with respect to Employees of an Employer who are
eligible to become Salaried Participants. The eligibility and participation provisions applicable
to other Employees are set forth in Appendix E, F, G, or H hereto.
2.1 Participation.
2.1.1 Prior to January 1, 2004, except as provided in Section 2.2, each eligible Employee
shall become a Salaried Participant in the Plan as of the first day of the Plan Year coincident
with or immediately following the day he is first credited with six months of Continuous Service
and has reached age 201/2.
Except as provided in Section 2.2, each eligible Employee whose initial date of hire is on or after
January 1, 2004 but prior to January 1, 2006, shall become a Salaried Participant in the Plan as of
the earlier of (i) the first day of January or (ii) the first day of July coincident with or
immediately following the day he is first credited with six months of Continuous Service and has
reached age 21. In no event will an Employee whose initial date of hire occurs on or after January
1, 2006, become a Salaried Participant in the Plan.
2.1.2 Notwithstanding any provision of the Plan to the contrary, after January 31, 2004, no
Employee of Weck Surgical employed at Research Triangle Park, North Carolina, no Salaried Exempt
and no Salaried Non-Exempt Employee of TFX Medical employed at Jaffrey, New Hampshire, and no sales
representative of Pilling Surgical employed at Horsham, Pennsylvania shall become a new Salaried
Participant in the Plan.
2.2 Ineligible Employees. The following Employees (individuals effective January 1,
2004) shall be ineligible to become a Salaried Participant in the Plan:
2.2.1 An Employee who is employed by an entity that is not an Employer;
2.2.2 An Employee of an Employer who does not work at the locations listed in Appendix A;
2.2.3 Except as to an Employee at a location listed in Appendix A where hourly paid Employees
are eligible to participate, an Employee other than individual who is employed by the Employer on a
salaried basis or who is classified as a salaried Employee of the Employer;
2.2.4 Effective January 1, 2004, an Employee who is a member of a unit of Employees as to
which there is evidence that retirement benefits were the subject of good faith collective
bargaining, unless a collective bargaining agreement covering those Employees provides for their
participation in the Plan;
2.2.5 An Employee who is a Leased Employees, defined as any person who is not an Employee and
who provides services to the Employer if: (i) such services are provided pursuant to an agreement
between the Employer and any other person or entity; (ii) such person has performed services for
the Employer on a substantially full-time basis for a period of at least one year; and (iii) such
services are performed under the primary direction or control of the Employer;
23
2.2.6 An Employee who is a non-resident alien and who has no income from sources within the
United States;
2.2.7 An Individual who has been classified by an Employer as an independent contractor,
notwithstanding a contrary determination by any court or governmental agency;
2.2.8 Effective January 1, 2004, an individual who has been classified by an Employer as a per
diem employee, intern or special project employee;
2.2.9 Effective January 1, 2004, an Employee who is a member of a class of Employees who are
excluded from participation in the Plan, as specified in Appendix A;
2.2.10 Effective January 1, 2004, an Employee who has agreed in writing that he is not
entitled to participate in the Plan;
2.2.11 An Employee whose terms and conditions of employment do not provide for participation
in or entitlement to benefits under the Plan; and
2.2.12 An Employee whose initial date of hire is on or after January 1, 2006.
With the exception of the Employees listed in Section 2.2.12, the Benefits Group shall interpret
the list of persons who are ineligible to participate in the Plan, as set forth above, to comply
with Code Section 410(a)(1).
2.3 Time of Participation Excluded Employees. An Employee whose initial date of
hire is prior to January 1, 2006, and who otherwise would be eligible to be a Salaried Participant
in the Plan, but is excluded because of the application of any provision of Section 2.2 (other than
Section 2.2.12), shall become a Salaried Participant as of the first day of the month coincident
with or next following the date upon which the applicable provision of Section 2.2 (other than
Section 2.2.12) ceases to apply. A Salaried Participant who becomes subject to any provision of
Section 2.2 (other than 2.2.12) shall cease to accrue Credited Service as of the last day of the
month ending with or within which, any such provision becomes applicable.
2.4 Reemployed Individuals. A Salaried Participant who is reemployed by an Employer
as an eligible Employee under Sections 2.1 and 2.2 following a Break-in-Service shall again become
entitled to participate in the Plan and accrue Credited Service (prior to December 31, 2008 or such
later date required by applicable law) as of the first day of the month coincident with or next
following the date he is reemployed. With respect to Participants other than Salaried
Participants, the provisions regarding participation following reemployment are set forth in
Appendix E, F, G, or H, as applicable.
24
ARTICLE III. AMOUNT OF RETIREMENT BENEFITS.
3.1 Normal Retirement Benefit. A Salaried Participant who retires on his Normal
Retirement Date shall be entitled to the greatest of (i) his Accrued Benefit calculated under
Sections 3.1.1, 3.1.2, 3.1.3 and 3.1.4, (ii) the flat rate benefit calculated under Section 3.1.5,
or (iii) the minimum benefit under Section 3.8. Notwithstanding the foregoing, a Salaried
Participant who formerly participated in the TRIP Plan and who retires on or after his Normal
Retirement Date shall be entitled to his Accrued Benefit as calculated under Section 3.1.6. Such
benefit shall be payable in accordance with Article VI. The Normal Retirement Benefit of a
Participant who is not a Salaried Participant shall be determined pursuant to the Appendix
applicable to such Participant. Notwithstanding the preceding, except as otherwise provided in
the Plan, an Appendix or required by applicable law, no Participant shall accrue any additional
benefit under the Plan after December 31, 2008.
3.1.1 Participation Before July 1, 1982. The Accrued Benefit for each year of
participation before July 1, 1982 shall equal the sum of the amounts determined under Sections
3.1.1.1 and 3.1.1.2 below:
3.1.1.1 In the case of a Salaried Participant who was a Salaried Participant on
July 1, 1979 and who made contributions to the Plan for the month of June 1979, a
past service Accrued Benefit equal to the product of Section 3.1.1.1.1 and 3.1.1.1.2
below, where:
3.1.1.1.1 Is the Salaried Participants Credited Service on July 1, 1979,
and
3.1.1.1.2 Is the sum of 3.1.1.1.2.1 and 3.1.1.1.2.2:
3.1.1.1.2.1 1% of the Salaried Participants Monthly Plan
Compensation for the Plan Year beginning July 1, 1979, and
3.1.1.1.2.2 1% of the Salaried Participants Monthly Plan
Compensation for the Plan Year beginning July 1, 1979 that is in excess
of $550, if any; provided, however, that if the Salaried Participants
Monthly Plan Compensation averaged over the five years immediately
preceding the date of his Severance from Employment is less than his
Monthly Plan Compensation for the Plan Year beginning July 1, 1979, such
average shall be used in determining this portion of the Participants
Accrued Benefit; and
3.1.1.2 A monthly pension for each Plan Year beginning with July 1, 1979 and
ending on June 30, 1982, where the monthly pension for each such year shall be
determined as the product of 3.1.1.2.1 and 3.1.1.2.2 below:
3.1.1.2.1 4.16667%, and
3.1.1.2.2 The contributions made by the Salaried Participant for each such
Plan Year.
25
3.1.2 Participation After June 30, 1982 and Before July 1, 1989. The Accrued Benefit
for each year of participation after June 30, 1982 and before July 1, 1989 shall equal the product
of 3.1.2.1 and 3.1.2.2 below, where:
3.1.2.1 Is the Salaried Participants Credited Service for each such Plan
Year, and
3.1.2.2 Is the sum of:
3.1.2.2.1 1% of the Salaried Participants Monthly Plan Compensation for
each such Plan Year, and
3.1.2.2.2 1% of the Salaried Participants Monthly Plan Compensation for
each such Plan Year that is in excess of $550, if any.
3.1.3 Participation After June 30, 1989 and Before January 1, 1998. The Accrued
Benefit for each year of participation after June 30, 1989 and before January 1, 1998 (including
the short Plan Year from July 1, 1997 through December 31, 1997) shall equal the amount determined
under Section 3.1.3.1 or the amount determined under Section 3.1.3.2 below, whichever is
applicable, multiplied by a fraction, the numerator of which is the number of months the Salaried
Participant was an Employee eligible to accrue Credited Service and the denominator of which is 12:
3.1.3.1 In the case of a Salaried Participant whose Credited Service at the
beginning of any such Plan Year is less than 35 years, an Accrued Benefit equal to
the sum of 3.1.3.1.1 and 3.1.3.1.2 below:
3.1.3.1.1 1.375% of the Salaried Participants Monthly Plan Compensation
for the Plan Year up to $880, and
3.1.3.1.2 2.000% of the Salaried Participants Monthly Plan Compensation
for the Plan Year in excess of $880, if any.
3.1.3.2 In the case of a Salaried Participant whose Credited Service at the
beginning of any such Plan Year is equal to 35 years or more, an Accrued Benefit
equal to 1.833% of such Salaried Participants Monthly Plan Compensation for the Plan
Year.
3.1.4 Participation After December 31, 1997. The Accrued Benefit of a Salaried
Participant for each year of participation beginning after December 31, 1997 shall equal the amount
determined under Section 3.1.4.1 or the amount determined under Section 3.1.4.2 below, whichever is
applicable, multiplied by a fraction, the numerator of which is the number of months the Salaried
Participant was an Employee eligible to accrue Credited Service and the denominator of which is 12:
3.1.4.1 In the case of a Salaried Participant whose Credited Service at the
beginning of any such Plan Year is less than 35 years, an Accrued Benefit equal to
the sum of 3.1.4.1.1 and 3.1.4.1.2 below:
26
3.1.4.1.1 1.375% of the Salaried Participants Monthly Plan Compensation
for the prior Plan Year up to one-twelfth of the Appropriate Integration Level,
and
3.1.4.1.2 2.000% of the Salaried Participants Monthly Plan Compensation
for the prior Plan Year in excess of one-twelfth of the Appropriate Integration
Level, if any.
3.1.4.2 In the case of a Salaried Participant whose Credited Service at the
beginning of any such Plan Year is equal to 35 years or more, an Accrued Benefit
equal to 1.8333% of such Salaried Participants Monthly Plan Compensation for the
prior Plan Year.
For purposes of this Section 3.1.4, the Appropriate Integration Level for a Salaried Participant
who is a Pre-1998 Employee shall be as set forth in Appendix C. The Appropriate Integration Level
for all other Salaried Participants shall be as set forth in Appendix D.
3.1.5 Flat Rate Benefit. In no event shall the Accrued Benefit of a Salaried
Participant who retires at a Normal Retirement Date or a Late Retirement Date be less than $12.00
multiplied by the Salaried Participants years of Credited Service on such date.
3.1.6 TRIP Plan Participants.
3.1.6.1 The Accrued Benefit of a Salaried Participant who formerly participated
in the TRIP Plan and who was employed on December 31, 1997 by Mal Tool & Engineering,
Cepco, Inc. or STS/Klock shall be the greatest of (i) the sum of the Salaried
Participants accrued benefit under the TRIP Plan as of December 31, 1997 and the
Salaried Participants Accrued Benefit calculated under Section 3.1.4, (ii) the flat
rate benefit calculated under Section 3.1.5, or (iii) the TRIP Plan Benefit
calculated under Section 3.1.6.3 below. Such a Salaried Participants credited
service under the TRIP Plan shall not count as Credited Service under this Plan for
purposes of Section 3.1.1, Section 3.1.2 or Section 3.1.3.
3.1.6.2 The Accrued Benefit of a Salaried Participant who formerly participated
in the TRIP Plan who was employed on December 31, 1997 by Weck Closure Systems or
Pilling-Weck Surgical Instruments shall be the greater of (i) the sum of the Salaried
Participants accrued benefit under the TRIP Plan as of December 31, 1997 and the
Salaried Participants accrued benefit calculated under Section 3.1.4, or (ii) the
flat rate benefit calculated under Section 3.1.5. Such a Salaried Participants
credited service under the TRIP Plan shall not count as Credited Service under this
Plan for purposes of Section 3.1.1, Section 3.1.2 or Section 3.1.3.
27
3.1.6.3 A Salaried Participants TRIP Plan Benefit shall equal the sum of the
amounts determined under 3.1.6.3.1 and 3.1.6.3.2 below, subject to 3.1.6.3.3 and
3.1.6.3.4 below:
3.1.6.3.1 1.05% of the lesser of the Salaried Participants Average
Monthly Compensation or one-twelfth of his Covered Compensation determined on
the date of his Severance from Employment, multiplied by his Credited Service
to a maximum of 40 years; and
3.1.6.3.2 1.5% of the excess, if any, of the Salaried Participants
Average Monthly Compensation over one-twelfth of his Covered Compensation
determined on his date of his Severance from Employment, multiplied by his
Credited Service to a maximum of 40 years.
3.1.6.3.3 For a Participant with compensation for a plan year prior to
June 30, 1994 in excess of $150,000, in no event shall such Salaried
Participants benefit determined according to (A) and (B) above be less than
the sum of: (i) the Salaried Participants accrued benefit on June 30, 1994
frozen in accordance with Treasury Regulations Section 1.401(a)(4)-13; and (ii)
the Salaried Participants accrued benefit determined using the benefit formula
applicable on or after July 1, 1994 with respect to Credited Service earned on
or after July 1, 1994.
3.1.6.3.4 In no event shall a Salaried Participants benefit determined
according to (A) and (B) above be less than the Salaried Participants accrued
benefit as of July 31, 1989 (June 30, 1989 for employees who met the
description in Code Section 414(q)(1)(B) as of June 30, 1989) under Section 5.1
of the TRIP Plan in effect on July 31, 1989.
3.1.7 Notwithstanding any provision of the Plan to the contrary, the following individuals
shall receive no additional Credited Service for benefit accrual purposes for any period of
employment after January 31, 2004:
3.1.7.1 Employees of Weck Surgical employed at Research Triangle Park, North
Carolina;
3.1.7.2 Salaried Exempt and Salaried Non-Exempt Employees of TFX Medical
employed at Jaffrey, New Hampshire; and
3.1.7.3 Sales Representatives of Pilling Surgical employed at Horsham,
Pennsylvania (formerly Fort Washington, Pennsylvania) who were hired after December
23, 1993 and before March 28, 1997.
3.1.8 Notwithstanding any provision of the Plan to the contrary, except as otherwise provided
in an Appendix or required by applicable law, no individuals shall receive additional Credited
Service for benefit accrual purposes for any period of employment after December 31, 2008.
28
3.2 Late Retirement Benefit. A Salaried Participant who retires after June 30, 1989 on
his Late Retirement Date shall be entitled to his Accrued Benefit calculated to his Late Retirement
Date, as determined under Section 3.1. The Late Retirement Benefit of a Participant who is not a
Salaried Participant, if any, shall be determined pursuant to the Appendix applicable to such
Participant.
3.3 Early Retirement Benefit.
3.3.1 General Rule. The Early Retirement Benefit payable to a Salaried Participant
who retires on an Early Retirement Date shall equal his Accrued Benefit, based on the Salaried
Participants Credited Service at his Early Retirement Date. At the Salaried Participants option
such retirement benefit shall be payable either beginning on his Normal Retirement Date without
reduction, or beginning as of an Annuity Starting Date coincident with or subsequent to his Early
Retirement Date. In the event the Salaried Participant elects to have payments begin before his
Normal Retirement Date, the rate of the payments shall be reduced by 5/9 of 1% for each month by
which his Annuity Starting Date precedes his Normal Retirement Date. The Early Retirement Benefit
of a Participant who is not a Salaried Participant, if any, shall be determined pursuant to the
Appendix applicable to such Participant.
3.3.2 Weck TRIP Plan Participants. Notwithstanding Section 3.3.1, a Salaried
Participant who was employed by Weck Closure Systems or Pilling-Weck Surgical Instruments and was a
participant in the TRIP Plan on December 31, 1997 and who retires after attaining age 55 and being
credited with 10 years of Continuous Service, may irrevocably elect to have his benefit payments
begin as of the first day of any month after his retirement date and before attaining age 60. Such
benefit payment shall be based on the Salaried Participants Accrued Benefit under the TRIP Plan as
of December 31, 1997, reduced by .35% for each month that the Salaried Participants Annuity
Starting Date precedes his Normal Retirement Date. Once a Salaried Participant making such an
election attains age 60, his benefit payments will be based on the greater of (a) the amount
described in the preceding sentence, and (b) the amount the Salaried Participant would have been
entitled to under Section 3.3.1 had his benefit commenced at age 60. If a Salaried Participant
entitled to elect the commencement of payments prior to age 60 under this Section 3.3.2 does not make such an
election, but does elect to have payments begin between age 60 and his Normal Retirement Date, his
benefit payments will be based on the greater of (a) the Salaried Participants Accrued Benefit
under the TRIP Plan as of December 31, 1997, reduced by .35% for each month that the Salaried
Participants Annuity Starting Date precedes his Normal Retirement Date, and (b) the amount the
Salaried Participant is entitled to under Section 3.3.1.
3.3.3 Mal Tool TRIP Plan Participants. Notwithstanding Section 3.3.1, a Salaried
Participant who was employed by Mal Tool & Engineering, Cepco, Inc. or STS/Klock and was a
participant in the TRIP Plan on December 31, 1997 and who retires after attaining age 55 and being
credited with 10 Years of Continuous Service, may irrevocably elect to have his benefit payments
begin as of the first day of any month after his retirement date and before attaining age 60. Such
benefit payments shall be based on the Salaried Participants TRIP Plan Benefit, as calculated
under Section 3.1.6.3, reduced by .35% for each month that the Salaried Participants Annuity
Starting Date precedes his Normal Retirement Date. Once a Salaried Participant making such an
election attains age 60, his benefit payments will be based on the greater of (a) the amount
described in the preceding sentence, or (b) the amount the Salaried Participant would have been
entitled to under Section 3.3.1 had his benefit commenced at age 60. If a Salaried Participant
entitled to elect the commencement of payments prior to age 60 under this Section 3.3.3 does not
make such an election, but does elect to have payments begin
29
between age 60 and his Normal Retirement Date, his benefit payments will be based on the greater of (a) the Salaried
Participants TRIP Plan Benefit, as calculated under Section 3.1.6.3, reduced by .35% for each
month that the Salaried Participants Annuity Starting Date precedes his Normal Retirement Date,
and (b) the amount the Salaried Participant is entitled to under Section 3.3.1.
3.4 Disability Retirement Benefit.
3.4.1 The Disability Retirement Benefit payable to a Salaried Participant who experiences a
Severance from Employment due to a Total and Permanent Disability before his Normal Retirement
Date, but after he has been credited with two or more years of Credited Service, is a benefit
beginning on his Normal Retirement Date equal to the Accrued Benefit the Salaried Participant would
have received had he remained employed by the Participating Employer during such time as he is
Totally and Permanently Disabled. For purposes of computing a Salaried Participants Accrued
Benefit under this Section 3.4.1, he shall receive credit for Continuous Service and Credited
Service for the period of his Total and Permanent Disability and it shall be assumed that such
Salaried Participants Monthly Plan Compensation during his period of Total and Permanent
Disability is that in effect immediately before the beginning of the Total and Permanent
Disability. Such benefit shall be payable in accordance with Article VI. In the event such
Salaried Participant (a) ceases to have a Total and Permanent Disability before his Normal
Retirement Date and is not thereafter reemployed by the Participating Employer, (b) dies before his
Normal Retirement Date, or (c) elects to begin receiving an Early Retirement Benefit, the Salaried
Participants Continuous Service and Credited Service shall be determined as of the date such
Salaried Participant ceases to be disabled, dies or begins to receive his Early Retirement Benefit,
and his further benefit entitlement, if any, shall be based upon such Continuous Service and
Credited Service. The Disability Retirement Benefit of a Participant who is not a Salaried
Participant, if any, shall be determined pursuant to the Appendix applicable to such Participant.
3.4.2 In lieu of the benefit accrual under Section 3.4.1, a Salaried Participant who
experiences a Severance from Employment due to a Total and Permanent Disability before his Normal
Retirement Date, but after he has been credited with 10 or more years of Continuous Service, may
elect to receive a reduced benefit beginning on the first day of any month following the month in
which he reaches age 60, if he is then disabled. For purposes of computing a Salaried
Participants Accrued Benefit under this Section 3.4.2, he shall receive credit for Continuous
Service and Credited Service for the period of his Total and Permanent Disability up to the month
payment of the reduced benefit begins, and it shall be assumed that such Salaried Participants
Monthly Plan Compensation during his period of Total and Permanent Disability is that in effect
immediately before the beginning of the Total and Permanent Disability. Such benefit shall be
payable in accordance with Article VI. In the event such Salaried Participant ceases to be disabled
before his Annuity Starting Date and is not thereafter reemployed by the Employer, or dies or
elects to begin receiving an Early Retirement Benefit, the Salaried Participants Continuous
Service and Credited Service shall be determined as of the date such Salaried Participant ceases to
be disabled, dies or begins to receive his Early Retirement Benefit, and his further benefit
entitlement, if any, shall be based upon such Continuous Service and Credited Service. If a
Salaried Participant receiving benefit payments hereunder ceases to be disabled before his Normal
Retirement Date and is not thereafter reemployed by the Employer, such Salaried Participants
Continuous Service and Credited Service shall be determined as of the one year anniversary of the
date of the Salaried Participants last benefit payment hereunder. In addition, such Salaried
Participants benefit payments hereunder shall
30
be discontinued until he again qualifies for a benefit and his retirement benefit, if any, shall be adjusted in accordance with Section 6.8, if he
again becomes an eligible Employee.
3.5 Vested Deferred Retirement Benefit. A Salaried Participant who experiences a
Severance from Employment before his Normal Retirement Date for any reason other than early
retirement, death or Total and Permanent Disability, and who has not been credited with 10 years of
Continuous Service, shall be entitled to begin receiving payment of his Accrued Benefit at his
Normal Retirement Date. A Salaried Participant who experiences a Severance from Employment before
his Normal Retirement Date for any reason other than early retirement, death or Total and Permanent
Disability, and who has been credited with 10 or more years of Continuous Service, shall be
entitled to a benefit equal to the amount determined under Section 3.5.1 or Section 3.5.2, as the
Salaried Participant shall elect. Vested terminated Salaried Participants who were participants in
the TRIP Plan on December 31, 1997 shall also be entitled to elect benefit payments as provided in
Section 3.5.3 or 3.5.4, as applicable. Any benefit under this Section 3.5 shall be paid in
accordance with Article VI. The Vested Deferred Retirement Benefit of a Participant who is not a
Salaried Participant, if any, shall be determined pursuant to the Appendix applicable to such
Participant.
