SOUTHWEST GEORGIA FINANCIAL CORPORATION PENSION RETIREMENT PLAN
As Amended and Restated
Effective as of January1, 2015
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Table of Contents
Page
ARTICLE I CONSTRUCTION AND DEFINITIONS..................................................................3
ARTICLEII MEMBERSHIPIN THE RETIREMENT PLAN .....................................................14
2.1 Initial Membership ................................................................................................14
2.2 Resumption of Membership ..................................................................................14
2.3 Termination ...........................................................................................................14
2.4 Membership Requirement Effective as of May 1, 1999..........................................14
2.5 Qualified Military Services ....................................................................................14
2.6 MoultrieInsurance Agency Membership ...............................................................15
2.7 Waiver of Participation..........................................................................................15
2.8 Empire Financial Services,Inc. Membership..........................................................15
2.9 Sylvester Banking Company Membership .............................................................15
2.10 Sylvester Banking Company Pension Plan ...........................................................15
ARTICLEIII MONTHLY RETIREMENT INCOME .................................................................16
3.1 General.................................................................................................................16
3.2 Normal Retirement ...............................................................................................16
3.3 Late Retirement ....................................................................................................20
3.4 EarlyRetirement....................................................................................................20
3.5 Disability Retirement..............................................................................................20
3.6 Method of Payment of Retirement Benefits ............................................................21
3.7 Suspension Of Benefits .........................................................................................23
ARTICLEIV DEATH BENEFITS ..............................................................................................25
4.1 Incidental Death Benefits for Eligible Spouse .........................................................25
4.2 Death Benefits in Absence of Surviving Eligible Spouse .........................................26
4.3 Special Military Death Benefit ...............................................................................26
ARTICLE V VESTING AND TERMINATION OF EMPLOYMENT........................................27
5.1 Vested Interest .....................................................................................................27
5.2 Method of Payment of Benefits to Member Separating from Service
before Retirement Date..........................................................................................28
5.3 Lump Sum Cash-Out Distribution...........................................................................28
5.4 Buy-Back ..............................................................................................................28
5.5 Determination Of Present Value .............................................................................29
ARTICLEVILIMITATIONS ON BENEFITS, NON-DISTRIBUTION
ALIENATION AND ASSIGNMENT, AND RIGHTS OF MEMBERS ........30
6.1 Limitation on Benefits forLimitation Years Beginning Before July 1,
2007 ....................................................................................................................30
6.2 Limitation on Benefits forLimitation Years Beginning On or After July 1,
Table of Contents
(continued)
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6.3 Special Rules for Benefits Payable to Highly Compensated Employees ................37
6.4 No Assignment of Benefits..................................................................................37
6.5 Commencement of Benefits ................................................................................38
6.6 Minimum Distribution Requirements: ...................................................................39
6.7 Reversion ............................................................................................................47
ARTICLEVII CONTRIBUTIONS BY THE EMPLOYER .......................................................48
7.1 Employer Contributions .....................................................................................48
7.2 Funding and Investment Policy ...........................................................................48
7.3 Payment of Expenses..........................................................................................48
ARTICLEVIII AMENDMENT AND TERMINATION OF PLAN ..........................................49
8.1 Right to Amend ..................................................................................................49
8.2 Right to Terminate...............................................................................................49
8.3 Allocation upon Termination ................................................................................49
8.4 Vesting upon Termination or Partial Termination ..................................................49
8.5 Distributions upon Termination ............................................................................49
8.6 Reversions upon Termination...............................................................................50
ARTICLEIXPLAN ADMINISTRATOR..................................................................................51
9.1 Designation ..........................................................................................................51
9.2 Compensation and Records .................................................................................51
9.3 Duties and Powers; Claims Review Procedures....................................................51
9.4 Authorization of Payments ...................................................................................53
9.5 No Discrimination ...............................................................................................53
9.6 Retention of Agents .............................................................................................53
ARTICLE X THE TRUST FUND AND TRUSTEE....................................................................54
10.1 General..............................................................................................................54
10.2 Disposition of Trust Fund...................................................................................54
10.3 Right of Removal ...............................................................................................54
10.4 Powers of Trustee .............................................................................................54
10.5 Interest-Bearing Deposit With Employer ............................................................54
10.6 Integration of Trust Agreement ...........................................................................54
ARTICLEXIMISCELLANEOUS PROVISIONS .....................................................................55
11.1 Prohibition Against Diversion ..............................................................................55
11.2 Prudent Man Rule ..............................................................................................55
11.3 Responsibilities of Parties ...................................................................................55
11.4 Reports Furnished Members...............................................................................55
11.5 Reports Available to Members ...........................................................................55
Table of Contents
(continued)
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11.7 Merger or Consolidation of Employer ..............................................................56
11.8 Plan Continuance Voluntary.............................................................................56
11.9 Suspension of Contributions.............................................................................56
11.10 Agreement Not An Employment Contract ............................................................56
11.11 Facility of Payments ............................................................................................56
11.12 Unclaimed Benefits ..............................................................................................57
11.13 Governing Law ....................................................................................................57
11.14 Headings No Part of Agreement...........................................................................57
11.15 Merger or Consolidation of Plan ...........................................................................57
11.16Indemnification.....................................................................................................58
11.17 Direct Transfer of Eligible Rollover Distributions....................................................58
ARTICLEXII TOP-HEAVY PROVISIONS............................................................................60
12.1 Application .......................................................................................................60
12.2 Definitions ........................................................................................................60
12.3 Accrual of Minimum Benefit .............................................................................60
12.4 Vesting.............................................................................................................61
12.5 Post-EGTRRA Top-Heavy Provisions .............................................................61
ANNEX A ............................................................................................................................. A-1
ANNEX B ...............................................................................................................................B-1
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SOUTHWEST GEORGIA FINANCIAL CORPORATION PENSION RETIREMENT PLAN
SOUTHWEST GEORGIAFINANCIAL CORPORATION, a holding company organized under the laws of the State ofGeorgia,(the “Employer”) herebyamends and restates the Southwest Georgia Financial Corporation Pension Retirement Plan (the “Plan”), generally effective as of January1, 2015.
W I T N E S SE T H:
EffectiveJanuary 1, 1976, the Plan was establishedby theEmployer toassistitsEmployees in providing a life income for their supportafterthey have retired from theemployment of the Employer.
Effective as ofJanuary1, 2000, the Plan was amended and restated to conform to the provisions of the Internal Revenue Code of 1986, as amended (the “Code”), theEmployee RetirementIncomeSecurityAct of 1974 (“ERISA”), the pension provisions of the General Agreement on TariffsandTrade (“GATT”); the Uniformed ServicesEmployment and Reemployment Rights Act of 1994 (“USERRA”), the Small Business Job Protection Act of 1996 (“SBJPA”), the Tax Reform Actof 1997 (“TRA ‘97”), the Internal Revenue Restructuring and Reform Act of 1998, and the Community Renewal Tax Relief Act of 2000.
Effective as of March 1, 2005, the Plan was amended and restated to incorporate the prior amendments to the Plan, including certain provisions required bytheEconomicGrowthand Tax Relief Reconciliation Act of 2001 (“EGTRRA”), and for certain other purposes(the“2005 Amendment and Restatement”). The provisions of the 2005 Amendment and RestatementonlyapplytothoseeligibleemployeeswhoterminateemploymentwiththeEmployeronorafterMarch 1, 2005, or such later date asmayapply for a provision which becomes effective after. Benefitspayable to or on behalf of a Member who terminates employment prior to March1,
2005 shall not be affectedby the termsofany Plan amendment adoptedafter such Member’stermination of employment, unless the amendment provides otherwise.
Effective December 31, 2006, the Plan was frozen as provided herein. No new Members are allowedto enter the Plan after December 31, 2006 and, except as otherwise provided, no additional benefits shall accrue under the Plan after December 31, 2006.
TheEmployer again amended and restated the Plan, generally effective asofJanuary 1, 2009, to reflectgood faith compliance with final regulations under Code Section 415, the requirements ofthe Pension Protection Act of 2006,the Worker, Retiree andEmployer RecoveryAct of 2008, the Heroes Earnings Assistance and Relief Tax Act of 2008 and for certain other purposes.
TheEmployer now desires to amend and restate the Plan tocomplywith theSmallBusinessJobs Act of 2010 (“SBJA”), the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Actof 2010 (“PRA 2010”),the Moving Ahead for Progressinthe 21stCentury Act (“MAP-21”), the AmericanTaxpayerReliefActof2012 (“ATRA”) andtheapplicablestatutoryorregulatorychanges included on the 2013 CumulativeList. Except as otherwise provided, this amendment and restatement shall be effective as of January 1, 2015.
Except as otherwise provided herein,the provisions of the amended and restatedPlan onlyapplytothoseeligibleemployeeswhoterminateemploymentwiththeEmployeronorafterJanuary 1, 2015 orsuch later date asmayapply for a provision which becomes effective after January1, 2015. Benefits payable to or on behalf of a Member who terminates employment prior to January 1, 2015 shall not beaffectedby the terms ofanyPlan amendment adoptedafter such Member’s termination ofemployment, unless the amended and restated Plan or applicable law provides otherwise.
ARTICLE I CONSTRUCTION AND DEFINITIONS
Any words herein used in the masculineshall be read and construed inthe
feminine where appropriate. Words in the singular shall be read and construed as though used in the plural in all cases where the context so requires.
As used herein, the following words and phrases shall have themeaningsspecified below, unless a different meaning is plainly requiredby the context:
1.1 The term“Accrued Benefit” as ofany date shall be, in thecase of a Memberwhois credited with at least one (1) Hour of Service on or after January1,1988,equaltotheMonthlyRetirement Income calculated pursuant to Section 3.2(b), 3.2(c),or 3.2(d) (using his AverageMonthlyEarnings asof the date of calculation).In no event, however, shallanyMember’s Accrued Benefit as of:
(a) January 1, 1988, be less than it was on December 31, 1987;
(b) January 1, 2000 be less than it was on December 31, 1999; and
(c) January 1, 2001 be less than it was on December 31, 2000.
Notwithstanding thepreceding, the Plan is frozen as of December 31, 2006, as provided herein.
1.2 The term“Actuarial Equivalent” shall mean a benefit of equivalent value determined in accordance with the provisions of the Plan, as certifiedby the Actuary. Effective January 1, 2000, theterm “Actuarial Equivalent” shall mean a formof benefit differing in time, period or manner ofpayment from a specific benefit provided underthe Plan but havingthesame value when computed using mortality according to the 1971Group Annuity Mortality Table for males and an8%per annum compounded interest rate. Notwithstanding the foregoing, for the purposes of determining the amount of any lump sumpayment under the Plan paid on orafterJanuary 1, 2000, the mortality table shall be the table prescribed by the Commissioner of Internal Revenue pursuant to Rev. Rul. 95-6 (as hereafter amendedor modified) and the interestrate shall equal the annualrate of interest on 30-yearTreasurysecurities as publishedby theCommissioner of Internal Revenue forthesecond full calendar month preceding the firstday of the PlanYear during which occurs the dateof distribution commencement.For purposesofdeterminingthe amount ofany lump sumpayment under the Plan paid prior to January 1, 2000, the interestrateshallbe the Applicable Interest Rate under Section 5.5(d)of the prior plan document and the1971 Group Annuity Mortality Table for males. Effective for distributions with an AnnuityStarting Date on orafter December 31, 2002 but before January 1, 2008,theapplicable mortality table to be used for purposes of: (i) satisfying the requirements of Code Section 417(e) as set forth in Sections 5.3 and5.5 of the Plan; and (ii) adjustinganybenefit or limitation under Code Section 415(b)(2)(B), (C), or (D)asset forthin Section 6.1ofthe Plan, shall be the applicablemortality table prescribedin Rev. Rul. 2001-62,the 1994 Group Annuity Reserving Table (94 GAR).
Notwithstanding the foregoing, for the purposesof determiningthe present value of a benefit payment that is subject to Code Section 417(e)on or after January 1, 2008,theapplicable interest rateshall bethe adjusted first, second, andthird segment rates appliedunderthe rules similar to the rules of Code Section 430(h)(2)(C) forthe secondmonth precedingthefirstday of the Plan Year in which the annuity starting date occurs(stabilityperiod).For this purpose, the first, second, and third segment ratesare the first, second, and third segmentrateswhich would be determined under Code Section 430(h)(2)(C) if:
(a) CodeSection430(h)(2)(D)wereappliedby substituting the averageyieldsfor the month described in thepreceding paragraph for the averageyields for the 24-month period described in such section, and
(b) Code Section 430(h)(2)(G)(i)(II) were appliedby substituting “Section
417(e)(3)(A)(ii)(II) for “Section 412(b)(5)(B)(ii)(II),” and
(c) The applicable percentage under Code Section 430(h)(2)(G) is treatedasbeing 20% in 2008, 40% in 2009, 60% in 2010, and 80% in 2011; and
the applicable mortality table shallbethe annual mortality table, modified as appropriateby theSecretaryof the Treasury based on the mortality table specified for the PlanYear under subparagraph (A)ofCodeSection 430(h)(3) (without regard to subparagraph(C) or (D) of such section) as published in rulings, notices or other guidance.In the event there is a change tothepublished mortality table, such change shall be effective as of the latest permissible date as set forth in such published rulings, notice or otherguidance issued by the Secretary of the Treasury.
1.3 The term“Actuary”shall mean an individual enrolledby theJointBoard for the
Enrollment of Actuaries under Section 3042 of the Employee Retirement Income SecurityActof
1974, as amended from time totime (“ERISA”), or a firm of actuaries, at least oneof whose members has been so enrolled.
1.4 The term“Anniversary Date” shall mean January 1ofeachyear.
1.5 The term“AnnuityStartingDate” shall meanthe firstday ofthe first period for which an amount is received or receivable as an annuity or, in the case of a benefit not payableinthe form of an annuity,the firstday on which all events have occurred which entitle the relevant Member to such benefit.
1.6 The term“AverageMonthlyEarnings” (as ofany date specified in the Plan provision in question) shall mean anEmployee’s averagemonthly Earnings for the periodof sixty(60) consecutivemonths within the preceding ten (10)year period which shall produce the highest average for him.If theEmployeehascompleted less thansixty(60) consecutive months of service prior to the respective date, the term “AverageMonthlyEarnings” shall mean the average oftheMonthly Earnings forthe months immediately preceding such date. Notwithstanding the foregoing, this Plan shallonly take into account theMonthly Average Earnings that are earned for periods of service prior to the Freeze Date.
1.7 The term“Beneficiary”shall mean, in thecase of a married Member, the Eligible
Spouse of such Member, provided the EligibleSpouse survives the Member and does not
consent to the designation of another Beneficiary in accordance with Sections 3.6, or 5.2of this Plan and Code Section 417(a)(2)(A).In the case ofany other Member,the term “Beneficiary” shall meanthe personor persons, includingany estate or trust, designated from time to timebysuchMember(insuchformasthePlanAdministratormayprescribeandwithsuchprioritiesandconditions as theMember shall specifyand the Plan Administrator shallagree to) to receiveany death benefit thatmaybepayable hereunder, if such person or persons survive the Member and are in existence after the Member’s death.If adeceasedmemberisnotsurvivedby aBeneficiarydetermined under the above provisions of this Section 1.7, or ifno Beneficiary is effectively named under the above provisions of this Section 1.7, theBeneficiaryshall be deemed to bethepersonorpersonsinthe first ofthefollowingclassesofbeneficiarieswith oneormoremembersof such class then surviving or in existence;
(a) The Member’s surviving Eligible Spouse; (b) The Member’s descendants, per stirpes; or(c) The Member’s estate.
1.8 The term“Board” or“Board of Directors” shall mean theEmployer’s Boardof
Directors.
1.9 The term“BreakinService” shall, as a general rule, mean a 12-montheligibility, vestingor benefit accrual computation period during whichthe Employeehas not completed more than 500 Hours of Service. The aggregate Break in Serviceshall be the numberofconsecutive 12-month computation periods during which theEmployeehas not completed more than 500 Hoursof Service.If the respective 12-month computation periods is to switch pursuant to the definition ofYear of Service and if the Employee does not complete more than 500 Hours of Service during thelast 12-month computation period that commences prior tothe switch,the
12-month computation period for determining whether theEmployee incurs consecutive oneyear Breaks in Serviceshall continue to bebased on the 12-month computation period in effectbeforetheswitchuntilmorethan500HoursofServiceare completed duringonesuch12-monthcomputation period.
Notwithstandingany provision of this Planto the contrary, for purposes of determining whether a Member incurs a Breakin Service for the respective computation period, such Member shall be credited with up to 501 Hours of Service for a “birth-related” absence. For these purposes, anEmployee’s absence from work shall be regarded as “birth-related” ifit is occasionedby thatEmployee’spregnancy, isbyreasonof the birth of achild of thatEmployeeor the placementof achild with theEmployee in connection withthe adoption of such childbythatEmployee, or is forthe purposeof caring for such child for a period beginning immediatelyafter the birth or placement. TheEmployee shall be credited with up to 501 Hours of Service which otherwise would normallyhave been completedby that Employee but for such “birth- related” absence.Ifit is not possible to determinethe Hoursof Service which otherwise would normally have been completed, thatEmployeeshall be deemed to complete 8 Hours of Service for each normalworkdayofabsence,nottoexceed501HoursofServiceintheaggregate.TheseHours of Service shall be credited duringthe computation period during whichthe absence begins if theEmployee does not otherwise complete more than 500 Hours of Service duringthat
computation period; otherwise, these Hours of Service shall be credited during the immediately following computation period. No credit shallbegiven for a “birth-related” absence, however, unless theEmployee furnishes to the Plan Administrator suchtimely information as shallbereasonablynecessary, in the Plan Administrator’s discretion, to establish the existence of a “birth-related” absence and the length of that “birth-related” absence.
Notwithstandinganyprovision of this Plan tothecontrary, a Member willnotincur a Break in Service while on qualified military service in accordance with the terms of Code Section 414(u)(8) and the provisions of the Uniformed Services Employment and ReemploymentRights Act (USERRA).
1.10 The term“Code” shall meanthe Internal Revenue Codeof 1986, as amended from time to time.All references herein to the Code shall be deemed torefer tothe Internal Revenue Code of 1986, and the regulations established pursuant thereto, asthey nowexist orasthey mayhereafterbe amended.Any reference herein to a specific section of the Code shall be deemed to refer to such section andthe regulationsestablished pursuant thereto, asthey nowexist or as theymay hereafter be amended.
1.11 The term“Death Benefit” shall meanany benefit paid to an Eligible Spouse or Beneficiaryat thedeath of a Member, Terminated Member,or Retired Member, as provided under the terms of the Plan.
1.12 The term“Early Retirement Date”shall mean, in thecaseof each Memberwhohas attained theageof 55 and has completedat least 15Years of Service, the firstday ofthe monthimmediatelyfollowingorcoincidentwiththelaterof(a) the datesuchMemberleavesthe employoftheEmployer in accordance with Section 3.4 hereofor (b) the datethe Member directs in writing shall be his Early Retirement Date. Notwithstandinganything herein tothecontrary, for purposes of determiningwhether a Member has satisfied the eligibility requirements forEarly Retirement, he shallreceive credit for all Years of Service completed after the Freeze Date.
1.13 The term“Earnings”shall mean compensation which is paid to a Memberby the Employer during the Plan Year and which is includable in the Member’sgross incomeforfederal incometax purposes, as reported on the Member’s FormW-2; provided, however,thatthe following incomeshall be excluded (i)any and all commissionincome and (ii) incomefromthe exercise of stock options, stock appreciation rights, restricted stock, restricted stock units and similar grants.Any amounts contributedby theEmployer on behalf of anEmployee pursuanttoasalaryreduction agreement which is not includable in the gross income of theEmployee under Code Sections 125, 132(0(4), 401(k), 402(a)(8), 402(h) or 403(b) shallbe included in Earnings. Prior to January 1, 1997, in thecase of a Member who is a memberof the familyof: (i) a5%owner or (ii) a Highly CompensatedEmployee in the group consisting ofthe ten Highly CompensatedEmployees paid the greatest annual earnings duringsuch Plan Year, eachasdetermined under Section 414(q)(6) ofthe Code, as in effect prior to January 1, 1997,theMember’s annual Earnings, for all Plan Years prior to January 1, 1997,shall includeany annual Earnings received from theEmployer by such Member’s spouse andany lineal descendantsofthe Member who have not attainedage 19 before the close of such PlanYear. The Earnings ofanyMembertakenintoaccountindeterminingbenefitaccrualsunderthePlanforanyPlanYear
beginning after December31, 2001, shallnot exceed $200,000as adjusted for cost-of-living increases in accordance with Section 401(a)(17)(B) of the Code and suchlimit shall be retroactivelyapplied to determine such Member’s benefit. Thus Earnings ofany Member taken into accountin determining benefit accruals underthe Plan foranyPlan Year beginning after December 31, 2004,shall notexceed $210,000. Earnings means compensation during the Plan Year or such other consecutive 12-monthperiod over which compensation is otherwise determined under the Plan (the determination period). The $210,000limit on earnings shallbeadjusted for cost-of-living increases inaccordance with Code Section 401(a)(17)(B). The cost- of-living adjustment in effect for a calendar year applies to Earnings for the determination period that begins with or within such calendar year. Notwithstanding the foregoing, this Plan shall only take into account the Earnings that are earned for periods of service priorto the Freeze Date and Earnings thatare earned for periods of serviceafter the Freeze Dateshall not be taken into account for purposes of the Plan.
1.14 The term“Effective Date” shall mean the date on which this amendment and restatement is effective, January 1, 2015, except where otherwise indicated in thetext of this Plan. The original effective date of the Plan was January 1, 1976.
1.15 The term“Eligible Spouse” shall meanthe legallymarried spouseof the Member at the earlier of the Member’s date of death or the Member’s Annuity Starting Date, provided the Member and his spouse have been married for at least oneyear asof such date. However, if a Member marries within one (1)year before hisAnnuityStarting Date and the Member andsuchSpouse have been married for at least one (1)year on orbefore the date of the Member’s death, such persons shallbe treated as having been married one (1)yearon the Member’s Annuity Starting Date.
1.16 The term“Employee”shall meanany person who is anEmployee (such term having its customarymeaning)of theEmployer and who is receiving remuneration for personal services rendered to the Employer (other than as an independent contractor). In addition, the termEmployeeshall include leasedemployees within the meaning of Code Section 414(n)(2) unless (i) such leasedemployees constitute less thantwenty percent (20%) of theEmployer’s non- highly compensatedworkforce within the meaning of Code Section 414(n)(5)(C)(ii), and (ii) such leasedemployeesare coveredby a plan described in Code Section 414(n)(5), inwhichevent such leasedemployees shall not beconsideredEmployees for purposes of this Plan. Leasedemployees shall not be eligible to participate in this Plan. Further, the followingEmployees shall not be eligible to participate in the Plan:
(a)Employees whose terms and conditions ofemployment are determinedbycollective bargainingwith a union or an affiliate thereof representing such persons andwithrespect to whom inclusion in thePlan has not been provided for inthe collective bargaining agreement;
(b) Any individual who is an independent contractor.
An independent contractor who is recharacterized by the Internal Revenue Service as a common law employee will not be considered as described in paragraph (b) for periods on andafter the recharacterization. The individual also willnot beconsidered as described in
paragraph (b) forperiods beforethe characterization, unless theEmployerhas classified the individual as an independent contractor ingood faith, and the individual was part of agroupofindependent contractors identifiedby similar work requirements. An individual’s ineligibility under the previous sentencehas no bearing on whetherthe individual isan excludableemployeefor purpose of the nondiscrimination tests under Code Sections 401(b) and 401(a)(4).
1.17 The term“Employer”shall mean Southwest Georgia Financial Corporation,itssuccessors and assigns, and, subject to the provisions ofSection 11.7,any business intowhichtheEmployermay be merged or consolidatedor to which substantiallyall of its assetsmay be transferred. The termshall also mean Southwest GeorgiaBank,anyother affiliate of Southwest Georgia Financial Corporation which shall, with SouthwestGeorgia Financial Corporation’s prior written consent, adopt this Plan, andany successor or assignof such anEmployer.Intheevent such an affiliate does so become a participatingemployer,it shall contribute to the Plan,and itsEmployees shall be entitled to benefits thereunder, in accordancewith its term, subjecttothe following special provisions:
(a) The contribution of each Employer shall be equal to that amount necessary to fund the benefits accruedby itsEmployees inaccordance with the funding methods and policies established under Article VII hereof.
