UNUM EMPLOYEES RETIREMENT SAVINGS PLAN
The UNUM Employees Retirement Savings Plan (formerly,
the UNUM Employees Retirement Savings Plan and Trust),
originally adopted effective January 1, 1984, was last
amended and restated effective generally January 1, 1994.
The Plan is hereby further amended and restated effective
generally January 1, 1997. The Plan is intended to qualify
as a profit sharing plan under Section 401(a) and Section
401(k) of the Code and to comply with the applicable
provisions of the Code and ERISA, as well as the regulations
and rulings issued thereunder.
ARTICLE I
DEFINITIONS
The following terms, when used herein, shall have the
meanings as hereinafter set forth, unless the context clearly
indicates otherwise:
1.1 "Account" shall mean the account established and
maintained under the Plan and Trust for each Participant
which shall reflect the Participant's share of the Trust
Fund; provided such Account shall, in accordance with Section
8.1, reflect separately the Participant's (a) Elective
Contributions, (b) Matching Contributions, (c) Discretionary
Contributions, (d) Rollover Contributions, (e) any direct
transfer of plan assets made on behalf of a Participant in
accordance with Section 4.1 or Article XVI and (f) for Plan
Years prior to January 1, 1989, his or her after-tax
contributions, if any, and Employer matching contributions
made thereon, if any.
1.2 "Actual Deferral Percentage" for any Plan Year
shall mean the average of the ratios, calculated separately
for each Eligible Employee, of the amount of Elective
Contributions made on behalf of such Employee for such year
and, at the election of an Employer, the amount of any
Matching Contributions and Qualified Nonelective
Contributions made on behalf of such Employee for such year
to such Employee's compensation for such year (whether or not
the Employee was a Participant for the entire Plan Year).
For purposes of this Section, "compensation" shall mean
compensation as defined in Section 7.5 and may, at the
election of an Employer, include amounts excludable from
gross income under Sections 125, 402(e)(3) and 402(h)(1)(B)
of the Code.
1.3 "Affiliated Employer" shall mean any corporation
which is a member of a controlled group of corporations (as
defined in Section 414(b) of the Code) that includes an
Employer; or any trade or business, whether or not
incorporated which is under common control (as defined in
Section 414(c) of the Code) with an Employer; or any service
organization which is a member of an affiliated service group
(as defined in Section 414(m) of the Code) that includes an
Employer; and any successor to any of the foregoing.
1.4 "Annual Addition" shall mean the sum of the
Employer Contributions, Employee contributions and
forfeitures, if any, allocated to the Account of a
Participant for a Limitation Year and the amounts described
in Section 7.6.
1.5 "Beneficiary" shall mean the person or persons
designated by a Participant as provided in Section 9.3 to
receive any benefits payable under the Plan following the
death of the Participant.
1.6 "Benefits Committee" shall mean the committee
appointed in accordance with Section 11.1.
1.7 "Board" shall mean the Board of Directors of
UNUM Corporation.
1.8 "Break in Service" shall mean an Eligibility
Computation Period during which an Employee has not completed
more than five hundred (500) Hours of Service. Effective
with respect to reemployments initiated on or after December
12, 1994, an Employee who is reemployed under USERRA shall be
treated as not having incurred a Break in Service by reason
of his or her period of qualified military service (as
defined in Section 3.9).
1.9 "Code" shall mean the Internal Revenue Code of
1986, as from time to time amended.
1.10 "Compensation" shall mean, with respect to any
Plan Year, the total compensation paid by an Employer to the
Employee (other than an Employee on the Branch or Individual
Compensation Plan) for services rendered while a Participant
that constitutes wages as defined in Section 3401(a) of the
Code and all other payments made by an Employer to an
Employee for services rendered while a Participant for which
the Employer is required to furnish the Employee a written
statement under Sections 6041(d), 6051(a)(3) and 6052 of the
Code without regard to any rules under Section 3401(a) of the
Code that limit the remuneration included in wages based on
the nature or location of the employment or services
performed. "Compensation" shall mean, with respect to an
Employee on the Branch or Individual Compensation Plan,
Compensation as defined in this Section 1.10, including draw
and sales bonus payments received while a Participant, but
excluding amounts held in an income stabilization account and
amounts paid by an Employer as a result of sales contest
participation. Notwithstanding the foregoing to the
contrary, Compensation (i) shall include elective
contributions made by an Employer on behalf of an Employee
that are not includable in income under Sections 125 or
402(e)(3) of the Code; and (ii) shall be reduced by
extended pay, overtime pay, varicomp, actuarial bonus
payments, stock options, prizes, awards, field transition
plan payouts, termination pay, commission fees, consultants
fees, other irregular payments (other than incentive plan pay,
representative's bonus, manager bonus, regional manager
bonus, DIC bonus, career bonus and reinsurance representative
bonus), reimbursements or other expense allowances, fringe
benefits (cash and non-cash), moving expenses, deferred
compensation and welfare benefits.
Notwithstanding the foregoing to the contrary, effective
January 1, 1994, the annual Compensation of any Employee in
excess of One Hundred Fifty Thousand Dollars ($150,000.00)
(or such higher amount as the Secretary may prescribe) shall
not be taken into account under the Plan. In the event
Compensation is determined based on a period of time which
contains fewer than twelve (12) calendar months, the annual
Compensation limit shall be an amount equal to the annual
Compensation limit for the calendar year in which the period
begins multiplied by a fraction, the numerator of which is
the number of full calendar months in the period and the
denominator of which is twelve (12). If Compensation for a
prior Plan Year is taken into account for any Plan Year, such
Compensation shall be subject to the annual Compensation
limit in effect for such prior Plan Year.
The average percentage of total compensation (as defined
in Regulation Section 1.414(s)-1(d)(3)(ii)) included in the
Compensation of Highly Compensated Employees as a group shall
not exceed by more than a de minimis amount the average
percentage of total compensation included in the Compensation
of Non-Highly Compensated Employees as a group. This
determination shall be made in accordance with the provisions
of Regulation Section 1.414(s)-1(d)(3) which is incorporated
herein by reference.
1.11 "Contribution Percentage" shall mean for any
Plan Year the average of the ratios, calculated separately
for each Eligible Employee, of the amount of Matching
Contributions (excluding the Matching Contributions, if any,
taken into account under Section 1.2) made on behalf of such
Employee for such year and, at the election of an Employer,
the amount of Elective Contributions and any Qualified
Nonelective Contributions made on behalf of such Employee to
such Employee's compensation for such year. For purposes of
this Section, "compensation" shall mean compensation as
defined in Section 7.5 and may, at the election of an
Employer, include amounts excludable from gross income under
Sections 125, 402(e)(3) and 402(h)(1)(B) of the Code.
Notwithstanding the foregoing provisions of this Section or
Section 1.2 to the contrary, no Elective Contributions may
be taken into account in calculating the Contribution
Percentage for any Eligible Employee unless the requirement
of Section 5.3(a) is satisfied both with and without the
exclusion of such Elective Contributions in calculating the
Employee's Actual Deferral Percentage.