3.5.1 The Salaried Participants Accrued Benefit, beginning on the first day of any month
following the month in which he reaches age 60, reduced as provided in Section 3.3.1, or
3.5.2 A lump sum payment equal to the amount of such Salaried Participants Accumulated
Contributions on the date of his Severance from Employment, plus a net remaining monthly benefit
beginning on the first day of any month following the month in which he reaches age 60, as the
Salaried Participant elects. The amount of such net remaining monthly benefit shall be the excess,
if any, of the amount determined under Section 3.5.2.1 below, over the amount determined under
Section 3.5.2.2 below, with such excess multiplied by the percentage determined under Section
3.5.2.3 below:
3.5.2.1 The Salaried Participants Accrued Benefit on the date of his Severance
from Employment.
3.5.2.2 The pension value of the Salaried Participants Accumulated
Contributions, which shall be the continued product of 3.5.2.2.1, 3.5.2.2.2 and
3.5.2.2.3 below:
3.5.2.2.1 The Salaried Participants Accumulated Contributions as of the
last day of the Plan Year in which his Severance from Employment occurs,
accrued to the Salaried Participants Normal Retirement Date at 5% interest,
per year, compounded annually.
3.5.2.2.2 The interest rate prescribed in Section 1.3.
3.5.2.2.3 1/12.
3.5.2.3 100% minus 5/9 of 1% for each month by which the start of the net
remaining monthly benefit precedes the Salaried Participants Normal Retirement Date.
31
3.5.3 Weck TRIP Plan Participants. A vested terminated or retired Salaried
Participant who was employed by Weck Closure Systems or Pilling-Weck Surgical Instruments and was a
participant in the TRIP Plan on December 31, 1997, may irrevocably elect to have his benefit
payments begin as of the first day of any month after he has attained age 55 and before his Normal
Retirement Date. Such benefit payment shall be based on the Salaried Participants Accrued Benefit
under the TRIP Plan as of December 31, 1997, reduced for commencement prior to his Normal
Retirement Date in accordance with the actuarial factors used under the TRIP Plan at December 31,
1997, as described in Appendix B. If such a Salaried Participant has been credited with 10 years
of Continuous Service and elects to have payments commence before he attains age 60, upon his
attainment of age 60 his benefit payments will be based on the greater of (a) the amount described
in the preceding sentence, and (b) the amount the Salaried Participant would have been entitled to
under Section 3.5.1 or Section 3.5.2 had his benefit commenced at age 60. If such a Salaried
Participant has been credited with 10 years of Continuous Service and elects to have payments
commence on or after he attains age 60 and before his Normal Retirement Date, his benefit payments
will be based on the greater of (a) the Salaried Participants Accrued Benefit under the TRIP Plan
as of December 31, 1997, reduced for commencement prior to his Normal Retirement Date in accordance
with the actuarial factors used under the TRIP Plan at December 31, 1997, as described in Appendix
B, and (b) the amount the Salaried Participant is entitled to under Section 3.5.1 or Section 3.5.2.
3.5.4 Mal Tool TRIP Plan Participants. A vested terminated or retired Salaried
Participant who was employed by Mal Tool & Engineering, Cepco, Inc. or STS/Klock and was a
participant in the TRIP Plan on December 31, 1997, may irrevocably elect to have his benefit
payments begin as of the first day of any month after he has attained age 55 and before his Normal
Retirement Date. Such benefit payment shall be based on the Salaried Participants TRIP Plan
Benefit, as calculated under Section 3.1.6.3, reduced for commencement prior to his Normal
Retirement Date in accordance with the actuarial factors used under the TRIP Plan at December 31,
1997, as described in Appendix B. If such a Salaried Participant has been credited with 10 years
of Continuous Service and elects to have payments commence before he attains age 60, upon his
attainment of age 60 his benefit payments will be based on the greater of (a) the amount described
in the preceding sentence, and (b) the amount the Salaried Participant would have been entitled to
under Section 3.5.1 or Section 3.5.2 had his benefit commenced at age 60. If such a Salaried
Participant has been credited with 10 years of Continuous Service and elects to have payments
commence on or after he attains age 60 and before his Normal Retirement Date, his benefit payments
will be based on the greater of (a) the Salaried Participants TRIP Plan Benefit, as calculated
under Section 3.1.6.3, reduced for commencement prior to his Normal Retirement Date in accordance
with the actuarial factors used under the TRIP Plan at December 31, 1997, as described in Appendix
B, and (b) the amount the Salaried Participant is entitled to under Section 3.5.1 or Section 3.5.2.
3.6 Return of Accumulated Contributions. An individual who was a Salaried Participant
in the Plan on June 30, 1982 and who experiences a Severance from Employment before his Normal
Retirement Date for any reason other than death or Total and Permanent Disability before he has
been credited with five years of Continuous Service shall be entitled to receive only the amount of
his Accumulated Contributions in a lump sum within six months following such Severance from
Employment.
3.7 Restoration of Accrued Pension Benefit. If in connection with his Severance from
Employment, a Salaried Participant receives a lump sum distribution of his Accumulated
Contributions in accordance with Section 3.6, and such Salaried Participant later returns to
employment with the Employer and again becomes eligible to participate in the Plan, he may
32
repay the full amount of the lump sum distribution of his Accumulated Contributions he received at the
earlier Severance from Employment, plus an amount equal to the interest rate in effect under the
definition of Accumulated Contributions in Section 1.2, compounded annually from the date of the distribution to the date of the repayment. The Administrative Committee shall
determine the period for repayment; provided that any such period shall not end earlier than the
fifth anniversary of the Salaried Participants Break-in-Service, as described in Section 1.13. In
such event, the Salaried Participants Continuous Service, Credited Service and Accrued Benefit,
determined at the earlier Severance from Employment, shall be restored.
3.8 Minimum Benefit. This Section applies to a Salaried Participant who has
Accumulated Contributions under the Plan and who becomes eligible to elect an Early Retirement Date
or reaches his Normal Retirement Date. Such Salaried Participants minimum benefit under the Plan
shall be equal to the Salaried Participants Accumulated Contributions, minus the sum of amounts
paid to such Salaried Participant, his surviving Spouse, or other Beneficiary under all other
Sections of this Article III or Article V. The minimum benefit shall be paid to the Salaried
Participants Beneficiary in accordance with Section 6.4.
3.9 Medicare Part B Reimbursement. Each Salaried Participant who on or after July 1,
1976 but before January 1, 1993, (a) retires on his Early Retirement Date, Normal Retirement Date
or Late Retirement Date, or (b) terminates his employment due to a Total and Permanent Disability,
and whose benefit payments have commenced, shall receive reimbursement for the Medicare Part B
premium for himself and his spouse for each month in which the Salaried Participant or his spouse
is eligible for Medicare Part B coverage beginning with the month in which the Participant or his
spouse attains age 65. The maximum monthly Medicare Part B premium which will be reimbursed is
$46.10. The retiree will be responsible for any increase in premium over that amount. No benefit
shall be paid under this Section 3.9 to a Participant who is only entitled to a vested deferred
retirement benefit under 3.5. For each Participant who, on or after January 1, 1993, but before
December 31, 2001, (a) retires on his Early Retirement Date, Normal Retirement Date or Late
Retirement Date, or (b) terminates his employment due to a Total and Permanent Disability, and
whose benefit payments have commenced, shall receive reimbursement for the Medicare Part B premium
for himself and his Spouse for each month in which the Salaried Participant or his Spouse is
eligible for Medicare Part B coverage beginning with the month in which the Salaried Participant or
his spouse attains age 65. This reimbursement is subject to the $46.10 maximum and shall be
reduced by the following percentages according to the date of retirement.
For Retirement dates: | Reimbursement shall be reduced by: | |||
1/l/1993 12/31/1993 |
10 | % | ||
1/l/1994 12/31/1994 |
20 | % | ||
1/l/1995 12/31/1995 |
30 | % | ||
1/l/1996 12/31/1996 |
40 | % | ||
1/l/1997 12/31/1997 |
50 | % | ||
1/l/1998 12/31/1998 |
60 | % | ||
1/l/1999 12/31/1999 |
70 | % | ||
1/l/2000 12/31/2000 |
80 | % | ||
1/l/2001 12/31/2001 |
90 | % |
No benefit shall be paid under this Section 3.9 to a Salaried Participant with a retirement
date after December 31, 2001, and no benefit shall be paid under this Section 3.9 to a Participant
whose participation in the Plan began on January 1, 1998 based on his employment
33
with Mal Tool & Engineering, Cepco, Inc., STS/Klock, Weck Closure Systems or Pilling-Weck Surgical Instruments, or
to any other Participant hired after such date by these Participating Employers.
3.10 Transfer of Employment. Prior to January 1, 2009, upon the transfer of an
ineligible Employee to a status such that the Employee is eligible to be a Salaried Participant in
the Plan, the Employee shall be eligible to be a Salaried Participant in the Plan on the first day of the month coincident
with or immediately following the date on which the Employees status changed.
3.11 Preservation of Accrued Benefit. In no event shall the Accrued Benefit of a
Salaried Participant who was a Salaried Participant in the Plan as of July 1, 1989 be less than the
Accrued Benefit of such Salaried Participant under the Plan immediately before such date.
34
ARTICLE IV. VESTING.
4.1 Rate of Vesting General Rule. A Salaried Participant shall have no vested
interest in his Accrued Benefit until he has been credited with five years of Continuous Service,
at which time he shall have a 100% vested interest in his Accrued Benefit. In any event, a
Salaried Participant shall have a 100% vested interest in his Accrued Benefit upon reaching his
Normal Retirement Age while employed by the Employer. The Committee or its delegate may determine
whether and to what extent service with an acquired, constituent or predecessor company, or service
with another company from which a plant or business is acquired, shall be deemed to be Continuous
Service for purposes of Plan. Further, the Committee or its delegate shall have the authority to
accelerate the vesting of a Participant, except for a Participant who is a Section 16 Officer, as
defined in Rule 16a-1 issued under the Securities Exchange Act of 1934, so long as such
acceleration satisfies the requirements of Code Section 401(a)(4) and the Treasury Regulations
thereunder. Further, to the extent a divestiture agreement that has been approved by the Board or
its delegate provides for the acceleration of vesting for certain Participants, the Plan shall be
treated as being amended pursuant to the terms of such divestiture agreement with respect to such
Participants. The vesting provisions applicable to the Accrued Benefit of a Participant who is
not a Salaried Participant shall be determined pursuant to the Appendix applicable to such
Participant.
4.2 Full Vesting in Accumulated Contributions. A Salaried Participant shall be 100%
vested in his Accumulated Contributions at all times.
35
ARTICLE V. DEATH BENEFITS.
5.1 Death of Vested Participant Before Annuity Starting Date. If a Salaried
Participant having a vested interest in his Accrued Benefit, dies before his Annuity Starting Date,
and such Salaried Participant is married on his date of death, except as otherwise provided in
Section 6.9, his surviving Spouse shall receive a death benefit as provided in Section 5.2. The
death benefit provisions applicable with respect to a Participant who is not a Salaried Participant
shall be determined pursuant to the Appendix applicable to such Participant.
5.2 Amount and Time of Payment of Vested Terminated Participants Death Benefit.
5.2.1 The monthly death benefit payable under Section 5.1 to the Spouse of a Salaried
Participant who dies before his first possible Annuity Starting Date shall be equal to the amount
the Spouse would have received if the Salaried Participant had died the day after having begun to
receive payments as of his first possible Annuity Starting Date having elected to receive his
benefit in the form of a Qualified Joint and Survivor Annuity. Subject to the lump sum payment
provisions of Section 6.7, the benefit shall be payable for the life of the Spouse beginning on the
Spouses Annuity Starting Date under Section 1.6.3.
5.2.2 The monthly death benefit payable under Section 5.1 to the Spouse of a Salaried
Participant who dies on or after his first possible Annuity Starting Date shall be equal to the
amount the Spouse would have received if the Salaried Participant had elected to receive his
benefit in the form of a Qualified Joint and Survivor Annuity on the day before his death. Subject
to the lump sum payment provisions of Section 6.7, the benefit shall be payable for the life of the
Spouse beginning on the date of the Salaried Participants death.
5.3 Death of Participant On or After Retirement Date.
5.3.1 If upon the last to occur of (A) the death of a Salaried Participant who has failed to
elect a benefit other than a Qualified Joint and Survivor Annuity form of benefit and who (i)
retired on his Early Retirement Date, Normal Retirement Date or Late Retirement Date, (ii)
experienced a Severance from Employment for reasons other than retirement, death or Total and
Permanent Disability and who has been credited with 10 years of Continuous Service, or (iii)
experienced a Severance from Employment for reasons other than retirement, death or Total and
Permanent Disability and who has been credited with 10 years of Continuous Service and who receives
a benefit under Section 3.4.2, or (B) the death of such Salaried Participants Spouse, the total of
the benefit payments to the Salaried Participant and his Spouse are less than the amount of such
Salaried Participants Accumulated Contributions, the Beneficiary designated by the last to die of
the Salaried Participant and his Spouse shall receive a benefit, in the form of a lump sum, equal
to the Salaried Participants Accumulated Contributions reduced by the aggregate amount of the
benefit payments to the Salaried Participant and his Spouse.
5.3.2 If upon the death of a Salaried Participant who has elected the monthly payments for
life form of benefit described in Section 6.2, and who (A) experienced a Severance from Employment
on his Early Retirement Date, Normal Retirement Date or Late Retirement Date, (B) experienced a
Severance from Employment for reasons other than retirement, death or Total and Permanent
Disability and who has been credited with ten years of Continuous Service, or (C) experienced a
Severance from Employment for reasons other than retirement, death or Total and Permanent
Disability, and who has been credited with 10 years of
36
Continuous Service and who receives a benefit under Section 3.4.2, the number of benefit payments to such Salaried Participant is less
than 60, such Salaried Participants Beneficiary shall receive a benefit in the form of a lump sum,
in an amount equal to the amount of such Salaried Participants benefit payments multiplied by 60
and reduced by the aggregate amount of such benefit payments to the Salaried Participant.
5.3.3 If upon the death of a surviving Spouse receiving benefit payments pursuant to Section
5.1, the aggregate amount of such benefit payments is less than the amount of such Salaried
Participants Accumulated Contributions on the date of his death, the Salaried Participants Beneficiary
shall receive a benefit in the form of a lump sum, in an amount equal to such Salaried
Participants Accumulated Contributions on the date of his death reduced by the aggregate amount of
benefit payments to the Salaried Participant and Salaried Participants surviving Spouse.
5.4 No Other Death Benefits. Except as provided in this Article V or in accordance
with a form of benefit elected under Article VI, no death benefits shall be payable with respect to
a Salaried Participants Accrued Benefit under the Plan.
5.5 Military Death Benefits. In addition to the rights under Code Section 414(u)
provided by the provisions of this Plan, in the case of a Participant who dies on or after January
1, 2007, while performing Qualified Military Service (as defined in Code Section 414(u)), the
survivors of the Participant shall be entitled to any additional benefits (other than benefit
accruals relating to the period of Qualified Military Service as provided by Code Section 414(u))
that are provided under the Plan assuming the Participant resumed and then terminated employment on
account of death. However, the foregoing sentence shall not provide any additional benefit
accruals, and the deemed resumption of employment of the Participant shall be applied only to
determine the eligibility of a Beneficiary for any pre-retirement death benefits, and only to the
extent required by applicable guidance, as incorporated herein.
37
ARTICLE VI. PAYMENT OF RETIREMENT BENEFITS.
6.1 Annuity Payment Date. Any benefit due a Participant, surviving Spouse or other
Beneficiary under this Article VI shall begin no later than 60 days following the close of the Plan
Year in which occurs the latest of:
6.1.1 The Participants Normal Retirement Date;
6.1.2 The tenth anniversary of the year in which the Participant commenced participation in
the Plan; or
6.1.3 The Participants actual Severance from Employment,
unless the Participant, Spouse or other Beneficiary elects otherwise. Subject to Section 6.7 and
Section 6.9, a Participant, Spouse or other Beneficiary may elect to have distribution made, or
begin, later than a date specified in Section 6.1.1, 6.1.2, or 6.1.3 above.
6.2 Normal Form of Retirement Benefit Unmarried Salaried Participants. The normal
form of retirement benefit for an unmarried Salaried Participant shall be an annuity for the life
of the Salaried Participant continuing until the last payment due before his death (single life
annuity with payments guaranteed for five years for a Pre-1998 Employee). Subject to the notice
and election procedures of Section 6.6, such a Salaried Participant may elect an optional form of
payment under Section 6.4. The normal form of benefit for an unmarried Participant who is not a
Salaried Participant shall be determined pursuant to the Appendix applicable to such Participant.
6.3 Normal Form of Retirement Benefit Married Salaried Participants. The normal
form of retirement benefit for a married Salaried Participant shall be a Qualified Joint and
Survivor Annuity. Such a Salaried Participant may elect an optional form of benefit under Section
6.4. The Salaried Participants election of an optional form of benefit will be valid only if his
Spouse consents to his election in writing, signed before a notary public, pursuant to the notice
and election procedures set forth in Section 6.6. The normal form of benefit for a married
Participant who is not a Salaried Participant shall be determined pursuant to the Appendix
applicable to such Participant.
6.4 Optional Forms of Retirement Benefit Payment. Subject to the notice and election
procedures in Section 6.6, a Salaried Participant may elect one of the following forms of benefit
payment in lieu of the normal form of benefit payment provided for in Section 6.2 or Section 6.3,
each of which shall be the Actuarial Equivalent, as defined in Section 1.3, of the normal form of
benefit payment for an unmarried Salaried Participant, as described in Section 6.2:
6.4.1 An annuity for the life of the Salaried Participant;
6.4.2 A joint and survivor annuity providing an annuity for the life of the Salaried
Participant with either 50%, 66-2/3% or 100% of such benefit (as elected by the Salaried
Participant) continuing after his death for the remaining lifetime of his Beneficiary; or
6.4.3 An annuity for the life of the Salaried Participant, with payments to the Salaried
Participant and his Beneficiary (or the estate of the last of the two to survive) guaranteed for a
period of 5 or 10 years.
38
6.4.4 For Plan Years beginning after December 31, 2007, a Salaried Participant may elect a
Qualified Optional Survivor Annuity. A Qualified Optional Survivor Annuity is:
6.4.4.1 A joint life annuity payable for the life of the Salaried Participant,
with continuation of payments as a survivor annuity for the remaining life of a
surviving Spouse at a rate of seventy-five percent (75%) of the rate payable during
the Salaried Participants lifetime; and
6.4.4.2 The Actuarial Equivalent of the normal form of benefit payment for an
unmarried Salaried Participant, as described in Section 6.2.
If the Qualified Optional Survivor Annuity is not actuarially equivalent to the Qualified Joint and
Survivor Annuity described in Section 6.3, Spousal consent is required for a Salaried Participant
to waive the Qualified Joint and Survivor Annuity and elect the Qualified Optional Survivor
Annuity.
No benefit may be elected for a period extending beyond the life expectancy, on the Annuity
Starting Date, of a Salaried Participant and his Beneficiary. In addition, the Actuarial
Equivalent present value of the benefit payable to the Salaried Participant must be more than 50%
of the Actuarial Equivalent present value of the benefit payable to him and his Beneficiary unless
his Beneficiary is his Spouse.
The optional forms of benefit for a Participant who is not a Salaried Participant shall be
determined pursuant to the Appendix applicable to such Participant.
6.5 Special Optional Form of Retirement Benefit Payments for TRIP Plan Participants.
A Salaried Participant who was a TRIP Plan participant may elect, subject to the notice and
election procedures in Section 6.6, and in lieu of one of the normal forms of benefit and optional
forms of benefit described above, the additional optional form of benefit described below, which
shall be the actuarial equivalent (using the 1983 Group Annuity Mortality Tables for males, set
back one year for retirees and five years for beneficiaries and an interest rate of 7 1/2%) of the
normal form of benefit payment for an unmarried Salaried Participant, as described in Section 6.2:
6.5.1 A retirement benefit payable for the life of the Salaried Participant, but in the event
of the death of the Salaried Participant prior to the receipt of retirement benefits at least equal
to the lump sum value of the Salaried Participants normal form of benefit, calculated in
accordance with Section 1.3, the excess of the lump sum value over the retirement benefit received
by the Salaried Participant shall be paid to the Salaried Participants Beneficiary.
6.6 Election of Benefits Notice and Election Procedures.
6.6.1 Initial Notice and Election. Not earlier than 180 days (90 days for Plan Years
beginning before January 1, 2007), but not later than 30 days (seven days if the 30-day period is
waived by the Participant and the Participants Spouse, if applicable) before the Participants
Annuity Starting Date, the Benefits Group shall provide a notice to a Participant who is eligible
to make a distribution election under the Plan. The notice shall describe the terms and conditions
of the normal form of benefit (qualified annuity with respect to Hourly Participants) payable to
him, explain the optional forms of benefit available under the Plan, including the eligibility
conditions, material features and relative values of those options, explain the Participants right
to make, and the financial effect of, an election to waive the normal form
39
of benefit (qualified annuity with respect to Hourly Participants), explain the rights of the Participants Spouse (if
the Participant is married), explain the Participants right to make, and the effect of, a
revocation of a previous election to waive the normal form of benefit (qualified annuity with
respect to Hourly Participants), and explain the Participants right to defer distribution until he
attains the later of Normal Retirement Age or age 62 in a manner that would satisfy the notice
requirements of Code Section 417(a)(3) and Treasury Regulations Section 1.417(a)(3)-1. Notices
given in Plan Years beginning after December 31, 2006, shall also include a description of how much
larger benefits will be if the commencement of distribution is deferred. The notice shall advise
the Participant that his benefit shall be paid in the normal form (qualified annuity with respect to Hourly
Participants) unless within the election period before his Annuity Starting Date, he notifies the
Benefits Group of an election to receive a different form of benefit, and, if he is married:
6.6.1.1 His Spouse (to whom the survivor annuity is payable under the Qualified
Joint and Survivor Annuity) consents in writing to the waiver election;
6.6.1.2 The Spouses consent acknowledges the effect of the waiver election and
is witnessed by a notary public or a member of the Benefits Group;
6.6.1.3 The Spouse consents to the alternate form of payment designated by the
Participant or to any change in that designated form of payment; and
6.6.1.4 Unless the Spouse is the Participants sole primary Beneficiary, the
Spouse consents to the Participants Beneficiary designation or to any change in the
Participants Beneficiary designation.
