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HBI » Topics » 4.4 Payment of Benefits

These excerpts taken from the HBI 8-K filed Sep 5, 2006.

Payment of Benefits

5.1 Time and Method of Payment Under the Deferral Program.

 

  (a) Distribution Options. Payment of a Participant’s Deferral made under the Deferral Program shall be made in a single lump sum or in substantially equal annual installments over a period not exceeding ten years as elected by the Participant in the Deferral Election. If a Participant fails to elect a method of payment, such payment shall be payable in a single lump sum.

 

  (b) Time When Payments Begin. If a Participant’s Deferral Account is payable in a single lump sum, the payment shall be made as soon as practicable following the Distribution Date but not later than 30 days following the Distribution Date. If a Participant’s Deferral is payable in installment payments, then the Participant’s Deferral shall be paid in substantially equal annual installments commencing as soon as practicable following the Distribution Date. Subsequent installment payments shall be paid each January 1st over the period as elected by the Participant in the Deferral Election. Notwithstanding any other provision of the Plan to the contrary, distributions to be made to a Top-50 Employee upon his

retirement or other termination of employment shall not be made before the date that is six (6) months after the Top-50 Employee’s retirement or other separation from service.

 

  (c) Changing Distribution Method. A Participant may make a one-time election after the original Deferral Election to change the method of payment elected by the Participant; provided, that such election shall be treated as a Re-Deferral Election. Installment payments shall be treated as a single payment for purposes of making a Re-Deferral Election, and the first scheduled installment will be the measuring standard for purposes of determining whether a Re-Deferral Election complies with the requirements of Section 3.2 above, specifically, no Re-Deferral Election shall be effective unless (i) the Committee receives the election not later than 12 months prior to the Distribution Date to be changed, and (ii) the new Distribution Date is not earlier than the fifth anniversary of the prior Distribution Date. The Committee, in its complete discretion, may modify the general rules set forth above as permitted by IRS Notice 2005-1 and regulations issued under Code Section 409A.

 

  (d) Special Rule for Small Amounts. Notwithstanding any election by the Participant regarding the timing and manner of payment of his Deferrals, upon a Participant’s retirement or other termination of employment, if the total value of the Participant’s Deferral Account (excluding Grandfathered Deferrals described in Supplement I to this Plan, and determined as of the Valuation Date coinciding with or immediately following the Participant’s termination of employment) is less than $25,000, then the Participant’s Deferral Account shall be distributed in a lump sum as soon as practicable following the Participant’s retirement or other termination of employment. Pursuant to Section 5.1(b) above, a six month delay may be required for any such distribution to a Top-50 Employee.

5.2 Payment Upon Total Disability. In the event a Participant becomes totally disabled before all amounts credited to his Deferral Account have been paid, payment of the Participant’s Deferral Account shall be made in a lump sum as soon as practicable after the Participant is determined to be totally disabled. A Participant will be considered to be totally disabled if the Participant is determined to be (i) unable to engage in any substantially gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering employees of the Participant’s Employer.

5.3 Payment Upon Death of a Participant. In the event a Participant dies before all amounts credited to his Deferral Account have been paid, payment of the Participant’s Deferral Account shall be made to the Participant’s Beneficiary in a single lump sum payment as soon as practicable after the Participant’s death.

5.4 Form of Payment. The payment of that portion of a Deferral deemed to be invested in the Interest Account shall be made in cash. The distribution of that portion of a Deferral deemed to be invested in the Stock Equivalent Account less applicable withholding shall be distributed in whole shares of common stock with fractional shares credited to federal income taxes withheld.

5.5 Unforeseeable Financial Emergency. If the Committee or its designee determines that a Participant has incurred an Unforeseeable Financial Emergency, the Participant may withdraw in cash and/or stock the portion of the balance of his Deferral Account needed to satisfy the Unforeseeable Financial Emergency, to the extent that the Unforeseeable Financial Emergency may not be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of the Participant’s assets, to the extent the liquidation of such assets would not itself cause severe financial hardship. A withdrawal on account of an Unforeseeable Financial Emergency shall be paid as soon as possible following the date on which the withdrawal is approved.

5.6 Withholding of Taxes. The Company shall withhold any applicable Federal, state or local income tax from payments due under the Plan. The Company may also be required to withhold Social Security taxes, including the Medicare portion of such taxes, and any other employment taxes as necessary to comply with applicable laws.

2.4 Payment of Benefits

Subject to subsection 2.8, upon receipt by the Committee of due proof and Conclusive Medical Evidence, in accordance with subsection 2.7, that a Covered Employee has become Totally Disabled, as defined in subsection 2.6, as a result of sickness or bodily injury, benefits will be payable in the amount determined in accordance with subsection 2.9. Such payment will commence with the first day following the expiration of the Elimination Period. Benefits will be payable for the period during which Total Disability continues following the Elimination Period and during which the Covered Employee is under the continuous care of a Physician and during which a defined treatment plan specifically appropriate for the disability is in progress. Benefits

 

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shall terminate with the payment for the month, or part of the month, in which occurs the earlier of (i) the date the Covered Employee ceases to be Totally Disabled, as defined in subsection 2.6; or (ii) the applicable date described in (a) or (b) next below:

 

  (a)     if such disability first occurs at or before the Covered Employee’s attainment of age sixty (60) years, the date he or she attains age sixty-five (65) years; or

 

  (b)     if such disability first occurs after the Covered Employee’s attainment of age sixty (60) years, upon the fifth anniversary of the date he or she first qualified for monthly disability benefits.

