RETIREMENT BENEFITS All ofï¬쳌cers of the Company, including the individuals in the Summary Compensation Table, are participants in the Company's pension plan for all eligible employees. Directors who are not employees do not participate in the plan. Eligibility for retirement beneï¬쳌ts is subject to certain vesting requirements, which include completion of ï¬쳌ve years of service where employment is terminated prior to normal or other retirement or death, as determined by applicable law and the plan. Beneï¬쳌t accruals continue for years of service after age 65. The annual pension beneï¬쳌ts payable under the pension plan are equal to 12â쳌„3% per year of service of the participant's average annual compensation during the ï¬쳌ve highest compensated consecutive years of the 10 years of service immediately preceding retirement less 12â쳌„3% per year of service of the participant's Social Security beneï¬쳌t, up to a maximum deduction of 50% of the Social Security beneï¬쳌t. Compensation for purposes of the pension plan is deï¬쳌ned as total W-2 compensation plus employee contributions made under salary reduction plans less (i) reimbursements or other expense allowances; (ii) cash and noncash fringe beneï¬쳌ts (including automobile allowances); (iii) moving expenses (including ‘‘home allowances''); (iv) deferred compensation; (v) welfare beneï¬쳌ts; (vi) severance pay; (vii) amounts realized from the exercise of a non-qualiï¬쳌ed stock option or the sale, exchange or other disposition of stock acquired under a qualiï¬쳌ed stock option; and (viii) amounts realized when restricted stock (or property) held by the employee is recognized in the employee's taxable income under Section 83 of the Internal Revenue Code. In general, such covered compensation for any year would be equivalent to the sum of the salary set forth in the Summary Compensation Table for such years plus the bonus shown in the Table for the immediately preceding year. The table below sets forth the estimated annual beneï¬쳌t payable on retirement at normal retirement age (age 65) under the Company's pension plan. Beneï¬쳌ts are based on accruals through December 31, 2005 for speciï¬쳌ed salary and years of service classiï¬쳌cations, and assume beneï¬쳌ts to be paid in the form of a single life annuity. The amounts have not been reduced by the Social Security offset referred to above. Pension Plan Table Average Annual Compensation(1) Years of Service(2) 10 15 20 25 30 35 $150,000 ..................... $25,005 $37,508 $50,010 $ 62,513 $ 75,015 $ 87,518 $175,000 ..................... 29,173 43,759 58,345 72,931 87,518 102,104 $200,000 ..................... 33,340 50,010 66,680 83,350 100,020 116,690 $225,000 ..................... 37,508 56,261 75,015 93,769 112,523 131,276 $235,000 ..................... 39,175 58,762 78,349 97,936 117,524 137,111 $250,000 ..................... 41,675 62,513 83,350 104,188 125,025 145,863 (1) Commencing January 1, 1994, for the purpose of determining beneï¬쳌t accruals and beneï¬쳌t limitations under the pension plan, a participant's compensation is deemed to be limited to $150,000 indexed for inflation in future years (the ‘‘OBRA '93 Limitation''). As a result of the OBRA '93 Limitation, the covered compensation under the Company's pension plan for the foregoing individuals for the years 1994 through 1996 was limited to $150,000, then increased to $160,000 for 1997, 1998 and 1999, to $170,000 for 2000 and 2001, to $200,000 for 2002 and 2003, to $205,000 for 2004, to $210,000 for 2005 and to $220,000 for 2006. (2) Mr. Fast joined the Company in 1999 and has six years of service credit under the Company's pension plan. Mr. duPont joined the Company in 1996 and has ten years of service credit under the Company's pension plan. Mr. Vipond joined the Company in 2005 and has one year of service credit under the Company's pension plan. Ms. Kopczick has 26 years of service credit under the Company's pension plan, including service with a predecessor company. Mr. Noonan joined the Company in 1996 and has ten years of service credit under the Company's pension plan. Mr. Mitchell joined the Company in 2004 and has two years of service credit under the Company's pension plan. The actual retirement beneï¬쳌t at normal retirement date payable pursuant to Section 235(a) of the Tax Equity and Fiscal Responsibility Act of 1982 (and subsequent to 1986 at the age at which unreduced Social Security beneï¬쳌ts may commence pursuant to the Tax Reform Act of 1986) may not exceed the lesser of $175,000 or 100% of the ofï¬쳌cer's average compensation during his highest three consecutive calendar years of earnings (the ‘‘Tax Act Limitation''). The Tax Act Limitation may be adjusted annually for changes in the cost of living. The dollar limit is subject to further reduction to the extent that a participant has fewer than 10 years of service with the Company or 10 years of participation in the deï¬쳌ned beneï¬쳌t plan. 19
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