1.12 "Deferral Election" shall mean an election made
by an Eligible Employee in accordance with Section 5.1 or
3.9.
1.13 "Determination Date" shall mean, with respect
to any Plan Year, the last day of the preceding year or in
the case of the first Plan Year of the Plan, the last day of
such Plan Year.
1.14 "Disabled" or "Disability" shall mean a
Participant's inability, due to injury or sickness, to
perform each of the material duties of his or her regular
occupation.
1.15 "Discretionary Contribution" shall mean a
contribution made by an Employer in accordance with Section
3.1(c).
1.16 "Effective Date" of this amendment and
restatement shall mean, except as otherwise provided herein,
January 1, 1997.
1.17 "Elective Contribution" shall mean a
contribution made by an Employer in accordance with Section
3.1(a) on behalf of a Participant pursuant to a Deferral
Election.
1.18 "Eligibility Computation Period" shall mean the
initial twelve (12) consecutive month period beginning with
the date on which the Employee first performs an Hour of
Service and each successive twelve (12) consecutive month
period beginning on the anniversary thereof. In measuring
completion of a Year of Participation Service upon an
Employee's return after a Break in Service, the term
"Eligibility Computation Period" shall mean the initial
twelve (12) consecutive month period beginning on the
Employee's reemployment commencement date and, where
necessary, each successive twelve (12) consecutive month
period beginning on the anniversary thereof.
1.19 "Eligible Employee" shall mean an Employee who
is eligible to participate in the Plan as provided in Section
2.1.
1.20 "Employee" shall mean any individual employed
by an Employer. A United States citizen or resident who is
employed by a foreign Affiliated Employer (as defined in
Section 3121(l)(8) of the Code) of an Employer shall be
treated as an Employee if:
(a) the Employer has entered into an agreement
under Section 3121(l) of the Code that applies to such
Affiliated Employer; and
(b) contributions under a funded plan of
deferred compensation (whether or not described in Section
401(a) or 403(a) of the Code) are not provided by any other
person with respect to the remuneration paid to such
individual by the foreign Affiliated Employer.
A United States citizen or resident who is employed by a
domestic subsidiary (as defined in Section 407(a)(2)(A) of
the Code) of an Employer shall be treated as an Employee if
contributions under a funded plan of deferred compensation
(whether or not described in Section 401(a) or 403(a) of the
Code) are not provided by any other person with respect to
the remuneration paid to such individual by the domestic
subsidiary. Notwithstanding the foregoing provisions of this
Section to the contrary, the term "Employee" shall exclude
pool temporary employees, Leased Employees, any individual
compensated exclusively on a commission basis, effective
January 1, 1990, any individual who is an employee under the
Deferred Profit Sharing Plan and the Registered Retirement
Savings Plan sponsored by UNUM Life Insurance Company of
America for its Canadian resident citizen employees, and
employees of Colonial Companies, Inc. (or one of its
subsidiaries) who are entitled to receive any form of
vested comissions as defined by Colonial Companies, Inc.
(except regional directors).
1.21 "Employer" shall mean UNUM Corporation and any
Affiliated Employer that adopts the Plan with the consent of
the Board. If an Employer is a member of a group of
employers which constitutes a controlled group of
corporations (as defined in Section 414(b) of the Code),
which constitutes trades or businesses (whether or not
incorporated) which are under common control (as defined in
Section 414(c) of the Code), or which constitutes an
affiliated service group (as defined in Section 414(m) of the
Code and modified in Section 414(o) of the Code), all such
employers shall be considered a single employer as required
by Sections 414(b), 414(c), 414(m) and 414(o) of the Code.
For purposes of applying the limitations of Article VII, the
Section 414(b) definition of a controlled group of
corporations and the Section 414(c) definition of trades or
businesses under common control shall be modified as provided
in Section 415(h) of the Code.
1.22 "Employer Contribution" shall mean any Elective
Contribution, Matching Contribution, Discretionary
Contribution, or Qualified Nonelective Contribution made in
accordance with the terms of the Plan.
1.23 "Employment Commencement Date" shall mean the
date on which an Employee first performs an Hour of Service
for an Employer.
1.24 "ERISA" shall mean the Employee Retirement
Income Security Act of 1974, as it may be amended from time
to time, and any regulations issued pursuant thereto, as such
Act or such regulations affect this Plan.
1.25 "Excess Contributions" shall mean for any Plan
Year the excess of
(a) the aggregate amount of Employer
Contributions taken into account under Section 3.7(a) that
are paid to the Trust on behalf of Highly Compensated
Eligible Employees for such year, over
(b) the maximum amount of such contributions
permitted under Section 3.7(a).
1.26 "Excess Deferral" shall mean Elective
Contributions in excess of the limitation of Section 6.1.
1.27 "Excess Elective Contributions" shall mean for
any Plan Year the excess of
(a) the aggregate amount of Employer
Contributions taken into account under Section 5.3 that are
paid to the Trust on behalf of Highly Compensated Eligible
Employees for such year, over
(b) the maximum amount of such contributions
permitted under Section 5.3.
1.28 "Five Percent Owner" shall mean any person who
owns (or is considered as owning within the meaning of
Section 318 of the Code) more than five percent (5%) of the
outstanding stock of an Employer or stock possessing more
than five percent (5%) of the total combined voting power of
all stock of an Employer.
1.29 "Former Participant" shall mean any individual
who ceases to be employed by an Employer or an Affiliated
Employer and is no longer employed by any of them, and who
has not received full distribution of his or her Account.
1.30 "Highly Compensated Eligible Employee" shall
mean an Employee who is eligible to participate in the Plan
as provided in Section 2.1 and who is a Highly Compensated
Employee.
1.31 "Highly Compensated Employee" shall mean any
Employee who:
(a) was a Five Percent Owner at any time during
the Plan Year or the preceding Plan Year; or
(b) had compensation from an Employer for the
preceding Plan Year in excess of Eighty Thousand Dollars
($80,000.00) or such higher amount in effect under Section
414(q) of the Code and was in the Top-Paid Group for such
year.
A former Employee shall be treated as a Highly
Compensated Employee if he or she was a Highly Compensated
Employee when such Employee separated from service or at any
time after attaining age fifty-five (55). For purposes of
this Section, "compensation" shall have the meaning given
such term under Section 415(c)(3) of the Code, but without
regard to the exclusions provided under Sections 125,
402(e)(3) and 402(h)(1)(B), and, in the case of employer
contributions made pursuant to a salary reduction agreement,
without regard to Section 403(b) of the Code.
The dollar amount in subsection (b) of this Section
shall be increased at the same time and in the same manner as
under Section 415(d) of the Code, except that the base period
shall be the calendar quarter ending September 30, 1996.
The determination of who is a Highly Compensated
Employee, including the determinations of the number and
identity of Employees in the Top-Paid Group, shall be made
in accordance with Section 414(q) of the Code and the
regulations thereunder.