If a Covered Employee fails or refuses to submit to a medical examination requested by the Committee, his or her Benefit payments shall be suspended, and payment of Benefits shall resume only when the Covered Employee submits to such medical examination and then only if such medical examination results in a finding of Conclusive Medical Evidence and satisfactory to the Committee that the Covered Employee continues to be Totally Disabled, as defined in subsection 2.6. Benefits may be denied, suspended or withheld if Plan assets are not sufficient.

4.4 Payment of Benefits

A Participant’s SERP Benefit shall, subject to the further provisions of this Plan, be payable to or on account of the Participant as follows:

 

  (a) RSSERP Benefit.

 

  (i) If the value of the Participant’s vested RSSERP Benefit (determined without regard to any Residual Credit) is less than $50,000 on the Participant’s Determination Date, then any 2006 Special Election made by the Participant shall be void, and the Participant’s RSSERP Benefit shall be paid in a lump sum as soon as administratively practicable following the Participant’s Determination Date, but in no event later than the end of the calendar year after the calendar year of the Participant’s Determination Date. Any Residual Credit to the Participant’s Account after his or her Determination Date shall be paid in a lump sum as soon as practicable after such credit is made, but in no event later than the end of the calendar year after the calendar year of the Participant’s Determination Date. Notwithstanding the foregoing, in no event shall distribution to a Specified Employee be made earlier than 6 months following his or her Separation from Service.

 

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  (ii) If the value of the Participant’s vested RSSERP Benefit (determined without regard to any Residual Credit) is $50,000 or more on the Participant’s Determination Date, the Participant’s RSSERP Benefit will be paid as follows:

 

  (A) Subject to Subparagraph (B) below, the Participant’s RSSERP Benefit shall be paid in a lump sum on or as soon as practicable after the Default Payment Date, but in no event later than the end of the calendar year after the calendar year of the Participant’s Determination Date.

 

  (B) In lieu of the payment method described in Subparagraph (A), during the Election Period, the Participant may elect to receive his or her RSSERP Benefit in one of the following forms, in accordance with rules and procedures established by the Committee:

 

  (1) In a lump sum paid as of the first business day of the calendar year beginning 5 years after the Default Payment Date (or any calendar year thereafter); or

 

  (2) In annual installments over a period of 5 or 10 years commencing as of the first business day of the calendar year beginning 5 years after the Default Payment Date (or any calendar year thereafter).

 

  (C) If the Participant made a valid 2006 Special Election and does not make an election described in Subparagraph (B), his or her RSSERP Benefit shall be paid in accordance with such 2006 Special Election commencing as soon as administratively practicable following the Participant’s Default Payment Date.

 

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       If a proper election is not made during the Election Period, the Participant shall be deemed to have elected a distribution under Subparagraph (A).

 

  (b) Pension SERP Benefit.

 

  (i) If the Present Value of the Participant’s vested Pension SERP Benefit is less than $50,000 on the Participant’s Determination Date or if the Participant does not qualify as a Retired Participant or a Totally Disabled Participant, then any 2006 Special Election made by the Participant shall be void, and the Present Value of the Participant’s Pension SERP Benefit shall be paid in a lump sum as soon as administratively practicable following the Participant’s Determination Date, but in no event later than the end of the calendar year after the calendar year of the Participant’s Determination Date. Notwithstanding the foregoing, in no event shall distribution to a Specified Employee be made earlier than 6 months following his or her Separation from Service. If the Participant’s distribution is suspended due to the waiting period imposed by operation of Code Section 409A and the related terms of the Plan, it shall be accumulated with interest at the Pension SERP Interest Rate.

 

  (ii) If the Present Value of the vested portion of the Participant’s Pension SERP Benefit is $50,000 or more on the Participant’s Determination Date and the Participant qualifies as either a Retired Participant or a Totally Disabled Participant, then the Participant’s Pension SERP Benefit will be paid as follows:

 

  (A) Subject to Subparagraph (B) below, if the Participant did not make a valid 2006 Special Election, the Participant’s Pension SERP Benefit shall be paid the Present Value of his or her Pension SERP Benefit shall be paid in a lump sum as soon as administratively practicable following the Default Payment Date but in no event later than the end of the calendar year after the calendar year of the Participant’s Determination Date.

 

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  (B) In lieu of the payment method and timing described in Subparagraph (A), and subject to the timing restrictions in Subparagraph (C), during the Election Period, the Participant may elect to receive his or her Pension SERP Benefit in one of the following forms, in accordance with rules and procedures established by the Committee:

 

  (1) The Present Value paid in a lump sum; or

 

  (2) The Present Value paid in monthly installments over a period of 5 or 10 years (as elected).

 

  (C) If a Participant makes an election as described in Subparagraph (B) during the Election Period, payments will commence as follows:

 

  (1) As elected by the Participant, as of the first day of any month following the date that is 5 years after the Default Payment Date.

 

  (2) The amount of the Participant’s Pension SERP Benefit will be determined as of the date the Participant retires and will be accumulated with interest at the Pension SERP Interest Rate to the payment date.

 

  (D) If the Participant made a valid 2006 Special Election and does not make an election described in Subparagraph (B), his or her Pension SERP Benefit shall be paid in accordance with such 2006 Special Election.

 

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EXCERPTS ON THIS PAGE:

8-K (3 sections)
Sep 5, 2006

RELATED TOPICS for HBI:

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