(b)Incomputing the Hours of Serviceof a person who is in theemploy ofonly oneof theEmployers hereunder atthe same time, the periodof service of such person withany of theEmployersshall be counted, and a transferof anEmployee from theemploymentofoneEmployer to theemployment of anothershall not interrupt his service, nor shall such a transfer constitute a termination of employment under the terms of this Plan.
(c)Inthe eventof a transfer ofany Member from theemployment of oneemployer to the Employment of another Employer,he shall be considered and treated thereafter as a Member who is anEmployee of theEmployer to which he is transferred, except, if such Memberthereafterforfeitsallor apartofhisinterestunderanyoftheprovisionsofthePlan,thePlan Administratorshall divide such forfeiture forthe purpose of allocation in an equitable manner, considering all the circumstances, between the two Employers.
In the eventof such a transfer,the contributionof eachEmployer with respect to the accrued benefitsof such transferring Member shall be an amount determinedbyallocating the total contribution thus necessary to theEmployers on the basisofthe amount of wagesor salary earned with each such Employer during its fiscalyear in which the transfer takes place.
1.18 The term“ERISA”shall meantheEmployee RetirementIncome Security Actof
1974, as amended from time to time, and the regulations established pursuant thereto,as they nowexist or asthey mayhereafterbe amended.Any reference herein to a specific sectionofERISA shall be deemed torefer to such section and the regulations established pursuant thereto, as they now exist or as theymay hereafter be amended.
1.19 The term“Forfeiture” shall mean the portionof a Member’s Accrued Benefit which is not vestedin accordance with Section5.1, and which is appliedas providedin thePlanto reduce Employer contributions which would otherwise be required.
1.19A The term“Freeze Date” shall mean December31, 2006, the date on which the
Plan is frozen for purposes of new Members and accrual of benefits, as set forth herein.
1.20 The term “Hour of Service” or “Hour” means:
(a)Each hour for which anEmployee is paid, or entitled topayment,by the Employer for the performance of duties. These hours shall be credited to theEmployee forthecomputation period in which the duties are performed; and
(b)Each hour for which anEmployee is paid, or entitled topayment,bythe Employer on accountof a period of time during which no duties are performed (irrespective of whether the employment relationship has terminated) due to vacation, holiday,illness,incapacity(including disability),jury duty,militarydutyorleaveofabsence,provided,however,thatunderthis paragraph (2):
(i)Nomorethan500HoursofServiceshallbecreditedforanysinglecontinuous period (whether or not such period occurs in a single computationperiod)during which the Employee performs no duties;
(ii) No hours shall be credited if suchpayment is made or due under a plan maintainedby theEmployersolelyfor purposes ofcomplying with applicable worker’s compensation, unemployment insurance or disability insurance laws; and
(iii) No hours shall be credited for apayment which reimburses an
Employee for medical or medically related expenses incurredby the Employee; and
(c)Each hour for which backpay, irrespective of mitigation of damages,iseither awarded or agreed toby theEmployer. These hours shall becredited to theEmployeeforthecomputationperiodtowhichtheawardoragreementpertains ratherthantheperiodinwhichtheaward, agreement,orpayment is made. The same Hours of Service shall not becreditedunder paragraphs(a) or(b), as thecasemay be, and thisparagraph(c). Crediting of hours forbackpayawardedoragreedtowithrespectto periods described in paragraph (b)shallbesubjectto the limitations of that paragraph.
(d) Hoursof Service credited under the Planshallbe calculated andcredited subject to the rules and restrictions set forth in Departmentof Labor Regulations Section
2530.200b-2(b), (c) and (f) which are incorporated hereinby this reference.
(e) The methodof determining Hoursof Service underthe Planshall beinaccordancewithDepartmentofLabor Regulations Section 2530.200b-3andshallbeappliedin a consistent and non-discriminatory manner to Employees or classes of Employees.
(f) Notwithstanding the foregoing, neither an Employee nor a Membershallearn or be credited with an Hour of Service after theFreeze Date for purposes of determining eligibility to participate or to calculate such Member’s Accrued Benefit. Following the Freeze Date, Hours of Service shall continue to be counted for purposes of determining Years of Service to determine a Member’s EarlyRetirement Date pursuant to Section 1.12, his VestedInterest
determinedpursuanttoSection5.1andhiseligibilityforanEarlyRetirementbenefitpursuantto
Section 3.4.
1.21 The term“Key Employee” means anEmployeedefinedin Code Section 416(i) and theTreasuryregulations thereunder.Generally,they shall includeany Employeeor formeremployee (and his Beneficiaries) who, atanytime during the Plan Yearorany ofthe preceding four Plan Years, is:
(a) an officerof the Employer (as that term is defined within the meaning of the regulations under Code Section 416) forany such Plan Year having 415 Compensation greater than $135,000 (as adjusted under Code Section 415(i)(1) for that Plan Year).
(b) a “five percent owner”of theEmployer. “Five percent owner” meansany personwho owns (or is considered as owningwithin the meaningof Code Section 318) more than 5% of the outstanding stockof theEmployer or stock possessing more than5% of thetotalcombined voting power of all stock of the Employer or, in the case of an unincorporated business,anyperson who owns more than 5% of the capital or profits interest in theEmployer.Indetermining percentage ownership hereunder,employers that would otherwise be aggregated under Code Section 414(b), (c), and (m) shall be treated as separate employers.
(c) a “one percent owner” of theEmployer having an annual415
Compensation from theEmployer of more than $150,000 as adjustedby theInternal Revenue Service.“One percentowner” meansanyperson who owns (or isconsidered as owning within the meaning ofCode Section 318) more than1% of the outstanding stock of theEmployer or stock possessing more than 1% of the total combined voting power of all stock of theEmployer or, in the case ofan unincorporated business,any person who owns more than 1% ofthe capital or profits interest in theEmployer. In determining percentage ownership hereunder,employers that would otherwise be aggregated under Code Section 414(b), (c), and (m) shallbe treatedasseparateemployers. However, in determining whether an individualhas 415 Compensationofmore than $150,000as adjustedby the Internal Revenue Service, 415 Compensation fromeach employer required tobe aggregated under Code Section 414(b), (c),and (m) shall be taken into account.
1.22 The term“LateRetirementDate” shall mean the firstday ofany month which is subsequent tothe Member’s Normal Retirement Date and which is coincident withorimmediatelyfollowingtheday the Member terminatesemployment with theEmployer forany reason other than death.
1.23 The term“Member”shall meananyEmployeeof theEmployerwho has become a Member as provided in Article II hereof.
1.24 The term“Monthly Earnings” shall mean 1/12th of Earnings as defined in Section
1.13. A Member’s Monthly Earnings shall be appropriately adjustedby the Plan Administrator to an annual basis if he receives compensation for less than the full Plan Year.
1.25 The term“MonthlyRetirementIncome”shall mean a monthly income due to, or withrespect to, a Retired Member whichshall commence as of hisEarly, Normal,or Late Retirement Date, or which shall commence upon his death pursuant tothe terms of Section 4.1.
Such “MonthlyRetirementIncome” shall continue for the period indicated in ArticleIIIorIV
hereof.
1.26 The term“Normal Retirement Date”shall mean the firstdayofthe month coincident with or immediately preceding the Member’s 65th birthday (“Normal Retirement Age”). A Membershall become fully vested and his Accrued Benefit shall become nonforfeitable as of his Normal Retirement Age.
1.27 The term“Plan” shall mean the pension plan set forth herein, as amended from time to time, whichis known as the Southwest Georgia Financial Corporation Pension Retirement Plan.
1.28 The term“Plan Administrator” shall mean the individual orentity(whichmay be a committee) whichwillbeappointedbyandserveatthepleasureoftheEmployertoadministerand manage the Plan in accordance with ArticleIX.In the event that theEmployer hasnotappointed a Plan Administrator, or in the event that the Plan Administrator appointedby theEmployer has resigned, been removedor is otherwise disabled from serving, the term Plan Administrator shall mean the Employer.
1.29 The term“Plan Year” shall mean the twelve month period beginning on January 1 and ending on December 31, which shall also serve as the “limitationyear” for purposesofSection 415 of the Code.
1.30 The term“Qualified Joint and Survivor Annuity” shall mean an annuity for the life ofthe Member with a survivor annuity forthe life of his Eligible Spouse which is equal to fiftypercent (50%) ofthe amount of the annuitypayable duringthe joint lives of the Member and his Eligible Spouse, and whichistheActuarialEquivalentof a 5-year certain annuityforthelife of the Member.
1.31 The term“Retired Member” shall meanany Member ofthe Planwhohasterminated hisemployment afterqualifying for retirement under Section 3.2, 3.3, 3.4,or 3.5. Retirement shall be considered to commence on theday immediately following the Member’s lastday ofemploymentby theEmployer or,if later, the lastdayofan authorized leaveofabsence.
1.32 The term“Sylvester Plan” shall mean theSylvester Banking Company Pension
Plan.
1.33 The term“SylvesterMember”shall mean Members in this Planwho are former
members of the Sylvester Plan who became Members in the Plan as of January 1, 2005 following the merger of the Sylvester Plan into the Plan.
1.34 The term“TerminatedMember”shall mean a Member who does not retire under Section 3.2, 3.3,3.4,or 3.5 hereof ordieunder Section 4.1,who incurs a oneyear Break in Service, and who has not again become an active Member.
1.35 The term“Total and Permanent Disability”or“Totallyand Permanently Disabled”
shall mean aphysical or mental condition which totallyand presumably permanentlyprevents a
Member from engaging inany substantially gainful activityand which entitles the Member topayment under theEmployer-sponsored long-term disability insurance program, assumingthatsuch program is then maintainedbytheEmployer and covers the Member.
1.36 The term“Trust Agreement” shall mean the Trust Agreement adopted December
9, 1975, as in effect as of the effective date of this amendment and restatement of the Plan.
1.37 The term“Trustee”shall mean the trustee or trustees then serving under the Trust
Agreement.
1.38 The term“Trust Fund” or“Fund”shall mean all contributions totheTrusttogether withthe earnings and increments thereon, less disbursements madeby the Trustee in accordance with the terms of this Plan.
1.39 The term“Yearof Service” shall mean a 12-month computation period during which anEmployee completes 1,000 or more Hours of Service. The computation periodinitially tobetakenintoaccountshallbethe12-month period commencing with the Employee’sfirstdayofemployment with theEmployer, whether or not suchemployment commenced prior to the original effective dateof the Plan. Whetherornot theEmployee is credited withat least 1,000
Hours of Service during this initial 12-month computation period, the computation period shall thereafter be the first calendaryear commencingafter the date such employment began andshallincludeeach calendaryear thereafter.In the event suchEmployee is credited with at least 1,000
Hours of Service during the initial 12-month computation period as wellas during his first full calendaryearof employment, suchEmployeeshall be credited with oneYear of Service plus a fraction of a Yearof Service, the numerator of such fractional Year of Service being the number of months during hisfirst partial calendaryear of suchemployment during which hewascreditedwithatleastone(1)HourofService,andthedenominatorofwhichistwelve(12).Ifan Employee completes at least 1,000 Hours ofService during such initial 12-month period and such periodoverlapstwocalendaryearsinneitherofwhichhastheEmployeecompletedatleast
1,000 Hoursof Service, he shall neverthelessbe credited with a Year of Service for thePlanYear in which he becomes a Member of the Plan but shallnot be credited withanyfractionalYearof Serviceas described above. However,in no event shall this definition be appliedtoreduce the benefit of a Member under the Plan computed asof December 31, 1987, usingthedefinition of Years of Service previously contained in the Plan.
Notwithstanding any provision of this Section 1.39 or the Plan generally to the contrary, a Member who is not credited with at least one (1) Hour of Service on or afterJanuary 1, 1988, shallreceive no credit, for purposes of calculating hisMonthlyRetirementIncome and Accrued Benefit, for Hours of Service completed after his Normal Retirement Date. Also,againnotwithstandinganyprovision of this Section1.39 or the Plan generally to the contrary, if a Terminated Memberis subsequentlyre-employed and again becomes a Member, orif a Member’s Break in Service ceases where no termination of employment has occurred, his “YearsofService”forvestingandbenefitaccrualpurposesshallnotincludeanyperiodsofemploymentprior to suchre-employment or cessationof Break in Service onlyif (i) such Member’s vested percentage pursuant to Section 5.1 was zero asof the date of termination or commencementofBreak in Service, and (ii) the Member’s Breaksin Service as of hisre-employment or cessation
of Break in Service equals or exceeds the greater of 5 consecutiveyearsor hisYearsof Service for vesting purposes as of his termination date or commencement of Break in Service.
In computing Years of Service hereunder,the period of anEmployee’semployment withanyothermemberof agroupofrelatedemployerswhichincludestheEmployershallbecountedfor participation and vesting purposes (but not for accrual of benefits purposes unless such otheremployerhasalsoadoptedthePlan),and atransferofanEmployeefromtheemployofonesuchmember to theemployof another membershall not interrupt such Employee’s service. Relatedemployers shall be determined under Code Section 414(b),(c), (m) and (n), to include membersof a controlled group or corporations, trades or business under common control, members ofanaffiliated service group, and entities related through the leasing of employees.
Notwithstandinganything herein to the contrary, no Member shallbe credited with anyYears of Serviceafterthe Freeze Date for purposes of calculatinghisMonthlyRetirementIncome and Accrued Benefit. A Member shall continue toreceive credit forYears of Service completed afterthe Freeze Date solely for purposes of determiningthe vested interest inhisAccrued Benefit asset forth in Section 1.12 and eligibilityfor Early Retirement asset forthinSection 5.1.
ARTICLE II
MEMBERSHIP IN THE RETIREMENT PLAN
2.1Initial Membership. AnEmployee who was a Member under the prior provisions of this Plan as of thedate immediatelypreceding the Effective Date shall remain a Member andshallcontinuetoparticipateinaccordancewiththeprovisionsofthisamendedandrestatedPlan.Notwithstandinganyprovisiontothe contrary, noEmployee shall become a Member in the Plan after the Freeze Date.
2.2ResumptionofMembership. A Retired or Terminated Member who, prior to the Freeze Date, returnsto theemploy of theEmployeror completes aYearof Service after incurring a Break in Service while stillemployedby theEmployer, shall again become a Member asof the Anniversary Date occurringwithin the Plan Year in which he isre-employedor in whichhe completes a Yearof Service following the Break in Service, whichever is applicable.Any such Member’s benefitpayments shall thereupon be suspended as provided in Section 3.7 of the Plan. If a Retired or Terminated Member is reemployedas anEmployee prior to theFreeze Date and continues in theemployof theEmployer throughthe lastday of the PlanYear, such individual shall resume his Membership for the Plan Year ofemployment, even though he completes not more than 500 Hours of Service during such Plan Year.
Notwithstandinganything herein tothecontrary, a Retired or Terminated Member who, after the Freeze Date, returns to the employoftheEmployerorcompletes aYearofServiceafterincurring a Break in Service while still employedbytheEmployer, shall not resume Membership in the Plan; provided,however, such Membermayreceive credit foradditionalYears of Service upon reemployment to the extent provided herein.
2.3Termination. Membership in this Plan shall continue until such Memberincurs a Break in Service, retires in accordance with Section 3.2,3.3, 3.4, or3.5, dies or becomes a Terminated Member as contemplated in Section 5.1 of the Plan.
2.4 Membership Requirement Effective as ofMay 1, 1999. Notwithstanding Section
2.1, effective May1,1999,anyEmployeewhoisemployed exclusively on a commissioned basis shall not be eligible to participate in the Plan.
2.5 Qualified Military Services.
(a)USERRA Provisions. Notwithstandingany provision of this Plan tothecontrary, contributions, benefits, and servicecredit with respect to qualified military service will be provided as required under Code Section 414(u).
(b) HEART Provisions.
(i) | Continued Benefit Accruals.In the case of death or Total and Permanent Disability occurring on or afterJanuary 1, 2007,thePlan shall not provideanycontinued benefit accruals underthePlan in the caseof aParticipant whodies or becomes TotallyandPermanently Disabled while performing qualified military service. |
(ii) | Differential WagePayments. Subject to all other provisions of the Plan,for PlanYears beginning on orafterJanuary 1, 2009, if a Participant on qualified military service receives a differentialwagepayment (as defined in Code Section3401(h)(2)), he orsheshall be treated as anEmployeeof theEmployer making thepayment, andthe differential wagepayment shall be treatedascompensation for all purposes of applying the Code except for purposes of determining benefit accruals under the Plan. |
2.6MoultrieInsuranceAgencyMembership. Prior to theFreeze Date and subjecttoSection 2.4, an Employee who had been employedby Southwest Georgia Insurance Services, Inc. (a/k/a Moultrie Insurance Agency) on or after May 1, 1999 became a Member on the date he first wasemployedbyanEmployer andmet the requirements of Section 2.1 where Years of Service included service under Southwest Georgia Insurance Services,Inc. from and afterMay 1,1999so long asit didnot otherwise duplicate Service under this Plan. No individualcan become a Member in this Plan after the Freeze Date.
2.7WaiverofParticipation. AnEmployee, leasedemployee, independent contractor, Beneficiaryor otherperson withanyclaim to benefits under the Planwho provided the Plan Administrator with aknowing,voluntaryand irrevocable waiver of benefits under the Planin a form satisfactory tothe Plan Administrator was notbe eligible to participate inor receive benefits from the Plan and was for all purposes treated as ineligible.
2.8EmpireFinancialServices,Inc.Membership. EffectiveJanuary 1, 2002, Empire Financial Services, Inc., asubsidiarycompany of Southwest Georgia Financial Corporation, became an adoptingEmployer in accordancewith Section 1.17 of the Plan. EffectiveJanuary 1,
2002 and prior tothe Freeze Date,Employees of Empire Financial Services were eligibletoparticipate in the Plan provided, however, that service under the Empire Financial Services, Inc. Profit Sharing Plan shall be recognized foreligibilityand vesting but not for accrual of benefits under the Plan. No individual can become a Member in this Plan after the Freeze Date.
2.9SylvesterBankingCompanyMembership. Effective asof February 27, 2004, the service ofEmployeeswhowereemployedbySylvester BankingCompany on the immediately precedingday will be counted as Hours of Service for purposes of determining eligibility under the Plan. SuchEmployees who met thePlan’seligibility service requirements on February 27,
2004 were immediatelyeligibletoparticipateinthePlan.InadditionpriorservicewithSylvester BankingCompany shall be recognized for calculating vesting but not for purposesofdetermining a Member’sAccrued Benefit under the Plan (except as provided in Section2.10with respect to the Member’s benefit under theSylvester Plan).
2.10 Sylvester Banking CompanyPension Plan.Each participant intheSylvester
BankingCompanyPension Plan (the“SylvesterPlan”) asof the close of business on December
31, 2004, shall, in connection with the merger of theSylvester Plan into the Plan, become a Memberin the Plan effectiveas ofthe earlierof the date specified inSection 2.9or the close of business onDecember 31, 2004. The Plan Administrator shall maintain records adequate to permit the determination of the amounts transferred attributable to aSylvester Member’s frozen accrued benefit under the Sylvester Plan.
ARTICLE III
MONTHLY RETIREMENT INCOME
3.1General.AnyMember who terminates hisemployment with the Employer onorafter hisEarly, Normal, orLate Retirement Date orbyreason of Total and Permanent Disability shall qualifyfor retirement under Sections 3.2,3.3, 3.4, or 3.5, andhisAccrued Benefit shallbefully vested.MonthlyRetirement Incomepayable under the terms of this Article shall be subject to the restrictions and limitations of ArticleVIand shallbe paidby the Trustee onlyby or atthedirectionof the Plan Administrator. NeithertheEmployer, the Plan Administrator, northeTrustee shall be under anyobligationtopayanyMonthly Retirement Income other than from the Trust Fund.
3.2 Normal Retirement.
(a)Benefit Computations Prior to January 1,1988 [Historical provision].Each Member who isnot credited with at least one (1) Hour of Service on or afterJanuary 1,
1988, who lives to his Normal Retirement Date and who retires on such date shall be entitled to amonthlyretirement benefit, commencing on his Normal RetirementDate, equal to the greaterof(1) $100 or (2)20%of his AverageMonthly Earnings, plus 15% of hisAverage Monthly Earningsinexcessof$1,000,plus.5%ofhisAverageMonthly EarningsmultipliedbyhisYearsof Serviceasof his Normal Retirement Date.Suchmonthlyretirement benefit is then multipliedby afraction, the numerator of which is such Member’s Years of Service as of the date of calculation andthe denominator of which is such Member’s Yearsof Service at his Normal Retirement Date ifhe were to live and remainin the employof theEmployer until his Normal Retirement Date.Ifthe Member has less than 15Years of Service, hismonthlyretirement benefits as determined under (1) or (2) above shall be reduced by 1/15th for each Year of Service less than 15,but such reduction shall innoeventreduce the Member’smonthlyretirement benefit to less than two percent (2%) of his Average Monthly Earningsforeach Year of Service not in excess of ten (10) Years of Service.All suchmonthlybenefits shall be computed to nearest dollar, with fifty cents ($.50) being regarded as the next higher dollar.
(b) Benefit Computations After December 31, 1987 And Prior toJanuary 1,
1989[Historicalprovision].In the case of a Member who retires on his Normal Retirement Date and who is credited with at least one (1) Hourof Service on or afterJanuary 1, 1988 but isnotcredited with (1)HourofServiceonorafterJanuary1,1989,suchMembershallbeentitledto amonthlyretirement benefit commencing on his Normal RetirementDate equal to (1) abasicmonthlybenefit ofthirty-five percent (35%)of such Member’s AverageMonthly Earningsplus(2)an excess benefit equal to three-fourths of one percent (.75%) of such Average Monthly Earnings in excessof one thousandsixhundredsixty-six dollars andsixty-sevencents($1,666.67) multiplied by the Member’s Yearsof Service not in excess ofthirty-five (35) Years of Service. Suchmonthlyretirement benefit is then multipliedby afraction, the numerator of which is such Member’sYearsof Service asof the dateof calculation and the denominatorofwhich is such Member’sYearsof Service at his Normal RetirementDate if he were to live and remain in theemploy of theEmployer until his Normal Retirement Date. The Member’s totalmonthly benefit so computed shall bereducedby 1/15th foreachYear of Service fewer than 15 credited to such Member. Provided, however, that in no event shallthe application of this
Section 3.2(b) result in a Member’s Accrued Benefit on or afterJanuary1,1988,being less than such Member’s Accrued Benefit determinedas of December 31, 1987, based upon such Member’s Years of Service and Average Monthly Earnings as of December 31, 1987.
(c)Benefit Computations After December 31,1988 and Prior to January 1,
2001[Historicalprovision].In the case of a Member who retires on his Normal Retirement Date (or otherwise terminatesemployment) and whois credited with at least one (1) Hourof Service on or afterJanuary 1,1989 but is not credited with (1) Hourof Service on orafterJanuary1,
2001, such Member shall be entitled to a monthlyretirement benefit commencing on hisNormal
Retirement Date equal to the sum of (i) and (ii):
(i) a basicmonthlybenefit ofthirty-fivepercent (35%) of such
Member’s Average Monthly Earnings multiplied by:
(1) | hisYears of Serviceas of his date of termination ofemployment or other termination of Service dividedby theYearsof Servicehe would haveif he continuedinemployment to his Normal Retirement Date; and |
(2) | afractionequaltotheYearsofServicehewould have ifhecontinued inemployment to his Normal Retirement Date dividedby 15; provided that this fraction is only appliedtoa Member if he would have fewer than fifteen (15) Years of Service at hisNormal Retirement Date (or ifhe isemployed after his Normal Retirement Date,at hisLateRetirement Date); |
(ii) an excess benefit equalto .72%, subject to Section 3.2(h),of such AverageMonthly Earnings in excess of one thousand four hundred sixteen dollars and sixteen cents ($1,416.16) multipliedby theMember’s Years of Service at his date of termination or other termination of Service not in excess of thirty-five (35)YearsofService.
In no event shall the application of this Section 3.2(c) result in a Member’s Accrued Benefit on or afterJanuary 1, 1989, being less than such Member’s Accrued Benefit determined as of December 31, 1988, based upon such Member’s Yearsof Service and Average Monthly Earnings as of December 31, 1988.
(d) Benefit Computations After December 31,2000 [Current Provision]. Effective as of the Freeze Date, no additional benefits shall accrue under the Plan.