The provisions set forth in this Section shall be
effective for Plan Years beginning after December 31, 1996;
provided, however, in determining whether an Employee is a
Highly Compensated Employee for the Plan Year beginning
January 1, 1997, such provisions shall be treated as having
been in effect for the Plan Year beginning January 1, 1996.
1.32 "Hour of Service" shall mean:
(a) Each hour for which an Employee is paid, or
entitled to payment, for the performance of duties for an
Affiliated Employer. Such hours shall be credited to the
computation period in which such duties are performed.
(b) Each hour for which an Employee is paid, or
entitled to payment, directly or indirectly, by an Affiliated
Employer on account of a period of time during which no
duties were performed (irrespective of whether the employment
relationship has terminated) due to vacation, holiday,
illness, incapacity (including Disability), layoff, jury
duty, military duty, or leave of absence. Notwithstanding
the preceding sentence, (i) no more than (five hundred and
one (501) Hours of Service shall be credited under this
subsection (b) to an Employee on account of any single
continuous period during which he or she performs no duties
(whether or not such period occurs in a single computation
period), (ii) Hours of Service shall not be credited if
payment is made or due under a plan maintained solely for the
purpose of complying with applicable workers' compensation,
unemployment compensation, or disability insurance laws, and
(iii) Hours of Service shall not be credited if payment is
made solely to reimburse an Employee for medical or medically
related expenses incurred by such Employee.
(c) Each hour for which back pay, irrespective
of mitigation of damages, is either awarded or agreed to by
an Affiliated Employer. The same hours shall not be credited
both under subsection (a) or (b) and under this subsection
(c). These hours shall be credited to the Employee for the
computation period or periods to which the award or agreement
pertains rather than the computation period in which the
award, agreement or payment is made.
Each Employee whose Compensation is not determined on an
hourly basis shall be credited with forty-five (45) Hours of
Service for each week such Employee completes at least one
(1) Hour of Service.
The number of Hours of Service to be credited to each
Employee shall be determined in accordance with the
provisions of 29 C.F.R. Sections 2530.200b-2(b), 2(c) and
2530.200b-3(e)(4) which are incorporated herein by reference.
Each Employee who is absent from work for any period (i)
by reason of the pregnancy of the Employee, (ii) by reason of
the birth of a child of the Employee, (iii) by reason of the
placement of a child with the Employee in connection with the
adoption of the child by the Employee, (iv) for purposes of
caring for such child for a period beginning immediately
following such birth or placement, or (v) by reason of an
approved leave of absence pursuant to a nondiscriminatory
policy established by his or her Employer shall, solely for
purposes of determining whether such Employee has incurred a
Break in Service, be credited with the Hours of Service which
would normally have been credited to such Employee but for
such absence or, if such Hours of Service cannot be
determined, eight (8) Hours of Service for each day of such
absence; provided the total number of Hours of Service
credited in accordance with this paragraph on account of such
absence shall not exceed five hundred and one (501). The
Hours of Service described in this paragraph shall be
credited in the computation period in which the absence
begins, if the Employee would be prevented from incurring a
Break in Service in such period solely because the Employee
is credited with such Hours of Service or, in all other
cases, in the immediately following computation period.
Each period of qualified military service (as defined in
Section 3.9) served by an Employee shall be deemed, upon
reemployment under USERRA, to constitute service with his or
her Employer for purposes of determining the
nonforfeitability of the contributions made on behalf of such
individual under the Plan.
1.33 "Investment Fund" shall mean an investment fund
described in Section 13.3.
1.34 "Investment Manager" shall mean any fiduciary,
other than the Trustee acting in such capacity or a named
fiduciary (as defined in Section 402(a)(2) of ERISA):
(a) who is appointed by the Board (or any
person or persons to whom the Board delegates its authority)
to manage, acquire, or dispose of all or any portion of the
Trust Fund;
(b) who is (i) registered as an investment
adviser under the Investment Advisers Act of 1940; (ii) is a
bank, as defined in said Act; or (iii) is an insurance
company qualified to manage, acquire or dispose of all or any
portion of the Trust Fund under the laws of more than one
State; and
(c) who has acknowledged, in writing, that he
or she is a fiduciary with respect to the Plan.
1.35 "Key Employee" shall mean any Employee or
former Employee (and the Beneficiary of such Employee) who at
any time during the Plan Year or the four (4) preceding Plan
Years is:
(a) an officer of an Employer having annual
compensation (within the meaning of Section 7.5) from such
Employer greater than fifty percent (50%) of the amount in
effect under Section 415(b)(1)(A) of the Code for any Plan
Year (but in no event shall more than fifty (50) Employees
or, if less, the greater of three (3) or ten percent (10%) of
all Employees be treated as Key Employees by reason of being
officers);
(b) a person owning (or considered as owning
within the meaning of Section 318 of the Code) more than a
one-half percent (%) interest, as well as one of the ten
largest interests in an Employer, and having annual
compensation (within the meaning of Section 7.5) from such
Employer of more than the limitation in effect under Section
415(c)(1)(A) of the Code for any Plan Year;
(c) a Five Percent Owner; or
(d) a person who has annual compensation (as
defined in Section 7.5) from an Employer of more than One
Hundred Fifty Thousand Dollars ($150,000.00) and who would be
described in subsection (c) above if one percent (1%) were
substituted for five percent (5%).
The determination of who is a Key Employee shall be made
in accordance with Section 416(i)(1) of the Code and the
regulations thereunder, the provisions of which are
incorporated herein by reference. For purposes of
determining annual compensation under this Section, amounts
excluded from gross income under Sections 125, 402(e)(3),
402(h)(1)(B) and 403(b) of the Code shall be taken into
account.
1.36 "Leased Employee" shall mean any person who is
not an Employee and who provides services to an Employer if:
(a) such services are provided pursuant to an
agreement between the Employer and any leasing organization;
(b) such person has performed such services for
the Employer (or for the Employer and any related person
determined in accordance with Section 414(n)(6) of the Code)
on a substantially full-time basis for a period of at least
one (1) year; and
(c) such services are performed under the
primary direction or control by the Employer.
Contributions or benefits provided to a Leased Employee
by the leasing organization which are attributable to
services performed for an Employer shall be treated as
provided by the Employer. A Leased Employee shall not be
considered an Employee if:
(d) he or she is covered by a money purchase
pension plan providing:
(i) an employer contribution rate (without
regard to Section 401(l) of the Code) of at least ten percent
(10%) of compensation, as defined in Section 415(c)(3) of the
Code, but including amounts excludable from gross income
under Sections 125, 402(a)(8), 402(h)(1)(B) or 403(b) of the
Code;
(ii) immediate participation; and
(iii) full and immediate vesting; and
(e) Leased Employees do not constitute more
than twenty percent (20%) of the Employer's nonhighly
compensated work force.
1.37 "Limitation Year" shall mean a Plan Year.