The Spouses consent to a waiver of the Qualified Joint and Survivor Annuity is irrevocable, unless
the Participant revokes the waiver election. The Spouse may execute a blanket consent to any form
of payment designation or to any Beneficiary designation made by the Participant, if the blanket
consent acknowledges the Spouses right to limit that consent to a specific designation but, in
writing, waives such right.
The Benefits Group may accept as valid a waiver election which does not satisfy the spousal consent
requirements of this Section if the Benefits Group establishes the Participant does not have a
Spouse, the Benefits Group is not able to locate the Participants Spouse, or other circumstances
exist under which the Secretary of the Treasury will excuse the consent requirement. If the
Participants Spouse is legally incompetent to give consent, the Spouses legal guardian (even if
the guardian is the Participant) may give consent. Also, if the Participant is legally separated
or has been abandoned (within the meaning of local law) and the Participant has a court order to
such effect, Spousal consent is not required unless a qualified domestic relations order provides
otherwise. Any consent necessary under this Section shall be valid only with respect to a Spouse
who signs the consent, or, in the event of a deemed permissible election, the designated Spouse (if
any). Additionally, a Participant may revoke a prior waiver without the consent of his Spouse at
any time before the Annuity Starting Date. The number of revocations shall not be limited. Any
new wavier or change of the terms of a specific consent shall require a new Spousal consent.
6.6.2 Election Period; Extension of Election Period. A Participants election period
under this Section 6.6 shall be the 180-day (90-day prior to January 1, 2007) period ending on his
Annuity Starting Date. If, by not later than the day before his Annuity Starting
40
Date, the
Participant notifies the Benefits Group in writing of an election not to take the Qualified Joint
and Survivor Annuity, and his Spouse has consented to such election, his benefit shall be paid in
the alternate form selected by the Participant. However, if by not later than the day before his
Annuity Starting Date, the Participant requests the Benefits Group to furnish him with additional
information relating to the effect of the Qualified Joint and Survivor Annuity, the election period
under this Section 6.6.2 shall be extended and his Annuity Starting Date shall be postponed to a
date not later than 180 days (90 days prior to January 1, 2007) following the furnishing to him of
the additional information.
The written explanation described in Section 6.6.1 of the Plan may be provided to the Participant
after his Annuity Starting Date (as defined in Treasury Regulation Section 1.401(a)-20, Q&A-10).
In such a case, the benefit election period must run for at least 30 days after the written
explanation described in Section 6.6.1 is provided to the Participant, and the Participants actual
benefit commencement date shall be after his Annuity Starting Date.
6.6.3 Change of Election Optional Form of Benefit. Any Participant electing an
optional form of benefit may revoke such election and file a new election with the Benefits Group
at any time prior to the Participants Annuity Starting Date. Upon the Participants Annuity
Starting Date, his election shall become irrevocable.
6.7 Payment of Small Benefits.
6.7.1 Payment Before Annuity Starting Date. The Benefits Group shall direct the
Trustee to make a single payment to a Participant who is a former Employee, or a surviving Spouse
of a vested Participant who died before his Annuity Starting Date, of the Actuarial Equivalent
present value of the benefit payable to that Participant, surviving Spouse, or other Beneficiary
before his applicable Annuity Starting Date if that Actuarial Equivalent present value does not
exceed $5,000 without the consent of the Participant, surviving Spouse, or other Beneficiary. Such
payment shall fully discharge all Plan liabilities with respect to such benefit.
Effective for distributions made on or after March 28, 2005, if a Participant experiences a
Severance from Employment for any reason, and the Actuarial Equivalent present value of the
Participants vested Accrued Benefit is $5,000 or less at the time of such Severance from
Employment, the Benefits Group shall direct the Trustee to distribute such benefit without the
Participants consent as soon as administratively feasible as follows:
6.7.1.1 If the Actuarial Equivalent present value of the Participants vested
Accrued Benefit is $1,000 or less and the Participant does not make an affirmative
election to have such amount paid directly to an Eligible Retirement Plan in
accordance with Section 6.10 of the Plan, such amount shall be paid directly to the
Participant in a cash lump sum.
6.7.1.2 If the Actuarial Equivalent present value of a Participants vested
Accrued Benefit is more than $1,000 and does not exceed $5,000 and the Participant
does not affirmatively elect to have such amount paid directly to him, or to an
Eligible Retirement Plan in accordance with Section 6.10 of the Plan, such amount
shall be paid directly to an individual retirement account or annuity under Section
408 of the Code (an IRA) established for the Participant pursuant to a written
agreement between the Administrative Committee and the provider of the IRA that meets
the requirements of Section 401(a)(31) of the Code and the Treasury Regulations
thereunder. The Benefits Group shall establish and
41
maintain procedures to inform each Participant to whom this Section applies of the nature and operation of the IRA
and the Participants investments therein, the fees and expenses associated with the
operation of the IRA, and the terms of the written agreement establishing such IRA on
behalf of the Participant.
6.7.1.3 Notwithstanding Sections 6.7.1.1 and 6.7.1.2, the Benefits Group shall
direct the Trustee to make a cash lump sum payment to a surviving Spouse of a vested
Participant who died before his Annuity Starting Date, of the Actuarial Equivalent
present value of the benefit payable to that surviving Spouse or other Beneficiary
before his applicable Annuity Starting Date, if that Actuarial Equivalent present
value does not exceed $5,000, without the consent of the surviving Spouse or other
Beneficiary. Such payment shall fully discharge all Plan liabilities with respect to
such benefit.
6.7.2 Deemed Cash-Outs.
6.7.2.1 Salaried Participants. If a Salaried Participant has a one year
Break-in-Service and the Actuarial Equivalent present value of his vested Accrued
Benefit is zero, the Participant shall be deemed to have received a distribution of
such vested Accrued Benefit.
6.7.2.2 Hourly Participants. An Hourly Participant who has no vested
interest in his Accrued Benefit at the time of his Severance from Employment shall be
deemed to receive a cash-out in the amount of $0 as of the date of such Severance
from Employment.
6.7.2.3 Arrow Salaried Participants. The deemed cash-out provisions in
Section 6.4 of Appendix F apply to Arrow Salaried Participants.
6.7.2.4 Arrow Hourly Participants. The deemed cash-out provisions in
Section 6.3 of Appendix G apply to Arrow Hourly Participants.
6.7.2.5 Arrow Berks Participants. The deemed cash-out provisions in
Section 6.3 of Appendix H apply to Arrow Berks Participants.
6.7.3 Disregard Prior Service. If a Participant receives a lump-sum distribution
under Section 6.7.1 and is subsequently reemployed, his prior service shall be disregarded in any
subsequent determination of his Accrued Benefit under the Plan, to the extent permissible under
Section 411(a)(7) of the Code and Treasury Regulations thereunder. Notwithstanding the preceding
sentence, if a nonvested Participant who receives a lump-sum distribution of $0 under Section 6.7.2
subsequently resumes employment with the Employer or a Related Employer before he has incurred five
consecutive one-year Breaks in Service, his prior service shall not be disregarded in subsequent
determinations of his Accrued Benefit.
6.8 Continued Employment After Normal Retirement Date; Reemployed Participants. Any
Salaried Participant who (a) continues in employment after his Normal Retirement Date, or (b)
having experienced a Severance from Employment and begun to receive benefits hereunder, is
subsequently reemployed as an Employee shall not be entitled to payment of benefits while so
employed or reemployed. Prior to January 1, 2009, such a Salaried Participant shall be eligible to
accumulate additional Credited Service. Upon Severance from Employment his benefit shall be
recomputed based upon his aggregate Credited Service. In the
42
case of a Salaried Participant who is reemployed, retirement benefit payments shall be redetermined as of the subsequent Severance from
Employment in accordance with the form of benefit payment in effect prior to the Salaried
Participants reemployment and adjusted to reflect the increase, if any, in benefits attributable
to Credited Service after reemployment. The rules of this Section shall be applied consistent with
the provisions of 29 CFR Section 2530.203-3 issued by the United States Department of Labor, which
provisions are incorporated herein by reference. With respect to Participants other than Salaried
Participants, the provisions regarding reemployment and suspension of benefits are set forth in
Appendix E, F, G or H, as applicable.
6.9 Required Distributions Code Section 401(a)(9).
6.9.1 Minimum Distribution Requirements for Participants. The Benefits Group may not
direct the Trustee to distribute the Participants vested Accrued Benefit, nor may the Participant
elect to have the Trustee distribute his vested Accrued Benefit, under a method of payment which,
as of the Required Beginning Date, does not satisfy the minimum distribution requirements under
Code Section 401(a)(9) and applicable proposed or final Treasury Regulations. With respect to
distributions under the Plan made in calendar years beginning on or after January 1, 2002 and prior
to January 1, 2006, the Plan will generally apply the minimum distribution requirements of Code
Section 401(a)(9) in accordance with F-3 and F-3A of Section 1.401(a)(9)-1 of the 1987 proposed
Treasury Regulations, A-1 of Section 1.401(a)(9)-6 of the 2001 proposed Treasury Regulations,
Section 1.401(a)(9)-6T of the temporary Treasury Regulations, or a reasonable and good faith
interpretation of Code Section 401(a)(9), notwithstanding any provision of the Plan to the
contrary. With respect to distributions under the Plan made in calendar years beginning on or after January
1, 2006, the Plan will apply the minimum distribution requirements of Code Section 401(a)(9) in
accordance with the Treasury Regulations under Code Section 401(a)(9) that were finalized in June
2004, as set forth in this Section 6.9.
6.9.1.1 Annuity Distributions. An annuity distribution made to the
Participant pursuant to this Article VI or an Appendix hereto must satisfy all of the
following requirements:
6.9.1.1.1 The periodic payment intervals under the annuity may not be
longer than one year.
6.9.1.1.2 The distribution period must not exceed the life (or joint
lives) of the Participant and his designated Beneficiary (as determined in
accordance with the requirements of Code Section 401(a)(9) and applicable
Treasury Regulations), or a period certain not longer than the period
described in Section 6.9.1.6 or 6.9.2.
6.9.1.1.3 The annuity does not recalculate the life expectancy of a
Participant or Spouse more frequently than annually and does not recalculate
the life expectancy of a non-Spouse Beneficiary.
6.9.1.1.4 Once payments have begun over a period, the Participant or
Beneficiary may not change the period, even if the period is shorter than the
maximum period permitted under Code Section 401(a)(9), unless:
43
6.9.1.1.4.1 The modification occurs when the Participant has had a
Severance from Employment or in connection with a Plan termination;
6.9.1.1.4.2 The payment period before the modification is a period
certain without life contingencies; or
6.9.1.1.4.3 The annuity payments after the modification are paid
under a Qualified Joint and Survivor Annuity over the joint lives of the
Participant and a designated Beneficiary, the Participants Spouse is the
sole designated Beneficiary, and the modification occurs in connection
with the Participants becoming married to such Spouse; and
all of the following conditions are satisfied:
6.9.1.1.4.4 The future payments after the modification satisfy the
requirements of Code Section 401(a)(9), the Treasury Regulations under
Code Section 401(a)(9), and this Section 6.9 (determined by treating the
date of the change as a new Annuity Starting Date and the actuarial
present value of the remaining payments prior to the modification as the
entire interest of the Participant);
6.9.1.1.4.5 For purposes of Code Sections 415 and 417, the
modification is treated as a new Annuity Starting Date;
6.9.1.1.4.6 After taking into account the modification, the annuity
(including all past and future payments) satisfies the requirements of
Code Section 415 (determined at the original Annuity Starting Date, using
the interest rate and mortality tables applicable to such date); and
6.9.1.1.4.7 The end point of the period certain, if any, for any
modified payment period is not later than the end point available to the
Participant at the original Annuity Starting Date under Code Section
401(a)(9) and this Section 6.9.
6.9.1.1.5 The payments are nonincreasing or increase only as follows:
6.9.1.1.5.1 By an annual percentage increase that does not exceed
the percentage increase in an index described in Treasury Regulations
Section 1.401(a)(9)-6(A-14)(b)(2), (b)(3), or (b)(4) (an Eligible
Cost-of-Living Index) for a 12-month period ending in the year during
which the increase occurs or a prior year;
6.9.1.1.5.2 By a percentage increase that occurs at specified times
and does not exceed the cumulative total of annual percentage increases
in an Eligible Cost-of-Living Index
44
since the Annuity Starting Date, or if later, the date of the most recent percentage increase;
6.9.1.1.5.3 By a constant percentage of less than 5% per year,
applied not less frequently than annually;
6.9.1.1.5.4 As a result of dividend or other payments that result
from actuarial gains, provided:
(A) Actuarial gain is measured not less frequently than
annually;
(B) The resulting dividend or other payments are either paid
no later than the year following the year for which the actuarial
experience is measured or paid in the same form as the payment of
the annuity over the remaining period of the annuity (beginning no
later than the year following the year for which the actuarial
experience is measured);
(C) The actuarial gain taken into account is limited to
actuarial gain from investment experience;
(D) The assumed interest rate used to calculate such
actuarial gains is not less than 3%; and
(E) The annuity payments are not increased by a constant
percentage as described in Section 6.9.1.1.5.3;
6.9.1.1.5.5 To the extent of the reduction in the amount of the
Participants payments to provide for a survivor benefit upon death, but
only if there is no longer a survivor benefit because the Beneficiary
whose life was being used to determine the distribution period dies or is
no longer the Participants Beneficiary pursuant to a qualified domestic
relations order within the meaning of Code Section 414(p);
6.9.1.1.5.6 To provide a final payment upon the Participants death
not greater than the excess of the actuarial present value of the
Participants Accrued Benefit (within the meaning of Code Section 411(a)(7))
calculated as of the Annuity Starting Date using the Applicable Interest
Rate and the Applicable Mortality Table (or, if greater, the total amount
of Employee contributions) over the total payments before the
Participants death;
6.9.1.1.5.7 To allow a Beneficiary to convert the survivor portion
of a joint and survivor annuity into a single sum distribution upon the
Participants death; or
45
6.9.1.1.5.8 To pay increased benefits that result from a Plan
amendment.
6.9.1.2 Limitation on Distribution Periods. As of the first
Distribution Calendar Year, distributions to a Participant, if not made in a single
sum, may be made only over one of the following periods:
6.9.1.2.1 The life of the Participant;
6.9.1.2.2 The joint lives of the Participant and a designated Beneficiary;
6.9.1.2.3 A period certain not extending beyond the life expectancy of the
Participant; or
6.9.1.2.4 A period certain not extending beyond the joint life and last
survivor expectancy of the Participant and a designated Beneficiary.
A Distribution Calendar Year is a calendar year for which a minimum distribution is
required. For distributions beginning before the Participants death, the first
Distribution Calendar Year is the calendar year immediately preceding the calendar
year which contains the Participants Required Beginning Date. For distributions
beginning after the Participants death, the first Distribution Calendar Year is the
calendar year in which distributions are required to begin pursuant to Section
6.9.2.2 or 6.9.2.3.
6.9.1.3 Form of Distribution. Unless the Participants interest is
distributed in the form of an annuity purchased from an insurance company or in a
single sum on or before the Required Beginning Date, as of the first Distribution
Calendar Year distributions will be made in accordance with Sections 6.9.1.1,
6.9.1.4, 6.9.1.5, 6.9.1.6, or 6.9.2. If the Participants interest is distributed in
the form of an annuity purchased from an insurance company, distributions thereunder
will be made in accordance with the requirements of Code Section 401(a)(9) and
Section 1.401(a)(9) of the Treasury Regulations. Any part of the Participants
interest which is in the form of an individual account described in Code Section
414(k) will be distributed in a manner satisfying the requirements of Code Section
401(a)(9) and Section 1.401(a)(9) of the Treasury Regulations that apply to
individual accounts.
6.9.1.4 Amount Required to be Distributed by Required Beginning Date.
The amount that must be distributed by the Participants Required Beginning Date (or,
if the Participant dies before distributions begin, the date distributions are
required to begin under Section 6.9.2.2 or 6.9.2.3) is the payment for one payment
interval. The second payment need not be made until the end of the next payment
interval, even if the second payment interval occurs in the calendar year following
the year in which the Required Beginning Date occurs. Payment intervals are the
periods for which payments are received under the annuity, e.g., bi-monthly, monthly,
semi-annually, or annually. All of the Participants benefit accruals as of the last
day of the first Distribution Calendar Year will be included in the calculation of
the amount of the annuity
46
payments for payment intervals ending on or after the Participants Required Beginning Date.
6.9.1.5 Additional Accruals. Any additional benefits accruing to the
Participant in a calendar year after the first Distribution Calendar Year will be
distributed beginning with the first payment interval ending in the calendar year
immediately following the calendar year in which such amount accrues. The Annuity
Starting Date and form of distribution commenced by the Required Beginning Date
applies to the distribution of these additional accruals, unless the Participant, if
a Salaried Participant, elects otherwise pursuant to the benefit options described in
Section 6.4, and if not a Salaried Participant, elects otherwise pursuant to Appendix
E, F, G, or H, as applicable, and that election otherwise complies with the minimum
distribution requirements of this Section 6.9.1. An additional accrual includes any
portion of the Participants Accrued Benefit which becomes nonforfeitable during the
applicable calendar year.
6.9.1.6 Period Certain Annuities. Unless the Participants Spouse is
the sole designated Beneficiary and the form of distribution is a period certain and
no life annuity, the period certain for an annuity distribution commencing during the
Participants lifetime may not exceed the applicable distribution period for the
Participant under the Uniform Lifetime Table set forth in Treasury Regulations
Section 1.401(a)(9)-9, Q&A-2, for the calendar year that contains the Annuity
Starting Date. If the Annuity Starting Date precedes the year in which the
Participant reaches age 70, the applicable distribution period for the Participant is
the distribution period for age 70 under the Uniform Lifetime Table set forth in
Treasury Regulations Section 1.401(a)(9)-9, Q&A-2, plus the excess of 70 over the age
of the Participant as of the Participants birthday in the year that contains the
Annuity Starting Date. If the Participants Spouse is the Participants sole
designated Beneficiary and the form of distribution is a period certain and no life
annuity, the period certain may not exceed the longer of the Participants applicable
distribution period, as determined under this Section 6.9.1.6, or the joint life and
last survivor expectancy of the Participant and the Participants Spouse as
determined under the Joint and Last Survivor Table set forth in Treasury Regulations
Section 1.401(a)(9)-9, Q&A-3, using the Participants and Spouses attained ages as
of the Participants and Spouses birthdays in the calendar year that contains the
Annuity Starting Date.
6.9.1.7 Nonannuity Distributions. A lump sum distribution made on or
before a Participants Required Beginning Date of his entire nonforfeitable Accrued
Benefit under the Plan satisfies the minimum distribution requirements of this
Section 6.9.1. Furthermore, a lump sum payment of additional accruals, as described
in Section 6.9.1.3, no later than the end of the first payment interval ending in the
calendar year immediately following the calendar year in which such amount accrues,
satisfies the minimum distribution requirements of this Section 6.9.1.
6.9.2 Minimum Distribution Requirements For Death Benefits Payable to Beneficiaries.
The method of distribution to the Participants Beneficiary must satisfy Code Section 401(a)(9) and
the applicable Treasury Regulations.
47
6.9.2.1 If the Participant dies after distribution of his interest begins in the
form of an annuity meeting the requirements of this Section 6.9, the remaining
portion of the Participants interest will continue to be distributed over the
remaining period over which distributions commenced, if any.
6.9.2.2 If the Participant dies before the date distribution of his interest
begins and there is no designated Beneficiary as of September 30 of the year
following the year of the Participants death, the Participants entire interest, if
any, will be distributed within 5 years after the date of the Participants death
(with payment completed by December 31 of the calendar year in which occurs the 5th
anniversary of the Participants date of death) (the 5-Year Rule).
6.9.2.3 If the Participant dies before the date distribution of his interest
begins and there is a designated Beneficiary, unless the Participant or Beneficiary
elects the 5-Year Rule, the Participants entire interest will be distributed, or
will begin to be distributed, no later than as follows:
6.9.2.3.1 If the Participants surviving Spouse is the Participants sole
designated Beneficiary, distributions to the surviving Spouse will begin by
December 31 of the later of the calendar year immediately following the
calendar year in which the Participant died or the calendar year in which the
Participant would have attained age 701/2.
6.9.2.3.2 If the Participants surviving Spouse is not the Participants
sole designated Beneficiary, distributions to the designated Beneficiary will
begin by December 31 of the calendar year immediately following the calendar
year in which the Participant died.
The Participants entire interest will be distributed over the life of the
designated Beneficiary or over a period certain not exceeding:
6.9.2.3.3 If the Annuity Starting Date is after the first Distribution
Calendar Year, the life expectancy of the designated Beneficiary determined
using the Beneficiarys age as of the Beneficiarys birthday in the calendar
year immediately following the calendar year of the Participants death; or
6.9.2.3.4 If the Annuity Starting Date is before the first Distribution
Calendar Year, the life expectancy of the designated Beneficiary determined
using the Beneficiarys age as of the Beneficiarys birthday in the calendar
year that contains the Annuity Starting Date.
In order for a Participant or Beneficiary to elect the 5-Year Rule instead of the life
expectancy rule set forth in this Section 6.9.2.3, the election must be made no later
than the earlier of September 30 of the calendar year in which distributions would be
required to begin under 6.9.2.3.3 or 6.9.2.3.4, or by September 30 of the calendar
year which contains the 5th anniversary or the Participants (or, if
applicable, surviving Spouses) death.