(i)Inthe case of a Member who is not aSylvester Member and who retires on his Normal Retirement Date (or otherwise terminatesemployment) and who is credited with at least one (1)Hourof Serviceon orafterJanuary 1, 2001, such Member shall be entitled to amonthlyretirement benefit commencingon his Normal Retirement Date equal to the sum of (1) and (2) below.
(1) | The Member’s Accrued Benefit asof December 31, 2000 determined as if such date were a dateof termination ofemployment butwith Average Monthly Earnings determined as of the date of actual termination ofemployment. |
(2) | 46% of the Member’s Average Monthly Earnings multiplied by |
(A) the ratio of the Member’sYears of Service since
January 1, 2001 divided by all Years of Service; and
(B) | a fraction equal to theYears of Service he would haveifhe continued inemploymentto his Normal Retirement Date dividedby 25; provided this fraction isonlyapplied to a Member if he would have fewer thantwenty-five (25) Yearsof Service athisNormalRetirementDate(orifheisemployedafter his Normal Retirement Date, at his Late Retirement Date). |
(ii)Normal Retirement Benefit. EachSylvester Membershall be entitled to amonthlyretirement benefitcommencing on his Normal RetirementDateequal to:
(1) | the Member’s frozen accrued benefit undertheSylvester Plan convertedusing theSylvester Plan’s actuarial assumptions to a 5-year certain and life monthly retirement income, plus |
(2) | (A) | 46% of such Member’s AverageMonthly Earnings, multiplied by |
(B) |
an accrual fraction equal to the Member’sYears of Service completed after March 1, 2004, divided by the Member’s Yearsof Service at his Normal Retirement Date, if hewere to live and remaininthe employ of theEmployer until hisNormalRetirement Date (excludinganyyears of service performed forSylvester), multiplied by | |
(C) |
an accrual fraction equal to the Member’sYears of Service at his Normal Retirement Date not in excess of 25, divided by 25. |
Provided however,thatinnoeventshalltheapplicationofthisSection3.2(d)(ii)resultinaSylvester Member’s Accrued Benefit on orafter March 1, 2004, being less thansuchSylvester Member’s Accrued Benefit determined as of February 27,2004 basedupon
suchSylvester Member’s Years of Service and Average Monthly Earnings as of February
27, 2004.
(e)Retired Members Entitled toGreater of Past or Current Benefit Formula.For Plan Years beginning on or afterJanuary 1, 1990,any Member who terminatedemploymentprior to 1988 andwho is entitled to a retirement benefit shallhave his retirement benefit recomputed under both the pre-1988 benefit formula contained in Section 3.2(a) and the post-
1987 benefit formula contained in Section 3.2(b), and shall be entitled to receive, prospectively from January 1, 1990 forward only, the greater of the retirement benefits calculatedunderSections 3.2(a) or 3.2(b) above.In no eventshall the recomputation of a Member’s retirement benefit causeor permit a Member to changethe methodof benefitpayment such Member previously elected pursuant to Section 3.6.
(f)FormofNormalRetirementBenefit. The monthly retirement benefit shall be expressed in the form of a 5-year certainannuityfor the lifeof the Member, althoughtheactual form of payment shall be in accordance with the terms of Section 3.6.
(g) Effective asofJanuary1,1989, aMember’sbenefitunderthisSection3.2shall in no event be less than the Member’s early retirement benefit calculated under Section 3.4.
(h) Effectiveas of January 1, 1989 and as applicable to a benefit determined under Section 3.2(c), ifthe Member commences benefits underthe Plan prior tothe Member’s reaching his SocialSecurityRetirement Age (as hereinafter defined)the ..72% excess integrationfactor in Section 3.2(c) shall be replacedby ..67% if the Social Security Retirement Age is 66 and .62% if the Social SecurityRetirement Age is67. The “Social SecurityRetirement Age” shall be as follows:
1, 2000;
(i) age 65 in thecase of a Member who attains age 62before January
(ii) age66inthecaseof aMember who attainsage62afterDecember
31, 1999, but before January 1, 2017; and
31, 2016.
(iii) age67inthecaseof aMember who attainsage62afterDecember
(i) Effective as of January 1, 1989, this subsection shall apply to a Member who is (i) credited with a Year of Service both before 1994 and after 1993; and (ii) whose annual compensation in one or more Plan Years priorto January 1, 1994 exceeded thelimit inCodeSection 401(a)(17)in effect onJanuary 1, 1994. Such Member’s benefit underthe Plan shallbethe greater of:
(i) such Member’s Accrued Benefit as of December 31, 1993; and
(ii) such Member’s Accrued Benefit as ofhis actual dateoftermination ofemployment or retirement using the benefit formula in Section 3.2(c) based on the Member’s total Years of Service.
3.3Late Retirement.SubjecttoapplicablelawandtheEmployer’s personnel policies, a Membermayremain in theemploy of theEmployer after his Normal Retirement Date, inwhicheventnoMonthlyRetirementIncome shall be paid prior to the Member’s Late Retirement Date.If a Memberdoes continue his employment with theEmployerbeyond his Normal Retirement Date, he shall be entitledto amonthly retirement benefit, commencing on hisLateRetirement Date,equalto themonthlyretirement benefit whichhe would have received under Section 3.2 if hehad retired on his Normal Retirement Date, takinginto account hisYears of Service and AverageMonthlyEarnings as of his Normal Retirement Date and assuming thattheform ofpaymentultimatelyreceived under Section 3.6 began asof his Normal Retirement Date; provided, however, that a Member who is credited with at least one (1) Hour of Service on orafterJanuary 1, 1988,shall be entitled on hisLate Retirement Date to the greater of hisMonthlyRetirementIncome computed in the manner provided in Section 3.2(b), 3.2(c), or 3.2(d) butbytaking into account hisYearsof Service, including Years of Service creditedafter hisNormalRetirement Date, (subject, however, toany applicable Year of Service maximums) and AverageMonthlyEarnings asof hisLate Retirement Date or the Actuarial Equivalent of themonthlyretirement benefit which he wouldhave received under Section 3.2if he had retired on his Normal Retirement Date. Themonthlyretirement benefit shall be expressed in the form of a 5-year certain annuityfor the life of the Member, although the actual formofpayment shall beinaccordance with theterms of Section 3.6. Notwithstanding the foregoing, exceptas otherwise provided in Section6.5 or under applicable law, effectiveon and after the Freeze Date,theMember shallnot be entitled toanyadditional Actuarial Equivalent increase inthe Monthly Retirement Income to which he otherwise would have been entitled athis Normal Retirement Date orany increase inMonthly RetirementIncomebasedonhiscompensationandserviceafterthe Freeze Date.
3.4 Early Retirement. A Member who is at least age 55 and has completed at least15
YearsofServiceshallbeeligibleforearlyretirementandthusshallbefully vested.If a Member does takeearly retirement, he shall be entitled to amonthlyretirement benefit, commencingonhis Normal Retirement Date, equal to his Accrued Benefit asof hisEarlyRetirement Date. Alternatively, if the Member elects to havehismonthlyretirement benefit begin before his Normal RetirementDate, such Membershall be entitled to amonthlyretirement benefit equal to themonthlyretirement benefit which would otherwise commence as ofhis Normal Retirement Date, reducedbyfive twelfths (5/12ths) of one percent (1%) foreach month that the commencement dateof suchpayments precedes the Member’s Normal Retirement Date. All suchmonthly benefits shall be computed to the nearest dollar, withfiftycents ($.50) being regardedasthenexthigherdollar.Themonthlyretirementbenefitshallbe expressedinthe form of a5-year certain annuityforthe lifeofthe Member, althoughthe actual form ofpayment shall be elected in accordance with theterms of Section 3.6. Notwithstandinganything herein tothecontrary,solelyfor purposes of determining a Member’s eligibilityforEarlyRetirement and hisEarly Retirement Date,Years of Service shall include Years of Service credited after the FreezeDate in accordance with the provisions of the Plan.
3.5DisabilityRetirement.If a Member becomesTotallyand Permanently Disabledafter completing at least 10Years of Service and prior to theFreezeDate, and if he remains Totallyand Permanently Disabled until his Normal Retirement Date, such Member shall be entitled to amonthlyretirement benefit, commencing on his Normal Retirement Date, computed as of the date such Member incurs a Total and Permanent Disability, inan amount equal tothe
monthlyretirement benefit to which he wouldhave been entitled under Section 3.2 if he had continued to work until his Normal Retirement Date and his Average Monthly Earnings continued at the same level as in effect at the time of the Total and Permanent Disability.
Total and PermanentDisability shallbe considered to have ended and entitlement to a disabilityretirementpension shallcease if, prior to his Normal Retirement Date, the Memberisreemployedby theEmployeror loses his entitlement topayments under all Employer-sponsored long-termdisabilityinsuranceprogramsunderwhichhewascovered at thetimeofhisTotalandPermanent Disability.If entitlement to adisability retirement pension ceases in accordance with the provisions of this paragraph for a reason other than reemploymentby theEmployer, such Member shall not be prevented fromqualifying for aMonthlyRetirement Income under another provision of the Plan, based upon hisYears of Service, Average Monthly Earnings, and ageatthe time of disabilityretirement, but such Member’s period of Total and Permanent Disability shall not be counted in calculating his Years of Service.If a Member recovers from Total and Permanent Disabilityand returns toemployment with theEmployer prior to the Freeze Date, his subsequent entitlement to aMonthlyRetirement Income shall be determined in accordance withtheprovisionsofthePlan,baseduponhisYearsofService,AverageMonthlyEarnings,andage,and the period of Total and Permanent Disability shall be counted in calculating his Years of Service.
3.6 Method of Payment of Retirement Benefits.
(a)Monthly Retirement Benefit of the Normal Form. Except as otherwise provided with respect to married Members in Section 3.6(b) and the election of an optionalformofpayment inSection 3.6(c), a Member entitled to retirement, termination or disability benefits hereunder shall receive such benefits in the form of a 5-year certainannuityfor the lifetimeofthe Member.
(b)Qualified Joint and Survivor Annuityfor Married Members. Benefits ofany Memberwhohasan Eligible Spouse onthe AnnuityStarting Dateshall be paid, unlesstheMember otherwise elects in the manner set forth below,in the formof a QualifiedJoint and Survivor Annuity, which shallbe the Actuarial Equivalentof thenormal formof monthly retirement benefit, providing periodicpayments forthe lifeofthe Member with afifty percent (50%) contingentsurvivorannuityforthebenefitofhisEligibleSpouse. The Plan Administrator shall establish an election period ofat least onehundred andeighty (180)days (ninety (90)days for elections prior toJanuary 1, 2007) prior to the date on which QualifiedJoint and Survivor Annuitypaymentsareto commence and shall provideeach Memberwith a written explanation of (i) the terms and conditions of the Qualified Joint and Survivor Annuity; (ii) the Member’s right to make, andthe effectof,an election to waive the QualifiedJoint and Survivor Annuity;(iii) the rights of the Member’s Eligible Spouse; (iv) the right to make, and the effect of, a revocation of a previous election to waive the Qualified Joint and Survivor Annuity; and (v)therelative values of thevariousoptionalformsofpaymentunderthePlan;provided,however,withrespect to the written explanation of the QualifiedJoint and SurvivorAnnuity with an Annuity Starting Date on and afterFebruary 1, 2006,the relative values ofthe various optional formsofbenefit under the Plan shall be made in a manner that would satisfy the notice requirementsofCode Section 417(a)(3) andTreasuryRegulations Section 1.417(a)-3.For notices given in PlanYears beginningafter December 31, 2006, such notification shall also include a descriptionof
the Member’s right todefer receipt of his orher benefit and how much larger benefits will be if the commencement of distributions isdeferred.Anyelection is revocableby the Member if revoked in a writing delivered tothe Plan Administrator within such election period. A Member who is eligible for a benefit shall be permitted to electany of the optional forms in(c) below (subject to the requirements of such forms).
(i) An election by a married Member to receive his retirement benefits in a form other than a Qualified Joint and Survivor Annuity shall not take effect unless:
(1) | the Member’s Eligible Spouse consents in writing to such election, and the Eligible Spouse’s consent acknowledges the effectof such election and is witnessedby a notary public or an official designated by the Plan Administrator; |
(2) | it is established to the satisfaction of the Plan Administrator that the Eligible Spouse’s consent cannotbe obtained because there isno Eligible Spouse, because the Eligible Spouse cannot be located, or because of such other circumstances as the Secretary of theTreasury mayprescribeby Regulations; or |
(3) | for elections made on orafterJanuary 1, 2008 with respect to AnnuityStarting Dates beginning onor afterJanuary 1, |
2008, the optional form of payment electedby such married
Member is set forth in Section 3.6(c)(iii).
Consentby an Eligible Spouse, or establishment that an Eligible Spouse’s consent cannot be obtained, shall be effective only with respect to such individual spouse.
(c)Election of Optional Forms ofPayment. A Member entitledto benefitspayable in the form of equal monthly installments for such Member’s life or a married Member’s electing (with the written consent of such Member’s Eligible Spouse) not toreceive a Qualified Joint and Survivor Annuity,mayelect to havehis retirement benefit payable under one oftheOptional Forms of Payment, set forth below, which is the Actuarial Equivalent of his Normal Retirement Benefit pursuant to Section 3.2 hereof:
(i) An annuity for the Member’s life alone;
or 10years; or
(ii) An annuity for the Member’s life, withpayments guaranteed for 5
(iii) An annuityforthe Member’s life, with a survivor annuityfortheMember’sEligibleSpousewhichis100%or75%oftheannuity whichispayableduringthejointlivesoftheMemberandhisEligibleSpouse.Notwithstandingtheforegoing,thewritten consent of such Member’s Eligible Spouse isnot required to the electionby a Member of the optional form ofpayment under this Section 3.6(c)(iii) for distributions with Annuity Starting Dates beginning on or after January 1, 2008.
(d)Lump Sum Cash-Out Distribution. Notwithstanding anyotherprovisionofthis Section 3.6, if the Actuarial Equivalent present valueof the Member’s benefit is lessthan
$5,000,andifbenefitpaymentshavenotbegunandtheMember’sAnnuityStartingDatehasnotbeen reached, the Plan Administrator shall distribute such benefits in a lump sumto the Member or his Beneficiary.For these purposes, the present value of the Member’sMonthlyRetirementIncomeshallbe calculated in accordancewith Section 5.5ofthePlan.Inthe eventof a distribution under this Section 3.6(d) in excess of $1,000, if the Member does not elect tohavesuch distributionpaiddirectly to an Eligible Retirement Plan specifiedby the Member in a Direct Rollover in accordance with Section 11.17 or to receive the distribution directly, thenthePlan Administrator willpay the distribution in a Direct Rollover to an Eligible Retirement Plan designatedby the Plan Administrator.
(e)Election Period.Any election of apaymentoption other than a Qualified Joint and Survivor Annuity(or arevocationofsame)by a Member must be made in writing filed with the Plan Administrator within an election period commencing on the date which is nine (9) months prior to the Member’s retirement date and terminating sixty(60) days prior tothe date upon which his benefits actuallycommence (the “Election Period”). Information pertainingtothis election shall be delivered to the Member on or before the commencement dateof the Election Period. The Member must requestany additional information he may desire within asixty(60) day period commencing on the date this information is mailed or delivered to him. Notwithstandinganything in this Section 3.6(e)to the contrary, the Election Period shall inallcases includethe sixty-day period followingthe date upon which the additional informationtimely requestedby a Member was mailed or delivered to him.
Notwithstanding the preceding paragraph orSection 3.6(b), effectiveJanuary 1,
1997, the written explanation described in Code Section 417(a)(3)(A)may be providedaftertheAnnuityStarting Date. The 90-dayapplicable election period to waive theJoint and Survivor Annuity described inCode Section 417(a)(6)(A) shall not end before the 30thdayafter the date on which such explanation is provided. The Secretary of theTreasury may,byregulations,limitthe period of timebywhich the AnnuityStarting Date precedes the provision of the written explanation other thanby providing that the AnnuityStarting Datemay not be earlier than termination of employment.
EffectiveJanuary 1, 1997, a Membermayelect (withanyapplicable spousal consent) to waiveany requirement thatthe written explanation be provided at least 30daysbefore the Annuity Starting Date (or to waive the 30-day requirement under the above paragraph) if the distribution commences more than 7 days after such explanation is provided.
(f)Death After Commencement of Benefits.Ifthe Member dies afterthecommencement ofthe distribution of benefits but prior to the distribution of all benefitspayableunder the respectivesettlementoption,thedistributionshallcontinuetotheBeneficiarypursuantto the form of payment selected by the Member under this Section 3.6.
3.7SuspensionOf Benefits. Except as providedin Section 3.5,if a RetiredorTerminated Member is receiving benefitpayments from or on behalf ofthe Plan on account of such retirementor termination, such benefitpaymentsshall immediatelycease uponre-employment, and, except as provided in Section 5.4, the total benefits theretofore paid to such
Member shall actuarially reduceany subsequent benefitpayments whichmay be dueormaybecome due to such Member underthe Plan.Anybenefits thereafterpayable to such Member shall be paid as otherwise provided in the Plan. Nopayment will be withheld under this Section unless the Plan notifies the Member, in accordance with the requirements ofERISA Section
203(a)(3)(B) and the regulations thereunder, that such Member’s benefitsare suspended. Totheextent requiredby ERISA, this Section 3.7 shall apply to Memberswho continueemploymentpast their Normal Retirement Date as provided in Section 3.3.
ARTICLE IV DEATH BENEFITS
4.1 Incidental Death Benefits for Eligible Spouse.
(a)If a Member dies while activelyemployed and prior to becoming a Retired Memberor Terminated Member and priortothe commencement of benefits pursuant to ArticleIII or V, Death Benefits shall bepayable tothe deceased Member’s Eligible Spouse, ifany. The surviving Eligible Spouse may elect between the following:
(i) Amonthlyretirement benefit, commencing on what wouldhavebeen the Member’s Normal Retirement Date (or hisLate RetirementDate if theMemberworksbeyond his Normal Retirement Date), equal to the amount which would have beenpayable to the Spouse under the QualifiedJoint and Survivor Annuity providedinSection 3.6(b) if the Member had terminatedhisemployment on the date of his death, had then lived until his Normal Retirement Date and begun to receive Monthly Retirement Income in the form of a QualifiedJoint and SurvivorAnnuity on thatdate,and had died on the day after the commencement of benefits; or
(ii) amonthlyretirement benefit, commencing on the firstday ofany month on orafter what would have been the Member’s 55thbirthdayandbefore whatwould have been the Member’s Normal Retirement date, equal to the amount which would have beenpayable to the Eligible Spouse under the QualifiedJoint and Survivor Annuity provided in Section 3.6(b) if the Member had terminated hisemployment onthedate of his death, had then lived until thedate on which benefitsactuallycommenceunderthisitem(ii)andhadbeguntoreceiveMonthlyRetirementIncomeintheformof a QualifiedJoint and Survivor Annuity on that date, and had died onthedayafterthecommencement of benefits.
In the absenceof an affirmative written electionby the Spouse, Death Benefits shall bepayable to the surviving Eligible Spouse in accordance with item (i), above, if the Member dies on or after his Normal Retirement Date. Otherwise, Death Benefits shall be payableinaccordancewithitem (ii), above,withthepaymentofbenefitscommencingonthefirstdayofthe month coincident with or immediatelyfollowing the Member’s 55th birthday if hediesbefore age 55 or commencing on thefirstday of the month coincident with or immediately following the date of the Member’s death if he was at least age 55 at the time of his death.
All suchmonthly benefits shall be computed to the nearest dollar, with fiftycents($.50) being regarded asthenexthigherdollar.Themonthlyretirement benefit shall continue for the life of the Spouse alone. The death of the Spouse, whether before or after the commencement ofmonthlybenefits,shall terminate the righttoany Death Benefits forany month aftertheSpouse’s death.
(b)Lump Sum Cash-Out Distribution. Notwithstanding anyotherprovisionofthis Section 4.1 to thecontrary, ifthe Actuarial Equivalent present valueof the Member’sDeathBenefits are less than $5,000, and if benefit paymentshavenot begun and the Member’s Annuity
Starting Datehas not been reached, the Plan Administrator, shall distribute such Death Benefits in a lump sumto the surviving Eligible Spouseof the deceased Member.For these purposes, the present value of the Member’sDeath Benefits shall be calculated in accordance with Section5.5 hereof.
4.2DeathBenefitsinAbsenceofSurvivingEligibleSpouse.If adeceasedMemberisnot survivedbyan Eligible Spouse, no Death Benefits shall bepayable under this Plan with respect to adeceased Member who is not a Retired Member or Terminated Member at thetimeof his death and who is not eligible for retirement under Sections 3.2,3.3, or 3.4 at thetime of his death. If a deceased Member who is not survivedbyan Eligible Spouse and who is not a Retired Member or Terminated Member, would have been eligible for normal, late or early retirement under Sections 3.2, 3.3, or3.4, respectively, at the timeof his death, his Beneficiary shallreceive as Death Benefits amonthlyamount for 60months equal to themonthlyretirement benefit which the Member would have receivedif he had retiredas ofthe dateof his death and had begun to receiveMonthlyRetirement Income in the formof a 5-year certain annuityforthelife of the Member, commencing on the firstday of the month followingthe month in whichhisdeath occurs.
4.3SpecialMilitaryDeathBenefit. Effective asofJanuary 1, 2007, the death benefit provided in Section 4.1 and 4.2 shall be provided toanyactive Member who dies whileinmilitary leave to the extent requiredby,and in accordance withthe mandatoryprovisions of,theHeroes Earnings Assistance and ReliefTax Act of 2008, including treatingany such Memberasif they had returned to active employment with the Employer and then terminated employment as a result of death for purposes of any additional survivor benefits provided under the Plan.
ARTICLE V
VESTING AND TERMINATION OF EMPLOYMENT
5.1Vested Interest. Whenever a Member, for reasons other than actual retirement under Sections 3.2, 3.3, 3.4, or 3.5 hereof ordeath under ArticleIV, incurs a oneyear Break in Service, he shall ceaseto be an active Member and shall become a Terminated Member. Subject to the limitations and restrictions of ArticleVI, each Terminated Member who is not thereafter credited with any additional Year(s) of Service shall be entitled at his Normal Retirement Date to receiveMonthlyRetirement Income equal to the vested percentageof his Accrued Benefit asofhis date of termination.
The vested percentageofany Terminated Member who is credited with at least one (1) Hour of Service on orafter January 1, 1989, shall be determinedin accordance withthefollowing schedule:
Completed Years of Service | Vested Percentage |
---|---|
Less than 5 | 0% |
5 or more | 100% |
The vested percentageofany Terminated Member who is not creditedwith at least one (1) Hour of Service onorafterJanuary 1, 1989shall be determined pursuant to the terms ofthePlan as it existed on the date of the Terminated Member’s termination of employment.
The nonvested portionof the Terminated Member’s Accrued Benefitshall constitute a Forfeiture as of the lastday of the PlanYear in which such Terminated Member’semploymentwith theEmployer terminates if the Member has no vested interestinhisAccrued Benefit, or upon the earlier to occur of a fifth consecutive Break in Serviceor a distribution ofany portion his vested Accrued Benefit if the Member does have a vested interestin hisAccrued Benefit.Any such Forfeitureshall serve to reducetheEmployer’s contributions required under Article VII. In the event a distribution is made, the relevant Member shall be afforded the Buy-Back option described in Section 5.4 of the Plan.
If a Terminated Member has completed at least 15 Yearsof Serviceas of the dateoftermination, then heshall be entitled to elect in writing to receiveMonthlyRetirement Income, commencing on orafter the firstday of the month on orafter the Member’s 55th birthdayandbefore his Normal Retirement Date, equal tothe amount otherwisepayable at his Normal Retirement Date, reducedby 5/12thsof 1% for each monththat the commencementof benefits precedes his Normal Retirement Date.
Notwithstanding anything herein to the contrary, for purposes of determining a Member’s vested interest in his Accrued Benefit under the Plan,Years of Serviceshall includeYearsofService credited afterthe Freeze Date in accordance withthe provisionsof the Plan. A Member with no vested interestin his Accrued Benefitshall not become vested as a result of the freezing of the Plan.
5.2Method ofPayment of Benefits to Member Separating from Service before RetirementDate.If the Member separates from service beforeretirementordeath,thesettlementoptions available to the Member will dependupon the Member’s marital status as of the date on which benefit payments commence or on which the Member dies.