1.38 "Matching Contribution" shall mean a
contribution made by an Employer in accordance with Section
3.1(b) on behalf of a Participant who has made a Deferral
Election.
1.39 "Named Fiduciary" shall mean with respect to
the operation and administration of the Plan, the Benefits
Committee and the Appellate Committee, and with respect to
the management of the Trust Fund, the Trustee.
1.40 "Non-Key Employee" shall mean any Employee who
is not a Key Employee.
1.41 "Normal Retirement Age" shall mean age sixty-
five (65).
1.42 "Participant" shall mean an Eligible Employee
who elects to participate in the Plan in accordance with
Section 5.1 or 3.9 and each other Eligible Employee on whose
behalf an Employer makes a Discretionary Contribution.
1.43 "Participant-Directed Brokerage Account" shall
mean a brokerage account established and maintained under the
Trust for the benefit of a Participant as provided in Section
13.7.
1.44 "Permissive Aggregation Group" shall mean each
plan of an Employer which is included in a Required
Aggregation Group and any other plan or plans of such
Employer which, when considered as a group with the Required
Aggregation Group, continues to satisfy the requirements of
Sections 401(a)(4) and 410 of the Code.
1.45 "Plan" shall mean the UNUM Employees Retirement
Savings Plan.
1.46 "Plan Year" shall mean the calendar year.
1.47 "Qualified Nonelective Contribution" shall mean
a contribution, other than an Elective Contribution or
Matching Contribution, made by an Employer in accordance with
Section 3.1(d) which (i) is treated as an Elective
Contribution, (ii) is nonforfeitable when made, (iii) is
distributable only in accordance with the provisions of
Article IX that are applicable to Elective Contributions, and
(iv) satisfies the requirements of Section 401(a)(4) of the
Code.
1.48 "Required Aggregation Group" shall mean each
plan of an Employer in which a Key Employee is a participant
and each other plan of such Employer which enables any plan
of the Employer in which a Key Employee is a participant to
meet the requirements of Sections 401(a)(4) or 410 of the
Code.
1.49 "Rollover Contributions" shall mean the cash
contributions made by an Employee in accordance with Section
3.8.
1.50 "Top Heavy" shall mean that as of the
Determination Date:
(a) the Top Heavy Ratio for the Plan exceeds
sixty percent (60%), if the Plan is not included in a
Required Aggregation Group;
(b) the Top Heavy Ratio for the Required
Aggregation Group which includes the Plan exceeds sixty
percent (60%), if the Plan is included in a Required
Aggregation Group, but is not included in a Permissive
Aggregation Group; or
(c) the Top Heavy Ratio for the Permissive
Aggregation Group which includes the Plan exceeds sixty
percent (60%), if the Plan is included in a Permissive
Aggregation Group.
1.51 "Top Heavy Ratio" shall mean:
(a) if the Plan is not included in a Required
Aggregation Group, a fraction, the numerator of which is the
sum of the Account balances of Key Employees under the Plan
and the denominator of which is the sum of the Account
balances of all Participants under the Plan; or
(b) if the Plan is included in a Required
Aggregation Group or a Permissive Aggregation Group, a
fraction, the numerator of which is the sum of the account
balances of Key Employees under all defined contribution
plans included in such group and the present value of the
accrued benefits of Key Employees under all defined benefit
plans included in such group and the denominator of which is
the sum of the account balances of all Participants under all
defined contribution plans included in such group and the
present values of the accrued benefits of all Participants
under all defined benefit plans included in such group.
The account balances, as well as the present values of
accrued benefits, shall be determined, as of the Valuation
Date coinciding with the Determination Date, in accordance
with the provisions of Section 416(g) of the Code and the
regulations thereunder which are incorporated herein by
reference. In determining the Top Heavy Ratio for any Plan
Year, if an individual is a Non-Key Employee with respect to
the Plan or with respect to any other plan which is included
in the same Required Aggregation Group or Permissive
Aggregation Group as the Plan, but was a Key Employee with
respect to the Plan or such other plan for any prior Plan
Year, any account balance or accrued benefit for such
individual shall not be taken into account. In addition, any
account balance or accrued benefit of any individual who has
not performed services for the Employer at any time during
the five (5) year period ending on the Determination Date
shall not be taken into account.
1.52 "Top-Paid Group" shall mean for any Plan Year
the group of Employees consisting of the top twenty percent
(20%) of Employees based on compensation (as defined in
Section 1.31) received from an Employer during such year.
For purposes of determining the number of Employees in the
Top-Paid Group, the following Employees shall be excluded:
(a) Employees who have not completed six (6)
months of service;
(b) Employees who normally work less than
seventeen and one-half (17.5) hours per week;
(c) Employees who normally work less than six
(6) months during any year;
(d) Employees who have not attained age twenty-
one (21);
(e) Employees who are nonresident aliens and
who receive no earned income (within the meaning of Section
911(d)(2) of the Code) from the Employer that constitutes
income from sources within the United States (within the
meaning of Section 861(a) (3) of the Code).
An Employer may elect to apply subsections (a), (b), (c) or
(d) by substituting a shorter period of service, a smaller
number or hours or months, or a lower age than that specified
in each subsection.
1.53 "Trust" shall mean the Trust Agreement under
the UNUM Employees Retirement Savings Plan and Trust and the
Duncanson & Holt, Inc. Employee Profit Participation and
Savings Plan, as amended from time to time.
1.54 "Trustee" shall mean the person or persons
appointed by the Board (or any person or persons to whom the
Board delegates its authority) to serve as trustee(s) of the
Trust.
1.55 "Trust Fund" shall mean the property held in
Trust for the benefit of the Participants and their
Beneficiaries.
1.56 "USERRA" shall mean the Uniformed Services
Employment and Reemployment Rights Act of 1994, 38 U.S.C.
Section 4301 ET SEQ., as in effect on December 12, 1994
(without regard to any subsequent amendment).
1.57 "Valuation Date" shall mean, effective December
4, 1995, any business day.
1.58 "Year of Participation Service" shall mean an
Eligibility Computation Period during which the Employee has
completed one thousand (1,000) Hours of Service.
ARTICLE II
PARTICIPATION
2.1 DATE OF PARTICIPATION. Except as hereinafter
provided, each Employee who is in the employ of an Employer
on the Effective Date and who meets the requirement of
Section 2.2 on or before such date shall be eligible to
participate in the Plan as of the Effective Date. Each other
Employee who thereafter meets the requirement of Section 2.2
shall be eligible to participate in the Plan as of the first
day of the first payroll period coinciding with or next
following the date on which the Employee meets said
requirement, provided he or she is still in the employ of an
Employer on said date. Notwithstanding the foregoing
provisions to the contrary, each Employee who was a
participant in the Duncanson & Holt, Inc. Employee Profit
Participation and Savings Plan or the Colonial Companies,
Inc. Security Saver Plan as of December 31, 1996, shall be
eligible to participate in the Plan as of the Effective Date,
provided he or she is still in the employ of an Employer on
the Effective Date.