6.9.2.4 If the Participant dies before the date distribution of his interest
begins, the Participants surviving Spouse is his sole designated Beneficiary, and
48
the surviving Spouse dies after the Participant but before distributions to the
surviving Spouse are required to begin, Sections 6.9.2.2 and 6.9.2.3 shall apply as
if the surviving Spouse were the Participant, except that the provision permitting
distributions to a surviving Spouse who is the sole designated Beneficiary to begin
by the December 31 of the calendar year in which the Participant would have attained
age 701/2 (if later than the December 31 of the calendar year immediately following the
calendar year in which the Participants death occurred) does not apply.
6.9.2.5 For purposes of computing life expectancy, the Benefits Group must use
the Single Life Table in Treasury Regulations Section 1.401(a)(9)-9, Q&A-1.
6.9.3 Special Rules. The Benefits Group, only upon the Participants written request
or, in the case of a distribution described in Section 6.9.2, only upon the written request of the
Participants Spouse, may recalculate the applicable life expectancy period for purposes of
calculating the minimum distribution applicable to a Distribution Calendar Year following the first
Distribution Calendar Year. The Participant must make a recalculation election not later than his
Required Beginning Date. A surviving Spouse must make a recalculation election no later than the
December 31 date described in 6.9.2.3.1. A recalculation election applicable to a joint life
expectancy payment, where the survivor is a non-Spouse Beneficiary, may not take into account any
adjustment to any life expectancy other than the Participants life expectancy, as prescribed by
applicable Treasury Regulations under Code Section 401(a)(9). In the absence of a recalculation
election, the Plan does not permit recalculation of the applicable life expectancy factor.
6.9.4 Payments to a Surviving Child. Payments made to a Participants surviving child
until the child reaches the age of majority (or dies, if earlier) shall be treated as if such
payments were made to the surviving Spouse to the extent the payments become payable to the
surviving Spouse upon cessation of the payments to the child. For purposes of this Section, a
child shall be treated as having not reached the age of majority if the child has not completed a
specified course of education and is under the age of 26. In addition, a child who is disabled
within the meaning of Code Section 72(m)(7) when the child reaches the age of majority shall be
treated as having not reached the age of majority so long as the child continues to be disabled.
6.10 Eligible Rollover Distributions.
6.10.1 Notwithstanding any provision of the Plan to the contrary that would otherwise limit a
Distributees election under this Article, a Distributee may elect, at the time and in the manner
prescribed by the Benefits Group, to have any portion of an Eligible Rollover Distribution (but not
less than $500) paid directly to an Eligible Retirement Plan specified by the Distributee in a
Direct Rollover. The Benefits Group may establish rules and procedures governing the processing of
Direct Rollovers and limiting the amount or number of such Direct Rollovers in accordance with
applicable Treasury Regulations. Distributions not transferred to an Eligible Retirement Plan in a
Direct Rollover shall be subject to income tax withholding as provided under the Code and
applicable state and local laws, if any. If a Participant elects to have a portion of an Eligible
Rollover Distribution transferred to an Eligible Retirement Plan pursuant to this Section 6.10, the
portion not transferred to an Eligible Retirement Plan shall be distributed to the Participant in
the same form of benefit as the portion of the distribution that was transferred to an Eligible
Retirement Plan.
49
6.10.2 Definitions.
6.10.2.1 Eligible Rollover Distribution: An Eligible Rollover
Distribution is any distribution of all or any portion of the balance to the credit
of the Distributee, except that an Eligible Rollover Distribution does not include:
(a) any distribution that is one of a series of substantially equal periodic payments
(not less frequently than annually) made for life (or life expectancy) of the
Distributee or the joint lives (or joint life expectancies) of the Distributee and
the Distributees designated beneficiary, or for a specified period of ten years or
more; (b) any distribution to the extent such distribution is required under Code
Section 401(a)(9); (c) any hardship distribution; (d) 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 received in
certain distributions); and (e) any other distribution(s) that is reasonably expected
to total less than $200 during a year. Notwithstanding the foregoing, any portion of
a distribution after December 31, 2001 that consists of after-tax contributions which are not includible in gross income may be transferred to: (1) an individual
retirement account or annuity described in Code Sections 408(a) or (b); or (2) a
qualified defined contribution plan described in Code Sections 401(a) or 403(a)
(through a direct trustee-to-trustee transfer) that agrees to separately account for
amounts so transferred (and any related earnings), including separately accounting
for the portion of such distribution that is includible in gross income and the
portion of such distribution which is not so includible. In addition, the portion of
any distribution on and after January 1, 2007 that consists of after-tax
contributions which are not includible in gross income may be transferred (in a
direct trustee-to-trustee transfer) to a qualified defined benefit plan or a Code
Section 403(b) tax-sheltered annuity that agrees to separately account for amounts so
transferred (and the earnings thereon), including separately accounting for the
portion of such distribution that is includible in gross income and the portion of
such distribution which is not so includible.
6.10.2.2 Eligible Retirement Plan: An Eligible Retirement Plan is an
individual retirement account described in Code Section 408(a), an individual
retirement annuity described in Code Section 408(b), an annuity plan described in
Code Section 403(a), a qualified trust described in Code Section 401(a) and,
effective January 1, 2002, an annuity contract described in Code Section 403(b) and
an eligible plan under Code Section 457(b) which is maintained by a state, political
subdivision of a state, or any agency or instrumentality of a state or political
subdivision of a state and which agrees to separately account for amounts transferred
into such plan from this Plan, and which accepts the Distributees Eligible Rollover
Distribution. In addition, for Plan Years beginning on and after January 1, 2008, an
Eligible Retirement Plan includes a Roth IRA, subject to the restrictions that apply
to rollovers from a traditional IRA into a Roth IRA. However, the Benefits Group is
not responsible for assuring a recipient is eligible to make a rollover to a Roth
IRA. This definition of Eligible Retirement Plan shall also apply in the case of a
distribution to a surviving Spouse, or to a Spouse or former Spouse who is the
alternate payee under a qualified domestic relations order, as defined in Code
Section 414(p).
50
6.10.2.3 Distributee: A Distributee includes an Employee or former
Employee. In addition, the Employees or former Employees surviving Spouse and the
Employees or former Employees 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. Effective
for distributions on and after January 1, 2007, a Distributee also includes the
Participants non-Spouse Beneficiary.
6.10.2.4 Direct Rollover: A Direct Rollover is a payment by the Plan
to the Eligible Retirement Plan specified by the Distributee. In the case of a
non-Spouse Beneficiary, a Direct Rollover may be made only to an individual
retirement account or annuity described in Code Section 408(a) or Section 408(b)
(IRA) that is established on behalf of the designated Beneficiary and that will be
treated as an inherited IRA pursuant to the provisions of Code Section 402(c)(1).
Also, in this case, the determination of any minimum required distribution under Code
Section 401(a)(9) that is ineligible for rollover shall be made in accordance with
Notice 2007-7, Q&A-17 and 18.
51
ARTICLE VII. CONTRIBUTIONS.
7.1 Employer Contributions. The Employer shall make the contributions required to
fund the cost of the benefits provided by this Plan. The Employer intend to make such
contributions as are necessary to fund the Plan in accordance with the minimum funding standards of
the Code. Contributions by the Employer are conditioned upon their deductibility under the Code
for federal income tax purposes
7.2 Funding Policy. The Administrative Committee shall be responsible for
ascertaining the projected financial needs of the Plan in order to provide for the payment of
benefits described in the Plan and for establishing a funding policy which it reasonably believes
will provide the Plan with the funds to satisfy those needs. Insofar as the funding policy
established by the Administrative Committee includes the determination of the contributions to the
Plan which the Employer should make from time to time, the funding policy must be approved by the
Committee and the Committee and Administrative Committee shall have no responsibility for any
refusal by any Employer to make such contributions, except that the Committee and Administrative
Committee shall give appropriate recognition to the reduced contributions in determining the
ongoing funding policy of the Plan. The Administrative Committees authority to establish the
Plans funding policy shall include the authority to allocate among the Trustees all of the
contributions of the Employer, and all accumulated earnings thereon, whether such contributions
have already been made or are made in the future. The Administrative Committee shall have the
right at any time and from time to time to change the method of funding benefits hereunder. The
Administrative Committee shall communicate periodically, as it deems appropriate, to the Trustee
and to any Plan Investment Manager, the Plans short-term and long-term financial needs so that
investment policy can be coordinated with Plan financial requirements.
7.3 Determination of Contributions. The Committee shall determine the amount of
contributions the Employer must make to the Trust under the terms of the Plan. In this regard, the
Committee may place full reliance upon all reports, opinions, tables, valuations, certificates and
computations the actuary furnishes the Committee.
7.4 Time of Payment of Employer Contributions. The Employer shall make its
contribution to the Trustee within the time prescribed by the Code or applicable Treasury
Regulations.
7.5 Return of Employer Contributions. Notwithstanding Section 9.1 of the Plan:
7.5.1 In the case of a contribution made by the Employer by a mistake of fact, such
contribution may be returned to the Employer within one year after its payment.
7.5.2 All Employer contributions to the Plan are conditioned on the allowance of their
deductibility for federal income tax purposes under the Code. If the deduction of a contribution
is disallowed by the Internal Revenue Service, to the extent of disallowance, the contribution may
be returned to the Employer within one year after the disallowance.
7.5.3 Any amounts returned under this Section shall be disposed of as directed by the
Committee through uniform and nondiscriminatory rules. The Trustee shall not increase the amount
of any contribution returnable under this Section for any earnings attributable to the
contribution, but the Trustee shall decrease the Employer contribution returnable for any losses
attributable to it.
52
All returns under this Section 7.5 shall be limited in amount, circumstance, and timing as required
by Section 403(c) of ERISA, and no such return shall be made if, solely on account of such return,
the Plan would cease to be a qualified plan under Code Section 401(a).
7.6 Forfeitures. Any forfeitures during a year arising from a Participants Severance
from Employment or otherwise before the termination of the Plan shall be used to reduce the
applicable Employers contributions under the Plan for following years and shall not increase any
benefit otherwise payable hereunder.
7.7 Irrevocability. The Employer shall have no right, title or interest in the
contributions made to the Trustee and no part of the Fund shall revert to the Sponsor or any
Participating Employer except that, after satisfaction of all liabilities of the Plan as set forth
in Section 9.8, any amount remaining shall revert to the Employer.
7.8 Employee Contributions. The Plan does not permit nor require contributions from
Participants.
7.9 Funding Notice. For Plan Years beginning on and after January 1, 2008 or such
later date required by applicable law and/or Department of Labor Regulations or other guidance, if
the Employer fails to make an installment or other payment required to meet the minimum funding
standard to the Plan within 60 days following the due date for such installment, the Benefits Group
must notify all Plan Participants and Beneficiaries, including alternate payees, in accordance with
ERISA Section 101(f). However, if the Employer has filed a waiver request with respect to the Plan
Year that includes the required installment, no notice is required unless the waiver request is
denied, in which case the Benefits Group must provide notice within 60 days after the date of the
denial.
7.10 Funding-Based Limits on Benefits and Benefit Accruals. Notwithstanding any
provisions of the Plan to the contrary, effective January 1, 2008, the Plan shall comply with all
applicable limits on benefit accruals, Plan amendments, benefit distributions and contributions as
set forth in Code Section 436 and the guidance issued thereunder, including available transition
relief.
53
ARTICLE VIII. ADMINISTRATION.
8.1 Fiduciary Responsibility. The Plan shall be administered by the Committee, which
shall be the Plans named fiduciary and administrator, as those terms are defined by ERISA, and
its agent designated to receive service of process. All matters relating to the administration of
the Plan, including the duties imposed upon the Plan administrator by law, except those duties
relating to the control or management of Plan assets, shall be the responsibility of the Committee,
Administrative Committee, or Benefits Group, in accordance with their authority under the benefit
plan governance structure approved by the Compensation Committee of the Board of Directors, as
amended from time to time. All matters relating to the control or management of Plan assets shall,
except to the extent delegated in accordance with the trust agreement, be the sole and exclusive
responsibility of the Trustee. The Trustee shall be responsible to ensure that contributions are
made to the Trust only to the extent required by the terms of the Trust or applicable law. It is
intended under this Plan and the Trust that each fiduciary shall be responsible for the proper
exercise of its own powers, duties, responsibilities, and obligations under this Plan and the Trust
and shall not be responsible for any act or failure to act of another fiduciary. No fiduciary
guarantees the Fund in any manner against investment loss or depreciation in asset value.
8.2 Appointment and Removal of Committee. The Committee shall consist of three or
more persons who shall be appointed and may be removed by the Board of Directors. Persons
appointed to the Committee may be, but need not be, employees of the Employer. Any Committee
member may resign by giving written notice to the Board of Directors, which notice shall be
effective 30 days after delivery. A Committee member may be removed by the Board of Directors by
written notice to such Committee member, which notice shall be effective upon delivery. In the
event of any vacancies on the Committee, the remaining Committee members then in office shall
constitute the Committee and shall have full power to act and exercise all powers of the Committee
described in this Article VIII. The Board of Directors shall promptly select a successor following
the resignation or removal of any Committee member, if necessary to maintain a Committee of at
least three persons.
8.3 Compensation and Expenses of Committee and Administrative Committee. Members of
the Committee and Administrative Committee who are employees of the Employer shall serve without
compensation. Members of the Committee and Administrative Committee who are not employees of the
Employer may be paid reasonable compensation for services rendered to the Plan. Such compensation,
if any, and all usual and reasonable expenses of the Committee and Administrative Committee may be
paid in whole or in part by the Employer, and any expenses not paid by the Employer shall be paid
by the Trustee out of the principal or income of the Fund.
8.4 Committee and Administrative Committee Procedures. The Committee and
Administrative Committee may enact such rules and regulations for the conduct of their business and
for the administration of the Plan as they shall deem necessary or appropriate. To the extent
permitted by their by-laws, the Committee and Administrative Committee may act either at meetings
at which a majority of its members are present or by a writing signed by a majority of its members
without the holding of a meeting. Records shall be kept of the actions of the Committee and
Administrative Committee. No Employee who is a Participant in the Plan shall vote upon, or take an
active role in resolving, any question affecting only his Accrued Benefit.
54
8.5 Plan Interpretation. The Committee shall have the duty and authority to interpret
the provisions of the Plan and to decide any dispute that may arise regarding the rights of
Participants thereunder and, in general, to direct the administration of the Plan. Any such
determination shall apply uniformly to all persons similarly situated and shall be binding and
conclusive upon all interested persons. The Committee shall have the authority to deviate from the
literal terms of the Plan to the extent the Committee shall determine to be necessary or
appropriate to operate the Plan in compliance with the provisions of applicable law. When making a determination or calculation, the Committee shall be entitled to rely upon
information furnished by a Participant or Beneficiary, the Employer, the legal counsel of the
Employer, or the Trustee.
8.6 Fiduciary Duties. In performing their duties, all fiduciaries with respect to the
Plan shall act solely in the interest of the Participants and their Beneficiaries, and:
8.6.1 For the exclusive purpose of providing benefits to the Participants and their
Beneficiaries;
8.6.2 With the care, skill, prudence and diligence under the circumstances then prevailing
that a prudent man acting in like capacity and familiar with such matters would use in the conduct
of an enterprise of like character and with like aims;
8.6.3 To the extent a fiduciary possesses and exercises investment responsibilities, by
diversifying the investments of the Fund so as to minimize the risk of large losses, unless under
the circumstances it is clearly prudent not to do so; and
8.6.4 In accordance with the documents and instruments governing the Plan insofar as such
documents and instruments are consistent with the provisions of Title I of ERISA
8.7 Consultants. The Committee, Administrative Committee, and Benefits Group may, and
to the extent necessary for the preparation of required reports shall, employ accountants,
actuaries, attorneys and other consultants or advisors. The fees charged by such accountants,
actuaries, attorneys and other consultants or advisors shall be paid from the Fund unless paid by
the Employer.
8.8 Method of Handling Plan Funds. No Committee, Administrative Committee, or
Benefits Group member shall, at any time, handle any assets of the Fund, except that all payments
to the Fund shall be made by the officer of the Employer charged with that responsibility by such
Employer. All payments from the Fund shall be made by the Trustee.
8.9 Delegation and Allocation of Responsibility. Prior to January 1, 2008, the
Committee, by unanimous action in writing, may delegate any Plan administrative responsibility to
any officer of the Sponsor or any Participating Employer and may allocate any of its
responsibilities to one or more members of the Committee. Effective on and after January 1, 2008,
the Committee may delegate any Plan administrative responsibility to any employee of the Employer
or any committee of such employees and may allocate any of its responsibilities to such committee,
subject to the terms of the Committees authority as chartered by the Board of Directors. In the
event of any such delegation or allocation the Committee shall establish procedures for the
thorough and frequent review of the performance of such duties. Persons to whom responsibilities
have been delegated may not delegate to others any discretionary authority or discretionary control
with respect to the management or administration of the Plan.
55
8.10 Other Committee, Administrative Committee and Benefits Group Powers and Duties.
The Committee, Administrative Committee and/or Benefits Group have the following powers and duties
in accordance with their authority under the benefit plan governance structure approved by the
Compensation Committee of the Board of Directors, as amended from time to time:
8.10.1 To determine the rights of eligibility of an Employee to participate in the Plan, the
value of a Participants Accrued Benefit and the vested percentage of each Participants Accrued
Benefit;
8.10.2 To adopt and enforce rules of procedure and regulations necessary for the proper and
efficient administration of the Plan, provided the rules are not inconsistent with the terms of the
Plan and the Trust;
8.10.3 To interpret and construe all terms, provisions, conditions and limitations of the Plan
and the rules and regulations it adopts (including the discretionary authority to interpret the
Plan documents, without limitation and issues of fact) and to reconcile any inconsistency or supply
any omitted detail that may appear in the Plan in such manner and to such extent as the Committee,
Administrative Committee and/or Benefits Group shall deem necessary and proper to effectuate the
Plan;
8.10.4 To direct the Trustee with respect to the crediting and distribution of the Trust;
8.10.5 To review and render decisions respecting a claim for (or denial of a claim for) a
benefit under the Plan;
8.10.6 To furnish the Employer with information which the Employer may require for tax or
other purposes;
8.10.7 To enlist or engage the services of employees of the Employer and other agents to
assist it with the performance of any of its duties, as the Committee Administrative Committee
and/or Benefits Group determines advisable;
8.10.8 To engage the services of an Investment Manager or Managers (as defined in ERISA
Section 3(38)), each of whom shall have full power and authority to manage, acquire or dispose (or
direct the Trustee with respect to acquisition or disposition) of any Plan asset under its control,
to remove any Investment Manager, and to appoint a successor if so desired;
8.10.9 Effective January 1, 2008, to ensure compliance with the minimum funding standards;
prior to January 1, 2008, to establish and maintain a funding standard account and to make credits
and charges to the account to the extent required by and in accordance with the provisions of the
Code;
8.10.10 To authorize any one of its members, or its secretary, to sign on its behalf any
notices, directions, applications, certificates, consents, approvals, waivers, letters or other
documents, such authority being evidenced by an instrument signed by all members and filed with the
Trustee;
56
8.10.11 To amend the Plan pursuant to Section 9.2 with the approval of the Board of Directors
if the amendment relates to or otherwise impacts the compensation of Section 16 Officers, as
defined in Rule 16a-1 issued under the Securities Exchange Act of 1934; and
8.10.12 As permitted by the Employee Plans Compliance Resolution System (EPCRS) issued by
the Internal Revenue Service, as in effect from time to time, (1) to voluntarily correct any Plan
qualification failure, including, but not limited to failures involving Plan operation,
impermissible discrimination in favor of Highly Compensated Employees, the specific terms of the
Plan document, or demographic failures; (2) implement any correction methodology permitted under
EPCRS; and (3) negotiate the terms of a compliance statement or a closing agreement proposed by the
IRS with respect to correction of a Plan qualification failure.
8.11 Records and Reports. The Benefits Group shall exercise such authority and
responsibility as it deems appropriate in order to comply with ERISA and regulations issued
thereunder relating to records of a Participants Service, Accrued Benefit and the percentage of
such Accrued Benefit that is vested under the Plan; notifications to Participants; registration
with the Internal Revenue Service; and annual reports to the Department of Labor.
8.12 Application and Forms for Benefits. The Benefits Group may require a Participant
or Beneficiary to complete and file with the Benefits Group an application for a benefit and all
other forms approved by the Benefits Group, and to furnish all pertinent information requested by the
Benefits Group. The Benefits Group may rely upon all such information so furnished it, including
the Participants or Beneficiarys current mailing address.
8.13 Authorization of Benefit Payments. The Benefits Group shall issue directions to
the Trustee concerning all benefits that are to be paid from the Fund pursuant to the provisions of
the Plan, and warrants that all such directions are in accordance with this Plan.
8.14 Unclaimed Accrued Benefit Procedure. The Plan does not require the Employer,
the Trustee, the Committee, the Administrative Committee, or the Benefits Group to search for, or
ascertain the whereabouts of, any Participant or Beneficiary. At the time the Participants or
Beneficiarys benefit becomes distributable under the Plan, the Benefits Group, by certified or
registered mail addressed to his last known address of record with the Benefits Group or the
Employer, shall notify any Participant, or Beneficiary, that he is entitled to a distribution under
this Plan. If the Participant or Beneficiary fails to claim his distributive share or make his
whereabouts known in writing to the Benefits Group within six (6) months from the date of mailing
of the notice, the Plan shall treat the Participants or Beneficiarys unclaimed payable Accrued
Benefit as forfeited. Where the benefit is distributable to the Participant, the forfeiture under
this paragraph occurs as of the last day of the notice period of this Section, if the Participants
vested Accrued Benefit does not exceed $5,000, or as of the first day the benefit is distributable
without the Participants consent, if the present value of the Participants vested Accrued Benefit
exceeds $5,000. Where the benefit is distributable to a Beneficiary, the forfeiture occurs as of
the last day of the notice period of this Section except, if the Beneficiary is the Participants
Spouse and the vested Accrued Benefit payable to the Spouse exceeds $5,000, the forfeiture occurs
as of the first day the benefit is distributable without the Spouses consent. The Employer shall
use the amounts representing the forfeited Accrued Benefit to reduce its contribution for future
Plan Years.