(a)If the Member thenhas an Eligible Spouse,the vested portion of his benefit will be paid inthe form of a Qualified50% Joint and Survivor Annuityas described in Section 3.6(b) unlessthe Member and his Eligible Spouse pursuantto the spousalconsentrequirements in Section 3.6(b)(2), elect to have the vested portion of his benefits paid in the form of a 5-year certainannuity.Payments under such QualifiedJoint and Survivor Annuityorstraight life annuity shall infact commence asof the Member’s Normal Retirement Date or,ifthe Member has completed at least 15 Years of Service as of his date of termination and so elects in writing, on the first day ofany month on or after the Member’s 55th birthdayand before his Normal Retirement Date. If the Member diesbeforethe commencement of benefits, a50%survivor annuity equalto the amount which would bepayable tothe surviving Eligible Spouse under aQualifiedJoint and Survivor Annuity(as though the Member had lived andbeguntoreceive a QualifiedJoint and Survivor Annuityon the commencement date) shall bepayable to the Surviving Eligible Spouse. The commencement dateof this 50% survivor annuity shallbethe firstdayof themonth coincident withor immediatelyfollowing the later ofthe Member’s
55th birthday or his date of death if he has completed at least 15Years of Service as of his date of termination and otherwise shall bethe Member’s Normal Retirement Date. The death ofthesurviving Eligible Spouse shall terminate theright toanyannuitypayments forany month after the surviving Eligible Spouse’s death.
(b) If the Member does not have an Eligible Spouse, the Member shall receive the vested portion ofhis Accrued Benefit in the form of a5-year certain annuityfor the lifeofthe Member, commencingon the Member’s Normal Retirement Date. Alternatively,iftheMember has completedat least 15 Years of Service asof his dateof termination and so electsinwriting, themonthlybenefit otherwisepayable to the Member atthe time ofhis Normal Retirement Date, reducedbyfive twelfths (5/12ths) of one percent (1%) for each month thatthecommencement of benefits precedes his Normal Retirement Date,shallbepayableintheformofa 5-year certain annuity for the life of the Member, commencing on the first dayofanymonthonorafterthe Member’s 55th birthdayand before his Normal Retirement Date. The Terminated Member’s death priorto the commencementof benefitsshall terminateany rightto benefits under this Plan with respect to that Terminated Member.
5.3Lump Sum Cash-Out Distribution. Notwithstandingany other provision of this Section 5.3 to the contrary,if the Actuarial Equivalent presentvalue ofthe vested portionof a Member’s Accrued Benefit is less than $5,000,and if benefitpayments have notbegun andtheAnnuity Starting Date of the relevant Member has not been reached, the Plan Administrator shall distribute such amount in a lump sum to the Member or the Beneficiary of a deceased Member.For these purposes,the present value ofthe vested portion of the Member’s Accrued Benefit shall be calculated in accordance with Section 5.5 hereof.
5.4Buy-Back.If aMember who has received a distributionpursuanttoSection5.3issubsequentlyreemployed and again becomes a Member of this Plan, the calculation of his Accrued Benefit andhisMonthlyRetirementIncomeshall be reducedby the Actuarial
Equivalent of such cash-out unless the amountof suchpayment is repaidto the Trust Fund, plus interest at5% per annum between the date ofpayment andthe dateofrepayment. This5%interestrate shall automatically be adjusted to reflectany regulation or ruling issued underCodeSection 411(c)(2)(D)which changes such interest rate.If such amount (plus interest) is repaid, the Member’s Accrued Benefits shall not be reduced by the Actuarial Equivalent of the cash-out.
5.5 Determination Of Present Value
(a)In General.Forpurposesofdeterminingwhetherthe present value of (1) a Member’s Vested Accrued Benefit, (2) a QualifiedJoint and Survivor Annuity within the meaning of Section 417 of the Code, or (3) a Qualified Pre-Retirement Survivor Annuity within the meaningof Section 417 of the Code exceeds $5,000, the present value of such benefitsorannuities shall be calculated in accordance with the provisions of Section 1.2 of the Plan.
(b)Minimum Value.Inno event shallthe present valueofany benefitorannuity determined under Section 5.5(a) be less than the greater of:
(i) The present value of such benefit or annuity using the Plan provisions (other than this Section 5.5) for determining the present value of accrued benefits or annuities, or
(ii) The present valueof such benefits or annuities determined under
Section 5.5(a) before application of this subsection (b).
(c)Coordination withLimitations on Contributions and Benefits.In no event shall the amount ofany benefit or annuitydetermined under this Section 5.5 exceed the maximum benefit permitted under Code Section 415.
ARTICLE VI
LIMITATIONS ON BENEFITS, NON-DISTRIBUTION ALIENATION AND ASSIGNMENT, AND RIGHTS OF MEMBERS
6.1 Limitation on Benefits forLimitation Years Beginning Before July 1, 2007.
(a)Anything herein to the contrary notwithstanding, the benefits computed under ArticleIII shall be subject to the following limitations: Themaximum benefit, when expressed as an annual benefit, shall not exceedthe lesser of $170,000 (subject to costof living adjustments under Code Section 415(d)) or 100% of the Member’s averageannual Earningsforhis three highest consecutiveyears, subject to the following:
(i) Themaximum limitation shall apply to a straight life annuity, with no ancillary benefits;
(ii)If benefits begin prior to the Member’s SocialSecurityRetirement Age (as hereinafter defined), themaximum will be adjusted so thatit is the Actuarial Equivalent of an annual benefit of $170,000, multipliedby the cost of living adjustment factor prescribedby the Secretary ofthe Treasury under Code Section 415(d) for years beginning after December 31, 1987. The “Social Security Retirement Age” shallbetheage used as the retirementage for the Member under Section 216(1) of the Social SecurityAct, except that such section shall be applied withoutregard to theage increase factor, and as if the early retirement age under Section 215(1)(2) of such Act were 62.
(iii) If benefits begin after a Member’s Social SecurityRetirementAge,themaximum shall be adjusted so thatit isthe Actuarial Equivalentof $7,500permonthbeginning at the Social Security Retirement Age, multipliedby thecost of living adjustment factor prescribedby theSecretaryof theTreasury under Code Section 415(d) foryears beginning after December 31, 1987, based on the lesserof the interestrateassumption used under the Plan or on an assumption of five percent(5%) peryear.EffectiveasofJanuary1,2000,thebenefitspaid in accordancewiththisSectionshallbeadjusted for the repeal of Code Section 415(e) provided that no increase in benefit is permitted toreflect the difference between thelimitation of Code Section 415(b)andCode Section 415(e) for the prior limitationyears.
(iv)If theEmployee has completed less than tenyears of participation in the Plan, the Member’s Accrued Benefit shall not exceed the maximum multiplied by a fraction, the numerator of which is the Member’s number ofyears (or part thereof)ofparticipation in the Plan, and the denominator of which is ten.
(v) Themaximum amount of $170,000 shall be increased as permittedbyInternal RevenueService Regulations to reflect cost-of-living adjustments above the baseperiodandfromandafterJanuary1,2005thebenefitpaidtoanyMemberwhoisin paymentstatuswillbeadjustedasofthefirstdayofeachlimitationyearfortheincrease,if any, in the dollar limitation indexed under Code Section 415(d).
(vi)In addition to other limitations set forthin the Plan and notwithstanding any other provisions of the Plan, the Accrued Benefit, including the right toany optional benefit provided in the Plan(and all other defined benefit plans required to be aggregated withthis Plan under the provisions of Code Section 415), shall not increase to an amount in excess of the amount permitted under Code Section 415.
(b) Effective as of the firstday of the firstlimitationyear beginning on orafterJanuary 1, 2000 (the “effective date”), and notwithstandinganyother provision of thePlan,the Accrued Benefitforany Member shallbe determinedbyapplying the termsof thePlanimplementing the limitations of CodeSection415 as if the limitations of Code Section415continued to include the limitations of Code Section 415(e) as ineffect on theday immediately prior to the effective date.
Notwithstandingany provision in the Plan tothe contrary, the preceding provision does not apply toanyEmployee participating inthe Plan who has completed one Hour of Service onorafter January 1, 2000.
(c)In the event that a Member’s benefits under this Plan andany other plan exceed the limitationsspecified in Section 6.1(a) or(b), appropriate reductionsin such benefits shall be madeby the Plan Administrator in the following order:
(i) First, any benefits from this Plan, and
(ii) to the extent that additional reductionsare necessary, such reductions shall be made to any defined contribution plan maintained by the Employer.
(d)For purposesof this Section 6.1,the following definitions and rulesofinterpretation shall apply:
(i) “Projected Annual Benefit” means the Annual Benefit to which a Member would be entitled under a defined benefit plan (after giving effect to any limitationon such benefit contained in such plan thatmaybe applicableto the Member) on the assumptionsthat he continuesEmployment untilhis Normal Retirement Date thereunder, that his Compensation continuesat the samerateas in effect for thePlanYear under consideration until such Normal Retirement Date, and thatall other relevant factors used to determine benefits under suchPlan remain constant for all future PlanYears.
(ii) The “Annual Addition” of a Member means amounts treated asEmployer contributions, plus the Member’s contributions (ifany), provided that for PlanYears ending before December 31, 1986, only the lesser of: (1) the portion of this Member contributions (ifany) during suchyear in excess of 6%of his compensation, within the meaningof Code Section 415(c)(3), or (2) one-halfof his Member contributions during such Year shallbe treated as Annual Additions.With respecttodefined contribution plans under which forfeitures can occur, Annual Additions shall also includeany forfeituresallocableduringthePlan Year.Further,amountsallocatedinPlanYears beginning after March 31, 1984, toan individual medical account, as definedinCode Section 415(1), which is part of a defined benefit plan maintainedby theEmployer
shall be treated as Annual Additions to a defined contribution plan. Also, amounts derived from contributions paid or accrued after December 31, 1985, whichareattributabletopost-retirement medical benefits allocatedtotheseparateaccount of aKeyEmployee, under a welfare benefit fund, as defined in Code Section 419(e), maintainedby theEmployer, shallbe treated as Annual Additions to a defined contribution plan. In no event shall this be construed as applying the limitations ofCode Section 415(c)(1)(B) to individual medical accounts or postretirement medical benefits.
(iii) The “Annual Benefit” of a Member meansthe annual amountpayable under a defined benefit plan computed in accordance with the following rules:
(1) | where the benefitpayable under a defined benefit planisother than inthe formof either a straight lifeannuity or a qualified joint and survivor annuity within the meaningofCode Section 401(a)(11)(G)(iii),itshall be adjusted to the Actuarial Equivalent benefit in theformof a straightlifeannuity on the basis of reasonable actuarial assumptions; |
(2) | in the caseof a benefit under a defined benefit plan which begins before age 62, such benefit shall be adjusted totheActuarial Equivalent of a benefit commencing atage 62 on the basis of reasonable actuarial assumptions; |
(3) | in the caseof a benefit under a defined benefit plan which begins afterage65, such benefit shallbe adjusted totheActuarial Equivalent of a benefit commencing atage 65onthe basis of reasonable actuarial assumptions. Theadjustment described in (2) aboveshall not increasethevalue of a Member’s Annual Benefit above $170,000 (this amount shallbe adjusted automatically in accordance with regulations promulgatedby theSecretary ofTreasury)ifthe Member’s benefit under the defined benefit plan does not exceed $75,000commencing at or afterage 55, or the Actuarial Equivalent of $75,000 atage55 inthecaseof a benefit commencing before age 55. |
(4) | “Dollar Limitation” means the limitation provided inCodeSection 415(c)(1)(A) (adjusted in accordancewithregulations oftheSecretaryoftheTreasury) asineffect for the particular Plan Year. |
(5) | “Prior Year” means ayear, preceding the current PlanYear,in which the Member was in the serviceof theEmployer.For purposes of the preceding sentence,year shall mean (in the event the Plan was in existence during suchyear) a PlanYear,or (in the eventthe Plan was not in existence during |
suchyear) a 12-monthperiodwhichbeginsandendsonthesame dates as the Plan Year.
(6) | For purposes of computing themaximum allocation under either Section 6.1(a) or Section 6.1(b), all defined benefit plans (whetheror not terminated) of theEmployer shall be treated as one defined benefit plan, and all defined contribution plans as defined in Code Section 414(i) (whether or not terminated)of theEmployer shallbetreated as one defined contribution plan. |
(e)EGTRRALimitation on Benefits.
(i) This Section 6.1(e) shall be effective for limitationyears ending after December 31, 2001, and thus effective as of January 1, 2002.
(ii)Effect on Members. Benefit increases resulting from the increase in the limitations ofCode Section 415(b)shall be providedto all MemberswhoareMembers and who have one Hour of Service on or after January 1, 2002.
(iii) Definitions.
(1) | Defined benefit dollar limitation. The “defined benefit dollar limitation” is $160,000, as adjusted, effective January 1 of eachyear, under Code Section 415(d) in such manner as the SecretaryoftheTreasury shall prescribe, andpayable in the form of a straight life annuity. A limitation as adjusted underCode Section 415(d)will apply to limitation years ending with or within the calendaryearforwhich the adjustment applies. Effective January 1, 2005, the “defined benefit dollar limitation” is $170,000. |
(2) | Maximum permissible benefit. The “maximum permissible benefit” is the defined benefit dollar limitation (adjustedwhererequired,asprovidedin(A)and,ifapplicable,in(B)or (C) below, and limited, if applicable, as provided in(D)below). |
(A) | If the Member has fewer than 10years of participation in the Plan, the defined benefit dollar limitation shall be multipliedby afraction,thenumeratorof which isthe number ofyears (or part thereof) of participation in the Plan andthedenominator of which is 10.Inthe caseof a Memberwhohas fewer than10 Yearsof Service with theEmployer, the defined benefit compensation limitation shall be multipliedby a fraction, (i) the numerator of which is the number of |
Years (or part thereof) of Service with the Employerand (ii) the denominator of which is 10.
(B) | If the benefit of a Member begins prior to age 62, the defined benefit dollar limitation applicable to the Member at such earlierage is an annual benefitpayable in the form of a straight life annuity beginning atthe earlierage that is the Actuarial Equivalent of the defined benefit dollar limitation applicable to the Member atage 62 (adjusted under(A) above, if required). The defined benefit dollar limitation applicable at an age prior to age 62 is determined as the lesser of (1) the Actuarial Equivalent (at such age)of the defined benefit dollar limitation computed usingthe interestrateand mortality table (or other tabular factor) specified in thePlan, and (2) the Actuarial Equivalent (at such age)of the defined benefit dollar limitation computed using a5% interestrateand the applicable mortality table as specified in Section 1.2 of the Plan.Any decrease in the defined benefit dollar limitation determined in accordance with this paragraph (B) shall not reflect a mortality decrement if benefits are not forfeited upon the death of the Member. Ifanybenefitsare forfeited upon death,the fullmortalitydecrement is taken into account. |
(C) | If the benefit of a Member begins afterthe Member attainsage 65,the defined benefit dollar limitation applicable to the Member at the later age istheannual benefitpayablein the formof a straight life annuity beginning at the laterage that istheActuarial Equivalentto the defined benefit dollar limitation applicable to the Memberat age 65 (adjusted under(A) above, if required). The Actuarial Equivalentof the defined benefitdollarlimitation applicableat an age after age65isdetermined as (1)the lesser of the Actuarial Equivalent(at such age)of the defined benefit dollar limitation computed usingthe interestrateand mortality table (or other tabular factor) specified in thePlan, and (2) the Actuarial Equivalent (at such age)of the defined benefit dollar limitation computed using a5% interestrateandthe applicablemortality table specifiedinSection 1.2of thePlan. For these purposes, |
mortality betweenage 65 and theage at which benefits commence shall be ignored.
(f)PFEALimitations On Benefits. Effective for distributions in PlanYearsbeginning after December 31, 2003,the determination of Actuarial Equivalent of formsofbenefit other than a straight life annuity shall be made in accordance with paragraph (i) or (ii) below.
(i)BenefitFormsNotSubjecttoSection417(e)(3)oftheCode: The straight life annuitythatistheActuarialEquivalenttotheMember’sformofbenefitshallbe determined under this paragraph (i) if the form of the Member’s benefit is either(A) a nondecreasing annuity (other than a straight lifeannuity)payable for a period of notlessthan the life of the Member (or, in thecaseof a qualified preretirement survivor annuity, the lifeof the surviving spouse), or (B)anannuity that decreases during the lifeoftheMember merely because of (i) the death ofthe survivor annuitant(butonly ifthereduction is not below 50% of the benefit payable before the deathof the survivor annuitant), or (ii)the cessation or reductionof Social Security supplements or qualified disabilitypayments (as defined in Section 401(a)(11) of the Code).
(1) | Limitation Years beginning beforeJuly 1,2007. For Limitation Years beginning beforeJuly 1, 2007, the Actuarial Equivalent straight life annuity is equal to the annual amountof the straight life annuity commencing at the same AnnuityStarting Date that has the same actuarial present value as the Member’s formof benefit computed using whichever ofthe following produces the greater annual amount: (i)the applicable interestrate and applicable mortality table specified in Section1.2 of thePlanforadjustingbenefitsinthesameform;and(ii) afive- percent interest rate assumption and the applicable mortality table (orother tabular factor) defined in Section 1.2 of the Plan for that Annuity Starting Date. | |
(2) |
Limitation Yearsbeginningon or afterJuly 1, 2007.ForLimitation Years beginning onor afterJuly 1, 2007, the applicable provisions of Annex A shall apply. | |
(ii) |
Bene |
fit Forms Subject to Section 417(e)(3)of the Code: The |
straight life annuity that is the Actuarial EquivalenttotheMember’sformofbenefitshall
be determined under this paragraph (ii) if the form of the Member’s benefit is other than a benefit form describedin paragraph (i).In this case, the Actuarial Equivalent straight life annuity shall be determined as follows:
(1) AnnuityStarting Datein Plan Years Beginning After 2005.
Ifthe AnnuityStarting Date of the Member’s form of benefit is in a Plan Year beginning after 2005, the Actuarial Equivalent straight life annuity is equal to the greatestof
the AnnualBenefit inthe form of the straight life annuity commencing atthesameAnnuityStartingDatethathasthesame actuarial present valueas the Member’s formofbenefit, computedusing the applicable interestrate and applicablemortalitytable (or other tabular factor) defined in Section 1.2 of the Plan for adjusting benefits in the same form; (ii) the annual amount of the straightlife annuity commencing atthesameAnnuityStartingDatethathasthesame actuarial present value as the Member’s benefit, computed using a 5.5 percent interest rate assumption and the applicablemortality table defined in Section 1.2 ofthePlan and (iii) the annual amount of the straight life annuity commencing atthesameAnnuityStartingDatethathasthesame actuarial present valueas the Member’s formofbenefit, computedusing the applicable interestrate and applicable mortalitytabledefinedinSection1.2 of the Plan for adjusting benefits in the same form, dividedby 1.05.
(2) AnnuityStarting Datein Plan Years Beginningin 2004or
2005.IftheAnnuity Starting Date of the Member’s form of benefit is in a Plan Year beginning in 2004 or 2005,theActuarial Equivalent straight life annuity is equal to the Annual Benefit in the form of the straight life annuity commencing at thesameAnnuityStartingDatethathasthesame actuarial present valueas the Member’s formofbenefit, computed using whicheverof the following produces the greater annual amount: (i) applicable interestrate and applicablemortality table defined inSection 1.2ofthe Plan for adjusting benefits in the same form; and (ii) a
5.5 percent interest rate assumption and the applicable mortality table defined in Section 1.2 of the Plan.
(3) | AnnuityStarting Dateon orafter FirstDay of First PlanYear Beginning in 2004 and Before December31, 2004.Ifthe AnnuityStarting Date of the Member’s benefit is on orafter the firstdayof the first PlanYear beginning in 2004 and before December 31, 2004, the applicationofsubparagraph (2) shall notcause the amountpayable under the Member’s form of benefit to be less than the benefit calculated underthe Plan, taking into account the limitations of this Article, except that the Actuarial Equivalent straight life annuity is equal totheannual amountofthestraightlife annuitycommencingatthesameAnnuityStarting Datethat hasthe same actuarial present value as the Member’s form of benefit, computed using whicheverof the following produces the greatest annual amount: (i) applicable interestrate and applicable mortality |
table specified in Section 1.2 of the Plan for adjusting benefits in the same form; (ii) the applicable interest rate and applicable mortalitytable (or other tabular factor) defined in Section 1.2 of the Plan; and (iii) the applicable interest rate(asineffectonthelastdayofthelastplanyearbeginning before January 1, 2004,under provisions ofthePlan then adopted and ineffect) and the applicable mortality table defined in Section 1.2 of the Plan.
6.2Limitation on Benefits forLimitation Years Beginning Onor AfterJuly 1, 2007.Anything herein to the contrary notwithstanding, the benefits computed under ArticleIIIwithAnnuityStarting Dates beginning onor afterJanuary 1, 2008 shall be subject to the limitations set forth in Annex A to this Plan.
6.3 Special Rules for Benefits Payable to Highly Compensated Employees.
(a) AnEmployee shallbe deemed an “AffectedEmployee” subject to this Section 6.3 if he is aHighly CompensatedEmployee, and is oneof the twenty-five (25)Employees paid the greatest compensation in the current or any prior Plan Year.
(b)In the event of Plan termination, the benefit ofanyAffectedEmployeeislimited to a benefit that is nondiscriminatory under Code Section 401(a)(4).
(c) Theannualpaymentsto anAffectedEmployeearerestrictedto an amount equal to thepaymentthat would be madeon behalf of the AffectedEmployee under (i) a single life annuity that isthe Actuarial Equivalentof the sum ofthe AffectedEmployee’s Accrued Benefit and other benefitspayable to the AffectedEmployee under the Plan, and (ii) the amount of thepayments thatthe AffectedEmployee is entitled toreceive under a social security supplement. The restrictions in this paragraph do not apply, however, if:
(i) Afterpayment to an AffectedEmployee of all benefitspayabletothe AffectedEmployee underthe Plan,the value of plan assets equalsor exceeds 110% of the value of current liabilities, as defined in Code Section 412(1)(7),
(ii) The valueof benefitspayable to the AffectedEmployee underthe
Plan isless than 1 percent of the value of current liabilities before distribution, or
(iii) The valueof the benefitspayable tothe AffectedEmployee under the Plan does not exceed the amount described in Code Section 411(a)(11)(A).
For purposes of subparagraphs (i), (ii) and (iii) above the value ofPlan assets and the value of current liabilities must be determined as ofthe same date.For purposes ofthissubsection, the term “benefit” includes, among other benefits, loans in excess ofthe amountssetforth in Code Section 72(p)(2)(A),any periodic income,any withdrawal valuespayable to a living employee, and any death benefits not provided for by insurance on the Employee’s life.
6.4NoAssignmentofBenefits. None of the benefits under the Plan shall be subjecttothe claims of creditors of Members, Terminated Members, Retired Members, Eligible Spouses,
or Beneficiaries, and such benefits shall not be subject to attachment, garnishment, orany other legal process whatsoever. No Member, Terminated Member, Retired Member, Eligible Spouse, or Beneficiarymayassign, sell, borrowon, or otherwise encumberanyof his beneficial interest in the Plan and Trust Fund, nor shallany such benefits be inany manner liable for or subject to the deeds, contracts, liabilities,engagements,or torts ofany Member, Terminated Member, Retired Member, Eligible Spouse, or Beneficiary.Ifany such Member, Terminated Member, Retired Member, Eligible Spouse, or Beneficiary shall become bankruptor attempt toanticipate,sell, alienate, transfer, pledge, assign, encumber, orchargeany benefit specifically provided for herein,or if a courtof competent jurisdiction entersan order purporting to subject such interest to the claim ofanycreditor, then such benefit shall be terminated and the Trustee shall hold or apply such benefit to or for the benefitof such Member, Terminated member, RetiredMember,Eligible Spouse, or Beneficiary in such manneras the Plan Administrator, in its sole discretion,may deem proper under the circumstances.
However, the foregoing provision against the assignmentof a Member’s benefitunderthe Plan shall not applyin thecase of (i) qualified domestic relations order which is determinedby the Plan Administrator to meet the requirements of Code Section 414(p) (“QDRO”), or (ii) the Member’sliability to the Plan due to:(A) the Member’s conviction of a crime involving the Plan,(B) a judgment, consent order, or decree in action for violation of fiduciary standards,or(C) a settlement involving the Department of Labor or Pension Benefit Guaranty Corporation.