2.2 PARTICIPATION REQUIREMENT. Each Employee who
has completed one (1) Year of Participation Service shall be
eligible to participate in the Plan.
2.3 REEMPLOYED ELIGIBLE EMPLOYEE. An Eligible
Employee who is reemployed by an Employer shall again be
eligible to participate as of the date he or she completes
one (1) Hour of Service.
2.4 SERVICE WITH AFFILIATED EMPLOYERS. In the event
an employee of an Affiliated Employer that has not adopted
the Plan becomes an Employee of an Affiliated Employer that
has adopted the Plan, he or she shall be eligible to
participate in the Plan effective as of the later of the
following dates:
(a) the first day of the first payroll period
coinciding with or next following the date on which he or she
meets the requirements of Section 2.2, taking into account
all of his or her prior service with an Affiliated Employer;
or
(b) the first day of the first payroll period
coinciding with or next following the date on which he or she
becomes an Employee of an Affiliated Employer that has
adopted the Plan.
A Participant who is transferred to an Affiliated
Employer that has not adopted the Plan shall cease to be
eligible to participate in the Plan effective as of the date
of his or her transfer.
ARTICLE III
CONTRIBUTIONS
3.1 EMPLOYER CONTRIBUTIONS. For each Plan Year,
each Employer shall contribute to the Plan:
(a) the Elective Contributions to be made in
accordance with Section 5.1 or 3.9 on behalf of each
Participant in its employ during such year;
(b) the Matching Contributions, if any, to be
made on behalf of each Participant in its employ during such
year who has made a Deferral Election for such year at the
rate determined by the Board; provided, however, no Matching
Contribution may be made with respect to any Excess Deferral
or Excess Elective Contribution or any Elective Contribution
which is returned to the Participant pursuant to Section
7.4(b);
(c) the Discretionary Contributions, if any, in
such amount as may be determined by the Board; and
(d) The Qualified Nonelective Contributions, if
any, to be made in accordance with Section 3.7 or 5.4.
3.2 TIMING OF EMPLOYER CONTRIBUTIONS. Effective
February 3, 1997, Elective Contributions shall be paid to the
Trust as of the earliest date on which such contributions can
reasonably be segregated from the general assets of the
Participant's Employer; provided in no event shall the date
determined pursuant to this sentence occur later than the
fifteenth (15th) business day of the calendar month following
the calendar month in which such contributions would
otherwise have been payable to the Participant in cash (the
"maximum time period"), unless the Employer extends the
maximum time period as provided in 29 C.F.R. Section 2510.3-
102(d). Matching Contributions and Discretionary
Contributions, if any, with respect to any Plan Year shall be
paid to the Trust at such time or times as may be determined
by an Employer, but not later than the date prescribed by law
for filing its federal income tax return for its taxable year
which ends with or within such Plan Year, including
extensions which have been granted for filing such return.
Qualified Nonelective Contributions, if any, with respect to
any Plan Year shall be paid to the Trust within twelve (12)
months after the end of such Plan Year.
3.3 FORM OF CONTRIBUTIONS. Elective contributions
shall be made in cash. Matching Contributions and
Discretionary Contributions may, at the election of the
Board, be made in cash or in shares of common stock of UNUM
Corporation, or in any combination thereof; provided any
contribution made in the form of shares of common stock of
UNUM Corporation shall be valued at its fair market value as
of the date of contribution.
3.4 MAXIMUM CONTRIBUTIONS. In no event shall the
contributions made by an Employer for any Plan Year exceed
the maximum amount which such Employer is permitted to deduct
for federal income tax purposes or cause the Annual Addition
for any Participant to exceed the amount permitted under the
Plan.
3.5 RETURN OF CONTRIBUTIONS. Contributions by each
Employer are conditioned upon the initial qualification of
the Plan under Section 401(a) of the Code and upon their
deductibility under Section 404 of the Code. Upon the
request of any Employer, any contributions attributable to
such Employer (a) which are made by reason of a mistake of
fact, (b) which are conditioned upon the initial
qualification of the Plan, or (c) for which a deduction is
disallowed shall be returned to the Employer within one (1)
year of the mistaken payment of the contribution, denial of
qualification (provided the application for qualification is
made by the time prescribed by law for filing such Employer's
federal income tax return for its taxable year in which the
Plan is adopted, or such later date as the Secretary of the
Treasury may prescribe), or disallowance of the deduction.
In the event of a denial of qualification, the amount
contributed for the period during which the Plan was not
qualified may be returned. In the event of a mistake of fact
or a disallowance of deduction, the amount which may be
returned to such Employer is the excess of the amount
contributed over the amount that would have been contributed
had there not occurred a mistake of fact or an error in
determining the deduction. Earnings attributable to any
excess contribution shall not be returned, and losses
attributable thereto shall reduce the amount which may be
returned.
The portion of any contribution returned to an Employer
in accordance with this Section that represents Elective
Contributions shall be paid promptly to the Participants on
whose behalf such contributions were made.
3.6 NONFORFEITABLE CONTRIBUTIONS. Each Participant
shall have a fully vested and nonforfeitable interest in his
or her Elective Contributions Account, Matching Contributions
Account and Discretionary Contributions Account at all times.
3.7 SPECIAL RULES FOR MATCHING CONTRIBUTIONS.
(a) The Contribution Percentage for Highly
Compensated Eligible Employees for any Plan Year commencing
after December 31, 1996, shall not exceed the greater of:
(i) the Contribution Percentage for all
other Eligible Employees for the preceding Plan Year
multiplied by 1.25; or
(ii) the lesser of the Contribution
Percentage for all other Eligible Employees for the preceding
Plan Year multiplied by 2, or the Contribution Percentage for
such Eligible Employees for the preceding Plan Year plus two
percent (2%).
(b) For purposes of this Section, if two or
more qualified plans maintained by the Employer are treated
as one plan to meet the requirements of Section 401(a)(4),
Section 410(b) or Section 401(m) of the Code, such plans
shall be treated as a single plan. If a Highly Compensated
Eligible Employee participates in any other qualified plan
maintained by the Employer to which Matching Contributions
are made, all such contributions for Plan Years ending with
or within the same calendar year shall be aggregated for
purposes of this Section. If a Highly Compensated Eligible
Employee participates in two or more cash or deferred
arrangements that have different plan years, all cash or
deferred arrangements ending with or within the same calendar
year shall be treated as a single arrangement. For Plan
Years beginning after December 31, 1989, plans may be
aggregated in order to satisfy Section 401(m) of the Code
only if they have the same plan year.
(c) To the extent Elective Contributions are
taken into account under this Section, any Elective
Contributions returned to a Participant pursuant to Section
7.4(b) shall be disregarded.
(d) Any Matching Contribution which is
attributable to an Excess Deferral or Excess Elective
Contribution shall be forfeited and shall be disregarded for
purposes of subsection (a) of this Section. Forfeitures
shall be used to reduce Employer Contributions.