57
If a Participant or Beneficiary who has incurred a forfeiture of his Accrued Benefit under this
Section makes a claim, at any time, for his forfeited Accrued Benefit, the Benefits Group shall
restore the Participants or Beneficiarys forfeited Accrued Benefit. The Benefits Group shall
direct the Trustee to distribute the Participants or Beneficiarys restored Accrued Benefit in
accordance with Article VI as if the Participant experiences a Severance from Employment in the
Plan Year in which the Benefits Group restores the forfeited Accrued Benefit.
8.15 Individual Statement. As determined by the Benefits Group in its discretion, the
Benefits Group shall furnish to the Participant (or Beneficiary of such deceased Participant) an
individual statement reflecting the value of his Accrued Benefit. In addition, subject to the
requirements of ERISA, the Benefits Group shall provide to any Participant or Beneficiary of a
deceased Participant who so requests in writing, a statement indicating the total value of his
Accrued Benefit and the vested portion of such Accrued Benefit, if any. The Benefits Group shall
also furnish a written statement to any Participant who has a Severance from Employment during the
Plan Year and is entitled to a deferred vested benefit under the Plan as of the end of the Plan
Year, if no retirement benefits have been paid with respect to such Participant during the Plan
Year. No Participant, except a member of the Committee, the Administrative Committee, Benefits
Group and their designees, shall have the right to inspect the records reflecting the Accrued
Benefit of any other Participant. Notwithstanding the above, effective January 1, 2008, at least
one time every three Plan Years, the Benefits Group shall provide each Participant with a vested
Accrued Benefit and who is employed by the Employer at the time the statement is to be furnished, a
pension benefit statement that indicates, on the basis of the latest information available, the
total benefits accrued and the vested benefits, if any, that have accrued or the earliest date on
which benefits will become vested. The statement must be written in a manner calculated to be
understood by the average Plan Participant and may be delivered in a manner and otherwise satisfy
the requirements of ERISA Section 105(a). Further, for each Plan Year beginning on and after
January 1, 2008, the Benefits Group shall prepare and distribute a Plan funding notice that satisfies the
requirements of ERISA Section 101(f) and applicable regulations thereunder.
8.16 Parties to Litigation. Except as otherwise provided by ERISA, only the Employer,
the Committee and the Trustee shall be necessary parties to any court proceeding involving the
Plan, any fiduciary of the Plan, the Trustee or the Fund. No Participant, or Beneficiary, shall be
entitled to any notice of process unless required by ERISA. Any final judgment entered in any
proceeding shall be conclusive upon the Employer, the Committee, the Administrative Committee,
Benefits Group, the Trustee, Participants and Beneficiaries.
8.17 Use of Alternative Media. The Committee, Administrative Committee and Benefits
Group may include in any process or procedure for administering the Plan, the use of alternative
media, including, but not limited to, telephonic, facsimile, computer or other such electronic
means as available. Use of such alternative media shall be deemed to satisfy any Plan provision
requiring a written document or an instrument to be signed in writing to the extent permissible
under the Code, ERISA and applicable regulations.
8.18 Personal Data to Benefits Group. Each Participant and each Beneficiary of a
deceased Participant must furnish to the Benefits Group such evidence, data or information as the
Benefits Group considers necessary or desirable for the purpose of administering the Plan and shall
otherwise cooperate fully with the Benefits Group in the administration of the Plan. The
provisions of this Plan are effective for the benefit of each Participant upon the condition
precedent that each Participant will furnish promptly full, true and complete evidence, data and
information when requested by the Benefits Group, provided the Benefits Group shall advise
58
each Participant of the effect of his failure to comply with its request. The Benefits Group in its
sole discretion may defer benefit commencement until all of the information it requests is
provided.
8.19 Address for Notification. Each Participant and each Beneficiary of a deceased
Participant shall file with the Benefits Group from time to time, in writing, his post office
address and any change of post office address. Any communication, statement or notice addressed to
a Participant, or Beneficiary, at his last post office address filed with the Benefits Group, or as
shown on the records of the Employer, shall bind the Participant, or Beneficiary, for all purposes
of this Plan.
8.20 Notice of Change in Terms. The Benefits Group, within the time prescribed by
ERISA and the applicable regulations, shall furnish all Participants and Beneficiaries a summary
description of any material amendment to the Plan or notice of discontinuance of the Plan and all
other information required by ERISA to be furnished without charge.
8.21 Assignment or Alienation. Subject to Code Section 414(p) relating to qualified
domestic relations orders, neither a Participant nor a Beneficiary shall anticipate, assign or
alienate (either at law or in equity) any benefit provided under the Plan, and the Trustee shall
not recognize any such anticipation, assignment or alienation. Furthermore, a benefit under the
Plan is not subject to attachment, garnishment, levy, execution, or other legal or equitable
process, including the claims of any trustee in bankruptcy or other representative of the
Participant or Beneficiary in such action.
8.22 Litigation Against the Plan. If any legal action filed against the Trustee, the
Sponsor, the Employer, the Committee, the Administrative Committee, the Benefits Group, or any
member or members of the Committee, Administrative Committee or Benefits Group, by or on behalf of
any Participant or Beneficiary, results adversely to the Participant or to the Beneficiary, the
Trustee shall reimburse itself, the Sponsor, the Employer, the Committee, the Administrative
Committee, the Benefits Group, or any member or members of the Committee, Administrative Committee
or Benefits Group all costs and fees expended by it or them by surcharging all costs and fees
against the sums payable under the Plan to the Participant or to the Beneficiary, but only to the extent a court of competent jurisdiction specifically authorizes and directs
any such surcharges and only to the extent Code Section 401(a)(13) does not prohibit any such
surcharges.
8.23 Information Available. Any Participant in the Plan or any Beneficiary may,
during reasonable business hours, examine copies of the Plan description, latest annual report, any
bargaining agreement, this Plan and Trust, contract or any other instrument under which the Plan
was established or is operated. The Benefits Group shall maintain all of the items listed in this
Section in its offices, or in such other place or places as it may designate from time to time in
order to comply with the regulations issued under ERISA. Upon the written request of a Participant
or Beneficiary, the Benefits Group shall furnish him with a copy of any item listed in this
Section. The Benefits Group may make a reasonable charge to the requesting person for the copy so
furnished.
8.24 Presenting Claims for Benefits. Any Participant or any other person claiming
under a deceased Participant, such as a surviving Spouse or Beneficiary, (Claimant) may submit
written application to the Benefits Group for the payment of any benefit asserted to be due him
under the Plan. Such application shall set forth the nature of the claim and such other
information as the Benefits Group may reasonably request. Promptly upon the receipt of any
59
application required by this Section, the Benefits Group shall determine whether or not the
Participant, Spouse, or Beneficiary involved is entitled to a benefit hereunder and, if so, the
amount thereof and shall notify the claimant of its findings.
If a claim is wholly or partially denied, the Benefits Group shall so notify the Claimant within 90
days after receipt of the claim by the Benefits Group, unless special circumstances require an
extension of time for processing the claim. If such an extension of time for processing is
required, written notice of the extension shall be furnished to the Claimant prior to the end of
the initial 90-day period. In no event shall such extension exceed a period of 90 days from the end
of such initial period. The extension notice shall indicate the special circumstances requiring an
extension of time and the date by which the Benefits Group expects to render its final decision.
Notice of the Benefits Group s decision to deny a claim in whole or in part shall be set forth in
a manner calculated to be understood by the Claimant and shall contain the following:
8.24.1 The specific reason or reasons for the denial;
8.24.2 Specific reference to the pertinent Plan provisions on which the denial is based;
8.24.3 A description of any additional material or information necessary for the Claimant to
perfect the claim and an explanation of why such material or information is necessary; and
8.24.4 An explanation of the claims review procedure set forth in Section 8.25 hereof.
If notice of denial is not furnished, and if the claim is not granted within the period of time set
forth above, the claim shall be deemed denied for purposes of proceeding to the review stage
described in Section 8.25.
8.25 Claims Review Procedure. If an application filed under Section 8.24 above shall
result in a denial by the Benefits Group of the benefit applied for, either in whole or in part,
such Claimant shall have the right, to be exercised by written application filed with the
Administrative Committee within 60 days after receipt of notice of the denial of his application
or, if no such notice has been given, within 60 days after the application is deemed denied under
Section 8.24, to request the review of his application and of his entitlement to the benefit
applied for. Such request for review may contain such additional information and comments as the
Claimant may wish to present. Within 60 days after receipt of any such request for review, the
Administrative Committee shall reconsider the application for the benefit in light of such
additional information and comments as the Claimant may have presented, and if the Claimant shall
have so requested, shall afford the Claimant or his designated representative a hearing before the
Administrative Committee.
The Administrative Committee shall also permit the Claimant or his designated representative to
review pertinent documents in its possession, including copies of the Plan document and information
provided by the Employer relating to the Claimants entitlement to such benefit. The Administrative Committee shall make a final determination with respect to the Claimants
application for review as soon as practicable, and in any event not later than 60 days after
receipt of the aforesaid request for review, except that under special circumstances, such as the
necessity for holding a hearing, such 60-day period may be extended to the extent necessary, but in
no event beyond the expiration of 120 days after receipt by the Administrative Committee
60
of such request for review. If such an extension of time for review is required because of special
circumstances, written notice of the extension shall be furnished to the Claimant prior to the
commencement of the extension. Notice of such final determination of the Administrative Committee
shall be furnished to the Claimant in writing, in a manner calculated to be understood by him, and
shall set forth the specific reasons for the decision and specific references to the pertinent
provisions of the Plan upon which the decision is based. If the decision on review is not furnished
within the time period set forth above, the claim shall be deemed denied on review
If such final determination is favorable to the Claimant, it shall be binding and conclusive. If
such final determination is adverse to such Claimant, it shall be binding and conclusive unless the
Claimant notifies the Administrative Committee within 90 days after the mailing or delivery to him
by the Administrative Committee of its determination that he intends to institute legal proceedings
challenging the determination of the Administrative Committee, and actually institutes such legal
proceeding within 180 days after such mailing or delivery.
8.26 Disputed Benefits. If any dispute shall arise between a Participant, or other
person claiming under a Participant, and the Administrative Committee after the review of a claim
for benefits, or in the event any dispute shall develop as to the person to whom the payment of any
benefit under the Plan shall be made, the Trustee may withhold the payment of all or any part of
the benefits payable hereunder to the Participant, or other person claiming under the Participant,
until such dispute has been resolved by a court of competent jurisdiction or settled by the parties
involved.
8.27 Claims Involving Benefits Related to Disability. The provisions of this Section
8.27 are effective for Total and Permanent Disability claims (and disability claims filed under an
Appendix hereto) filed on or after January 1, 2002. Notwithstanding any provision of this Article
VIII to the contrary, the Benefits Group and Administrative Committee shall comply with and follow
the applicable Department of Labor Regulations for claims involving a determination of Total and
Permanent Disability or benefits related to Total and Permanent Disability, including, but not
limited to:
8.27.1 The Benefits Group shall advise a Claimant of the Plans adverse benefit determination
within a reasonable period of time, but not later than 45 days after receipt of the claim by the
Plan. If the Benefits Group determines that due to matters beyond the control of the Plan, such
decision cannot be reached within 45 days, an additional 30 days may be provided and the Benefits
Group shall notify the Claimant of the extension prior to the end of the original 45-day period.
The 30-day extension may be extended for a second 30-day period, if before the end of the original
extension, the Benefits Group determines that due to circumstances beyond the control of the Plan,
a decision cannot be rendered within the extension period.
8.27.2 Claimants shall be provided at least 180 days following receipt of a benefit denial in
which to appeal such adverse determination.
8.27.3 The Administrative Committee shall review the Claimants appeal and notify the Claimant
of its determination within a reasonable period of time, but not later than 45 days after receipt
of the Claimants request for review. Should the Administrative Committee determine that special circumstances
(such as the need to hold a hearing) require an extension of time for processing the appeal, the
Administrative Committee shall notify the Claimant of the
61
extension before the end of the initial 45 day period. Such an extension, if required, shall not exceed 45 days.
8.27.4 If the Administrative Committees final determination is favorable to the Claimant, it
shall be binding and conclusive. If such final determination is adverse to such Claimant, it shall
be binding and conclusive unless the Claimant notifies the Administrative Committee within 90 days
after the mailing or delivery to him by the Administrative Committee of its determination that he
intends to institute legal proceedings challenging the determination of the Administrative
Committee, and actually institutes such legal proceeding within 180 days after such mailing or
delivery.
62
ARTICLE IX. EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION AND MERGER.
9.1 Exclusive Benefit. Except as otherwise provided herein, the Employer shall have
no beneficial interest in any asset of the Trust and no part of any asset in the Trust may ever
revert to or be repaid to the Employer, either directly or indirectly; nor prior to the
satisfaction of all liabilities with respect to the Participants and their Beneficiaries under the
Plan, shall any part of the corpus or income of the Trust Fund, or any asset of the Trust, be (at
any time) used for, or diverted to, purposes other than the exclusive benefit of the Participants
or their Beneficiaries.
9.2 Amendment of the Plan. The Plan may be amended at any time and from time to time
by the Board of Directors. The Plan may also be amended at any time and from time to time by the
Committee (with the approval of the Board of Directors if the amendment relates to or otherwise
impacts the compensation of Section 16 Officers, as defined in Rule 16a-1 issued under the
Securities Exchange Act of 1934). The Administrative Committee also has the authority to amend the
Plan to the extent such amendments are (i) required by law or (ii) do not result in a material
increase in the Employers contributions to or the cost of maintaining the Plan, including without
limitation merging Employer sponsored retirement plans and adding covered locations to the Plan.
No amendment shall divest any vested interest of any Participant, surviving Spouse, or other
Beneficiary, and no amendment shall be effective unless the Plan shall continue to be for the
exclusive benefit of the Participants, surviving Spouses, and other Beneficiaries. In addition, no
amendment shall decrease any Participants Accrued Benefit, eliminate or reduce any benefit subsidy
or early retirement benefit, or eliminate any optional form of benefit except in accordance with
Section 411(d)(6) and Section 412(c)(8) of the Code.
In addition to the above, if the Employer makes an alternative deficit reduction contribution
pursuant to Code Section 412(l)(12) and ERISA Section 302(d)(12), any amendment to the Plan will
satisfy the requirements of Code Section 412(l)(12)(B) and ERISA Section 302(d)(12).
9.3 Amendment to Vesting Provisions. The Board of Directors has the right to amend
the vesting provisions of the Plan at any time. In addition, the Committee (or the Administrative
Committee pursuant to a delegation by the Committee) has the right to amend the vesting provisions
of the Plan at any time unless the amendment relates to or otherwise impacts the compensation of
Section 16 Officers, as defined in Rule 16a-1 issued under the Securities Exchange Act of 1934.
However, the Administrative Committee and Benefits Group shall not apply any such amended vesting
schedule to reduce the vested percentage of any Participants Accrued Benefit derived from Employer
contributions (determined as of the later of the date the Employer adopts the amendment, or the
date the amendment becomes effective) to a percentage less than the vested percentage computed
under the Plan without regard to the amendment. An amended vesting schedule shall apply to a
Participant only if the Participant receives credit for at least one Hour of Service after the new
schedule becomes effective.
If the Employer makes a permissible amendment to the vesting provisions of the Plan, each Salaried
Participant having at least three (3) Plan Years of service with the Employer, and each Hourly
Participant, Arrow Salaried Participant, Arrow Hourly Participant, and Arrow Berks Participants
with at least three Years of Vesting Service, may elect to have the percentage of his vested
Accrued Benefit computed under the Plan without regard to the amendment. For Participants who do
not have at least one Hour of Service on any Plan Year beginning after December 31, 1988, the
election described in the preceding sentence applies only to Participants having at least five (5)
Plan Years of service with the Employer. The Participant must file his election with the Benefits
Group within sixty (60) days of the latest of (a) the
63
adoption of the amendment; (b) the effective date of the amendment; or (c) the Participants receipt of a copy of the amendment. The Benefits
Group, as soon as practicable, shall forward to each affected Participant a true copy of any
amendment to the vesting provisions, together with an explanation of the effect of the amendment,
the appropriate form upon which the Participant may make an election to remain under the vesting
provisions provided under the Plan prior to the amendment, and notice of the time within which the Participant must make an election
to remain under the prior vesting provisions. The election described in this Section does not
apply to a Participant if the amended vesting provisions provide for vesting at least as rapid at
all times as the vesting provisions in effect prior to the amendment. For purposes of this
Section, an amendment to the vesting provisions of the Plan includes any Plan amendment which
directly or indirectly affects the computation of the vested percentage of an Employees rights to
his Employer derived Accrued Benefit.
9.4 Merger/Direct Transfers and Elective Transfers. The Employer and the
Administrative Committee shall not consent to, or be a party to, any merger or consolidation with
another plan, or to a transfer of assets or liabilities to another plan, unless immediately after
the merger, consolidation or transfer, the surviving plan provides each Participant a benefit equal
to or greater than the benefit each Participant would have received had the Plan terminated
immediately before the merger, consolidation or transfer. The Trustee possesses the specific
authority to enter into merger agreements or agreements for the direct transfer of assets with the
trustee of other retirement plans described in Code Section 401(a), and to accept the direct
transfer of plan assets, or to transfer Plan assets as a party to any such agreement, upon the
consent or direction of the Employer or the Administrative Committee.
If permitted by the Employer in its discretion, the Trustee may accept a direct transfer of plan
assets on behalf of an Employee prior to the date the Employee becomes a Participant in the Plan.
If the Trustee accepts such a direct transfer of plan assets, the Benefits Group and Trustee shall
treat the Employee as a Participant for all purposes of the Plan, except the Employee shall not
accrue benefits until he actually becomes a Participant in the Plan.
Unless a transfer of assets to this Plan is an Elective Transfer, the Plan will preserve all Code
Section 411(d)(6) protected benefits with respect to the transferred assets, in the manner
described in Section 9.2. A transfer is an Elective Transfer if: (a) the transfer satisfies the
first paragraph of this Section; (b) the transfer is voluntary, under a fully informed election by
the Participant; (c) the Participant has an alternative that retains his Code Section 411(d)(6)
protected benefits (including an option to leave his benefit in the transferor plan, if that plan
is not terminating); (d) the transfer satisfies the applicable spousal consent requirements of the
Code; (e) the transferor plan satisfies the joint and survivor notice requirements of the Code, if
the Participants transferred benefit is subject to those requirements; (f) the Participant has a
right to immediate distribution from the transferor plan, in lieu of the Elective Transfer; (g) the
transferred benefit is at least the greater of the single sum distribution provided by the
transferor plan for which the Participant is eligible or the present value of the Participants
accrued benefit under the transferor plan payable at that plans normal retirement age; (h) the
Participant has a one hundred percent (100%) vested interest in the transferred benefit; and (i)
the transfer otherwise satisfies applicable Treasury Regulations. If this Plan accepts an Elective
Transfer from a defined contribution plan, the Plan guarantees a benefit derived from that Elective
Transfer equal to the value of the transferred amount, expressed as an annual benefit payable at
Normal Retirement Age in the normal form of benefit. The Trustee shall distribute this guaranteed
benefit attributable to the Elective Transfer at the same time and in the same manner as it
distributes the Participants Accrued Benefit, and the Administrative Committee shall treat the
guaranteed benefit as part of the Participants Accrued Benefit for purposes of
64
valuing the Participants Accrued Benefit under any consent or election requirements provided in the Plan. An
Elective Transfer may occur between qualified plans of any type.
The Trustee shall hold, administer and distribute any transferred assets as a part of the Trust
Fund, and the Trustee shall maintain a separate Transfer Account for the benefit of the Employee
on whose behalf the Trustee accepted the transfer in order to reflect the value of the transferred
assets.
Furthermore, a merger or direct transfer described in this Section of the Plan is not a termination
for purposes of the special distribution provisions described in this Section.
9.5 Termination of the Plan. The Sponsor, through action of its Board of Directors,
shall have the right, at any time, to suspend or discontinue its contributions under the Plan, and
to terminate, at any time, this Plan and the Trust. The Plan shall terminate upon the first to
occur of the following:
9.5.1 The date terminated by action of the Sponsor.
9.5.2 The date the Sponsor shall be judicially declared bankrupt or insolvent.
9.5.3 The dissolution, merger, consolidation or reorganization of the Sponsor, or the sale by
the Sponsor of all or substantially all of its assets, unless the successor or purchaser makes
provision to continue the Plan, in which event the successor or purchaser must substitute itself as
the Sponsor under this Plan.
The Plan may also be terminated by the Committee (with the approval of the Board of Directors if
the amendment relates to or otherwise impacts the compensation of Section 16 Officers, as defined
in Rule 16a-1 issued under the Securities Exchange Act of 1934).
In addition to the above, while each Participating Employer intends to continue the Plan
indefinitely, each reserves the right to terminate or partially terminate the Plan at any time as
to its Employees. If the Plan is terminated or partially terminated by a Participating Employer,
assets shall be allocated to the Accrued Benefits of affected Participants in the manner prescribed
in Section 9.8. No Employees of the Participating Employer shall thereafter be admitted to the Plan
as new Participants, and no Participating Employer shall make further contributions to the Fund,
except as may be required by law.
9.6 Full Vesting on Termination. Notwithstanding any other provision of the Plan to
the contrary, upon either full or partial termination of the Plan, an affected Participants right
to his Accrued Benefit shall be one hundred percent (100%) vested.
9.7 Partial Termination. Upon termination of the Plan with respect to a group of
Participants which constitutes a partial termination of the Plan, the Trustee shall allocate and
segregate for the benefit of the Employees then or theretofore employed by the Employer with
respect to which the Plan is being terminated the proportionate interest of such Participants in
the Fund. Such proportionate interest shall be determined by the actuary. The actuary shall make
this determination on the basis of the contributions made by the Employer, the provisions of this
Article and such other considerations as the actuary deems appropriate. The fiduciaries shall have
no responsibility with respect to the determination of any such proportionate interest.