Effective as of April6, 2007, a domestic relations order that otherwise satisfiestherequirements for a QDRO will not fail tobe a QDROsolely becausethe order revises another domestic relations order or QDRO orsolely because of the time at which the order is issued, including issuance after the Annuity Starting Date or after the Member’s death.
6.5Commencement of Benefits. Notwithstandingany provision to thecontrary,the payment of benefits tothe Member shall begin not later than 60days after the lastday of the Plan Year in which the latest of (a), (b), or (c) occurs:
(a) The Member’s Normal Retirement Date;
Member; or
(b) The 10th anniversaryof the date on which such Member first becomes a
(c) The date on which such Member terminates his service with the Employer.
Otherwise,thepayment of benefits shall commence asofany earlierdate specifiedin this Plan.Paymentof a Member’s benefits shall commence not later than April 1of the calendaryear that follows:
(i) for a Member who is a 5% owner (as defined in Code Section
416(i)(1)), the calendar year in which the Member reaches age 701/2, and
(ii) for each other Member, the later of the calendaryear in whichthe
Member (1) reaches age 70 1/2, or (2) retires.
Notwithstandingany provision of the Plan tothecontraryand priortoJanuary 1, 2003, all distributions fromthe Plan shall be made in accordance with the requirements of the regulations under Code Section 401(a)(9), including the minimum incidental benefit distribution requirements under Section 1.401(a)(9)-2 of the Proposed Regulations.With respecttodistributions under the Plan made for calendaryears beginning on or after January 1, 2001 and prior toJanuary 1, 2003, the Plan will applythe minimum distributionrequirementsof Code Section 401(a)(9) in accordance with regulations under such section that were proposedonJanuary 17, 2001, notwithstandingany provision of the Plantothe contrary. This provision shall continue ineffect untilthe end of the last calendaryear beginning before the effective date of final regulations under Code Section 401(a)(9) or such other dateasmay be specified in guidance publishedby the Internal Revenue Service.
With respect to distributions underthe Plan required tobe made under Code Section
401(a)(9) for calendaryears 2003 and later,the Plan will apply the minimum distribution requirements of Code Section 401(a)(9) in accordance with the final regulations underCodeSection 401(a)(9) that were issued on April 17, 2002, in accordance with Rev. Proc. 2002-29.
A Member’s Accrued Benefit will be actuarially increased to take into account certain periods afterage 70-1/2forwhichtheMemberdoesnotreceiveanybenefitsunderthePlan.Theactuarial increase applies for the period (1) that begins on the April 1 following the calendaryear in which the Member attainsage 70-1/2 (January 1, 1997 in thecase of a Memberwho attainsage 70-1/2 prior to 1996) (the “Start Date”), and (2) that ends onthe date on which benefits commence in an amount sufficient to satisfy CodeSection 401(a)(9) (the “End Date). After applyingthe actuarial increase,an affected Member’s Accrued Benefitas of theEnd Date must be no less than the Actuarial Equivalent as of the End Date of the Member’sAccrued Benefit as of the Start Date plusthe Actuarial Equivalent as of the End Date of additional benefits accruedaftertheStartDate, reducedbytheActuarialEquivalentofany distributions made after theStartDate.Any actuarial increase providedby this subsection is the same as, and not in additionto,the actuarial increase required for that same period under CodeSection 411, except thattheactuarial increase required under this paragraph must be provided even during a period during which anEmployee is inERISA Section 203(a)(3)(B) Service. The actuarial adjustment inthissubsection does not apply in the case of a5-percent owner.
Effective as of January 1, 2003, required minimum distributions shall be madeinaccordance with Section 6.6 of thisPlan. Notwithstandingany other provision of thisPlan,nothing contained in this Section 6.5 or the following Section 6.6 shall be construed as providingany optional form of payment that is notavailable under the other distribution provisions ofthePlan.
6.6 Minimum Distribution Requirements:
(a)Effective Date: This Section 6.6 applies for purposes of determining required minimum distributions for distribution calendaryears beginning with the 2003 calendaryear.
(b)Precedence: The requirements of this Sectionwill take precedenceover any inconsistent provisions of the Plan.
(c)Requirements ofTreasuryRegulations Incorporated: All distributions required under this Section will be determined and made in accordance with the Treasury Regulations under Code Section 401(a)(9).
(d)TEFRA Section 242(b)(2) Elections: Notwithstanding the other provisions of this Section, other than Section 6.6(c), distributionsmay be made under a designation made before January 1, 1984, in accordance with Section 242(b)(2) of the Tax Equity and FiscalResponsibility Act (TEFRA) and the provisions of the Plan that relate to Section 242(b)(2) of TEFRA.
(e)Time and Manner of Distribution:
(i)Required Beginning Date: The Member’s entire interest willbedistributed, or beginto be distributed, to the Memberno later than the Member’s Required Beginning Date.
(ii)DeathofMemberBeforeDistributionsBegin:If the Memberdiesbefore distributions begin, the Member’s entire interest will be distributed, orbegin tobedistributed, no later than as follows:
(1) | If the Member’s surviving spouse is the Member’s sole Designated Beneficiary, then, except as provided in the Plan, distributions tothe surviving spousewill beginbyDecember 31 of the calendaryear immediatelyfollowing the calendaryear in which the Member died, orbyDecember31 ofthe calendaryear in whichthe Member would have attained age 701/2, if later. |
(2) | If the Member’s surviving spouse is not the Member’ssoleDesignated Beneficiary, then, except as provided in the Plan, distributions to the Designated Beneficiary will beginbyDecember 31 of the calendaryear immediately following the calendaryear in which the Member died. |
(3) | Ifthereisno Designated BeneficiaryasofSeptember30oftheyear following theyearof the Member’s death,theMember’sentire interest will be distributedby December |
31 of the calendaryear containingthe fifth anniversary of the Member’s death.
(4) | If the Member’s surviving spouse is the Member’s sole Designated Beneficiaryand the surviving spouse dies after the Member but before distributions to the surviving spouse begin, this Section 6.6(e)(ii), other than Section |
6.6(e)(ii)(1), will applyas if the surviving spouse werethe
Member.
(5) | For purposes of this Section 6.6(e)(ii) and Section 6.6(h)(ii), distributionsare considered to begin on the Member’s Required Beginning Date (or,if Section 6.6(e)(ii)(4) applies, the date distributionsare required to begin tothesurviving spouse under Section 6.6(e)(ii)(1)).If annuitypayments irrevocably commence tothe Member before the Member’s Required Beginning Date (or tothe Member’s surviving spouse before the date distributionsare requiredtobegintothesurviving spouse under Section 6.6(e)(ii)(1)), the date distributionsare considered tobegin is the date distributions actually commence. |
(iii)Form of Distribution: Unless the Member’s interest is distributed in the form of an annuity purchased from an insurancecompanyor in a single sum onorbefore the Required Beginning Date, as of the first distribution calendaryear distributions will be made in accordance with Sections 6.6(f),6.6(g), and 6.6(h)(ii).If the Member’s 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) andtheTreasuryRegulations thereunder.Any part ofthe Member’s interest which is in the form of an individual account described in Code Section 414(k)willbedistributedin amannersatisfyingtherequirementsofCodeSection 401(a)(9) and the Treasury Regulations that apply to individual accounts.
(f)Determination of Amount to be Distributed Each Year:
(i)GeneralAnnuityRequirements:Ifthe Member’s interest is paid in the form of annuity distributions under the Plan,payments under the annuity will satisfy the following requirements:
(1) | the annuity distributions will be paid in periodicpaymentsmade at uniform intervals not longer than oneyear; |
(2) | the distribution period will be over a life (or lives) or over a period certain not longer than the period described in Section 6.6(g) or (h)(ii); |
(3) | oncepaymentshavebegunover aperiod,theperiodcertainwillnot be changed even if the period certain is shorter than the maximum period; |
(4) | payments will eitherbe nonincreasingor increase onlyas follows: |
(A) | byan annual percentage increase that doesnotexceed the annual percentage increase in a cost-of- living index that is based on prices intheyear during which the increase occurs or the prioryear; |
(B) | by a percentage increase that occurs at specified times(e.g., at specified ages) and does not exceed the cumulativetotal of annual percentage increases in a cost-of-living index since the Annuity Starting Date,or if later,the dateof the most recent percentage increase.Incases providing such a cumulative increase, an actuarial increasemaynotbe provided to reflect thefact that increases were not provided in the interim years; |
(C) | to the extent of the reduction in the amount oftheMember’spaymentsto provide for a survivor benefit upon death,butonly if the Beneficiary whose life was being used to determine the distribution period described in Section6.6(g) dies or is nolonger the Member’s Beneficiary pursuant to a qualified domestic relations order within the meaning of Code Section 414(p); |
(D) | to allow a Beneficiary to convert a survivor portion of a joint and survivor annuity into a singlesumdistribution upon the Member’s death; |
(E) | topay increased benefits that result from a Plan amendment; |
(F) | by a constant percentage, applied not less frequently than annually, at a ratethat is less than five percent (5%) peryear; |
(G) | to provide a finalpayment upon the death oftheMember that does not exceed the excess oftheactuarial present value of the Member’s Accrued Benefit (within the meaning of Code Section |
411(a)(7)) calculated as ofthe Annuity Starting Date usingthe applicable interest rate andtheapplicablemortality table describedin Section1.2or Annex A as applicable (or, if greater, thetotalamount ofemployee contributions) overthe total ofpayments before the death of the Member; or
(H) | as a result of dividendor otherpayments that result from Actuarial Gains, provided: |
(i) Actuarial Gain is measured not less frequently than annually;
(ii) | The resulting dividend or other payments are either paid nolater than theyear following the year for which the actuarial experience is measured or paid in the same form asthepayment of the annuity over the remaining period of the annuity(beginning no later than theyear following theyear for which the actuarial experience is measured); |
(iii) | The Actuarial Gain taken into account is limited to actuarial gain from investment experience; |
(iv) | The assumed interestrate used to calculate such Actuarial Gains is notless than 3 percent; and |
(v) | The annuity paymentsare not also being increasedby aconstant percentageasdescribed in Section 6.6(f)(i)(4)(F) above. |
(ii) | Amount Required to be Distributed by Required Beginning Date: (1) The amountthat must be distributed onor beforethe |
Member’s Required Beginning Date (or,ifthe Member dies before distributions begin, the date distributionsarerequired to begin under Section 6.6(e)(ii)(1)or (2) is thepayment that is required for onepayment interval. The secondpayment neednot be made until the endof the nextpayment interval evenif thatpayment interval ends inthenext calendaryear. Payment intervalsare the periods for whichpayments are received, e.g., bi-monthly,monthly, semi-annually, orannually. All of the Member’s benefit accrualsas ofthe lastdayofthe first distributioncalendaryear will be included in the calculation of the amount of the annuity payments forpayment intervals endingon or after the Member’s Required Beginning Date.
(2) | In thecaseof a single sum distribution of a Member’s entire Accrued Benefit during a Distribution Calendar Year, the amount that isthe required minimum distribution for the Distribution CalendarYear (and thus not eligible for rollover under Code Section 402(c)) is determined under this Section 6.6(f)(ii)(2). The portion ofthe single sum distribution that is a required minimum distributionisdeterminedby treating the single sum distribution as a distribution from an individual account Plan and treating |
the amount of the single sum distribution as the Member’s account balance as ofthe end ofthe relevant valuation calendaryear.Ifthe single sum distribution isbeing made in the calendaryear containing the Required Beginning Date and the required minimum distribution for the Member’s first Distribution CalendarYearhas notbeendistributed, thenthe portion ofthe single sum distribution that represents the required minimum distribution for the Member’s first and second Distribution Calendar Yearsisnot eligible for rollover.
(iii)Additional Accruals After First DistributionCalendar Year:Any additional benefits accruing to the Member in a calendaryear after the first distribution calendaryear will be distributed beginning withthe firstpayment interval ending inthecalendaryear immediatelyfollowing the calendaryear in which such amount accrues. Notwithstanding the preceding, the Plan willnot fail to satisfy the requirements of this Section 6.6(f)(iii) andCode Section 401(a)(9)merely because there isan administrativedelay in the commencement of the distribution of the additional benefitsaccrued in a calendaryear, provided that the actualpayment of such amount commencesas soonaspracticable. However,paymentmustcommencenolaterthanthe end ofthefirstcalendaryear following the calendaryear in which the additional benefit accrues, and the total amount paid during such first calendaryearmust be no less than the total amountthatwas required to be paid during thatyear under this Section 6.6(f)(iii).
(g) RequirementsForAnnuity Distributions That CommenceDuringthe
Member’s Lifetime:
(i)JointLife Annuities Where the Beneficiary is the Member’s Spouse:If distributions commence under a distribution option that isin the form of a joint and survivor annuityfor the joint lives of the Member and the Member’s spouse, the minimumdistribution incidental benefit requirement will not be satisfied as of the date distributions commence unless, underthe distribution option, the periodic annuitypaymentpayable to the survivor does not at any time on and after the Member’s Required Beginning Date exceedthe annuity payable to the Member. In the case of an annuity that provides for increasingpayments, the requirement of this Section 6.6(g)(i) will notbeviolated merely because benefitpayments tothe Beneficiary increase, providedtheincrease is determined in the same manner for the Member and the Beneficiary.Iftheform of distribution combines a joint and survivor annuityfor thejoint lives oftheMember and the Member’s spouse and a period certain annuity, the preceding requirements will apply to annuitypayments to be made tothe Designated Beneficiary after the expiration of the period certain.
(ii)JointLifeAnnuitiesWheretheDesignatedBeneficiaryIsNotthe Member’sSpouse:IftheMember’sinterestisbeingdistributedintheform of ajointandsurvivor annuity forthe joint lives ofthe Member and a nonspouse Beneficiary, annuitypayments to be made on or after the Member’s Required Beginning Date to the Designated Beneficiary after the Member’s death must not exceed the “applicable
percentage” of theannuitypayment for such period that would have beenpayable to the Member determinedby using the methodologyand the table setforth in Treasury Regulations Section 1.401(a)(9)-6, Q&A-2(c)(2), in the manner described in Q&A-
2(c)(1), to determine the applicable percentage.Ifthe form of distribution combines a joint and survivorannuityfor the joint lives of the Member and a nonspouse Beneficiaryand a period certain annuity, the requirement in the preceding sentence will apply toannuitypayments to be made to the Designated Beneficiaryafter the expiration of the period certain.
(iii)Period Certain Annuities: Unless the Member’s spouse is thesoleDesignated Beneficiary and the form of distribution is a period certain and no life annuity, the period certain foran annuity distribution commencing duringthe Member’s lifetimemay not exceed the applicable distribution period for the Member under the Uniform Lifetime Table set forth in TreasuryRegulations Section 1.401(a)(9)-9, Q&A-2 forthecalendaryearthat contains the Annuity Starting Date. Ifthe AnnuityStarting Date precedes theyear in which the Member reaches age 70, the applicable distribution period for the Member is the distribution period for age 70 under the UniformLifetime Table set forth in TreasuryRegulations Section 1.401(a)(9)-9, Q&A-2, plus the excess of 70 over the age of the Member as of the Member’s birthday in theyear that contains the Annuity Starting Date. Ifthe Member’s spouse is the Member’s sole Designated Beneficiary andthe form of distribution is a period certain and no life annuity, the period certain may notexceed the longer ofthe Member’s applicable distribution period, as determined under this Section 6.6(g)(iii),or the joint life and last survivor expectancy ofthe Member and the Member’s spouse as determined undertheJoint and Last SurvivorTable set forth in TreasuryRegulations Section 1.401(a)(9)-9,Q&A-3, usingthe Member’s and spouse’s attained ages as of the Member’s and spouse’s birthdays in the calendaryear that contains the Annuity Starting Date.
(h) Requirements for Minimum Distributions After the Member’s Death:
(i)DeathAfterDistributionBegins:Ifthe Memberdiesafterthe date distributions begin in the form of an annuitymeetingthe requirements of this Section, the remaining portion of the Member’s interestwill continue to be distributed over the remaining period over which distributions commenced.
(ii) Death Before Distributions Begin:
(1) | Member’s Survivedby Designated Beneficiary: Except as provided inthe Plan,if the Memberdies before thedatedistribution of his interest begins and there is a Designated Beneficiary, the Member’s entire interest will be distributed beginning no later than the time described in 6.6(e)(ii)(1) or (2) over the lifeof the Designated Beneficiary or over a period certain not exceeding: |
(A) unless the Annuity Starting Date isthe date before the first distribution calendaryear,the life
expectancy ofthe Designated Beneficiary determined usingthe Beneficiary’sage asoftheBeneficiary’s birthday inthe calendaryearimmediatelyfollowing the calendaryearoftheMember’s death; or
(B) | if the AnnuityStarting Date isbefore the first distribution calendaryear, the life expectancy of the Designated Beneficiary determined usingtheBeneficiary’sageasoftheBeneficiary’sbirthdayinthe calendaryear that contains the AnnuityStarting Date. |
(2) | No Designated Beneficiary:If the Memberdies beforethedate the distributionsbegin and there is no Designated Beneficiaryas of September 30 of theyear followingtheyear of the Member’s death, distribution of the Member’s entire interest will be completedbyDecember 31 of the calendaryear containing the fifth anniversary oftheMember’s death. |
(3) | Death of Surviving SpouseBefore Distributionsto Surviving SpouseAre Required to Begin:Ifthe Member diesbefore the date distribution of his interestbegins,theMember’s surviving spouse is the Member’ssoleDesignated Beneficiary, and the surviving spouse diesbefore distributions to the surviving spouse begin, this Section 6.6(h) will applyas if the surviving spouse were the Member, exceptthat the timeby which distributions mustbegin willbe determined without regard to |
6.6(e)(ii)(1). (i)Definitions:
(i) Designated Beneficiary: The individualwho is designatedastheBeneficiaryunderthePlanandisthedesignatedbeneficiary under Code Section 401(a)(9) and Treasury Regulations Section 1.401(a)(9)-4.
(ii)DistributionCalendarYear: A calendaryear for which a minimum distribution isrequired. For distributions beginning before the Member’s death, the distribution calendaryear is the calendaryear immediately preceding the calendaryear which contains theMember’sRequiredBeginningDate.Fordistributionsbeginningafterthe Member’s death,the first distribution calendaryear is the calendaryear in which distributions are required to begin under Section 6.6(e)(ii).
(iii) Life Expectancy: Life expectancy as computed by use of the Single
Life Table in Treasury Regulations Section 1.401(a)(9)-9, Q&A-1.
(iv) Required Beginning Date: The required beginning date for a Member who is a five-percent (5%) owner (within the meaning of Code Section 416(i)(1)) is April 1 of the calendaryear next following the calendaryear in which the Member attainsage 70-1/2. The required beginning date forany other Member is April 1 ofthecalendaryear nextfollowing the later to occurof the calendaryear of his attainment of age 70-1/2 or the calendaryear of his retirement.
(v)Actuarial Gain: Actuarial Gain means the difference betweenanamount determined usingthe actuarial assumptions (i.e., investment return, mortality, expense, and other similar assumptions) usedto calculate the initialpayments beforeadjustmentforanyincreasesandtheamountdeterminedunderthe actual experience with respect to those factors. Actuarial Gain also includes differences between the amount determined using actuarial assumptions when an annuity was purchasedor commenced and such amount determined using actuarial assumptions used in calculatingpaymentsatthe time the Actuarial Gain is determined.
6.7 Reversion.Employer contributionsare to revert to theEmployer underthefollowing conditions:
(a)Mistake of Fact. In the case of an Employer contribution which is made by theEmployerbyreason of a mistake of fact, such contribution shall bereturned to theEmployer within oneyear after the payment of the contribution.
(b)DisqualificationofPlan.If this Plan does notinitiallyqualify underCodeSection 401(a),Employer contributions attributable to a period for whichthe Plan is disqualified shall be returned to theEmployer within oneyear after the date ofdenial of qualification of the Plan.
(c)Nondeductible Contribution.IfanyEmployer contribution is determinedby theInternal Revenue Service to be nondeductible under Code Section 404, then suchEmployer contribution, to the extent that is determined to be nondeductible, shall be returnedtothe Employer within oneyear after the disallowance of the deduction.
(d) Plan Termination. Upon terminationofthe Plan, as providedin Section
8.6 of the Plan.
ARTICLE VII CONTRIBUTIONS BY THE EMPLOYER
7.1 Employer Contributions. The Plan benefits to Members, Terminated Members,
Retired Members, Spouses, and Beneficiaries of the Plan shall be satisfied to the extentthatcontributions bytheEmployer to the Trust Fund and investment earnings on the Trust Fund shall so permit.Employer contributions duringanyPlanYear shall be determinedby the Board (a)onthe basis of the actuarial statement submitted by the Actuaryemployedby the Plan Administrator on behalf of Members, Terminated Members, Retired Members, Spouses, and Beneficiaries, (b) on the basis of the Plan’s investmentpolicy, and(c) within the range of the minimumandmaximum amounts required and permittedbylaw, on the basis of theEmployer’s financial position as determinedby the Board from time to time. So long asthe Plan has notbeenterminated or revoked and theEmployer is financially able, the contribution madeby the Employer duringany Plan Yearshall be at least the amountof the contribution certifiedby theActuary as necessary to avoid an accumulated funding deficiency.
7.2FundingandInvestmentPolicy. From time to time, the Plan Administrator or its delegate shall furnish the Trustee with anestimate of the amounts required during at leastthenext three Plan Yearsto provide benefitpayments to Members, Terminated Members, Retired Members, Eligible Spouses, and Beneficiaries.On the basis of this estimate, and also taking into account estimated administrative expenses ofthe Plan andany knownor contemplated eventsthatareexpectedtohavesignificantfinancialeffectsonthePlan,theTrusteeshalldeterminetheshort-term andlong-termliquidityneedsofthe Plan. In addition to makingthe ultimateinvestmentdecisions,theTrusteeshalldetermine the broadinvestmentpolicy withrespecttothePlan on the basis ofthe Plan’s liquidity needs, on the basis of reasonable goals as totheappropriate rate of investment return and degree of investmentrisk,and on the basis ofthenonbinding recommendations of the Employer. It is expected that this broad investmentpolicyshall be revised from time to time to recognize changing conditions. Alternatively,any or all of the responsibilities allocated tothe Trustee inthis Sectionmay be delegated by the BoardofDirectors to an investment manager within the meaning of ERISA Section 3(38).
7.3Paymentof Expenses.All expenses of administering this Plan and the Trustas may be mutually agreed upon fromtime to time or that may arise in connection with the Plan and Trust shall be paid from the Trust Fund, unless the Employerpays such expenses.
ARTICLE VIII
AMENDMENT AND TERMINATION OF PLAN
8.1RighttoAmend.TheEmployerreservestherighttoamendthisPlanorthe Trust,by aresolution adoptedby the Board of Directors, without the consent ofanyMember, Terminated Member, Retired Member, Eligible Spouse, or Beneficiary, provided, however,thatno amendmentof this Plan orthe Trust shall depriveany Member, Terminated Member, Retired Member, Eligible Spouse, or Beneficiary ofany vested equitable interest herein norshall such amendment increase the duties and obligations of the Trustee except with its consent.
8.2Right to Terminate.Althoughit is the intention oftheEmployer that this Plan shall be continued and that contributions shall be made regularlytheretoeachyear,theEmployer,by aresolution adoptedby the Board of Directors,may terminate this Plan or permanently discontinue contributions at anytime.
8.3Allocation upon Termination.If this Plan is terminated, the value ofthe Trust Fund remaining after providing for the expenses of administration of the Plan and Trust shallbeallocated among the Members, Terminated Members, Retired Members, Eligible Spouses, and Beneficiaries in the order of precedence and amounts specified in ERISA Section 4044 andtheregulations thereunder.
The allocation ofthe Trust Fund in accordance with this Section shallbe based onthemethod ofpaymentofMonthlyRetirement Income or Death Benefits specifiedin this Plan and shall be calculated asof the date on which this Plan is terminated.In the event that the Trust Fund assets on or afterthe date of termination are insufficient to fundall benefits within any class, the benefits of all higher orders of precedence shall be funded, the benefits of all lower orders of precedenceshall be unfunded, and the assets remaining shall be allocated amongtheMembers of such partially fundedclassonthebasisoftheirrespective actuarial reserves, subject to the provisions of ERISA Section 4044 and any regulations thereunder.