(e) For purposes of this Section, Matching
Contributions (and any Qualified Nonelective Contributions
treated as Matching Contributions) shall be treated as made
for a Plan Year to which they relate if such contributions
are made no later than the end of the twelve (12) month
period beginning on the day after the close of the Plan Year.
Each Employer shall maintain records sufficient to
demonstrate satisfaction of this Section and the amount of
any Elective Contributions or Qualified Nonelective
Contributions taken into account under this Section. The
determination and treatment of the individual contribution
percentage of any Eligible Employee shall satisfy such other
requirements as may be prescribed by the Secretary of the
Treasury.
(f) In the event that the Contribution
Percentage of the Highly Compensated Eligible Employees for
any Plan Year exceeds the limitation of subsection (a) above,
the Benefits Committee shall, within two and one-half (2.5)
months after the end of such year, distribute the Excess
Contributions (plus any income and minus any loss allocable
thereto) to such Highly Compensated Eligible Employees on the
basis of the amount of Employer Contributions made on behalf
of each such Employee and taken into account under Section
1.11 and shall designate such distribution as a distribution
of Excess Contributions (plus any income and minus any loss
allocable thereto).
(g) Excess Contributions shall be adjusted for
any income or loss up to the date of distribution. The
income or loss allocable to Excess Contributions shall be
determined by the same manner in which income or loss is
allocated to Participants' Accounts under Article VIII.
(h) The amount of any Highly Compensated
Eligible Employee's Excess Contributions shall be determined
by reducing contributions on behalf of such Employees in the
order of their respective amounts of Employer Contributions
taken into account under Section 1.11, beginning with the
highest such amount. The determination of the amount of
Excess Contributions with respect to the Plan shall be made
after first determining the amount of Excess Deferrals under
Article VI then second determining the amount of Excess
Elective Contributions under Section 5.3.
(i) Notwithstanding the foregoing provisions of
this Section to the contrary, in lieu of distributing Excess
Contributions (plus any income and minus any loss allocable
thereto) to Highly Compensated Eligible Employees in order to
comply with subsection (a) above for any Plan Year, an
Employer may make Qualified Nonelective Contributions within
twelve (12) months after the end of such year to the Plan on
behalf of each non-Highly Compensated Eligible Employee who
has made a Deferral Election for such year as are necessary
to comply with subsection (a) above. Such Qualified
Nonelective Contributions shall be made on behalf of non-
Highly Compensated Eligible Employees in the order of their
respective Contribution Percentages, beginning with the
lowest such percentage, until one of the limitations of
subsection (a) above is no longer exceeded.
3.8 ROLLOVER CONTRIBUTIONS. An Employee who has
received an eligible rollover distribution (as defined in
Section 402(c)(4) of the Code) from an employee's trust
described in Section 401(a) of the Code which is exempt from
tax under Section 501(a) of the Code may transfer all or any
portion of such distribution to the Trust, provided the
transfer is made to the Trust not later than the sixtieth
(60th) day following the day on which the Employee received
such distribution. In addition, an Employee who receives a
distribution from an individual retirement account (within
the meaning of Section 408(a) of the Code), which account is
attributable solely to a rollover contribution (as defined in
Section 402(c)(5) of the Code) from an employee's trust
described in Section 401(a) of the Code which is exempt from
tax under Section 501(a) of the Code, may transfer the entire
amount distributed to the Trust, provided the transfer is
made to the Trust not later than the sixtieth (60th) day
following the day on which the Employee received such
distribution. Notwithstanding the foregoing to the contrary,
an Employee who has received an eligible rollover
distribution (as hereinabove defined), solely by reason of
the death of his or her spouse, or a distribution from an
individual retirement account (as hereinabove defined), which
account is attributable solely to a rollover contribution (as
hereinabove defined) from an employee's trust described in
Section 401(a) of the Code which is exempt from tax under
Section 501(a) of the Code of amounts received by reason of
the death of his or her spouse, may not transfer any portion
of such distribution to the Trust.
A Rollover Contribution shall be credited to a Rollover
Contributions Account on behalf of the contributing Employee,
and such Employee shall have a fully vested and
nonforfeitable interest in his or her Rollover Contributions
Account. The Rollover Contributions Account of any Employee
who is not a Participant shall be administered, invested and
distributed as if such account constituted an Elective
Contributions Account. The Rollover Contributions Account of
a Participant shall be administered, invested and distributed
in the same manner and at the same time as his or her
Elective Contributions Account.
3.9 USERRA MAKE-UP CONTRIBUTIONS. The provisions of
this Section shall be effective with respect to reemployment
initiated on or after December 12, 1994. In addition to any
Elective Contributions made in accordance with Section 5.1,
an Eligible Employee who is reemployed by his or her Employer
and entitled to benefits under USERRA may elect to have such
Employer make Elective Contributions on his or her behalf in
accordance with this Section; provided, any additional
Elective Contributions made in accordance with this Section
do not exceed the maximum amount of Elective Contributions
that such Employer would have been permitted to make on
behalf of such Eligible Employee in accordance with the
limitations of Articles VI and VII of the Plan and Sections
402(g), 404(a) and 415 of the Code during such Employee's
period of qualified military service if such Employee:
(a) had continued to be employed by such
Employer during such period; and
(b) received Compensation from such Employer
equal to:
(i) the Compensation the Employee would
have received during such period if the Employee were not in
qualified military service, determined based on the rate of
pay the Employee would have received from such Employer but
for the absence; or
(ii) if the Compensation the Employee
would have received during such period was not reasonably
certain, the Employee's average Compensation from the
Employer during the twelve (12) month period immediately
preceding the period of qualified military service (or, the
period of employment immediately preceding the period of
qualified military service, if shorter).
Notwithstanding the foregoing to the contrary, the Benefits
Committee shall adjust the amount of Elective Contributions
made in accordance with this Section for any Elective
Contributions actually made during an Employee's period of
qualified military service. Any Elective Contributions on
behalf of an Eligible Employee pursuant to this Section 3.9
shall be made during the period which begins on the date of
reemployment of such Employee with his or her Employer and
whose duration is equal to the lesser of (i) three (3) times
the period of qualified military service which resulted in
the application of this Section 3.9 to such Employee, and
(ii) five (5) years.
An Employer shall make Matching Contributions with
respect to any additional Elective Contributions made in
accordance with this Section which would have been required
had such Elective Contributions actually been made during the
period of qualified military service which resulted in the
application of this Section to the Employee.
Any Elective Contributions or Matching Contributions
made by an Employer on behalf of an Eligible Employee
pursuant to this Section 3.9 shall not be subject to any
otherwise applicable limitation contained in Section 402(g),
404(a), or 415 of the Code and shall not be taken into
account in applying such limitations to other contributions
or benefits under the Plan or any other plan maintained by
such Employer with respect to the year in which such
contributions are made, but such contributions shall be
subject to such limitations with respect to the year to which
they relate (in accordance with rules prescribed by the
Secretary of the Treasury). Any such Elective Contributions
and Matching Contributions shall not be taken into account,
either for the Plan Year in which they are made or for the
Plan Year to which they relate, for purposes of Sections 3.7,
5.3, or Article X of the Plan and for purposes of Sections
401(a)(4), 401(a)(26), 401(k)(3), 401(k)(11), 401(k)(12),
401(m), 410(b), or 416 of the Code.