65
The funds so allocated and segregated shall be used by the Trustee to pay benefits to or on behalf
of Participants in accordance with Section 9.8.
9.8 Allocation of Assets Upon Termination of Trust Fund. If any Participating
Employer terminates the Plan with respect to some or all Participants employed by it, the Benefits
Group shall first determine the date of distribution, if any, and the value of Plan assets
allocable to such Participants. Subject to provision for expense of administration of liquidation,
the Benefits Group, with the advice of the Plans enrolled actuary, shall determine amounts
allocable with respect to each affected Participant, surviving Spouse, and other Beneficiary. Such
allocation shall be made among the affected Participants, surviving Spouses, and other
Beneficiaries in the following order:
9.8.1 To that portion of a Participants benefit, if any, derived from his Accumulated
Contributions;
9.8.2 In the case of benefits payable as an annuity:
9.8.2.1 If the benefit of a Participant, surviving Spouse, or other Beneficiary
was in pay status as of the beginning of the three year period ending on the
termination date of the Plan, to each such benefit, based on the provisions of the
Plan (as in effect during the five year period ending on such date) under which the
benefit would be the least; or
9.8.2.2 If a benefit (other than a benefit described in Section 9.8.2.1) would
have been in pay status as of the beginning of such three year period and if the
benefits had begun (in the normal form of annuity under the Plan) as of the beginning
of such period, to each such benefit based on the provisions of the Plan (as in
effect during the five year period ending on such date) under which such benefit
would be the least.
For purposes of Section 9.8.2.1, the lowest benefit in pay status during a three year
period shall be considered the benefit in pay status for such period.
9.8.3 Any remaining assets shall be allocated:
9.8.3.1 To all other benefits (if any) of individuals under the Plan
guaranteed under Section 4022 of ERISA (without regard to Section 4022 (b) (5)
of ERISA);
9.8.3.2 To the additional benefits (if any) which would be determined
under Section 9.8.3.1 if Section 4022(b)(6) of ERISA did not apply;
9.8.3.3 To all other nonforfeitable benefits under the Plan;
9.8.3.4 To all Accrued Benefits under the Plan; and
9.8.3.5 To the Employer, if all liabilities of the Plan to Participants,
their surviving Spouses, and their other Beneficiaries, including liabilities
under Section 4044(d)(3) of ERISA, have been satisfied and such distribution is
not prohibited by any provision of law.
66
If the Fund is insufficient to provide in full for any of the classes set forth
above, the assets remaining shall be applied proportionately among
Participants, surviving Spouses, and other Beneficiaries of that class and
nothing shall be applied to any subsequent class.
The above priorities and allocation of assets shall be determined in accordance with Section 4044
of ERISA.
9.9 Manner of Distribution. Subject to the foregoing provisions of this Article IX,
any distribution after termination of the Plan may be made, in whole or in part, to the extent that
no discrimination in value results, in cash, in securities or other assets in kind (based on their
fair market value as of the date of distribution), or in nontransferable annuity contracts
providing for pensions commencing at Normal Retirement Date, as the Benefits Group in its
discretion shall determine.
9.10 Overfunding. If there are assets remaining after satisfying all liabilities to
Participants and Beneficiaries upon termination of the Plan, the Trustee shall return the amount by
which the Employer has overfunded the Plan to the Employer. The Employer shall instruct the
Trustee regarding the amount of overfunding to be so returned.
67
ARTICLE X. WITHDRAWAL OF PARTICIPATING EMPLOYER.
10.1 Withdrawal. Each Participating Employer may elect to cause a withdrawal from the
Plan of that share of Plan assets allocable to the benefits of Participants employed by it, their
surviving Spouses, and other Beneficiaries. After the effective date of such a withdrawal, the
provisions of the Plan shall continue to be effective (with such amendments as may thereafter be
made from time to time by the withdrawing Employer) as a separate plan for the exclusive benefit of
the Participants employed by the withdrawing Participating Employer, their surviving Spouses, and
other Beneficiaries, as to which the withdrawing Participating Employer shall succeed to all the
rights, powers and duties of the Sponsor under the Plan. In such case, the board of directors of
the withdrawing Participating Employer shall succeed to all the rights, powers, and duties of the
Board of Directors under the Plan, and the board of directors of the withdrawing Participating
Employer shall appoint a committee to administer the separate plan after the effective date of the
withdrawal.
10.2 Notice of Withdrawal. Whenever any Participating Employer shall elect to cause a
withdrawal from the Plan with respect to its Employees, it shall, by action of its board of
directors, file notice in writing with the Committee and the Trustee of its election, and shall
direct the Trustee or a successor trustee named by such withdrawing Participating Employer to hold
as a separate trust the amount of assets that the Plan actuary shall certify to the Committee and
the Trustee, or successor, to be allocable to the benefits of Participants employed by the
withdrawing Participating Employer, their surviving Spouses, and other Beneficiaries. Such
separate plan and trust initially shall have the same provisions as the Plan and the trust
agreement for the Trust under the Plan, except as otherwise provided in Section 10.1.
10.3 Withdrawal at Request of Board of Directors. In the event that the Board of
Directors shall determine that a Participating Employer shall no longer participate in the Plan,
such Participating Employer shall withdraw from the Plan in the manner provided in Section 10.1 and
Section 10.2 within six months after notice of such determination is given.
10.4 Continuation of Plan. Neither the withdrawal from the Plan nor the termination
thereof by a Participating Employer pursuant to the provisions of Article IX and Article X shall
affect in any manner the continuance of the Plan with respect to any other Employer, and all the
terms and conditions of the Plan shall continue to be applicable to such Employer and its Employees
as if such withdrawal or termination had not taken place.
68
ARTICLE XI. LIMITATIONS ON BENEFITS.
11.1 Limitation on Annual Benefits.
11.1.1 Definitions. For purposes of this Section 11.1, the following definitions and
rules of interpretation shall apply:
11.1.1.1 Annual Benefit. The Participants retirement benefit
attributable to Employer contributions (including any portion of such benefit payable
to an alternate payee under a qualified domestic relations order satisfying the
requirements of Code Section 414(p)), payable annually in the form of a straight life
annuity (with no ancillary benefits) under a Defined Benefit Plan subject to Code
Section 415(b). The Annual Benefit excludes any benefits attributable to Employee
contributions, rollover contributions, or assets transferred from a qualified plan
that was not maintained by the Employer. However, effective for Limitation Years
beginning on or after July 1, 2007, the determination of the Annual Benefit shall
take into account social security supplements described in Code Section 411(a)(9) and
benefits transferred from another defined benefit plan, other than transfers of
distributable benefits pursuant to Treasury Regulations Section 1.411(d)-4, Q&A-3.
Except as provided below, for Limitation Years beginning before July 1, 2007, the
Annual Benefit payable in a form other than a straight life annuity must be adjusted
to an actuarial equivalent straight life annuity before applying the limitations of
this Section 11.1. For Limitation Years beginning on or after July 1, 2007, except
as provided below, if the Participants Annual Benefit is payable in a form other
than a straight life annuity, the Annual Benefit shall be adjusted to an actuarially
equivalent straight life annuity that begins at the same time as such other form of
benefit and is payable on the first day of each month, before applying the
limitations of this Section 11.1. In addition, for Limitation Years beginning on or
after July 1, 2007, for a Participant who has or will have distributions commencing
at more than one Annuity Starting Date, the Annual Benefit shall be determined as of
each such Annuity Starting Date (and shall satisfy the limitations of this Section
11.1 as of each such date), actuarially adjusting for past and future distributions
of benefits commencing at the other Annuity Starting Date(s). For this purpose, the
determination of whether a new Annuity Starting Date has occurred shall be made
without regard to Treasury Regulations Section 1.401(a)-20, Q&A-10(d) and with regard
to Treasury Regulations Sections1.415(b)-1(b)(1)(iii)(B) and (C).
No actuarial adjustment to the Annual Benefit is required for: (i) survivor benefits
payable to a surviving Spouse under a Qualified Joint and Survivor Annuity to the
extent such benefits would not be payable if the Participants Annual Benefit were
paid in another form; (ii) benefits that are not directly related to retirement
benefits (such as a qualified disability benefit, preretirement incidental death
benefits, and post-retirement medical benefits); or (iii) effective for Limitation
Years beginning on and after July 1, 2007, the inclusion in the form of benefit of an
automatic benefit increase feature, provided the form of benefit is not subject to
Code Section 417(e)(3) and would otherwise satisfy the limitations of this Section
11.1, and the Plan provides that the amount payable under the form of benefit in any
Limitation Year shall not exceed the limits of this Section 11.1
69
applicable at the Annuity Starting Date, as increased in subsequent years pursuant to Code Section
415(d). For this purpose, an automatic benefit increase feature is included in a
form of benefit if the form of benefit provides for automatic, periodic increases to
the benefits paid in that form.
The Benefits Group shall determine actuarial equivalence under this Section 11.1.1.1
in accordance with the following:
11.1.1.1.1 Distributions Beginning After December 31, 2001 and Before
January 1, 2004. The actuarially equivalent straight life annuity is equal
to the annual amount of the straight life annuity commencing at the same
Annuity Starting Date that has the same actuarial present value as the
Participants form of benefit, computed using whichever of the following
produces the greater amount: (a) (i) with respect to Salaried Participants,
the Plans interest rate and mortality table specified in Section 1.3 for
adjusting benefits in the same form; (ii) with respect to Hourly Participants,
the Plan interest rate and mortality table specified in Appendix E or a
Schedule thereto for adjusting benefits in the same form; and (iii) with
respect to Arrow Salaried Participants, the Plans interest rate and mortality
table specified in Appendix F for adjusting benefits in the same form; (iv)
with respect to Arrow Hourly Participants, the Plans interest rate and
mortality table specified in Appendix G for adjusting benefits in the same
form; and (v) with respect to Arrow Berks Participants, the Plans interest
rate and mortality table specified in Appendix H for adjusting benefits in the
same form; and (b) a 5% interest rate assumption and the Applicable Mortality
Table for that Annuity Starting Date. Notwithstanding the foregoing, to
determine actuarial equivalence under this Section 11.1.1.1 for a benefit that
is in a form other than a straight life annuity and that is subject to Code
Section 417(e)(3), the Applicable Interest Rate shall be substituted for a 5%
interest rate assumption in the preceding sentence.
11.1.1.1.2 Distributions Beginning in Years After December 31,
2003.
11.1.1.1.2.1 Benefit Forms Not Subject to Code Section
417(e)(3). The straight life annuity that is the actuarial
equivalent to the Participants form of benefit shall be determined under
this Section 11.1.1.1.2.1 if the form of the Participants benefit is a
non-decreasing annuity (other than a straight life annuity) payable for a
period of not less than the life of the Participant (or, in the case of a
qualified pre-retirement survivor annuity, the life of the surviving
Spouse), or an annuity that decreases during the life of the Participant
merely because of the death of the survivor annuitant (but only if the
reduction is not below fifty percent (50%) of the benefit payable before
the death of the survivor annuitant) or the cessation or reduction of
Social Security supplements or qualified disability payments (as defined
in Code Section 401(a)(11)).
70
11.1.1.1.2.1.1 For Limitation Years beginning before July
1, 2007, the actuarial equivalent straight life annuity is equal to
the annual amount of the straight life annuity commencing at the same
Annuity Starting Date that has the same actuarial present value as
the Participants form of benefit computed using whichever of the
following produces the greater amount: (I) (i) with respect to
Salaried Participants, the Plans interest rate and mortality table
specified in Section 1.3 for adjusting benefits in the same form;
(ii) with respect to Hourly Participants, the Plan interest rate and
mortality table specified in Appendix E or a Schedule thereto for
adjusting benefits in the same form; and (iii) with respect to Arrow
Salaried Participants, the Plans interest rate and mortality table
specified in Appendix F for adjusting benefits in the same form; (iv)
with respect to Arrow Hourly Participants, the Plans interest rate
and mortality table specified in Appendix G for adjusting benefits in
the same form; and (v) with respect to Arrow Berks Participants, the
Plans interest rate and mortality table specified in Appendix H for
adjusting benefits in the same form; and (II) a 5% interest rate
assumption and the Applicable Mortality Table for that Annuity
Starting Date.
11.1.1.1.2.1.2 For Limitation Years beginning on or after July
1, 2007, the actuarially equivalent straight life annuity is equal to
the greater of: (I) the annual amount of the straight life annuity
(if any) payable to the Participant under the Plan commencing at the
same Annuity Starting Date as the Participants form of benefit; and
(II) the annual amount of the straight life annuity commencing at the
same Annuity Starting Date that has the same actuarial present value
as the Participants form of benefit computed using a 5% interest
rate assumption and the Applicable Mortality Table in effect prior to
January 1, 2008 for the Annuity Starting Date.
11.1.1.1.2.2 Benefit Forms Subject to Code Section
417(e)(3). The straight life annuity that is actuarially
equivalent to the Participants form of benefit shall be determined
under this Section 11.1.1.1.2.2 if the form of the Participants
benefit is other than a benefit form described in Section
11.1.1.1.2.1.
11.1.1.1.2.2.1 Annuity Starting Dates in Plan Years
beginning on or after January 1, 2004 and before January 1, 2006.
The actuarially equivalent straight life annuity is equal to the
annual amount of the straight life annuity commencing at the same
Annuity Starting Date that has the same actuarial present value as
the Participants form of benefit computed using whichever of the
following produces the greater annual amount: (I) (i) with respect
to Salaried Participants, the Plans interest rate and mortality
table specified in Section 1.3 for adjusting benefits in the same
form; (ii) with respect to Hourly Participants, the Plan interest
rate and mortality table specified in Appendix E or a
71
Schedule thereto for adjusting benefits in the same form; and
(iii) with respect to Arrow Salaried Participants, the Plans
interest rate and mortality table specified in Appendix F for
adjusting benefits in the same form; (iv) with respect to Arrow
Hourly Participants, the Plans interest rate and mortality table
specified in Appendix G for adjusting benefits in the same form; and
(v) with respect to Arrow Berks Participants, the Plans interest
rate and mortality table specified in Appendix H for adjusting
benefits in the same form; and (II) a 5.5% interest rate assumption
and the Applicable Mortality Table.
Notwithstanding the foregoing, if the Annuity Starting Date is
on or after January 1, 2004 and before December 31, 2004, the
application of this Section 11.1.1.1.2.2.1 shall not cause the amount
payable under the Participants form of benefit to be less than the
benefit calculated under the Plan, taking into account the
limitations of this Section 11.1, except that the actuarially
equivalent straight life annuity is equal to the annual amount of the
straight life annuity commencing at the same Annuity Starting Date
that has the same actuarial present value as the Participants form
of benefit, computed using whichever of the following produces the
greatest annual amount: (A) (i) with respect to Salaried
Participants, the Plans interest rate and mortality table specified
in Section 1.3; (ii) with respect to Hourly Participants, the Plan
interest rate and mortality table specified in Appendix E or a
Schedule thereto; and (iii) with respect to Arrow Salaried
Participants, the Plans interest rate and mortality table specified
in Appendix F; (iv) with respect to Arrow Hourly Participants, the
Plans interest rate and mortality table specified in Appendix G; and
(v) with respect to Arrow Berks Participants, the Plans interest
rate and mortality table specified in Appendix H; (B) the Applicable
Interest Rate and the Applicable Mortality Table; and (C) the
Applicable Interest Rate (as in effect on the last day of the last
Plan Year beginning before January 1, 2004, under provisions of the
Plan then adopted and in effect) and the Applicable Mortality Table.
11.1.1.1.2.2.2 Annuity Starting Dates in Plan Years
beginning after December 31, 2005. The actuarially equivalent
straight life annuity is equal to the annual amount of the straight
life annuity commencing at the same Annuity Starting Date that has
the same actuarial present value as the Participants form of
benefit, computed using: (I) (i) with respect to Salaried
Participants, the Plans interest rate and mortality table specified
in Section 1.3 for adjusting benefits in the same form; (ii) with
respect to Hourly Participants, the Plan interest rate and mortality
table specified in Appendix E or a Schedule thereto for adjusting
benefits in the same form; and (iii) with respect to Arrow Salaried
Participants, the Plans interest rate and mortality table specified
in Appendix F for adjusting benefits in the same form; (iv) with
respect to Arrow Hourly Participants, the Plans interest rate and
72
mortality table specified in Appendix G for adjusting benefits
in the same form; and (v) with respect to Arrow Berks Participants,
the Plans interest rate and mortality table specified in Appendix H
for adjusting benefits in the same form; (II) the interest rate
assumption specified in Code Section 415(b)(2)(E)(ii)(I) (currently
5.5.%) and the Applicable Mortality Table in effect prior to January
1, 2008; or (III) the Applicable Mortality Table in effect prior to
January 1, 2008 and the Applicable Interest Rate, divided by 1.05,
whichever produces the greatest benefit.
11.1.1.2 Compensation.
11.1.1.2.1 Salaried Participants. Except as otherwise provided
in an Appendix hereto, Compensation with respect to the Limitation Year
means the Participants wages, salaries, fees for professional services and
other amounts received for personal services actually rendered in the course
of employment with the Employer maintaining the Plan to the extent that the
amounts are includible in gross income (including, but not limited to,
commissions paid salesmen, compensation for services on the basis of
percentage of profits, commissions on insurance premiums, tips and bonuses.)
A Compensation payment includes Compensation paid by the Employer to an
Employee through another person under the common paymaster provisions of
Code Sections 3121(s) and 3306(p). However, Compensation does not include:
11.1.1.2.1.1 Employer contributions (other than amounts
excludible from the Employees gross income under Code Section
402(e)(3) (relating to a Code Section 401(k) arrangement), Code
Section 402(h) (relating to a Simplified Employee Pension), Code
Section 403(b) (relating to a tax-sheltered annuity), Code Section
408(p) (relating to a Simple Retirement Account), Code Section 125
(relating to a cafeteria plan), Code Section 132(f)(4) (relating to
qualified transportation fringe benefits, effective for Limitation
Years beginning after December 31, 2000), or Code Section 457(b)
(collectively Elective Contributions)) to the extent such
contributions are not includible in the Employees gross income for
the taxable year in which contributed, and any distributions (whether
or not includible in gross income when distributed) from a plan of
deferred compensation (whether or not qualified), other than amounts
received during the year by a Participant pursuant to a nonqualified
unfunded deferred compensation plan, which shall be included in
Compensation, but only to the extent includible in gross income;
11.1.1.2.1.2 Amounts realized from the exercise of a nonqualified
stock option, or when restricted stock (or property) held by an
Employee either becomes freely transferable or is no longer subject
to a substantial risk of forfeiture;
73
11.1.1.2.1.3 Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option;
11.1.1.2.1.4 Other amounts which receive special tax benefits,
such as premiums for group term life insurance (but only to the
extent that the premiums are not includible in the gross income of
the Employee and are not salary reduction amounts that are described
in Code Section 403(b)), or contributions made by an Employer
(whether or not under a salary reduction agreement) towards the
purchase of an annuity contract described in Code Section 403(b)
(whether or not the contributions are excludible from the gross
income of the Employee), other than Elective Contributions; and
11.1.1.2.1.5 Other items of remuneration that are similar to any
of the items listed in 11.1.1.2.1.1 through 11.1.1.2.1.4, above.
For Plan Years and Limitation Years beginning on and after January 1,
2002, amounts referenced under Code Section 125 include any amounts
not available to a Participant in cash in lieu of group health
coverage because the Participant is unable to certify that he has
other health coverage. An amount will be treated as an amount under
Code Section 125 only if the Employer does not request or collect
information regarding the Participants other health coverage as part
of the enrollment process for the health plan. For any self-employed
individual Compensation shall mean earned income, as defined in Code
Section 401(c)(2).
For Limitation Years beginning on and after January 1, 2008,
Compensation shall include Post-Severance Compensation paid by the
later of: (i) two and one-half (21/2) months (or such other period as
extended by subsequent Treasury Regulations or other published
guidance) after Severance from Employment with the Employer; or (ii)
the end of the Limitation Year that includes the date of the
Employees Severance from Employment with the Participating Employer.
Post-Severance Compensation means payments that would have been
included in the definition of Compensation if they were paid prior to
the Employees Severance from Employment and the payments are: (a)
regular Compensation for Services during the Participants regular
working hours, Compensation for Services outside the Participants
regular working hours (such as overtime or shift differential),
commissions, bonuses, or other similar compensation, if the payments
would have been paid to the Employee if the Employee had continued in
employment with the Employer; (b) for accrued bona fide sick,
vacation or other leave, but only if the Participant would have been
able to use the leave if employment had continued; or (c) received by
an Employee pursuant to a nonqualified unfunded deferred compensation
plan,
74
but only if the payment would have been paid to the Employee at the
same time if the Employee had continued in employment with the
Employer and only to the extent the payment is includible in the
Employees gross income. Any payments not described in the preceding
sentence are not considered Post-Severance Compensation if paid after
Severance from Employment, except for payments (1) to an individual
who does not currently perform services for the Employer by reason of
Qualified Military Service (within the meaning of Code Section
414(u)(1)) to the extent these payments do not exceed the amounts the
individual would have received if the individual had continued to
perform services for the Employer; or (2) to any Participant who is
permanently and totally disabled for a fixed or determinable period,
as determined by the Benefits Group. For purposes of this Section
11.1.1.2, permanently and totally disabled means that the
individual is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment
which can be expected to result in death or which has lasted or can
be expected to last for a continuous period of not less than 12
months.
Effective January 1, 2009, if Salaried Participants Compensation
under the Plan was not frozen effective for Plan Years beginning
after 2008, Compensation would also include any differential wage
payments (as defined in Code Section 3401(h)(2)) from the Employer,
as required by Code Section 414(u)(12), as amended by the HEART Act.
Back pay, within the meaning of Treasury Regulations Section
1.415(c)-2(g)(8), shall be treated as Compensation for the Limitation
Year to which the back pay relates to the extent the back pay
represents an amount that would otherwise be Compensation.
11.1.1.2.2 Hourly Participants. Compensation shall mean
Limitation Compensation, as defined in Appendix E.
11.1.1.2.3 Arrow Salaried Participants. Compensation shall mean
Limitation Compensation, as defined in Appendix F.