8.4VestinguponTerminationorPartialTermination.In the event of the termination of the Plan, the Accrued Benefit as ofthe date of termination of each Member whohas not terminated hisemployment asofthe date of termination of the Planshall be fully vested in his Accrued Benefit. Similarly, in the event of a partial termination of the Plan, each Member who is affectedby such partial termination shall be fully vested in his Accrued Benefit.
8.5Distributions upon Termination. TheEmployer shall filetimely notice ofthetermination with the Internal Revenue Service in orderto obtain a determination letter fromtheInternal Revenue Service that the Plan is qualified upon termination under Code Section 401(a).Within a reasonableperiod of time followingthe receipt of a determination letter fromtheInternal Revenue Service, the interest ofeach Member, Terminated Member, Retired Member, Eligible Spouseor Beneficiary shall be distributable in the formof anon-transferable annuity commencing at age 62or 65, which annuity shall be purchased withthe assets allocated forthebenefitof such person upon terminationorshall be provided for insome other mannerasdeterminedby the Plan Administrator; provided, however, that each Membermaybe offeredtheoption of a lump sum distribution with the consent of his Eligible Spouse, if any.
8.6Reversions upon Termination.Anyassets remaining afterthe satisfaction of all liabilities under the Plan as of the date of termination to Members, Terminated Members, Retired Members, Eligible Spouses, and Beneficiaries, which funds remainbyreason of erroneous actuarial computation, shall be returned to the Employer.
ARTICLE IX
PLAN ADMINISTRATOR
9.1Designation. TheEmployer shall serve asthe Plan Administrator, in which capacity it shallgenerallyhave allthe powers, duties and responsibilities asset forth inERISA.It is anticipated thattheEmployer shall delegate its rights, duties and responsibilities as Plan Administratortoanadministrativecommitteeconsistingofoneormorepersonsdesignatedfromtime to time by the Board, and the Employerhereby authorizes such delegation.
The President of theEmployer (or in the event of thePresident’sinability or failuretoact,any Vice President of such company) shall certify in writing to the Trustee, aspromptlyas practicable afterany change in the membership of the administrative committee, the names of the persons then serving as members ofthe committee. The Trusteeshall be entitled to rely on the names so certified asbeing the authorized and acting membersof the committee until notified of anychangeby subsequent certification.
The administrative committeemayact at a meeting orby unanimous written consent without a meeting. The administrative committee shall elect oneof its members as chairman, appoint a secretary,whomayormay not be a committee member, and advise the Trustee of such actions in writing. Thesecretary shall keep a record of all meetings and forward all necessary communications to theEmployer orthe Trustee. A quorumof the committee shall consist ofnot lessthantwo-thirdsofthemembersthereof,and amajorityvoteofthosepresentshallcontrolonall matters acteduponat a meetingofthe committee. A dissenting committee member who, within a reasonabletime after hehas knowledge ofany action or failure to actby the majority,registers his dissent inwriting delivered to the other committee members,theEmployer, and the Trustee, shall not be responsible for any such action or failure to act.
9.2Compensation and Records. The Plan Administrator shall serve untilthedesignation of a replacementby the Board of theEmployer. No compensation shall be paid the Plan Administratorfrom the Trust Fund for its services. The Plan Administrator shall keep a permanent record of its actions with respect to the Plan, which shall be available for inspectionby appropriate parties as provided in the Code and ERISA.
9.3Duties and Powers; Claims Review Procedures. Subject to the limitations of the Plan, the Plan Administrator shall from time totime establish rules forthe administration ofthePlan and transaction of its business. The records of theEmployer, as certified to the Plan Administrator, shall be conclusive with respect toanyand all factual matters dealing with theemploymentof a Member. The Plan Administrator shall havethe exclusive discretionary powerto construe and interpret the Plan, and to determine all questions thatmayarise thereunderrelatingto(a)theeligibilityofindividualstoparticipateinthePlan,(b)theamountofbenefitstowhichany Member or Beneficiary maybecome entitled hereunder, and(c)any situationnotspecifically covered by the provisionsof thePlan, and thePlan Administrator’s decisions on such matters shall be final and binding on all parties.Any interpretationor determination made pursuant to such discretionaryauthority will be upheld on judicial review, unlessit is shown to be in abuse of discretion (i.e., arbitrary and capricious).
The Plan Administrator shall pass uponany written claim for benefits under thisPlan,which claim shall be submittedby the Member, Terminated Member, Retired Member, Eligible Spouse, or Beneficiaryupon a form furnished to such claimantby the Plan Administrator.Intheevent thatthe claimofanyperson to all orany part ofanypayment or benefit under this Planshallbedenied,thePlan Administratorshallprovidetotheclaimant,within 90daysafterreceipt ofsuchclaim(unlessspecialcircumstancesrequireanextensionoftimeforprocessing,inwhichwritten notice of such extension shall be provided to the claimant andsuch decision shouldberendered as soon as possible, but in noeventlater than 180days after receipt of such claim), a written notice setting forth, in a manner calculated to be understood by the claimant:
(a) The specific reason or reasons for the denial;
based;
(b) Specific references tothe pertinent Plan provisions on whichthe denial is
(c) A description ofanyadditional material or information necessaryfortheclaimant toperfect the claim and an explanation as towhy such material or information is necessary; and
(d) A description of the Plan’s review procedures and the time limits applicable to such procedures, including a statement of the claimant’s right to bring a civil action under Section 502(a) of ERISA following an adverse benefit determination upon review.
Within 60daysafter receipt of the above material, the claimant shall have a reasonable opportunityto appeal the claim denial to the Plan Administrator for a full andfairreview. The claimant or his duly authorized representative;
(e)May request a review upon written notice to the Plan Administrator;
(f)Mayreview and obtain copiesof pertinent documents, records and other information relevant to the claimant’s claim for benefits; and
(g)May submit issues and comments in writing, documents, records and other information relating to the claim for benefits.
A decisionby the Plan Administrator shall be made not later than 60days after receiptof a request for review, unless special circumstances require an extension of time for processing, in which written notice of such extension shall be provided tothe claimant and such decision should berendered as soon as possible, but in no event laterthan 120daysafterreceiptof such claim. ThePlan Administrator’s decision on review shall bewritten and shall include specific reasons forthe decision, written in a manner calculated to be understoodby theclaimant, with specific references to the pertinent Plan provisions on which the decision is based. The decision upon review shall also include a statement that the claimant is entitled to receive, upon request and free ofcharge, reasonable access to, and copies of, all documents, records and other information relevant to the claimant’s claim for benefits and a statement of the claimant’s right to bring an action under Section 502(a) of ERISA.
All determinations with respect to questions arising in the administration, interpretation, and application of the Plan, including the review of denied claims, shall be conclusive and binding on all persons, subject, however, tothe provisions ofthe Code andERISA.
9.4Authorization ofPayments. The Plan Administrator shall direct the Trustee in writing to makepayments from the Trust Fund toany Member, Terminated Member,RetiredMember, Eligible Spouse, or Beneficiary who qualifies for such payments hereunder. Such written order to theTrustee shall specifyat least the name of such person, his address, his Social Security number, and the amount and frequency of such payments.
9.5No Discrimination. The Plan Administratorshall not take action or directtheTrustee to takeanyaction with respect toany ofthe benefits provided hereunder or otherwise in pursuanceof the powers conferred hereinupon the Plan Administrator which would be discriminatory in favor of Members or employees who are officers, shareholders, or highly compensatedemployees orwhichwouldresultin benefitingoneMember, orgroupofMembers,at the expenseof another, or in the applicationof different rules to substantially similar setsoffacts.
9.6Retention ofAgents. The Plan Administratormay delegate its responsibilities under this Article IX to one or more of its employees and mayemploy such counsel, accountants, Actuaries, or other agents as it shall deem advisable. The Employershallpay,orcausetobepaidfrom the Trust Fund,the compensationofsuch counsel, accountants, Actuaries, andotheragentsandany other expenses incurredby the Plan Administrator in the administration of the PlanandTrust.
ARTICLE X
THE TRUST FUND ANDTRUSTEE
10.1General. TheEmployer has entered into a Trust Agreement withthe Trusteetohold the funds necessary to provide the benefits as set forth in this Plan.
10.2DispositionofTrustFund. The Trust Fund shall be received, held in Trust, and disbursedby the Trustee in accordance with the provisions of theTrust Agreement andtheprovisions as set forthin this Plan. No part ofthe Trust Fundshall be used for,or diverted to, purposes other than for the exclusive benefit of Members, Terminated Members,RetiredMembers, Eligible Spouses, and Beneficiaries under this Plan prior to the satisfaction ofall liabilities hereunder with respect to such persons. No person shall haveany interest in or righttothe Trust Fund orany part thereof, except as specifically provided forin this Plan or theTrustAgreement.
10.3Right of Removal. The Board oftheEmployermayremove the Trustee atany time upon thenotice requiredby the terms of the Trust Agreement and, upon such removal or upon the resignation of the Trustee, theEmployer shall designate and appoint a successor Trustee.
10.4PowersofTrustee. The Trustee shall have such powers to hold, invest, reinvest, control, and disburse funds as at that time shall be set forth in the Trust Agreement. In exercising such powers, the Trusteemayrequest instructions in writing from the Plan Administrator onanymatters affecting the Trust and may rely and act thereon.
10.5Interest-Bearing DepositWith Employer. The investment of allor part oftheTrust Fund in deposits which bear a reasonable rate of interest in Southwest Georgia Bank or any other bank or financial institution which is supervisedby the United States or a State and which is a fiduciary for the Plan is expressly authorized.
10.6Integrationof Trust Agreement. The Trust Agreement shall be deemed to form a part of the Plan, andall rightsof Members or others under this Planshall be subject totheprovisions of the Trust Agreement to the extent such provisions are not contradictedby specific provisions of this Plan.
ARTICLE XI MISCELLANEOUS PROVISIONS
11.1 Prohibition Against Diversion. There shall beno diversion ofany portion of the
assets ofthe Trust Fund other than for the exclusive benefit of Members, Terminated Members, Retired Members, Eligible Spouses, and Beneficiaries, except as provided in Section 8.6 atthetime of termination ofthe Plan and Trust, orexcept asmay otherwisebe permissible under the Code and Regulations issued thereunder.
11.2PrudentManRule. For purposes of Part 4ofTitle I of ERISA, the Employer, the Trustee, and the Plan Administrator shalleach be named fiduciaries and shalleach discharge their respective duties hereunder with the care, skill, prudence and diligence underthecircumstancesthenprevailingthat a prudent manacting in a likecapacity and familiar withsuchmatters would use in the conduct of an enterprise of a like character andwith like aims.Withoutlimitingthegenerality oftheabove,itisspecificallyprovidedthatthe appointment and retentionofany parties pursuant to Article IX of the Plan are “duties” of the Employer for purposes of this Section.
11.3Responsibilities of Parties. TheEmployershall be responsible for the administration and managementof the Plan except for those duties specificallyallocated to the Trustee or Plan Administrator. The Trustee shall have exclusive responsibilityfor the management and control of theresponsibilityfor all matters specifically delegated toitby the Employer inthe Plan. TheEmployer shall be deemed the Plan Sponsor for all purposesof ERISA.
11.4Reports Furnished Members. The Plan Administrator shall cause tobe furnished toeach Member, and toeach Terminated Member, Retired Member, Eligible Spouse,orBeneficiaryreceivingbenefitsunderthisPlan,in themannerandwithinthetimelimitsspecifiedin the Code and ERISA, each of the following:
(a) A summary plan description and periodic revisions; (b) Notification of amendments to the Plan; and
(c) An annual funding notice.
11.5ReportsAvailabletoMembers. The Plan Administrator shall make copies of the allowing documents available atthe principal officeofEmployer for examinationbyanyMember, Terminated Member, Retired Member, Eligible Spouse, or Beneficiary:
(a) The Plan and Trust Agreement;
(b) The summary plan description; and
(c) The latest annual report.
11.6Reports Upon Request. The Plan Administrator shall furnish toanyMember, Terminated Member, Retired Member, Eligible Spouse, or Beneficiary who so requests in writing, once duringany 12-month period, a statement indicating, onthe basis of the latest available information:
(a) The total benefits accrued; and
(b) The nonforfeitable benefits, if any, which have accrued, or the earliest date on which benefits will become nonforfeitable.
The Plan Administrator shall also furnish toany Member, Terminated Member, Retired Member, Eligible Spouse,or Beneficiarywho so requests in writing, at a reasonablecharge to be prescribedbyregulation of the Secretary of Labor,any document referred to in Section 11.5.
11.7MergerorConsolidationofEmployer.If theEmployer is mergedor consolidated with another organization, or another organization acquires allor substantiallyallofthe Employer’s assets, such organizationmay, but shall not be required to, become theEmployer hereunderbyactionof its governing board.Such change inEmployers shall not be deemed a termination of the Plan by either the predecessor or successor Employer.
11.8PlanContinuanceVoluntary.AlthoughitistheintentionoftheEmployerthatthisPlan shall be continued and its contributions made regularly, this Plan is entirely voluntary on the part of theEmployer, and the continuanceof the Plan and thepayments thereunderarenotassumed as a contractual obligation of the Employer.
11.9SuspensionofContributions. TheEmployer specificallyreserves the right, in its sole and uncontrolled discretion, tomodifyor suspend contributions tothe Plan (in whole orinpart)atanytimeorfromtimetotimeandforany periodorperiods,ortodiscontinueatanytimethe contributions under this Plan.
11.10Agreement Not AnEmployment Contract.This Plan shall not be deemed to constitute a contract betweentheEmployer andany Memberor tobe a considerationoraninducement for theemploymentofany Member orEmployee. Nothing contained in this Plan shall be deemed togiveany Member or Employee the right to be retained in the service of theEmployer or to interfere with the right of the EmployertodischargeanyMemberorEmployeeat any time regardlessofthe effect which such discharge shall haveupon such individual as a Member in the Plan.
11.11Facilityof Payments.Inmakinganydistributiontoorforthebenefitofanyminoror incompetent Member, Terminated Member, Retired Member, Eligible Spouse, or Beneficiary or for the benefit ofany other Member, Terminated Member, Retired Member, Eligible Spouse, or Beneficiary who, inthe opinion ofthe Plan Administrator, is incapable of properlyusing,expending, investing, or otherwise disposing ofsuchdistribution,thenthePlanAdministrator,inits sole, absolute, and uncontrolled discretionmay, butneed not, orderthe Trustee to make such distribution to a legalor natural guardian or other relativeof suchminor or court appointed committee ofany incompetent, or toanyadult with whom such person temporarilyorpermanently resides; andany such guardian, committee, relative, or other person shall have full
authorityand discretion to expend such distribution for the use and benefit of such person;andthe receipt of such guardian, committee, relative or otherpersonshallbe acompletedischargetothe Trustee, withoutany responsibility on its part or on the partof thePlan Administrator to see to the application thereof.
11.12Unclaimed Benefits.Ifany benefitspayable to,or with respect to, aMember are not claimed for a period of 7years from the dateof entitlement,as determinedby thePlanAdministrator, and following a diligent effort to locate such person, the person shall be presumed dead and the post-death benefits, ifany underthis Plan, shall be paid pursuant to the law of intestate succession of the State of Georgia, as in effect on the date of payment, provided thattheMember’s benefits shall be reinstated in the event that such person later files claim for such benefits with the Plan Administrator and in the event that the Memberor his Eligible Spouse or other Beneficiaryhas not previouslyreceivedthe Actuarial Equivalent of such benefits. No benefits shall be paid retroactively to the date of entitlement if themember cannot be locatedatsuch time after adiligentsearchbutlaterisfound;instead,benefitswithrespecttosuchMembershall be paid prospectivelyfrom the first date of the month coincident with or immediately following the date on which the Member files a claim therefore with the Plan Administrator. Nothing in this Section shall be construed to prohibit the Plan Administrator, in itssolediscretion, from paying benefits prior tothe expiration of such7-year period toany surviving Eligible Spouse or other Beneficiaryof a Member who cannot be locatedafter a diligent search has been conducted.
11.13GoverningLaw. This Plan shall be administered in the United Statesof America, and its validity, construction, and all rights hereunder shall be governedby the laws of the United States of America underERISA. Tothe extent thatERISA shallnotbe held to have preempted local law, the Planshall beadministered underthe lawsof the State of Georgia.Ifany provision of thePlanshallbeheldinvalidorunenforceable,theremainingprovisionshereofshallcontinueto be fully effective.
11.14Headings No Part of Agreement. Headings of articles, sections, and subsections of the Plan are inserted for convenience of reference. They constitute no part of the Plan and are not to be considered in the construction thereof.
11.15Merger or Consolidation of Plan. This Planand Trust shall not be mergedorconsolidate with, nor shallanyassets or liabilities be transferred to,any other plan, unless the benefits payabletoeachMemberifthePlanwasterminatedimmediatelyaftersuchactionwouldbe equal to or greater than the benefits to which such Member would have beenentitled if this Plan had been terminated immediatelybefore such action. Effective asof the close of business on December 31, 2004,the Planshall acceptthe merger ofthe Sylvester Plan into the Plan, and, as soon as administrativelypracticable thereafter, the related trust-to-trust transferof assets and liabilities, in accordance with the requirements of Code Section 414(1). The merger of theSylvester Plan with and into the Plan shall notdecrease a Member’s vested interest and shall not reduce aMember’s benefits in violation of Code Section 411(d)(6). The Companyand thePlanAdministrator shall have the authority to take such actions asmay benecessary to effectuatethemerger of theSylvester Plan with and intothe Plan and the related transfer of assets and liabilities.
11.16Indemnification. TheEmployer hereby agrees to indemnifyany EmployeeorMember of the Board of theEmployer to the full extent ofanyexpenses, penalties, damages,orother pecuniary loss which suchEmployee or membermay sufferas a result ofhisresponsibilities, obligations, or duties in connection with the Plan. Such indemnification shallbepaidby theEmployer to theEmployee or member to the extent that fiduciary liability insurance is not available tocover thepayment of suchitems, butin no event shall such items be paidoutof Plan assets.
11.17Direct Transfer of Eligible Rollover Distributions.
(a) Notwithstandinganyprovision of the Plan to the contrary, with respect toany distribution madeon or afterJanuary 1, 1993, a Distributeemayelect, at the time and inthemanner prescribedbythe Plan Administrator, to haveany portionof an Eligible Rollover Distribution paid directly to an Eligible Retirement Plan specifiedby the Distributee in a Direct Rollover.
apply:
(b) For the purposes ofthis Section 11.17, thefollowing definitions shall
(i)“Eligible Rollover Distribution” shall meanany distribution of all orany portionof the balance to the credit ofthe Distributee, except that an Eligible Rollover Distribution shall not include:anydistributionthat is one of a series of substantiallyequal periodic payments (not less frequently than annually) made for the life (or lifeexpectancy)ofthe Distributee orthe joint lives (or joint life expectancies)oftheDistributee andthe Distributee’s designated Beneficiary,or for a specified periodoftenyears or more;any distributionto the extentsuch distribution is required underCodeSection 401(a)(9);any hardship distributiondescribed in Code Section 401(k)(2)(B) (i)(IV); or the portion ofany distribution that is not includable ingross income (determined without regard to the exclusion for net unrealized appreciation with respecttoemployer securities). Effective as of January1,2007,anEligibleRolloverDistributionshall includeanyafter-tax contributions credited to the Distributee, provided, however,thattheEligibleRetirementPlantowhichsuchcontributionswouldbetransferredtoin a Direct Rollover agrees to account separately for such amountsso transferred (including interest thereon), including accounting separatelyfor the portion of the distribution whichisincludibleingrossincomeandtheportionofthedistributionwhichisnotincludibleingross income.
(ii) “Eligible RetirementPlan” shall mean an individual retirement account described in Code Section 408(a), an individual retirement annuitydescribedinCode Section 408(b), an annuity plan described in Code Section 403(a), or a qualified trust described in Code Section 401(a), that accepts the Distributee’s Eligible Rollover Distribution. However,in the caseof an Eligible Rollover Distribution to the surviving spouse, an Eligible Retirement Plan shall meanonlyan individual retirement account or individual retirement annuity. An Eligible Retirement Plan shall alsomean an annuity contractdescribedinCodeSection403(b) andaneligibleplanunderCodeSection457(b)which is maintained by a state, political subdivision of a state,oranyagencyorinstrumentalityof a state or political subdivision of a state and which agrees to separately
account for amounts transferred into such planfrom this Plan. The definition of Eligible Retirement Plan shall also applyinthecaseof adistributionto asurvivingspouse,orto a spouse or former spouse who is the alternatepayee under a qualified domestic relation order, as defined in Code Section 414(p). For distributions made on or afterJanuary1,
2008, Eligible Retirement Plan shall also include a Roth IRA describedin Code Section
408A(b).
(iii)“Distributee”shall mean anEmployee or formerEmployee.Inaddition, theEmployee’s or formerEmployee’s surviving spouse and theEmployee’s or formerEmployee’s spouse or former spousewho is the alternatepayee under a qualified domestic relations order, as defined in Code Section 414(p),are Distributees withregardto the interest of the spouse or former spouse. Effective as of January 1, 2010, a non- spouse beneficiary who is a “designatedbeneficiary” under Code Section 401(a)(9)(E) and the regulations thereunder(a “Non Spouse Beneficiary”)shall be a Distributee with respect to the rights set forth in Section 11.17(c).
(iv)“DirectRollover” shall mean apayment tothe Eligible Retirement Plan specifiedby the Distributee eitherby direct transfer from the Plan, orby delivery of thedistributioncheckbytheDistributee,providedsuchcheckismadeoutin amannertoensure that it is negotiable onlyby the trustee of the Eligible Retirement Plan.
(c)Non-Spouse BeneficiaryRollover Right.FordistributionsbeginningonorafterJanuary 1, 2010, a Non-Spouse Beneficiaryby a direct trustee to trustee transfermayroll over all orany partof his orher distribution to an Eligible Retirement Plan which isanindividual retirement account described in Code Section 408(a) or an individual retirement annuitydescribed inCode Section 408(b) (collectively,an “IRA”) established on behalfoftheNon-Spouse Beneficiary for purposes of receivingthe distribution, provided the distribution qualifies as an Eligible Rollover Distribution. To the extent provided under applicable law and for purposes provided under this paragraph, atrust maintained for the benefitof one ormoredesignated beneficiaries shall be treated in the same manner as a trust designated beneficiary.
(i)Trust Beneficiary.Ifthe Member’s named Beneficiary is a trust, the Planmay make a direct rollover to anIRAon behalfof the trust, provided the trust satisfies the requirements to be a designated Beneficiary within the meaningofCodeSection 401(a)(9)(E).
(ii)Required Minimum Distributions Not Eligible for Rollover. A Non-Spouse Beneficiarymay not rollover an amount that is arequired minimum distribution, as determined under the applicable TreasuryRegulations and otherInternal Revenue Service guidance.Ifthe Memberdies before hisor her Required Beginning Date(asdefinedinSection6.6)andtheNon-SpouseBeneficiaryrollsovertoanIRAthemaximum amounteligible for rollover, the Beneficiary mayelect to useeither the 5-year rule or the life expectancyrule, pursuant to TreasuryRegulations Section 1.401(a)(9)-3,A-4(c), in determining the required minimum distributions from the IRA that receives the Non-Spouse Beneficiary’s distribution.
ARTICLE XII
TOP-HEAVY PROVISIONS
12.1Application.For Plan Years beginningJanuary1, 1984 or later, in the eventthatthe Plan is determined to be a Top-HeavyPlan as hereinafter defined, this ArticleXII shall become effective as of the first day of the Plan Year in which the Plan is a Top-HeavyPlan.
12.2 Definitions.
(a)TopHeavy Compensation.For purposes of this Section of the Plan, Top-Heavy Compensation meansan individual’s compensation (as determined under Code Section
415(c)(3)) from theEmployer for the PlanYear, as adjusted pursuant to Code Section 415(d); provided, however,that for purposesof determiningKey Employees, Top-Heavy Compensation shall be increasedbyelective contributions under a cafeteria plan (Code Section 125), elective deferrals (Code Sections 401(k) and 401(a)(8)), and contributions to aSEP (Code Section
402(h)(1)(B)), and, in thecase ofEmployer contributions made pursuant to a salaryreduction agreement, increasedby contributions to a tax-sheltered annuity (Code Section 403(b)).
(b)MinimumBenefit. The accrued benefit equal to two percent (2%) of a Member’s average TopHeavy Compensation for each Yearof Service disregarding YearsofService when the Plan was not a Top-Heavy Plan.