No provision of this Section 3.9 shall be construed to
require any crediting of earnings to a Participant's Account
with respect to any Employer Contribution before such
Employer Contribution is actually made or any allocation of
any forfeiture with respect to a period of qualified military
service.
For purposes of this Section, "qualified military
service" shall mean any service in the uniformed services (as
defined in USERRA) by any individual if such individual is
entitled to reemployment rights under USERRA with respect to
such service.
An election by an Eligible Employee to have his or her
Employer make additional Elective Contributions on his or her
behalf pursuant to this Section 3.9 shall be made by such
written, telephonic or electronic means as shall be
prescribed by the Benefits Committee.
ARTICLE IV
DIRECT TRANSFERS
4.1 DIRECT TRANSFERS. The assets of another profit
sharing plan may, with the prior consent of the Benefits
Committee, be directly transferred to the Trust, provided
immediately prior to the transfer, the transferor plan is
qualified under Section 401(a) of the Code and the related
trust is exempt under Section 501(a) of the Code. Upon
receipt, the Benefits Committee shall credit the Account of
each Employee who participated in the transferor plan with
the portion of the transferred assets standing to the credit
of such Employee under the transferor plan immediately prior
to such transfer, provided such amount shall be separately
accounted for in accordance with Section 8.1. Except as
otherwise provided in Article XVI, each elective, matching or
other type of contribution comprising the Transfer Account of
any Employee or any Participant shall be administered,
invested and distributed in accordance with the provisions of
this Plan applicable to such type of contribution, provided,
however, each Employee shall have a fully vested and
nonforfeitable interest in his or her Transfer Account. With
respect to a Participant who has an outstanding loan balance
under the transferor plan at the time of the transfer, the
promissory note evidencing such loan shall be transferred to
this Plan and the outstanding loan balance shall be treated
in accordance with the provisions of Section 9.6 as an
outstanding loan balance under this Plan.
The Benefits Committee may direct the Trustee to
transfer the assets of the Plan credited to the Account of a
Participant or Former Participant to the related trust of
another employer's retirement plan, provided immediately
prior to the transfer the transferee plan contains a
provision permitting such transfer and is qualified under
Section 401(a) of the Code and the related trust is exempt
under Section 501(a) of the Code.
ARTICLE V
DEFERRAL ELECTIONS
5.1 TIME AND METHOD. An Eligible Employee may
participate in the Plan by electing to defer part of his or
her Compensation each pay period, provided that, effective
January 1, 1997, an Eligible Employee may not defer less than
one percent (1%) nor more than fifteen percent (15%) of his
or her Compensation each pay period. The deferral percentage
must be a whole number. The amount deferred shall be
contributed to the Plan by the Employer on behalf of the
electing Eligible Employee. A Deferral Election shall be
made by such written, telephonic or electronic means as shall
be prescribed by the Benefits Committee.
A Deferral Election shall be effective on the first day
of the first payroll period next following the date on which
such election is received by the Benefits Committee or its
designated representative. A Deferral Election shall remain
in effect until amended or terminated in accordance with
Section 5.2. A deemed Deferral Election pursuant to Section
16.2 or Section 16.3 shall be effective as of January 1,
1997.
If a Participant terminates a Deferral Election in
accordance with Section 5.2, such Participant may
subsequently make another Deferral Election, which, effective
December 4, 1995, shall be effective as of the first day of
the first payroll period next following the date on which
such election is received by the Benefits Committee or its
designated representative.
5.2 AMENDMENT OR TERMINATION BY PARTICIPANT.
Effective December 4, 1995, a Participant may amend his or
her Deferral Election to increase or decrease the deferral
percentage within the limits of Section 5.1 or may terminate
his or her Deferral Election at any time. An amendment or
termination shall be made by such written, telephonic or
electronic means as shall be prescribed by the Benefits
Committee and shall be effective as of the first day of the
first payroll period next following the date on which the
amendment or termination is received by the Benefits
Committee or its designated representative.
5.3 LIMITATIONS ON ACTUAL DEFERRAL PERCENTAGE. In
the event a Highly Compensated Eligible Employee participates
in two or more cash or deferred arrangements (under Section
401(k) of the Code) that have different plan years, for
purposes of this Section, all such arrangements ending with
or within the same calendar year shall be treated as a single
arrangement. For purposes of this Section, this Plan and any
other Code Section 401(k) plan maintained by an Employer
shall be treated as a single plan if such plans are treated
as one plan for purposes of Section 401(a)(4) or Section
410(b) of the Code or if a Highly Compensated Eligible
Employee participates in such other plan. For Plan Years
beginning after December 31, 1989, plans may be aggregated to
satisfy Section 401(k) of the Code only if such plans have
the same plan year.
(a) The Actual Deferral Percentage for Highly
Compensated Eligible Employees for any Plan Year commencing
after December 31, 1996, shall not exceed the greater of:
(i) the Actual Deferral Percentage for all
other Eligible Employees for the preceding Plan Year
multiplied by 1.25; or
(ii) the lesser of the Actual Deferral
Percentage for all other Eligible Employees for the preceding
Plan Year multiplied by 2, or the Actual Deferral Percentage
for such Eligible Employees for the preceding Plan Year plus
two percent (2%).
(b) The sum of the Actual Deferral Percentage
for Highly Compensated Eligible Employees and the
Contribution Percentage for Highly Compensated Eligible
Employees for any Plan Year commencing after December 31,
1996, shall not exceed the greater of:
(i) the sum of (1) the greater of the
Actual Deferral Percentage for all other Eligible Employees
for the preceding Plan Year multiplied by 1.25 or the
Contribution Percentage for all other Eligible Employees for
the preceding Plan Year multiplied by 1.25, and (2) the
lesser of the Actual Deferral Percentage for all other
Eligible Employees for the preceding Plan Year plus 2 or the
Contribution Percentage for all other Eligible Employees for
the preceding Plan Year plus 2, provided that in no event
shall such percentage plus 2 exceed such percentage
multiplied by 2.
(ii) the sum of (1) the lesser of the Actual
Deferral Percentage for all other Eligible Employees for the
preceding Plan Year multiplied by 1.25 or the Contribution
Percentage for all other Eligible Employees for the preceding
Plan Year multiplied by 1.25, and (2) the greater of the
Actual Deferral Percentage for all other Eligible Employees
for the preceding Plan Year plus 2 or the Contribution
Percentage for all other Eligible Employees for the preceding
Plan Year plus 2, provided that in no event shall such
percentage plus 2 exceed such percentage multiplied by 2.