11.1.1.2.4 Arrow Hourly Participants. Compensation shall mean
Limitation Compensation, as defined in Appendix G.
11.1.1.2.5 Arrow Berks Participants. Compensation with respect
to a Limitation Year means wages within the meaning of Code Section 3401(a)
(for purposes of income tax withholding at the source), plus Elective
Contributions. For purposes of this Section 11.1.2.5, Elective
Contributions are amounts that would be included in an Employees wages
but for an election under Code Sections 402(e)(3), 402(h)(1)(B), 402(k), 125
(a), 132(f)(4) (relating to qualified transportation fringe benefits,
effective for Limitation Years beginning after December 31,
75
2000), or Code Section 457(b). However, any rules that limit the
remuneration included in wages based on the nature or location of the
employment or the services performed are disregarded for purposes of
determining an Employees Compensation. For Plan Years and Limitation Years
beginning on and after September 1, 2002, amounts referenced under Code
Section 125 include any amounts not available to a Participant in cash in
lieu of group health coverage because the Participant is unable to certify
that he has other health coverage. An amount will be treated as an amount
under Code Section 125 only if an Employer does not request or collect
information regarding the Participants other health coverage as part of the
enrollment process for the health plan. For any self-employed individual
Compensation shall mean earned income, as defined in Code Section 401(c)(2).
For Limitation Years beginning on and after September 1, 2007, Compensation
shall not be greater than the limit under Code Section 401(a)(17) that
applies to that year.
For Limitation Years beginning on and after August 1, 2007, Compensation
shall include Post-Severance Compensation paid by the later of: (A) two and
one-half (21/2) months (or such other period as extended by subsequent
regulations or other published guidance) after Severance from Employment
with the Employer; or (B) the end of the Limitation Year that includes the
date of the Employees Severance from Employment with the Employer.
Post-Severance Compensation means payments that would have been
included in the definition of Compensation if they were paid prior to the
Employees Severance from Employment and the payments are: (i) regular
Compensation for services during the Participants regular working hours,
Compensation for services outside the Participants regular working hours
(such as overtime or shift differential), commissions, bonuses, or other
similar compensation, if the payments would have been paid to the Employee
if the Employee had continued in employment with the Employer; (ii) for
accrued bona fide sick, vacation or other leave, but only if the Participant
would have been able to use the leave if employment had continued; or (iii)
received by an Employee pursuant to a nonqualified unfunded deferred
compensation plan, but only if the payment would have been paid to the
Employee at the same time if the Employee had continued in employment with
the Employer and only to the extent the payment is includible in the
Employees gross income. Any payments not described in the preceding
sentence are not considered Post-Severance Compensation if paid after
Severance from Employment, except for payments (I) to an individual who does
not currently perform services for a Employer by reason of Qualified
Military Service (within the meaning of Code Section 414(u)(1)) to the
extent these payments do not exceed the amounts the individual would have
received if the individual had continued to perform services for the
Employer; or (II) to any Employee who is permanently and totally disabled
for a fixed or determinable period, as determined by the Committee. For
purposes of this Section 5.9(a)(5), permanently and totally disabled means
that the individual is unable to engage in any substantial gainful activity
by reason of any medically determinable physical or mental impairment which
can be expected to
76
result in death or which has lasted or can be expected to last for a
continuous period of not less than 12 months.
Back pay, within the meaning of treasury regulations section
1.415(c)-2(g)(8), shall be treated as Compensation for the Limitation Year
to which the back pay relates to the extent the back pay represents an
amount that would otherwise be Compensation.
11.1.1.3 Defined Benefit Plan. A retirement plan that does not provide
for individual accounts for Employer contributions. The Benefits Group shall treat
all Defined Benefit Plans (whether or not terminated) maintained by the Employer as
a single plan.
11.1.1.4 Defined Contribution Plan. A retirement plan that provides
for an individual account for each participant and for benefits based solely on the
amount contributed to the participants account, and any income, expenses, gains,
and losses, and any forfeitures of accounts of other participants that the plan may
allocate to such participants account. Solely for purposes of this Section 11.1
(except for the $10,000 minimum benefit limitation of Section 11.1.2.4), the
Benefits Group shall treat Employee contributions made to any Defined Benefit Plan
maintained by a Participating Employer as a separate Defined Contribution Plan.
The Benefits Group shall also treat as a Defined Contribution Plan an individual
medical account (as defined in Code Section 415(1)(2)) included as part of a
Defined Benefit Plan maintained by a Participating Employer and a welfare benefit
fund under Code Section 419(e) maintained by an Employer to the extent there are
post-retirement medical benefits allocated to the separate account of a key
employee (as defined in Code Section 419A(d)(3)). The Benefits Group shall treat
all Defined Contribution Plans (whether or not terminated) maintained by an
Employer as a single plan.
11.1.1.5 Employer. The Employer that adopts this Plan and any Related
Employers. Solely for purposes of applying the limitations of this Section 11.1,
the Benefits Group shall determine Related Employers by modifying Code Sections
414(b) and (c) in accordance with Code Section 415(h).
11.1.1.6 High Three-Year Average Compensation. The average of the
Participants Compensation for the three (3) consecutive Years of Service (or, if
the Participant has less than three (3) consecutive Years of Service, the
Participants longest consecutive period of service, including fractions of years,
but not less than one year) with the Employer that produces the highest average.
Effective for Limitation Years beginning on or after July 1, 2007, in the case of a
Participant who is rehired by the Employer after a Severance from Employment, the
Participants High Three-Year Average Compensation shall be calculated by excluding
all years for which the Participant performs no services for and receives no
Compensation from the Employer (the break period) and by treating the years
immediately preceding and following the break period as consecutive. In addition,
effective for Limitation Years beginning on or after July 1, 2007, a Participants
Compensation for a Year of Service shall not include Compensation in excess of the
limitation under Code Section 401(a)(17) that is in effect for the calendar year in
which such Year of Service begins
77
11.1.1.7 Limitation Year. The Plan Year. If the Limitation Year is
amended to a different 12 consecutive month period, the new Limitation Year must
begin on a date within the Limitation Year in which the amendment is made.
11.1.1.8 Predecessor Employer. If the Plan, as maintained by the
Employer, provides a benefit which a Participant accrued while performing services
for a former employer, the former employer is a Predecessor Employer with respect
to the Participant. A former entity that antedates the Employer is also a
Predecessor Employer with respect to a Participant if, under the facts and
circumstances, the Employer constitutes a continuation of all or a portion of the
trade or business of the former entity.
11.1.1.9 Projected Annual Benefit. The annual benefit (adjusted to an
actuarially equivalent straight life annuity if the plan expresses such benefit in
a form other than a straight life annuity or qualified joint and survivor annuity)
to which a Participant would be entitled under a Defined Benefit Plan on the
assumptions that he continues employment until the normal retirement age (or
current age, if that is later) thereunder, that his Compensation continues at the
same rate as in effect for the Limitation Year under consideration until such age,
and that all other relevant factors used to determine benefits under the Defined
Benefit Plan remain constant as of the current Limitation Year for all future
Limitation Years.
11.1.1.10 Year of Service.
11.1.1.10.1 Salaried Participants. A 12 consecutive month
period measured from the date an Employee is first credited with an Hour of
Service or any anniversary thereof (or his reemployment commencement date or
any anniversary thereof), but only if the Plan is in existence for such Year
of Service and the Participant is a Participant in the Plan at least one day
during that Year of Service.
11.1.1.10.2 Hourly Participants. A Year of Vesting Service, as
determined under Section 3.2 of Appendix E, but only if the Plan is in
existence for such Year of Vesting Service and the Participant is a
Participant in the Plan at least one day during that Year of Vesting
Service.
11.1.1.10.3 Arrow Salaried Participants. A Year of Benefit
Service, as determined under Section 1.38 of Appendix F, but only if the
Plan is in existence for such Year of Benefit Service and the Participant is
a Participant in the Plan at least one day during that Year of Benefit
Service.
11.1.1.10.4 Arrow Hourly Participants. A Year of Benefit
Service, as determined under Section 1.38 of Appendix G, but only if the
Plan is in existence for such Year of Benefit Service and the Participant is
a Participant in the Plan at least one day during that Year of Benefit
Service.
78
11.1.1.10.5 Arrow Berks Participants. A Year of Benefit
Service, as determined under Section 1.33 of Appendix H, but only if the
Plan is in existence for such Year of Benefit Service and the Participant is
a Participant in the Plan at least one day during that Year of Benefit
Service.
If the Participant receives credit for only a partial Year of Service, he
will receive credit for only a partial Year of Service for purposes of the
limitations of this Section 11.1. For any other Defined Benefit Plan taken
into account, a Year of Service is each accrual computation period for which
the Participant receives credit for at least the number of Hours of Service
(or period of service, if the Defined Benefit Plan uses elapsed time)
necessary to accrue a benefit for that accrual computation period and the
eligibility conditions of the Defined Benefit Plan include the Participant
as a participant in that plan on at least one day of that accrual
computation period. If the Employee satisfies the conditions described in
the previous sentence, he will receive credit for a Year of Service (or a
partial Year of Service, if applicable) equal to the amount of benefit
accrual service (computed to fractional parts of a year) credited under that
Defined Benefit Plan for the accrual computation period. A Participant
receives credit for a Year of Service under another Defined Benefit Plan
only if the Defined Benefit Plan was established no later than the last day
of the accrual computation period to which the Year of Service relates. The
Participant will not receive credit for more than one Year of Service under
this paragraph with respect to the same 12-month period.
11.1.2 Limitation on Annual Benefit. A Participants Annual Benefit payable at any
time within a Limitation Year may not exceed the limitations of this Section 11.1.2, even if the
benefit formula under the Plan would produce a greater Annual Benefit.
11.1.2.1 General Rule. Effective for Limitation Years ending after
December 31, 2001, with respect to Participants who are credited with an Hour of
Service after such date, a Participants Annual Benefit may not exceed the lesser
of $160,000 (as automatically adjusted under Code Section 415(d), effective January
1 of each year, as published in the Internal Revenue Bulletin), payable in the
form of a straight life annuity (the Dollar Limitation); or 100% of the
Participants High Three-Year Average Compensation, payable in the form of a
straight life annuity (the Compensation Limitation).
If a Participant is rehired after a Severance from Employment, the Compensation
Limitation is the greater of 100% of the Participants High Three-Year Average
Compensation, as determined prior to the Severance from Employment, or 100% of the
Participants High Three-Year Average Compensation, as determined after the
Severance from Employment.
Effective for Annuity Starting Dates in Limitation Years ending after December 31,
2001, the Dollar Limitation shall be adjusted if the Participants Annuity Starting
Date is before age 62 or after age 65. If the Annuity Starting Date is before age
62, the Dollar Limitation shall be adjusted under Section 11.1.2.2. If the Annuity
Starting Date is after age 65, the Dollar Limitation shall be adjusted under
Section 11.1.2.3. However, no adjustment shall be made to the Dollar
79
Limitation to reflect the probability of a Participants death between the Annuity
Starting Date and age 62 or between age 65 and the Annuity Starting Date, as
applicable, if benefits are not forfeited upon the death of the Participant prior
to the Annuity Starting Date. To the extent benefits are forfeited upon death
before the Annuity Starting Date, such an adjustment shall be made. For this
purpose, no forfeiture shall be treated as occurring upon the Participants death
if the Plan does not charge Participants for providing a qualified preretirement
survivor annuity, as defined in Code Section 417(c), upon the Participants death.
11.1.2.2 Annuity Starting Date Prior To Age 62. The following rules
apply if distribution of a Participants Annual Benefit commences prior to his
attaining age 62:
11.1.2.2.1 Limitation Years beginning before July 1, 2007. The
Dollar Limitation for the Participants Annuity Starting Date is the annual
amount of a benefit payable in the form of a straight life annuity
commencing at the Participants Annuity Starting Date that is the actuarial
equivalent of the Dollar Limitation (adjusted under Section 11.1.2.5 for
years of participation less than 10, if required) with actuarial equivalence
computed using whichever of the following produces the smaller annual
amount: (a) (i) with respect to Salaried Participants, the Plans interest
rate and mortality table specified in Section 1.3 for adjusting benefits in
the same form; (ii) with respect to Hourly Participants, the Plan interest
rate and mortality table specified in Appendix E or a Schedule thereto for
adjusting benefits in the same form; and (iii) with respect to Arrow
Salaried Participants, the Plans interest rate and mortality table
specified in Appendix F for adjusting benefits in the same form; (iv) with
respect to Arrow Hourly Participants, the Plans interest rate and mortality
table specified in Appendix G for adjusting benefits in the same form; and
(v) with respect to Arrow Berks Participants, the Plans interest rate and
mortality table specified in Appendix H for adjusting benefits in the same
form; or (b) a 5% interest rate assumption and the Applicable Mortality
Table.
11.1.2.2.2 Limitation Years beginning on and after July 1, 2007.
11.1.2.2.2.1 If the Plan does not have an immediately commencing
straight life annuity payable at both age 62 and the age of benefit
commencement, the Dollar Limitation for the Participants Annuity
Starting Date is the annual amount of a benefit payable in the form
of a straight life annuity commencing at the Participants Annuity
Starting Date that is the actuarial equivalent of the Dollar
Limitation (adjusted under Section 11.1.2.5 for years of
participation less than 10, if required) with actuarial equivalence
computed using a 5% interest rate assumption and the Applicable
Mortality Table in effect prior to January 1, 2008 for the Annuity
Starting Date (and expressing the Participants age based on
completed calendar months as of the Annuity Starting Date).
80
11.1.2.2.2.2 If the Plan has an immediately commencing straight
life annuity payable at both age 62 and the age of benefit
commencement, the Dollar Limitation for the Participants Annuity
Starting Date shall be the lesser of the Dollar Limitation determined
under Section 11.1.2.2.2.1 and the Dollar Limitation (adjusted under
Section 11.1.2.5 for years of participation less than 10, if
required) multiplied by the ratio of the annual amount of the
immediately commencing straight life annuity under the Plan at the
Participants Benefit Annuity Starting Date to the annual amount of
the immediately commencing straight life annuity under the Plan at
age 62, both determined without applying the limitations of this
Section 11.1.
11.1.2.3 Annuity Starting Date After Age 65.
11.1.2.3.1 Limitation Years beginning before July 1, 2007. The
Dollar Limitation for the Participants Annuity Starting Date is the annual
amount of a benefit payable in the form of a straight life annuity
commencing at the Participants Annuity Starting Date that is the actuarial
equivalent of the Dollar Limitation (adjusted under Section 11.1.2.5 for
years of participation less than 10, if required) with actuarial equivalence
computed using whichever of the following produces the smaller amount: (a)
(i) with respect to Salaried Participants, the Plans interest rate and
mortality table specified in Section 1.3 for adjusting benefits in the same
form; (ii) with respect to Hourly Participants, the Plan interest rate and
mortality table specified in Appendix E or a Schedule thereto for adjusting
benefits in the same form; and (iii) with respect to Arrow Salaried
Participants, the Plans interest rate and mortality table specified in
Appendix F for adjusting benefits in the same form; (iv) with respect to
Arrow Hourly Participants, the Plans interest rate and mortality table
specified in Appendix G for adjusting benefits in the same form; and (v)
with respect to Arrow Berks Participants, the Plans interest rate and
mortality table specified in Appendix H for adjusting benefits in the same
form; or (b) a 5% interest rate assumption and the Applicable Mortality
Table.
11.1.2.3.2 Limitation Years beginning on and after July 1, 2007.
11.1.2.3.2.1 If the Plan does not have an immediately commencing
straight life annuity payable at both age 65 and the age of benefit
commencement, the Dollar Limitation at the Participants Annuity
Starting Date is the annual amount of a benefit payable in the form
of a straight life annuity commencing at the Participants Annuity
Starting Date that is the actuarial equivalent of the Dollar
Limitation (adjusted under Section 11.1.2.5 for years of
participation less than 10, if required) with actuarial equivalence
computed using a 5% interest rate assumption and the Applicable
Mortality Table in effect prior to January 1, 2008 for that Annuity
Starting Date (and expressing the Participants age based on
completed calendar months as of the Annuity Starting Date).
81
11.1.2.3.2.2 If the Plan has an immediately commencing straight
life annuity payable at both age 65 and the age of benefit
commencement, then the Dollar Limitation for the Participants
Annuity Starting Date shall be the lesser of the Dollar Limitation
determined under Section 11.1.2.3.2.1 and the Dollar Limitation
(adjusted under Section 11.1.2.5 for years of participation less than
10, if required) multiplied by the ratio of the annual amount of the
adjusted immediately commencing straight life annuity under the Plan
at the Participants Annuity Starting Date (the annual amount of such
annuity payable to the Participant, computed disregarding the
Participants accruals after age 65 but including actuarial
adjustments, even if those actuarial adjustments are used to offset
accruals) to the annual amount of the adjusted immediately commencing
straight life annuity under the Plan at age 65 (the annual amount of
such annuity that would be payable under the Plan to a hypothetical
Participant who is age 65 and has the same Accrued Benefit as the
Participant), both determined without applying the limitations of
this Section 11.1
11.1.2.4 Minimum Benefit Limitation. If a Participants Annual Benefit
payable for a Limitation Year under any form of benefit under this Plan and all
other Defined Benefit Plans ever maintained by the Employer (without regard to
whether a plan has been terminated) does not exceed $10,000 multiplied by a
fraction, the numerator of which is the Participants number of Years of Service
(or part thereof, but not less than one year and not to exceed 10) and the
denominator of which is 10, and the Participant does not participate (and has never
participated) in any Defined Contribution Plan maintained by the Employer (or a
Predecessor Employer) , the Annual Benefit satisfies the limitations of this
Section 11.1.2 even if it exceeds the limitations set forth in Section 11.1.2.1.
For this purpose, mandatory employee contributions under a defined benefit plan,
individual medical accounts under Code Section 401(h), and accounts for
postretirement medical benefits established under Code Section 419A(d)(1) are not
considered a separate Defined Contribution Plan.
11.1.2.5 Adjustment For Years of Service/Participation Less Than 10.
If a Participant has less than ten (10) Years of Service with the Employer at the
time benefits commence, the Benefits Group shall multiply the Compensation
Limitation and the $10,000 Minimum Benefit Limitation of Section 11.1.2.4 by a
fraction, the numerator of which is the number of Years of Service (computed to
fractional parts of a year) with the Employer and the denominator of which is ten
(10). If a Participant has less than ten (10) years of participation in the Plan
at the time benefits commence, the Benefits Group shall multiply the Dollar
Limitation by a fraction, the numerator of which is the number of years of
participation (computed to fractional parts of a year) in the Plan and the
denominator of which is ten (10). The reduction described in this Section 11.1.2.5
shall not reduce a Participants maximum Annual Benefit to less than one-tenth of
the maximum Annual Benefit determined without regard to such reduction. To the
extent required by Treasury Regulations or by other published Internal Revenue
Service guidance, the Committee shall apply the reduction of this Section 11.1.2.5
separately to each change in the benefit structure of the Plan.
82
11.1.2.6 Adjustments To Dollar Limitation. The Dollar Limitation of
this Section 11.1 2 shall be automatically adjusted under Code Section 415(d),
effective January 1 of each year, as published in the Internal Revenue Bulletin.
The adjusted Dollar Limitation is applicable to the Limitation Year ending with or
within the calendar year of the date of the adjustment; provided, however, that
effective for Limitation Years beginning on and after July 1, 2007, a Participants
benefits shall not reflect the adjusted limit before January 1 of that calendar
year.
11.1.2.7 Current Accrued Benefit Exception. Notwithstanding anything
in this Section 11.1 to the contrary, the maximum Annual Benefit for any
individual who was a Participant as of the first day of the Limitation Year
beginning after December 31, 1986, in one or more Defined Benefit Plans maintained
by a Participating Employer on May 6, 1986, shall not be less than the Current
Accrued Benefit for all such Defined Benefit Plans. The Current Accrued Benefit
shall mean a Participants Accrued Benefit under the Plan, and under all other
Defined Benefit Plans maintained by the Employer, determined as if the Participant
had experienced a Severance from Employment as of the close of the last Limitation
Year beginning before January 1, 1987, when expressed as an Annual Benefit within
the meaning of Code Section 415(b)(2). In determining the amount of a
Participants Current Accrued Benefit, any change in the terms and conditions of
the Plan after May 5, 1986, and any cost of living adjustment occurring after May
5, 1986, shall be disregarded. This Section applies only if the Plan and any other
Defined Benefit Plans individually and in the aggregate satisfied the requirements
of Code Section 415 for all Limitation Years beginning before January 1, 1987.
11.1.2.8 Application Of Limitations. A Participants Accrued Benefit
at any time may not exceed the applicable limitation under this Section 11.1.2.
The Benefits Group shall calculate the Participants normal retirement pension
without regard to the limitations of this Section 11.1.2 and then apply these
limitations (as reduced, if applicable, pursuant to Section 11.1.3) to the
determination of the Participants Accrued Benefit.
11.1.2.9 Aggregation Rules. For purposes of this Section 11.1, all
qualified Defined Benefit Plans (whether terminated or not) ever maintained by the
Employer shall be treated as one Defined Benefit Plan, and all qualified Defined
Contribution Plans (whether terminated or not) ever maintained by the Employer
shall be treated as one Defined Contribution Plan. The rules under Code Section
415(j) shall apply as appropriate for purposes of this Section 11.1 for Limitation
Years that begin on or after July 1, 2007. In no event shall a Participants
benefit be double counted in the application of these aggregation rules. The
limitations of this Section 11.1 shall be determined and applied taking into
account the aggregation rules provided herein, and the aggregation rules not
otherwise provided in this Section 11.1, as incorporated by reference from Treasury
Regulations Section 1.415(f)-1. However, any increase in benefits resulting from
the application of such rules in effect as of the Limitation Year beginning on or
after July 1, 2007, shall apply only to Participants who have completed at least
one (1) Hour of Service with the Employer after the last day of Limitation Year
that ends just before the Limitation Year that begins on or after July 1, 2007.