(c)Top-HeavyPlan. A plan that is required in suchyeartosatisfy therequirements of Code Section 416because the aggregate ofthe Accrued Retirement Benefits of allKey Employees in the Plan exceedssixtypercent (60%) of the aggregateof the Accrued Retirement Benefits ofall Members in the Plan, such determination tobe made in accordance with the procedures described inCode Section 416(g)and the regulations thereunder asof the Annual Valuation Date immediately preceding such Plan Year (or inthecase ofthe firstPlanYear,asofthelastday of such Plan Year). The Accrued Retirement Benefit of anyMemberwhohas not performedany services fortheEmployerin the past fiveyearsshall not be included. For purposes of determining whether the Plan is a Top-Heavy Plan, the Plan shall be aggregated with all other plans maintainedby theEmployer whichare required to be aggregated with thePlan in order for the Plan to meet the requirements of Code Sections 401(a)(4) and 410, and all other plans maintainedby theEmployer in which aKey Employee is a Member (the “Required Aggregation Group.”) The Planmayalsobe aggregated withany other plans maintainedby the Employer (the “Permissive Aggregation Group”) so long as such aggregation would not prevent the aggregated group from satisfying the requirements of Code Sections 401(a)(4) and 410.
12.3Accrual of MinimumBenefit.Forany Plan Year in which the Plan is a Top-Heavy Plan, theMinimum Benefit as defined in Section 12.2(b)shall be accrued foreachMember who is not a Key Employee, provided that the total Minimum Benefit accrued for a non-KeyEmployee under this provision shall not exceed 20% of his Top Heavy Compensation.
EffectiveJanuary 1, 2007,any minimum benefits requiredby this ArticleXII willbeprovided under one or more of the defined contribution plans maintained by the Employer.
12.4Vesting.If foranyPlanYearor Years thePlan is a Top-HeavyPlan, anEmployee’s vested interest in hisAccrued Benefit for such PlanYear and all preceding Plan Years shall not be less than as determined under the following vesting schedule:
Years of Service
Less than 2 | Vested Percentage
0% | Forfeited Percentage
100% |
2 | 20% | 80% |
3 | 40% | 60% |
4 | 60% | 40% |
5 | 80% | 20% |
6 | 100% | 0% |
If the Plan ceases to be a Top-Heavy Plan, the vesting schedule in this Section 12.4 shall revert to the provisions in Section 5.1; provided that any portion of the accrued benefit that was nonforfeitable before the Plan ceases to be a Top-Heavy Plan shall remain nonforfeitable, and further provided that any Member who has three (3) or more Years of Service at the time the Plan ceases to be a Top-Heavy Plan shall have the right to elect during the Election Period (as hereinafter defined) to continue to have his vested interest determined in accordance with the vesting schedule contained in this Section 12.4.
For the purposes of this Section 12.4,Years of Service shall include Service prior totheEffective Date, and shall include Service during the Election Period. The Election Period shall be the period during which such Membersmaymakesuchvestingscheduleelectionandshallbeginon the date of the adoption of the amendment which changes the vesting schedule andshall end on the later of:
(i) The date which is60days afterthe adoptionof the amendment which changes the vesting schedule;
(ii) The date which is 60days after the effective date oftheamendment which changes the vesting schedule; or
(iii) The date which is 60 days after the date such Member is notified in writing of the amendment which changes the vesting schedule.
12.5 Post-EGTRRA Top-Heavy Provisions.
(a)Effectivedate. This Section 12.5 shall applyfor purposes of determining whether the Plan is aTop-Heavy Plan under Code Section 416(g) forPlanYears beginning after December 31, 2001, and whether the Plan satisfies the minimum benefits requirements ofCodeSection 416(c) for such years. This Section 12.5 amends Sections 12.1 through12.4 of the Plan.
(b) Determination of Top-Heavy Status.
(i) Key Employee.KeyEmployee meansanyEmployee or former
Employee (includingany deceasedEmployee)who atanytime during the Plan Year that
includes the determination date was an officer of theEmployer having annual compensationgreater than $135,000 (as adjusted under Code Section 416(i)(1) forPlanYears beginning after December 31, 2005), a 5% owneroftheEmployer, or a 1%ownerof theEmployer having annual compensation of more than $150,000.Forthis purpose, annualcompensationmeanscompensationwithinthemeaningofCodeSection415(c)(3).The determination of who is a Key Employee will be made inaccordance with Code Section 416(i)(1) and the applicable regulations and other guidance of general applicability issued thereunder.
(ii)Determination of Present Values and Amounts. This Section
2.5(b)(ii) shall apply for purposes of determining the present value of accrued benefits of
Employees as of the determination date.
(1) | DistributionsDuring YearEnding on the Determination Date. The present value of accrued benefits of an Employee as ofthe determination date shallbe increasedby thedistributions made with respect to theEmployee underthePlan andany plan aggregated with the Plan underCodeSection 416(g)(2) during the1-year period ending onthedetermination date. The preceding sentence shall also apply to distributions under a terminated plan which, hadit not been terminated,wouldhavebeen aggregatedwiththePlanunder Code Section 416(g)(2)(A)(i).Inthecaseof a distribution made for a reason other than separation from service or, effective asof January 1, 2002, severance fromemployment, death, or disability, this provision shallbeapplied by substituting “5-year period” for “1-yearperiod.” |
(2) | Employees Not Performing Services During Year Ending on the Determination Date. The accrued benefits of any individual who hasnot performed services forthe Employing Unit during the 1-year period ending on the determination date shall not be taken into account. |
(c)Minimum Benefits. For purposes of satisfying the minimumbenefitrequirements of Code Section 416(c)(1), in determining Years of Service with the Employer,anyService with the Employer shall be disregardedto the extent that such Service occurs during a PlanYear when the Plan benefits (within the meaning of Code Section 410(b)) no KeyEmployee or former Employee.
INWITNESS WHEREOF, theEmployerhas caused this amended and restated
Plan to be executed and effective as of January 1, 2015.
EMPLOYER:
SOUTHWEST GEORGIA FINANCIAL CORPORATION
Date:January 21, 2015
By:/s/DeWitt Drew
Title:President and Chief Executive Officer
ANNEX A
AMENDMENTS REQUIRED UNDER SECTION 415 REGULATIONS, PFEA AND WRERA
I. PREAMBLE AND EFFECTIVE DATE
This Annex Ato the Plan is adopted to reflect certain provisions of the final regulations under Section 415of the Code, the Pension FundingEquityActof 2004, andthe Worker, Retiree andEmployerRecovery Act of 2008. This Annex A shallbe effective as stated herein and shallmodify, amend, and supersede the provisionsof Section 6.1 of the Plan to theextentthoseprovisions are inconsistent with the provisions of this Annex A.
This Annex A shallapply in Limitation Years beginningon or afterJuly 1, 2007, exceptasotherwise provided herein.
II. MAXIMUM PERMISSIBLE BENEFIT
Notwithstandingany other provisionof thePlan, in no event shallthe annual accrued benefit accruedby a Membernor the annual benefitpayable to a Member underthisPlan attributable toEmployer contributions andpayable as a straight life annuityat Normal Retirement Age exceed the lesserof the Defined Benefit Dollar Limitation or the Defined Benefit Compensation Limitation.
A. | ApplicableMortality Table. For purposes ofthe Annex A,the term Applicable MortalityTable shall be the applicable mortalitytable described under Code Section 417 (e)(3)(B). |
B. | Defined Benefit CompensationLimitation: 100% of a Member’sHigh Three- Year Average Compensation, payable in the form of a straight life annuity. |
C. | Defined Benefit Dollar Limitation: Effective forLimitationYears ending after December 31, 2005, the Defined Benefit DollarLimitation is $170,000, automaticallyadjusted underCode Section 415(d) and as provided inG. below, effectiveJanuary 1 of eachyear, as published in the Internal Revenue Bulletin, andpayable in the form of a straight life annuity. The new limitation shall apply toLimitationYears ending with or within the calendaryear of the date oftheadjustment, but a Member’s benefits shallnot reflectthe adjustedlimit priortoJanuary 1 of that calendaryear. |
D. | Adjustment for Less Than 10 Years of Participation or Service: If the Member has less than 10years of participation in the Plan, the Defined Benefit DollarLimitation shall be multipliedby afraction-- (i) the numeratorof which isthenumber of Years (or part thereof, but not less than oneyear) of participation in the Plan, and (ii) the denominator of which is10.In the caseof a Member whohasless than tenyearsof Yearsof Service withtheEmployer,the Defined Benefit CompensationLimitation shall be multipliedby afraction-- (i) the numeratorof |
which is the number ofyears (or part thereof, but not less than oneyear)of Years of Service with the Employer, and (ii) the denominator of which is 10.
E. | Adjustment of Defined Benefit DollarLimitation for Benefit Commencement Before Age 62 or after Age 65: The Defined Benefit Dollar Limitation shall be adjusted ifthe Annuity Starting Date ofthe Member’sbenefitis before age 62orafter age65. IftheAnnuityStarting Date is before age 62, the Defined Benefit DollarLimitation shall be adjusted under Section III. If the AnnuityStarting Date is after age 65, the Defined Benefit DollarLimitation shall be adjusted under Section IV. |
F. | High Three-Year Average Compensation: The average Compensation for the three consecutiveyearsof Yearsof Service (or, if the Memberhas less thanthreeconsecutiveyears of Years of Service, the Member’s longest consecutiveperiodof Yearsof Service, including fractionsofyears, but not less than oneyear) with theEmployerthat produces the highest average.Any rehired Member’s High Three-Year Average Compensation will bethe amount determined under this SectionII.F. or, if greater, the amount determined under Treas. Reg. Section |
1.415(d)-1(a)(2)(iii).
Compensation for purposes of thisAnnex A means regular compensation for services during theEmployee’s regular working hours,or compensation for services outside theEmployee’s regular working hours (such as overtime orshiftdifferential), commissions, bonuses or other similar payments,mustbecountedasannual Compensation if suchpayment is made within two and one-half (2 1/2) monthsafter severance fromemployment with theEmployer and thepaymentwould have been paid to the Employee if the employment had continued.
Backpay, within the meaning ofTreasuryRegulations Section 1.415(c)-2(g)(8), shall be treated as annual Compensation for the Limitation Year to which the backpayrelates to the extent that backpayrepresentswages and compensationthatwould otherwise be included under this definition.
G. | Annual AdjustmentofLimitations: The Defined Benefit Compensation Limitation and the Defined Benefit DollarLimitation shall be adjusted annually permitting an increasein a Member’s periodicpayments effective forpaymentsdue on orafterJanuary 1 of theLimitation Year for which the increase intheLimitation Year is effective. The adjusted limitation shall be equal to the greater of the amount that would be permitted without regard to the adjustment multipliedby afraction, the numerator of which isthe Defined Benefit Dollar LimitationorDefined Benefit CompensationLimitation, whichever is less, taking intoaccount the adjustment and the denominator of which is the limitation ineffect fortheimmediately preceding Limitation Year. |
(1) | The Defined Benefit Dollar Limitationshall be adjusted for each Limitation Yearby multiplying the limitation applicable forthe immediatelypreceding Limitation Yearbyan annual adjustment factor, |
withany result that isnot a multiple of $5,000 rounded downto the next lowest multiple of $5,000.For purposes of this Section G.(1), the “annual adjustment factor” is a fraction, the numerator of which is the valueofthe“applicable index” forthe calendar quarter ending September 30ofthecalendaryear preceding the calendaryear for which the adjustment isbeing made and the denominator of which isthe value of such index for thecalendar quarter beginningJuly 1, 2001; provided that if the fraction determined under this sentence is less than one (1), then such fraction shall be deemed to be equal to (1).
(2) | The Defined Benefit CompensationLimitation shall be adjusted foreachLimitation Year after the Member’s termination ofemploymentbymultiplyingthe limitation applicable for the immediatelypreceding Limitation Yearbyan annual adjustment factor. For purposes ofthisSection G. (2),the “annual adjustment factor” is a fraction,the numerator of which is the valueof the “applicable index” for the calendar quarter ending September 30 of the calendaryear preceding the calendaryear for which the adjustment is being made andthe denominator of which isthevalue of such index for the September 30 of the calendaryear prior tothecalendaryear used in the numerator; provided that if the fraction determined under this sentence is less than one (1), then such fraction shall be deemed to be equal to one (1) and the adjustment factor for future calendaryears will be determined in accordance with guidance prescribedbytheCommissionerofthe InternalRevenueServiceandpublishedintheInternal Revenue Bulletin. |
(3) | For purposes of this Section G., the “applicable index”is determined consistent with theprocedures to adjust benefit amounts under Section |
215(i)(2)(A) of the Social Security Act.
H. | If the Member is, orhasever been, a participant in another qualified defined benefit plan (without regard to whether the plan has been terminated) maintainedby theEmployeror a predecessoremployer, the sumof the Member’sannualbenefits from all such plans may not exceed the maximum permissible benefit. |
III. ADJUSTMENT OF DEFINED BENEFIT DOLLAR LIMITATIONFORBENEFIT COMMENCEMENT BEFORE AGE 62
A. Limitation Years Beginning BeforeJuly 1,2007. The applicable provisions of
Section 6.1 shall apply.
B. Limitation Years Beginning On or After July 1, 2007.
(1) | Plan Does Not Have ImmediatelyCommencing StraightLife AnnuityPayable at Both Age62 and the Age of Benefit Commencement.If the AnnuityStarting Date for the Member’s benefit is prior toage 62 and occurs in aLimitationYear beginning on orafter July 1, 2007, and the |
Plan does not havean immediatelycommencing straight life annuitypayable at bothage 62and theage of benefit commencement, the Defined Benefit DollarLimitation for the Member’sAnnuityStarting Date is the annual amount of a benefitpayable in the form of a straight life annuity commencing at the Member’s Annuity Starting Date that istheactuarial equivalent ofthe Defined Benefit DollarLimitation (adjusted under Section II.D. foryearsofparticipationlessthan10,ifrequired),computedusing a five-percent interest rate assumption andthe Applicable Mortality Table for the AnnuityStarting Date (and expressingthe Member’sagebased on completed calendar months as of the Annuity Starting Date).
(2) | Plan HasImmediate Commencing StraightLife AnnuityPayable at Both Age 62 and the Age of Benefit Commencement.If the AnnuityStarting Date for the Member’s benefit is prior to age 62 and occurs in a LimitationYear beginning on or after July 1, 2007, and the Plan has an immediately commencing straight life annuity payable at bothage 62 and theageofbenefit commencement, the Defined BenefitDollarLimitation for the Member’s AnnuityStarting Date is the lesser of the limitation determined under the above paragraph and the Defined Benefit Dollar Limitation (adjusted under Section II.D. foryears of participation less than 10,ifrequired) multiplied by the ratio of the annual amount of the immediately commencing straight life annuity under the Planat the Member’s Annuity Starting Date to the annual amount ofthe immediatelycommencing straight life annuity under the Plan atage 62, both determined without applying the limitations of Article VI, as modified by this Annex A. |
IV. ADJUSTMENT OF DEFINED BENEFIT DOLLAR LIMITATIONFORBENEFIT COMMENCEMENT AFTER AGE 65
A. | Limitation Years Beginning BeforeJuly 1, 2007. The provisions of Section 6.1 shall apply. |
B. Limitation Years Beginning On or After July 1, 2007.
(1) | Plan Does Not Have ImmediatelyCommencing StraightLife AnnuityPayableatAge65andtheAgeofBenefitCommencement.If the Annuity Starting Date forthe Member’s benefit is afterage65 and occurs in a Limitation Year beginningon or afterJuly 1, 2007, andthe Plan does not have an immediately commencingstraightlifeannuitypayable atbothage |
65 and the ageof benefit commencement,the Defined Benefit Dollar Limitation attheMember’sAnnuityStartingDateistheannualamountofa benefitpayable in the form of a straight lifeannuitycommencing at the Member’s Annuity Starting Date that is the actuarial equivalentoftheDefined Benefit Dollar Limitation (adjusted under SectionII.D. foryearsof participationless than 10, if required), computed using a five-percent interestrate assumption and the Applicable Mortality Table forthat
AnnuityStarting Date (and expressingthe Member’s age based on completed calendar months as of the Annuity Starting Date).
(2)Plan HasImmediately Commencing Straight Life AnnuityPayable at Age
65 and the Age of Benefit Commencement.Ifthe AnnuityStarting Date for the Member’s benefit isafterage 65 and occurs in aLimitation Year beginning on orafterJuly 1, 2007, and the Plan has an immediately commencing straight life annuitypayable at bothage 65 and theageofbenefit commencement, the Defined Benefit DollarLimitation at the Member’s AnnuityStarting Date is the lesser of the limitation determined in the paragraphimmediatelyabove and the Defined Benefit Dollar Limitation (adjusted under Section II.D. for years of participation less than
10, if required) multipliedby the ratioofthe annual amountoftheadjusted immediatelycommencing straight lifeannuity under the Plan at the Member’s Annuity Starting Date to the annual amount of the adjusted immediatelycommencing straight life annuityunder the Plan atage65,both determined without applying the limitations of this paragraph. For this purpose, the adjusted immediatelycommencing straight life annuity under the Plan at the Member’s AnnuityStarting Date is the annual amount of such annuity payable to the Member, computed disregarding the Member’s accrualsafter age 65 but including actuarial adjustmentseven if those actuarial adjustmentsare usedto offset accruals; andtheadjusted immediatelycommencing straight lifeannuity under the Plan atage 65 isthe annual amount of such annuity that would bepayable under the Plan to a hypothetical Member who is age 65 and has the same accrued benefit as the Member.
V. LIMITATIONS ON BENEFITS
The determination of actuarial equivalent of forms of benefit other than a straight life annuity shall be made in accordance with paragraph A or B below.
A. | Benefit Forms Not Subject to Section 417(e)(3) of the Code: Thestraight life annuity that is actuariallyequivalent tothe Member’s form of benefit shall be determined under this paragraph A if the formof the Member’s benefit is either(A) a nondecreasingannuity(other than a straight life annuity) payable for a period of notless than the lifeof the Member (or, in the case of a Qualified Preretirement Survivor Annuity, the lifeofthe surviving spouse), or(B)anannuity that decreases during the lifeof the Member merely becauseof (i)thedeath of the survivor annuitant (butonly if the reduction is not below50% of the benefit payable before the death of the survivor annuitant), or (ii) the cessation or reductionof SocialSecurity supplementsor qualified disability payments (as defined in Section 401(a)(11) of the Code). |
For Limitation Years beginning on or after July1,2007,theactuariallyequivalent straight life annuity is equal to the greater of (i)the annual amount of the straight life annuity(ifany)payable to the Member under the Plan commencing at the
same Annuity Starting Date asthe Member’sform of benefit; and (ii)the annual amount of the straight life annuitycommencing at the same AnnuityStartingDatethat has the same actuarial present value as the Member’s form of benefit, computed using a five-percent interest rate assumption and the applicable mortality table (or other tabularfactor) defined in Section 1.2 for that Annuity Starting Date.
B. | For purposes of adjustments under SectionV., no actuarialadjustment to the benefit shall be made for: |
(1) | survivor benefitspayableto asurvivingSpouseunder aqualifiedjointandsurvivor annuity to the extent such benefits would not bepayable iftheMember’s benefit were paid in another form; |
(2) | ancillarybenefits that are not directly related to retirement benefits (such as a qualified disability benefit, pre-retirement incidental death benefits, and post-retirement medical benefits); or |
(3) | the inclusion in the form of benefit of an automatic benefit increase feature, provided the form of benefit isnot subject toCode Section 417(e)(3) and would otherwise satisfy the limitations of this Annex A, and the Plan provides that the amountpayable under the form of benefit inanyLimitation Yearshallnot exceedthe limits ofthis Annex A applicable at the AnnuityStarting Date, as increased in subsequentyears pursuanttoCode 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. |
ANNEX B
FUNDING-BASED LIMITS ON BENEFITS AND BENEFIT ACCRUALS
I. PREAMBLE
This Annex B to the Plan is adopted to reflect certain provisions of the Pension Protection Act of
2006(“PPA”)andtheWorker,Retiree and EmployerRecovery Act of2008.ThisAnnex Bshallbe effective as stated herein and shall supersede the provisionsof thePlan to theextentthoseprovisions are inconsistent with the provisions of this Annex B. Notwithstanding anythinginthisAnnex B to the contrary, the provision of Code Section 436 and the regulations thereunder are incorporatedhereinbyreference.Also, notwithstanding any language set forthin this Annex Bof the Plan, effective asof December31, 2006, the Planwasamended to freeze all future benefit accruals.
II. EFFECTIVE DATE AND APPLICATION OF ANNEX B
The provisions of this Annex B apply toPlanYears beginning after December 31, 2007. For purposes of thisAnnexB,the term Plan shall includeany predecessor plan.Ifthe Planhas a valuation date other than the firstdayof thePlanYear, the provisions of Code Section 436 and this Annex B will applied in accordance with the regulations thereunder.
III. | FUNDING-BASED LIMITATION ON SHUTDOWN BENEFITSAND OTHER UNPREDICTABLE CONTINGENT EVENT BENEFITS |
A. | In General:If a Member is entitled to an “unpredictable contingent event benefit”payable with respect toanyevent occurring duringany Plan Year, then such benefitmay not be provided if the “adjusted funding target attainment percentage” for such Plan Year: |
(1) is less than sixty percent (60%) or,
(2) | would beless thansixty percent(60%) percent taking into account such occurrence. |
B. | Exemption: Paragraph A. shall cease to apply with respecttoanyPlan Year, effective asof the firstdayof the Plan Year,uponpaymentby the Employer of a contribution (in addition toany minimum required contribution under Code Section 430) equal to: |
(1) | inthecaseofA.(1)above,theamountoftheincreaseinthefundingtargetof the Plan (under Code Section 430) forthePlan Year attributable totheoccurrence referred to in paragraph A, and |
(2) | in thecaseof A.(2) above, the amount sufficient to result in an “adjusted funding target attainment percentage” of sixty percent (60%). |
C. | Unpredictable Contingent Event Benefit: For purposes of this Section, the term “unpredictable contingent event benefit” meansany benefitpayablesolelyby reason of: |
(1) a plant shutdown (or similar event, as determinedby the Secretary ofthe
Treasury), or
(2) | an event other than the attainment ofanyage, performance ofany service, receipt or derivationofanycompensation, or occurrence of death or disability. |
IV. | LIMITATIONS ONPLAN AMENDMENTS INCREASING LIABILITYFORBENEFITS |
TheEmployer reservesthe right tomodify, amend or terminate thePlan as provided in Article
VIII; provided, however, the following shall apply:
A. | In General: No amendment whichhasthe effect of increasing liabilities ofthePlanbyreason of increases in benefits, establishment of new benefits, changing the rate of benefit accrual, or changingthe rate at which benefits become nonforfeitablemay take effect duringanyPlanYearif the “adjusted funding target attainment percentage” for such Plan Year is: |
(1) less than eighty percent (80%), or
(2) | would be less than eighty percent (80%) taking into account such amendment. |
B. | Exemption: Paragraph A. above shall cease to apply with respect to any Plan Year, effective as of the firstday of the PlanYear (or if later, the effective date oftheamendment), uponpaymentby theEmployer of a contribution (in addition to any minimum required contribution under Code Section 430) equal to: |
(1) | in the caseof paragraph A.(1) above, the amount of the increasein the funding target of the Plan (under Code Section 430) for the Plan Year attributable to the amendment, and |
(2) in the caseof paragraph A.(2) above,the amount sufficient to result inan
“adjusted funding target attainment percentage” of eighty percent (80%).