83
11.1.2.10 Special Rule for Pre-2000 Annuity Starting Dates. With
respect to a Participant who has an Annuity Starting Date prior to the first
Limitation Year commencing on or after January 1, 2000, his benefit shall continue
to be subject to the maximum Annual Benefit limits and the provisions of the Plan
that were in effect at his Annuity Starting Date, and shall not be increased due to
the repeal of Code Section 415(e).
11.1.2.11 Special Rule for New Benefit Limits Under EGTRRA. Any
benefit increases resulting from the increase in the limitations of Code Section
415(b) effective for Limitation Years ending after December 31, 2001 shall be
provided to all Employees participating in the Plan who have one Hour of Service on
or after the first day of the first Limitation Year ending after December 31, 2001.
11.1.2.12 2007 Grandfather Provisions. The application of the
provisions of this Section 11.1 effective as of the first Limitation Year on or
after July 1, 2007, shall not cause the maximum Annual Benefit for any Participant
to be less than the Participants accrued benefit under all the Defined Benefit
Plans of the Participating Employer (or a predecessor) as of the end of the last
Limitation Year beginning before July 1, 2007, under provisions of the Plan or
plans that were both adopted and in effect before April 5, 2007. The preceding
sentence applies only if the provisions of such Defined Benefit Plans that were
both adopted and in effect before April 5, 2007 satisfied the applicable
requirements of statutory provisions, Treasury Regulations, and other published
guidance relating to Code Section 415 in effect as of the end of the last
Limitation Year beginning before July 1, 2007, as described in Treasury Regulations
Section 1.415(a)-1(g)(4). In addition, the Plan will not be treated as failing to
satisfy the limitations of Code Section 415 merely because the definition of
Compensation for a Limitation Year as used for purposes of the limitations of this
Section 11.1 reflects compensation for a Plan Year that is in excess of the annual
compensation limit under Code Section 401(a)(17) that applies to that Plan Year.
11.1.2.13 Benefits Under Terminated Plans. If a Defined Benefit Plan
maintained by the Employer has terminated with sufficient assets for the payment of
benefit liabilities of all participants and a participant in the plan has not yet
commenced benefits under the plan, the benefits provided pursuant to the annuities
purchased to provide the Participants benefits under the terminated Defined
Benefit Plan at each possible Annuity Starting Date shall be taken into account in
applying the limitations of this Section 11.1. If there are not sufficient assets
for the payment of all participants benefit liabilities, the benefits taken into
account shall be the benefits that are actually provided to the Participant under
the terminated plan.
11.1.2.14 Benefits Transferred from the Plan. If a participants
benefits under a Defined Benefit Plan maintained by the Employer are transferred to
another Defined Benefit Plan maintained by the Employer and the transfer is not a
transfer of distributable benefits pursuant to Treasury Regulations Section
1.411(d)-4, Q&A-3(c), the transferred benefits are not treated as being provided
under the transferor plan. Instead the benefits are taken into account as benefits
provided under the transferee plan. If a participants benefits under a Defined
Benefit Plan maintained by the Employer are transferred to another Defined
84
Benefit Plan that is not maintained by the Employer and the transfer is not a
transfer of distributable benefits pursuant to Treasury Regulations Section
1.411(d)-4, Q&A-3(c),the transferred benefits are treated by the Employers plan as
if such benefits were provided under annuities purchased to provide benefits under
a plan maintained by the Employer that terminated immediately before the transfer
with sufficient assets to pay all participants benefit liabilities under the plan.
If a participants benefits under a Defined Benefit Plan maintained by the
Employer are transferred to another Defined Benefit Plan in a transfer of
distributable benefits pursuant to Treasury Regulations Section 1.411(d)-4,
Q&A-3(c), the amount transferred is treated as a benefit paid from the transferor
plan.
11.1.2.15 Formerly Affiliated Plans of a Participating Employer. A
formerly affiliated plan of the Employer shall be treated as a plan maintained by
the Employer, but the formerly affiliated plan shall be treated as if it had
terminated immediately prior to the cessation of affiliation with sufficient assets
to pay participants benefit liabilities under the plan and had purchased annuities
to provide benefits.
11.1.2.16 Plans of a Predecessor Employer. If the Employer maintains a
Defined Benefit Plan that provides benefits accrued by a participant while
performing services for a Predecessor Employer, the participants benefits under a
plan maintained by the Predecessor Employer shall be treated as provided under the
plan maintained by the Employer. However, for this purpose, the plan of the
Predecessor Employer shall be treated as if it had terminated immediately prior to
the event giving rise to the Predecessor Employer relationship with sufficient
assets to pay participants benefit liabilities under the plan, and had purchased
annuities to provide benefits; the Employer and Predecessor Employer shall be
treated as if they were a single employer immediately prior to such event and as
unrelated employers immediately after the event; and, if the event giving rise to
the predecessor relationship is a benefit transfer, the transferred benefits shall
be excluded in determining the benefits provided under the plan of the Predecessor
Employer.
11.1.2.17 Aggregation With Multiemployer Plans. If the Employer
maintains a multiemployer plan, as defined in Code Section 414(f), and the
multiemployer plan so provides, only the benefits under the multiemployer plan that
are provided by the Employer shall be treated as benefits provided under a plan
maintained by the Employer for purposes of this Section 11.1. Effective for
Limitation Years ending after December 31, 2001, a multiemployer plan shall be
disregarded for purposes of applying the Compensation Limitation and the limitation
in Section 11.1.2.4.
11.1.3 Incorporation by Reference. Notwithstanding anything contained in this Section
11.1 to the contrary, the limitations, adjustments and other requirements provided in this Section
11.1 shall at all times comply with the provisions of Code Section 415 and the Treasury Regulations
issued thereunder, the terms of which are specifically incorporated into this Plan by reference.
11.1.4 Repeal of Provision. Should Congress provide by statute, or the Internal
Revenue Service provide by regulation or ruling, that any or all of the conditions set forth in
this Section 11.1 are no longer necessary for the Plan to meet the requirements of Section 401 or
85
other applicable provisions of the Code then in effect, such conditions shall immediately
become void and shall no longer apply, without the necessity of further amendment to the Plan.
11.2
Benefit Limitations Rules for Certain Highly Compensated Employees. If the Plan
is terminated, the benefit due any Participant or former Participant who is one of the 25 highest
paid Highly Compensated Employees shall be restricted in the manner set forth in Section 11.2.1 and
Section 11.2.2.
11.2.1 Benefit Restriction. The benefit payable shall be limited to a benefit that is
nondiscriminatory under Section 401(a)(4) of the Code.
11.2.2 Distribution Restriction. The annual payment shall be restricted to an amount
equal to the payments that would be made on behalf of such Participant under a single life annuity
that is the Actuarial Equivalent of the sum of the Participants Accrued Benefit and the
Participants other benefits, as defined below.
11.2.3 Definition of Benefits. For purposes of this Section, the term benefits
shall include loans in excess of the amounts set forth in Section 72(p)(2)(A) of the Code, any
periodic income, any withdrawal values payable to a living Participant, and any death benefits not
provided for by insurance on the Participants life.
11.2.4 Restrictions Not Applicable. The restrictions described in this Section 11.2
shall not apply if:
11.2.4.1
after payment to a Participant described in this Section 11.2 of all
benefits described in Section 11.2.3, the value of Plan assets equals or exceeds
110% of the value of the Plans current liabilities, as defined in Section
412(l)(7) of the Code; or
11.2.4.2 the value of the benefits described in Section 11.2.3 for a
Participant described in this Section 11.2 is less than 1% of the value of the
Plans current liabilities.
Should Congress provide by statute, or the Internal Revenue Service provide by regulation or
ruling, that any or all of the conditions set forth in this
Section 11.2 are no longer necessary
for the Plan to meet the requirements of Section 401 or other applicable provisions of the Code
then in effect, such conditions shall immediately become void and shall no longer apply, without
the necessity of further amendment to the Plan.
86
ARTICLE XII. PROVISIONS RELATING TO TOP-HEAVY PLAN.
12.1 Top-Heavy Requirement. Notwithstanding anything in the Plan to the contrary, if
the Plan is a Top-Heavy Plan within the meaning of Section 1.59 and Section 416(g) of the Code,
then the Plan shall meet the requirements of Sections 12.2, 12.3, and 12.4 for any such Plan Year,
but only to the extent required by Code Section 416. In the event that Congress should provide by
statute, or the Treasury Department should provide by regulation or ruling, that the limitations
provided in this Article are no longer necessary for the Plan to meet the requirements of Code
Section 401 or other applicable law then in effect, such limitations shall become void and shall no
longer apply, without the necessity of further amendment to the Plan. The provisions of this
Article do not apply to the collectively bargained portion of this Plan.
12.2 Minimum Vesting Requirement. For any Plan Year in which this Plan is a Top-Heavy
Plan, the nonforfeitable interest of each Participant in his Accrued Benefits shall be based on the
following schedule:
12.2.1 Salaried Participants:
Years of Continuous Service | ||||
As Defined in Plan | ||||
Section 1.17 | Vested Interest | |||
Less than two
|
0 | % | ||
Two but less than three
|
20 | % | ||
Three but less than four
|
40 | % | ||
Four but less than five
|
60 | % | ||
Five or more
|
100 | % |
12.2.2 Hourly Participants:
Years of Vesting Service | Vested Percentage | |||
Less than 2
|
0 | % | ||
2
|
20 | % | ||
3
|
40 | % | ||
4
|
60 | % | ||
5
|
80 | % | ||
6
|
100 | % |
12.2.3 Arrow Salaried Participants: In a Plan Year in which the Plan is a Top-Heavy
Plan, each Participant who has earned three or more Years of Vesting Service shall be fully vested
in his Accrued Benefit.
87
12.2.4 Arrow Hourly Participants: In a Plan Year in which the Plan is a Top-Heavy Plan,
each Participant who has earned three or more Years of Vesting Service shall be fully vested in his
Accrued Benefit.
12.2.5 Arrow Berks Participants: In a Plan Year in which the Plan is a Top-Heavy Plan,
each Participant who has earned three or more Years of Vesting Service shall be fully vested in his
Accrued Benefit.
The vesting schedules set forth in this Section 12.2 does not apply to the Accrued Benefit of any
Employee who does not have an Hour of Service after the Plan has initially become Top Heavy.
12.3 Minimum Benefit Requirement. If this Plan is Top Heavy in any Plan Year, the Plan
guarantees a minimum benefit to each Non-Key Employee who is a Participant eligible for such
benefit as provided in this Article XII. A Participants Top Heavy minimum benefit is an annual
benefit, payable as a straight life annuity commencing at his Normal Retirement Age equal to the
Participants average Compensation (as defined in Section 11.1.1.2) for the period of consecutive
years (not exceeding five) during which the Participant had the greatest aggregate Compensation
from the Employer, multiplied by the applicable percentage equal to two percent (2%) multiplied by
the number (not exceeding ten (10)) of Years of Top Heavy Service as a Non-Key Employee Participant
in the Plan. When determining whether years are consecutive for purposes of averaging
Compensation, the Benefits Group shall disregard years for which the Participant does not complete
at least one thousand (1,000) Hours of Service. A Year of Top Heavy Service is a Plan Year in
which the Plan is Top Heavy and: (i) with respect to a Salaried Participant, the Participant is
credited with a year of Credited Service; (ii) with respect an Hourly Participant, the Participant
is credited with 1,000 Hours of Service; and (iii) with respect to an Arrow Salaried Participant,
Arrow Hourly Participant, or an Arrow Berks Participant, a 12-consecutive-month period that begins
on a Participants Employment Date or Reemployment Date (whichever is applicable), or on any
anniversary of such date, in which a Participant completes 1,000 or more Hours of Service. If a
Non-Key Employee participates in this Plan and in a Top Heavy Defined Contribution Plan included in
the Required Aggregation Group, the minimum benefits shall be provided under this Plan. No accrual
shall be provided pursuant to this paragraph for a Plan Year in which the Plan does not benefit any
Key Employee or former Key Employee.
A Participant under this Section shall include an Employee who is otherwise eligible to participate
in the Plan, but who receives no accrual or a partial accrual because of the level of his
Compensation, because he is not employed on the last day of the accrual computation period, or
because the Plan is integrated with Social Security. If the accrual computation period does not
coincide with the Plan Year, a minimum benefit accrues with respect to each accrual computation
period falling wholly or partly in a Plan Year in which the Top Heavy minimum benefit requirement
applies.
If a Participant accrues an additional benefit for a Plan Year by reason of this Section, the
Participants Accrued Benefit shall never be less than the Accrued Benefit determined at the end of
that Plan Year, irrespective of whether the Plan is a Top Heavy plan for any subsequent Plan Year.
The Employer shall not impute Social Security benefits to determine whether the Plan has satisfied
the Top Heavy minimum benefit requirement for a Participant, nor shall the Plan offset a
Participants Social Security benefit from his Accrued Benefit attributable to the Top Heavy
minimum benefit requirement.
88
No additional benefit accruals shall be provided pursuant to this Section 12.3 above to the extent
that the total accruals on behalf of the Participant attributable to Employer contributions will
provide a benefit expressed as a life annuity commencing at Normal Retirement Age that equals or
exceeds 20 percent of the Participants average Compensation (as defined in Section 11.1.1.2) for
the period of consecutive years (not exceeding five) during which the Participant had the greatest
aggregate Compensation from the Employer. If the form of benefit is other than a single life
annuity, the Non-Key Employee must receive an amount that is the Actuarial Equivalent of the
minimum single life annuity benefit. If the benefit commences at a date other than at Normal
Retirement Age, the Non-Key Employee must receive at least an amount that is the Actuarial
Equivalent of the minimum single life annuity benefit commencing at Normal Retirement Age.
12.4 Change in Top-Heavy Status. If the Plan becomes a Top-Heavy Plan and subsequently
ceases to be a Top-Heavy Plan, the vesting schedule in Section 12.2 shall continue to apply in
determining the vested percentage of the Accrued Benefit of: (i) any Salaried Participant who had
at least three years of Credited Service as of the last day of the last Plan Year in which the Plan
was a Top-Heavy Plan; (ii) any Hourly Participant who had at least three Years of Vesting Service
as of the July 31 of the last Plan Year in which the Plan was a Top-Heavy Plan; and (iii) any Arrow
Salaried Participant, Arrow Hourly Participant, or Arrow Berks Participant who had a least three
Years of Vesting Service as of the last day of the last Plan Year in which the Plan was a Top-Heavy
Plan. For all other Participants, the vesting schedule in Section 12.2 shall apply only to their
Accrued Benefit as of such last day.
89
ARTICLE XIII. VETERANS REEMPLOYMENT RIGHTS.
13.1 USERRA. Notwithstanding any provision of the Plan to the contrary, contributions,
benefits and service credit with respect to Qualified Military Service will be provided in
accordance with Section 414(u) of the Code.
13.2 Crediting Service.
13.2.1 An Employee reemployed by the Employer in accordance with Chapter 43 of Title 38 of the
United States Code shall be treated as not having incurred a Break-in-Service by reason of such
Employees period of Qualified Military Service.
13.2.2 Upon reemployment by the Employer in accordance with Chapter 43 of Title 38 of the
United States Code, an Employees period of Qualified Military Service:
13.2.2.1 With respect to Salaried Participants shall be deemed Continuous
Service.
13.2.2.2 With respect to Hourly Participants, shall be counted for purposes of
determining such Employees and/or Participants Years of Vesting Service and Years
of Benefit Accrual Service
13.2.2.3 With respect to Arrow Salaried Participants, shall be counted for
purposes of determining such Employees and/or Participants Years of Vesting
Service and Years of Benefit Service.
13.2.2.4 With respect to Arrow Hourly Participants, shall be counted for
purposes of determining such Employees and/or Participants Years of Vesting
Service and Years of Benefit Service.
13.2.2.5 With respect to Arrow Berks Participants, shall be counted for
purposes of determining such Employees and/or Participants Years of Vesting
Service and Years of Benefit Service.
13.3 Compensation. An Employee who is in Qualified Military Service shall be treated
as receiving compensation from the Employer during such period of Qualified Military Service equal
to:
13.3.1 The Compensation the Employee would have received during such period if the Employee
were not in Qualified Military Service, determined based on the rate of pay the Employee would have
received from the Employer but for absence during the period of Qualified Military Service; or
13.3.2 If the Compensation the Employee would have received during such period was not
reasonably certain, the Employees average compensation from the Employer during the 12-month
period immediately preceding the Qualified Military Service (or, if shorter, the period of
employment immediately preceding the Qualified Military Service).
90
13.4 Qualified Military Service. For purposes of the Plan, the term Qualified
Military Service means any service in the uniformed services (as defined in Chapter 43 of Title
38 of the United States Code) by any Employee if such Employee is entitled to reemployment rights
under such Chapter with respect to such service.
13.5 Earnings and Forfeitures. Nothing in this Article XIII shall be construed as
requiring:
13.5.1 Any crediting of earnings to an Employee with respect to any contribution before such
contribution is actually made; or
13.5.2 The allocation of any forfeiture with respect to the period of an Employees Qualified
Military Service.
91
ARTICLE XIV. MISCELLANEOUS.
14.1 Limited Purpose of Plan. Nothing contained in the Plan shall be deemed to give
any Participant or other Employee the right to be continued as an Employee, nor shall it interfere
with the right of the Employer to discharge or otherwise deal with him without regard to the
existence of the Plan and without liability for any claim for any payment whatsoever except to the
extent expressly provided for in the Plan. Each Employer expressly reserves the right to discharge
any Employee whenever in its judgment its best interests so require.
14.2 Non-alienation. No benefit payable under the Plan shall be subject in any manner
to anticipation, assignment, or voluntary or involuntary alienation. This Section shall not
preclude the Trustee from complying with the terms of a qualified domestic relations order as
defined in Section 414(p) of the Code.
14.3 Facility of Payment. If the Benefits Group, in its sole discretion, deems a
Participant, surviving Spouse, or other Beneficiary who is entitled to receive any payment
hereunder to be incompetent to receive the same by reason of age, illness or any infirmity or
incapacity of any kind, the Benefits Group may direct the Trustee to apply such payment directly
for the benefit of such person, or to make payment to any person selected by the Benefits Group to
disburse the same for the benefit of the Participant, surviving Spouse, or other Beneficiary.
Payments made pursuant to this Section shall operate as a discharge, to the extent thereof, of all
liabilities of the Employer, the Committee, the Administrative Committee, the Benefits Group, the
Trustee and the Fund to the person for whose benefit the payments are made.
14.4 Effect of Return of Benefit Checks. Each person entitled to benefits under this
Plan shall furnish the Benefits Group with the address to which his benefit checks shall be mailed.
If any benefit check mailed by regular United States mail to the last address appearing on the
Benefits Groups records is returned because the addressee is not found at that address, the
mailing of benefit checks shall stop. Thereafter, if the Benefits Group receives written notice of
the proper address of the person entitled to receive such benefit checks and is furnished with
evidence satisfactory to the Benefits Group that such person is living, all amounts then due but
unpaid shall be forwarded to such person.
14.5 Impossibility of Diversion.
14.5.1 General Rule. All Plan assets shall be held as part of the Fund, until paid to
satisfy allowable Plan expenses or to provide benefits to Participants, surviving impossible for
any part of the Fund to be used for, or diverted Spouses and other Beneficiaries. It shall be
impossible for any part of the Fund to be used for, or diverted to, purposes other than for the
exclusive benefit of Participants, surviving Spouses, or other Beneficiaries under the Plan or the
payment of reasonable expenses of the administration of the Plan. The reasonable expenses incident
to the operation of the Plan shall be paid out of the Trust Funds, but the Employer in its
discretion may determine at any time to pay part or all thereof directly. Any such determination
shall not require the Employer to pay the same or other expenses at any other time.
14.5.2 Special Rule; Return of Contributions. It is intended that the Plan and the
Fund shall continue to qualify under Section 401(a) of the Code. Therefore, Section 14.5.1 shall
be subject to the following provisions:
92
14.5.2.1 Contributions are conditioned upon their deductibility under Section
404 of the Code; the entire contribution attributable to any Plan Year as to which
deductibility is disallowed may be recovered, to the extent of the amount of the
disallowance, within one year after the disallowance. Nondeductible contributions
that are treated as de minimis pursuant to Revenue Procedure 90-49 shall be
returned to the Participating Employer within one year of the date of the Plan
actuarys certification of such nondeductibility.
14.5.2.2 In the case of a contribution which is made in whole or in part by
reason of a mistake of fact, so much of such contribution as is attributable to the
mistake of fact shall be returnable to the Participating Employer upon demand by
the Committee, upon presentation of evidence of the mistake of fact to the Trustee
and of calculations as to the impact of such mistake. Demand and repayment must be
effectuated within one year after the payment of the contribution to which the
mistake applies.
Income and gains attributable to the excess contributions may not be recovered by the Participating
Employer. Losses attributable to such contribution shall reduce the amount the Participating
Employer may recover.
14.6 Unclaimed Benefits. If a Participant, surviving Spouse, or other Beneficiary to
whom a benefit is payable under the Plan cannot be located following a reasonable effort to do so
by the Benefits Group, such benefit shall be forfeited but shall be reinstated if a claim therefor
is filed by the Participant, surviving Spouse, or other Beneficiary.
14.7 Construction. The masculine gender includes the feminine and the singular may
include the plural, and vice versa, unless the context clearly indicates otherwise.
14.8 Governing Law. Except to the extent such laws are superseded by ERISA, the laws
of the Commonwealth of Pennsylvania shall govern.
14.9 Contingent Effectiveness of Plan Amendment and Restatement. The effectiveness of
the Plan as amended and restated, including but not limited to the contributions made by the
Participating Employers, shall be subject to and contingent upon a determination by the District
Director of Internal Revenue that the Plan continues to be qualified under the applicable
provisions of the Code. If the District Director determines that the amendment and restatement
does adversely affect the prior qualification of the Plan under the applicable Sections of the
Code, then, upon notice to the Trustee, the Board of Directors shall have the right further to
amend the Plan or to rescind the amendment and restatement.
This Plan has been executed on December 29, 2009.
TELEFLEX INCORPORATED |
||||
By: | /s/ Douglas Carl | |||
Title: Director of Benefits | ||||
93