C. | Exception for Certain BenefitIncreases: Paragraph A. shall not apply to any amendment which provides for an increase in benefits under a formula which is not based on a Member’s compensation, but only if the rate of such increase is not in excess of the contemporaneousrate of increase inaverage wages of Members coveredby the amendment. |
V. LIMITATIONS ON ACCELERATED BENEFIT DISTRIBUTIONS
The following shallapply to thepayment of benefits under the Planexcept tothe extent the Plan is exempt from the requirements of this Section V by reason of Code Section 436(d)(4):
A. | Funding Percentage Less ThanSixtyPercent (60%):If the Plan’s “adjusted funding target attainment percentage” for a PlanYear is less thansixty percent (60%), then the Planmay notpayany“prohibitedpayment” after the valuation date for the Plan Year. |
B. | Bankruptcy: Duringany period in whichtheEmployer is a debtor in a case under Title 11, United States Code, or similar Federal or State law, thePlanmaynotpay any“prohibitedpayment.” The preceding sentence shall not apply onor afterthedate on whichthe enrolledactuary ofthe Plan certifies that the “adjusted funding target attainment percentage”of the Plan isnot less than one hundred percent (100%). |
C. Limited Payment if Percentage at Least Sixty Percent (60%) but Less Than Eighty
Percent (80%):
(1) | In General:Ifthe Plan’s “adjusted funding target attainment percentage” for a Plan Year is sixtypercent (60%) or greater but less than eighty percent (80%), then the Planmay notpayany“prohibitedpayment” after the valuation date for the Plan Year tothe extent the amount ofthe payment exceeds the lesser of: |
(i) | fifty(50) percent ofthe amount of thepayment which couldbemade without regard to this Section, or |
(ii) | the present value (determined under guidance prescribedby thePension BenefitGuarantyCorporation, using the interestandmortalityassumptions under Code Section 417(e)) ofthemaximum guarantee with respect to the Member underERISA Section 4022. |
(2) One-Time Application:
(i) | In General:Only one “prohibitedpayment” meetingtherequirementsof subparagraph C.(1)may bemade with respect toanyMemberduringany period of consecutivePlanYearstowhichthe limitations undereither paragraphA. orB. or this paragraph applies. |
(ii) | Treatment of Beneficiaries:For purposes ofthis subparagraph, a Member andany Beneficiary(including an alternatepayee, as definedinCodeSection 414(p)(8))shallbetreatedasoneMember.If the Accrued Benefit of a Member is allocated to suchanalternatepayee and one or more other persons, the amount under |
subparagraph C.(1) shall be allocatedamong such persons in the same manner as the Accrued Benefit is allocated unlessthequalified domestic relations order (as defined in Code Section
414(p)(1)(A)) provides otherwise.
D. | Exception: This Section shall not applyforany PlanYear if the terms ofthe Plan (asineffectfortheperiodbeginningonSeptember1,2005,and endingwithsuchPlan Year) provide for no benefit accruals with respect toany Member during such period. |
E. “Prohibited Payment”:ForpurposesofthisSection,theterm“prohibitedpayment”
means:
(A) | anypayment, in excess of themonthlyamount paid under a single life annuity(plusany Social Security supplements described inthe last sentenceof Code Section 411(a)(9)), to a Member or Beneficiary whoseAnnuityStartingDate occurs duringany period a limitation under paragraph A. or B. is in effect, |
(B) | any payment for the purchase of an irrevocable commitmentfromaninsurer to pay benefits, and |
(C) | any otherpayment specifiedby the Secretary of theTreasury in regulations under Code Section 436(d)(5)(C). |
Such term shall not include thepayment of a benefit which under Code Section
411(a)(11) may be immediately distributed without the consent of the Member.
VI. LIMITATION ON BENEFIT ACCRUALSFOR PLANS WITHSEVEREFUNDING SHORTFALLS
Notwithstanding any other provisionof the Plan, effective asof December 31, 2006, the
Plan was amended to freeze all future benefit accruals.
A. | In General:If the Plan’s “adjusted funding target attainment percentage” for a PlanYear is less thansixty percent (60%), benefit accruals under the Planshallcease as of the valuation date for the Plan Year. |
B. | Exemption: Paragraph (1) shallcease to apply with respect toanyPlan Year, effective asof the firstdayof the Plan Year,uponpaymentby the Employer of a contribution (in addition toany minimum required contribution under Code Section 430) equal to the amount sufficient to result in an “adjusted funding target attainment percentage” of sixty percent (60%). |
VII. | RULES RELATINGTO CONTRIBUTIONS REQUIREDTO AVOID BENEFIT LIMITATIONS |
A. Provision of Security:
(1) | In General:For purposes of this AnnexB,the “adjusted funding target attainment percentage”shall be determinedby treating as an asset ofthePlananysecurity providedby theEmployerin a form meetingtherequirements of subparagraph (2). |
(2) | Formof Security: The security requiredunder subparagraph (1)shallconsist of: |
(i) | a bond issuedby a corporate suretycompany that is an acceptable surety for purposes of ERISA Section 412, |
(ii) | cash, or United States obligations which mature in three (3)yearsor less, held in escrowby a bank or similar financial institution, or |
(iii) | such other form of security as is satisfactory tothe Secretaryandthe parties involved. |
(3) | Enforcement:Any security provided under subparagraph (1)may be perfected and enforced at any time after the earlier of: |
(i) the date on which the Plan terminates,
(ii) | if there is a failure to make apayment of theminimum required contribution forany Plan Year beginning after the securityisprovided, the due date for thepayment under CodeSection 430(j), or |
(iii) | if the “adjusted funding target attainment percentage” is less thansixty percent (60%)for a consecutiveperiod of 7years,thevaluation date for the lastyear in the period. |
(4) | Release of Security: The security shallbe released (andany amounts thereundershallberefundedtogetherwithanyinterest accruedthereon)atsuch time as the Secretarymayprescribein Regulations, including Regulations for partial releases of the securityby reason of increases in the “adjusted funding target attainment percentage.” |
B. | Prefunding Balanceor Funding standardCarryover BalanceMay Not be Used: No prefundingbalanceorfundingstandardcarryoverbalanceunderCode Section |
430(f)may be used under SectionsIII.,IV.orVI tosatisfyanypayment anEmployermay make underany such Section to avoid or terminate the application of any limitation under such Section.
C. Deemed Reduction of Funding Balances:
(1) | In General: Subject to subparagraph (3), inanycase in which a benefit limitation under SectionIII.,IV.,V., orVI would (but for this subparagraph and determined without regard to subsection III.B., IV.B., orVI.B.) apply to such Plan for the Plan Year, theEmployershall be treated for purposes of this title as having madean election under Code Section 430(f) to reducethe prefunding balance or funding standardcarryover balanceby such amount as isnecessary for such benefit limitation to not apply to the Plan for such Plan Year. | |
(2) |
Exception for Insufficient Funding Balances: Subparagraph (1) shallnotapply with respect to a benefit limitation forany Plan Year iftheapplication of subparagraph (1) would notresult in the benefit limitation not applying for such Plan Year. | |
VIII. |
PRESUME |
D UNDERFUNDING FOR PURPOSES OF BENEFIT LIMITATIONS |
A. | Presumption of Continued Underfunding:Inanycase in which a benefit limitation under Section III., IV., V., or VI has been applied to a Plan with respect to the PlanYear preceding the current Plan Year, the “adjusted funding target attainment percentage”of the Plan for the current PlanYear shall be presumedtobe equaltothe“adjustedfundingtargetattainmentpercentage”ofthe Planforthepreceding Plan Yearuntil the enrolled actuary of the Plan certifiesthe actual “adjusted funding target attainment percentage” of thePlan for the current PlanYear. |
B. | Presumption of Underfunding after TenthMonth:Inanycase in which no certificationofthe“adjustedfundingtargetattainmentpercentage”forthecurrentPlan Year is made with respect tothe Plan before the firstday ofthe 10th month of suchyear, for purposesof Section III.,IV.,V., orVI, such firstday shallbedeemed, for purposes of such Section, to be the valuation date of the Plan forthecurrent Plan Year and the Plan’s “adjusted funding target attainment percentage” shall be conclusivelypresumedtobelessthansixtypercent(60%) as ofsuchfirst day. |
C. | Presumption of Underfunding after Fourth Month forNearly Underfunded Plans: In any case in which: |
(1) | a benefit limitation under SectionIII.,IV., V.,orVI did not apply to aPlanwithrespecttothePlanYearprecedingthecurrentPlanYear,butthe“adjusted fundingtarget attainment percentage” of the Plan for such preceding Plan Yearwas not more than ten (10) percentage points greater than the percentage which would have causedsuch Section to apply tothePlan with respect to such preceding Plan Year, and |
(2) | as of the firstday ofthe 4th month of the current PlanYear, the enrolled actuaryof the Plan has not certified the actual “adjusted funding target |
attainment percentage” of the Plan for the current PlanYear, until the enrolledactuary so certifies, such first day shall be deemed, for purposes of such Section, tobe the valuation date of thePlan forthe currentPlanYear and the “adjusted funding target attainment percentage”of the Plan as of such firstday shall, for purposesof such Section, be presumedtobeequal toten (10) percentage pointsless thanthe “adjusted funding target attainment percentage” of the Plan for such preceding Plan Year.
IX. | TREATMENTOFPLAN ASOF CLOSEOF PROHIBITED OR CESSATION PERIOD |
A. | Operation of Plan after Period: Unless the Planotherwise provides,payments and accruals will resume effectiveas of thedayfollowingthe closeof theperiod for whichany limitation ofpayment or accrualof benefits under SectionV. orVI. applies. |
B. | Treatment of Affected Benefits: Nothing in this Section shall be construed as affecting the Plan’s treatment of benefits which would have been paidor accrued but for this Annex B. |
X. DEFINITIONS AND MISCELLANEOUS
A. | “Funding Target Attainment Percentage”has the same meaninggiven such termbyCode Section 430(d)(2), except as otherwise provided herein. However, inthe case of PlanYears beginning in 2008, the “funding target attainment percentage” for the preceding Plan Yearmay be determined using such methodsof estimation as the Secretary of the Treasurymay provide from time to time. |
B. | “Adjusted Funding Target Attainment Percentage” means the “fundingtargetattainment percentage” which is determined under paragraph A.by increasingeachof the amounts under subparagraphs(A) and (B) of Code Section 430(d)(2)by the aggregate amount of purchases of annuities foremployees other than highly compensatedemployees (as defined inCode Section 414(q)) which were madeby the Plan during the preceding two (2) Plan Years. |
C. Application to Plans Whichare FullyFunded WithoutRegard to Reductions for
Funding Balances:
(1) | In General:In the caseof a Plan forany Plan Year, if the “fundingtargetattainment percentage” is one hundred percent (100%)or more (determined and withoutregard to the reduction in the value ofassetsunder Code Section 430(0(4)), the “fundingtarget attainment percentage” for purposes of paragraphs A. and B. shall be determined without regard to such reduction. |
(2) | Transition Rule: Subparagraph (1) shallbe applied to Plan Years beginning after 2007 andbefore 2011by substituting for “one hundred |
percent (100%)” the applicable percentage determined in accordance with the following table:
In the case of a Plan Year beginning in calendaryear: | The applicable percentage is |
2008 | 92% |
2009 | 94% |
2010 | 96% |
(3) | Subparagraph (2) shallnot apply with respecttoanyPlan Year beginning after 2008 if the Plan was subject to the Deficit Reduction Contribution for the Plan Year beginning in 2007. |
FIRST AMENDMENT TO THE
SOUTHWEST GEORGIA FINANCIAL CORPORATION
PENSION RETIREMENT PLAN
WHEREAS, Southwest Georgia Financial Corporation (the “Company”) sponsors the Southwest Georgia Financial CorporationPension Retirement Plan, as amended and restated effective January 1, 2015 (the “Plan”), to provide retirement benefits to eligible employees of the Company and their beneficiaries; and
WHEREAS, the Company has reserved the authority to amend the Plan pursuant to Section 8.1 thereof; and
WHEREAS, the Company now desires to amend the Plan to provide that (i) vested Members who have attained age 62 but remain employed may elect to receive their benefits under the Plan in the form of an immediate lump sum or any other permitted form of distribution and (ii) Retired Members and Terminated Members not in pay status may elect to receive their benefits in the form of an immediate lump sum distribution; and
WHEREAS, the Company has approved this First Amendment to the Plan (the “First Amendment”).
NOW, THEREFORE, the Company hereby amends the Plan as follows, to be effective as of December 1, 2016:
1.
The Plan is hereby amended by deleting Section 3.6(c) in its entirety and inserting in lieu thereof the following new Section 3.6(c):
“(c)Election of Optional Forms of Payment. A Member entitled to benefits payable in the form of equal monthly installments for such Member’s life or a married Member’s electing (with the written consent of such Member’s Eligible Spouse) not to receive a Qualified Joint and Survivor Annuity, may elect to have his retirement benefit payable under one of the Optional Forms of Payment, set forth below, which is the Actuarial Equivalent of his Normal Retirement Benefit pursuant to Section 3.2 hereof:
(i) An annuity for the Member’s life alone;
(ii) An annuity for the Member’s life, with payments guaranteed for 5 or 10 years;
(iii) An annuity for the Member’s life, with a survivor annuity for the Member’s Eligible Spouse which is 100% or 75% of the annuity which is payable during the joint lives of the Member and his Eligible Spouse. Notwithstanding the foregoing, the written consent of such Member’s Eligible Spouse is not required to the election by a Member of the optional form of payment under this Section 3.6(c)(iii) for distributions with Annuity Starting Dates beginning on or after January 1, 2008; or
(iv) A single lump sum distribution to the Member.”
2.
The Plan is hereby amended by deleting Sections 4.1 and 4.2 in their entirety and inserting in lieu thereof the following new Sections 4.1 and 4.2:
“4.1Incidental Death Benefits for Eligible Spouse.
(a) If a Member dies while actively employed and prior to becoming a Retired Member or Terminated Member and prior to the commencement of benefits pursuant to Article III or V, Death Benefits shall be payable to the deceased Member’s Eligible Spouse, if any. The surviving Eligible Spouse may elect among the following:
(i) A monthly retirement benefit, commencing on what would have been the Member’s Normal Retirement Date (or his Late Retirement Date if the Member works beyond his Normal Retirement Date), equal to the amount which would have been payable to the Spouse under the Qualified Joint and Survivor Annuity provided in Section 3.6(b) if the Member had terminated his employment on the date of his death, had then lived until his Normal Retirement Date (or his Late Retirement Date if the Member works beyond his Normal Retirement Date) and begun to receive Monthly Retirement Income in the form of a Qualified Joint and Survivor Annuity on that date, and had died on the day after the commencement of benefits;
(ii) A monthly retirement benefit, commencing on the first day of any month on or after the Member’s death and before what would have been the Member’s Normal Retirement Date, equal to the amount which would have been payable to the Eligible Spouse under the Qualified Joint and Survivor Annuity provided in Section 3.6(b) if the Member had terminated his employment on the date of his death, had then lived until the date on which benefits actually commence under this item (ii) and had begun to receive Monthly Retirement Income in the form of a Qualified Joint and Survivor Annuity on that date, and had died on the day after the commencement of benefits; or
(iii) A single lump sum distribution, to be made as soon as administratively practicable after the surviving Eligible Spouse elects to receive the lump sum distribution provided benefit payments have not begun and the Annuity Starting Date has not been reached, equal to the Actuarial Equivalent of the amount defined in item (i) or (ii) above, as applicable.
In the absence of an affirmative written election by the Spouse, Death Benefits shall be payable to the surviving Eligible Spouse in accordance with item (i), above, if the Member dies on or after his Normal Retirement Date. Otherwise, Death Benefits shall be payable in accordance with item (ii) above, with the payment of benefits commencing on the first day of the month coincident with or immediately following the Member’s 55th birthday if he dies before age 55 or commencing on the first day of the month following the date of the Member’s death if he was at least age 55 at the time of his death.
All such monthly benefits shall be computed to the nearest dollar, with fifty cents ($.50) being regarded as the next higher dollar. The monthly retirement benefit (if not payable as a single lump sum) shall continue for the life of the Spouse alone. The death of the Spouse, whether before or after the commencement of monthly benefits or the lump sum distribution, shall terminate the right to any Death Benefits for any month or time after the Spouse’s death.
(b) Notwithstanding any other provision of this Section 4.1 to the contrary, if the Actuarial Equivalent present value of the Member’s Death Benefits is less than $5,000, and if benefit payments have not begun and the Member’s Annuity Starting Date has not been reached, the Plan Administrator, shall distribute such Death Benefits in a lump sum to the surviving Eligible Spouse of the deceased Member. For these purposes, the present value of the Member’s Death Benefits shall be calculated in accordance with Section 5.5 hereof.
4.2 Death Benefits in Absence of Surviving Eligible Spouse.
(a) If a deceased Member is not survived by an Eligible Spouse, no Death Benefits shall be payable under this Plan with respect to a deceased Member who is not a Retired Member or Terminated Member at the time of his death and who is not eligible for retirement under Sections 3.2, 3.3, or 3.4 at the time of his death. If a deceased Member who is not survived by an Eligible Spouse and who is not a Retired Member or Terminated Member, would have been eligible for normal, late or early retirement under Sections 3.2, 3.3, or 3.4, respectively, at the time of his death, his Beneficiary may elect between the following:
(i) a monthly amount for 60 months equal to the monthly retirement benefit which the Member would have received if he had retired as of the date of his death and had begun to receive Monthly Retirement Income in the form of a 5-year certain annuity for the life of the Member, commencing on the first day of the month following the month in which his death occurs; or
(ii) a single lump sum distribution, to be made as of the first day of the month following the month in which the Member’s death occurs, equal to the Actuarial Equivalent of the benefit in (i) above.
(b) Notwithstanding any other provision of this Section 4.2 to the contrary, if the Actuarial Equivalent present value of the Member’s Death Benefits is less than $5,000, and if benefit payments have not begun and the Member’s Annuity Starting Date has not been reached, the Plan Administrator, shall distribute such Death Benefits in a lump sum to the Beneficiary of the deceased Member. For these purposes, the present value of the Member’s Death Benefits shall be calculated in accordance with Section 5.5 hereof.
3.
The Plan is hereby amended by deleting Sections 5.1 and 5.2 in their entirety and inserting in lieu thereof the following new Sections 5.1 and 5.2:
“5.1Vested Interest. Whenever a Member, for reasons other than actual retirement under Sections 3.2, 3.3, 3.4, or 3.5 hereof or death under Article IV, incurs a one year Break in Service, he shall cease to be an active Member and shall become a Terminated Member. Subject to the limitations and restrictions of Article VI, each Terminated Member who is not thereafter credited with any additional Year(s) of Service shall be entitled at his Normal Retirement Date to receive Monthly Retirement Income equal to the vested percentage of his Accrued Benefit as of his date of termination.
The vested percentage of any Terminated Member who is credited with at least one (1) Hour of Service on or after January 1, 1989, shall be determined in accordance with the following schedule:
Completed Years of Service | Vested Percentage |
Less than 5 | 0% |
5 or more | 100% |
The vested percentage of any Terminated Member who is not credited with at least one (1) Hour of Service on or after January 1, 1989 shall be determined pursuant to the terms of the Plan as it existed on the date of the Terminated Member’s termination of employment.
The nonvested portion of the Terminated Member’s Accrued Benefit shall constitute a Forfeiture as of the last day of the Plan Year in which such Terminated Member’s employment with the Employer terminates if the Member has no vested interest in his Accrued Benefit, or upon the earlier to occur of a fifth consecutive Break in Service or a distribution of any portion his vested Accrued Benefit if the Member does have a vested interest in his Accrued Benefit. Any such Forfeiture shall serve to reduce the Employer’s contributions required under Article VII. In the event a distribution is made, the relevant Member shall be afforded the Buy-Back option described in Section 5.4 of the Plan.
In lieu of Monthly Retirement Income commencing at his Normal Retirement Date, a Terminated Member may elect in writing to receive Monthly Retirement Income commencing on or after the first day of the month following the date the Member becomes a Terminated Member and before his Normal Retirement Date, equal in amount to the Actuarial Equivalent of his Monthly Retirement Income otherwise commencing at his Normal Retirement Date.
Notwithstanding and in lieu of the foregoing, if a Terminated Member has completed at least 15 Years of Service as of the date of termination, then he shall be entitled to elect in writing to receive Monthly Retirement Income, commencing on or after the first day of the month on or after the Member’s 55th birthday and before his Normal Retirement Date, equal to the amount otherwise payable at his Normal Retirement Date, reduced by 5/12ths of 1% for each month that the commencement of benefits precedes his Normal Retirement Date.
Notwithstanding the foregoing, a Terminated Member shall be entitled to elect in writing to have his retirement benefit paid in the form of a single lump sum distribution, to be made as of the first day of the month following the month in which the Member becomes a Terminated Member and elects to receive the lump sum distribution and before his Normal Retirement Date, provided benefit payments have not begun and the Annuity Starting Date has not been reached, equal to the Actuarial Equivalent of the Monthly Retirement Income otherwise commencing at the Terminated Member’s Normal Retirement Date or, if the Terminated Member has completed at least 15 Years of Service as of the date of termination and elects to receive his lump sum on or after the first day of the month on or after the Member’s 55th birthday and prior to his Normal Retirement Date, such amount, if greater, equal to the amount payable at his Normal Retirement Date, reduced by five twelfths (5/12ths) of one percent (1%) for each month that the date of the single lump sum distribution precedes his Normal Retirement Date.
Notwithstanding anything herein to the contrary, for purposes of determining a Member’s vested interest in his Accrued Benefit under the Plan, Years of Service shall include Years of Service credited after the Freeze Date in accordance with the provisions of the Plan. A Member with no vested interest in his Accrued Benefit shall not become vested as a result of the freezing of the Plan.
5.2 Method of Payment of Benefits to Member Separating from Service before Retirement Date. If the Member separates from service before retirement or death, the settlement options available to the Member will depend upon the Member’s marital status as of the date on which benefit payments commence or on which the Member dies.
(a) If the Member then has an Eligible Spouse, the vested portion of his benefit will be paid in the form of a Qualified 50% Joint and Survivor Annuity as described in Section 3.6(b) unless the Member and his Eligible Spouse, pursuant to the spousal consent requirements in Section 3.6(b)(2), elect to have the vested portion of his benefits paid in (i) the form of a 5-year certain and life annuity or (ii) in a single lump sum distribution. Payments under such Qualified Joint and Survivor Annuity or 5-year certain and life annuity shall in fact commence as of the Member’s Normal Retirement Date or, if the Member so elects in writing, on the first day of any month following the Member becoming a Terminated Member and before his Normal Retirement Date. If the Member dies before the commencement of benefits, a 50% survivor annuity equal to the amount which would be payable to the surviving Eligible Spouse under a Qualified Joint and Survivor Annuity (as though the Member had lived and begun to receive a Qualified Joint and Survivor Annuity and died on the commencement date) shall be payable to the surviving Eligible Spouse, unless the surviving Eligible Spouse elects in writing to receive a single lump sum distribution equal to the Actuarial Equivalent of the 50% survivor annuity otherwise payable commencing on that date. The commencement date of the 50% survivor annuity shall be the first day of the month following the month which includes the date of the Member’s death unless a lump sum distribution is elected. Payment of the single lump sum distribution shall be made as soon as administratively practicable after the Terminated Member's or surviving Eligible Spouse’s, as applicable, election to receive a single lump sum distribution provided benefit payments have not begun and the Annuity Starting Date has not been reached. The death of the surviving Eligible Spouse shall terminate the right to any payments after the surviving Eligible Spouse’s death.
(b) If the Member does not have an Eligible Spouse, the Member shall receive the vested portion of his Accrued Benefit in the form of (i) a 5-year certain and life annuity, commencing on the Member’s Normal Retirement Date or (ii) a single lump sum distribution. Payments of the 5-year certain and life annuity shall in fact commence as of the Member's Normal Retirement Date or, if the Member so elects in writing, on the first day of any month following the Member becoming a Terminated Member and before his Normal Retirement Date. Payment of the single lump sum distribution shall be made as soon as administratively practicable after the Terminated Member's election to receive a single lump sum distribution provided benefit payments have not begun and the Annuity Starting Date has not been reached. The Terminated Member’s death prior to the commencement of benefits shall terminate any right to benefits under this Plan with respect to that Terminated Member.
4.
The Plan is hereby amended by adding the following new Section 3.8 to the end of Article III of the Plan:
“3.8In-Service Retirement Income.
(a) Subject to the maximum overall benefit limitations of Article VI, a Member who remains employed after reaching age 62 may elect to commence payment of his retirement income as provided in this Section 3.8.
(b) The election to commence payment of a Member’s retirement income must be made by the Member on forms provided by the Plan Administrator for such purpose.
(c) Payment of the Member’s retirement income with respect to an election under this Section 3.8 shall be made in any of the settlement options set forth in the Plan as if the Member terminated employment at such time, subject to applicable consent requirements.”
5.
All parts of the Plan not inconsistent herewith are hereby ratified and affirmed.
IN WITNESS WHEREOF, the Company has caused this First Amendment to be executed the 28 day of September, 2016, to be effective as of the 1st day of December, 2016.
SOUTHWEST GEORGIA FINANCIAL CORPORATION
By:/s/DeWitt Drew
Title:President and Chief Executive Officer