Subsection (b) of this Section shall not apply if the
respective Actual Deferral Percentage and Contribution
Percentage of the Highly Compensated Eligible Employees for
any Plan Year commencing after December 31, 1996, does not
exceed the respective Actual Deferral Percentage and
Contribution Percentage of all other Eligible Employees for
the preceding Plan Year multiplied by 1.25.
For purposes of this Section, Elective Contributions,
Matching Contributions and Qualified Nonelective
Contributions must be made before the last day of the twelve
(12) month period immediately following the Plan Year to
which such contributions relate.
For purposes of this Section, any Elective Contributions
returned to a Participant pursuant to Section 7.4(b) shall be
disregarded.
Each Employer shall maintain records sufficient to
demonstrate compliance with this Section and the amount of
any Matching Contributions or Qualified Nonelective
Contributions used to satisfy this Section. The
determination and treatment of the contributions on behalf of
any Participant that are taken into account for purposes of
this Section shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
5.4 RESTRICTIONS AND ADJUSTMENTS. The Benefits
Committee may restrict the deferral percentages elected by
Participants if the Benefits Committee determines such
restriction is necessary to comply with Section 3.4, Section
5.3, Article VI or Article VII.
In the event that the Actual Deferral Percentage of the
Highly Compensated Eligible Employees for any Plan Year
exceeds the limitations prescribed in Section 5.3(a), the
Benefits Committee shall, within two and one-half (2.5) months
after the end of such year, distribute the Excess Elective
Contributions (plus any income and minus any loss allocable
thereto) to such Highly Compensated Eligible Employees on the
basis of the amount of Employer Contributions made on behalf
of each such Employee and taken into account under Section
1.2 and shall designate such distribution as a distribution
of Excess Elective Contributions (plus any income and minus
any loss allocable thereto).
The amount of any Highly Compensated Eligible Employee's
Excess Elective Contributions shall be determined by reducing
contributions on behalf of such Employees in the order of
their respective amounts of Employer Contributions taken into
account under Section 1.2, beginning with the highest such
amount. The amount of Excess Elective Contributions with
respect to a Highly Compensated Eligible Employee for any
Plan Year shall be reduced by the amount of Excess Deferrals
previously distributed to such Employee under Article VI for
the calendar year ending with or within the Plan Year;
provided, however, that notwithstanding the distribution of
an Excess Deferral in accordance with Section 6.2 to a Highly
Compensated Eligible Employee, such distributed amount shall
be taken into account under Section 5.3.
Excess Elective Contributions shall be adjusted for any
income or loss up to the date of distribution. The income or
loss allocable to Excess Elective Contributions shall be
determined by the same manner in which income or loss is
allocated to Participants' Accounts under Article VIII of the
Plan.
In the event the sum of the Actual Deferral Percentage
for Highly Compensated Eligible Employees and the
Contribution Percentage for Highly Compensated Eligible
Employees for any Plan Year exceeds the limitations
prescribed in Section 5.3(b), the Benefits Committee shall,
within two and one-half (2.5) months after the end of such
year, reduce the Contribution Percentage for Highly
Compensated Employees in the manner prescribed in subsections
(f) through (h) of Section 3.7.
Notwithstanding the foregoing provisions of this Section
to the contrary, in lieu of distributing Excess Elective
Contributions (plus any income and minus any loss allocable
thereto) or reducing the Contribution Percentage for Highly
Compensated Employees in the manner prescribed in subsections
(f) through (h) of Section 3.7 in order to comply with
Section 5.3(b) for any Plan Year, an Employer may make
Qualified Nonelective Contributions to the Plan within twelve
(12) months after the end of such year, on behalf of each non-
Highly Compensated Eligible Employee who has made a Deferral
Election for such year as are necessary to comply with
Section 5.3. Such Qualified Nonelective Contributions shall
be made on behalf of non-Highly Compensated Eligible
Employees in the order of their respective individual
deferral percentages, beginning with the lowest such
percentage, until the limitations of Section 5.3 are no
longer exceeded.
ARTICLE VI
EXCESS DEFERRALS
6.1 LIMITATION ON ELECTIVE CONTRIBUTIONS. Effective
January 1, 1997, the Elective Contributions that may be
allocated to a Participant's Account for any calendar year
shall not exceed Nine Thousand Five Hundred Dollars
($9,500.00), reduced by the amount of any employer
contributions for such year on behalf of such Participant
pursuant to an election to defer compensation under any
qualified cash or deferred arrangement within the meaning of
Section 401(k) of the Code, any simplified employee pension
cash or deferred arrangement within the meaning of Section
402(h)(1)(B) of the Code, any eligible deferred compensation
plan under Section 457 of the Code, any plan within the
meaning of Section 501(c)(18) of the Code, a salary reduction
agreement for the purchase of an annuity contract under
Section 403(b) of the Code, and any elective employer
contribution under Section 408(p)(2)(A)(i) of the Code. For
purposes of this Section, any Elective Contributions returned
to a Participant pursuant to Section 7.4(b) shall be
disregarded. The dollar limitation of this Section shall be
automatically adjusted to reflect any cost of living
adjustment made under Section 402(g)(5) of the Code.
6.2 DISTRIBUTION OF EXCESS DEFERRAL. In the event
that the limitation of Section 6.1 is exceeded with respect
to any Participant, not later than April 15 of the following
calendar year, the Benefits Committee shall distribute the
Excess Deferral (plus any income and minus any loss allocable
thereto) to such Participant and designate such distribution
as a distribution of an Excess Deferral (plus any income and
minus any loss allocable thereto), provided that the Benefits
Committee has received the notice prescribed in Section 6.3.
Excess Deferrals shall be adjusted for any income or loss up
to the date of distribution. The income or loss allocable to
Excess Deferrals shall be determined by the same manner in
which income or loss is allocated to the Participant's
Accounts under Article VIII of the Plan.
The amount of Excess Deferral with respect to a
Participant for any calendar year shall be reduced by the
amount of any Excess Elective Contributions previously
distributed to such Participant for the Plan Year beginning
with or within the calendar year.
6.3 NOTICE BY PARTICIPANT. It shall be the
responsibility of the Participant to notify the Benefits
Committee of any Excess Deferral for a calendar year. Such
notice shall be made by such written, telephonic or
electronic means as shall be prescribed by the Benefits
Committee; shall specify the amount of the Excess Deferral;
shall state that if the Excess Deferral is not distributed,
such excess shall be includable in the Participant's gross
income under Section 402(g) of the Code; and shall be
submitted to the Benefits Committee not later than March 1 of
the following calendar year. A Participant shall be deemed
to have notified the Benefits Committee of an Excess Deferral
to the extent such Participant has an Excess Deferral for a
calendar year, taking into account only Elective
Contributions under the Plan and any other plans of the
Employer subject to Section 402(g) of the Code.
ARTICLE VII
LIMITATION ON ANNUAL ADDITIONS
7.1 LIMITATION FOR DEFINED CONTRIBUTION PLANS.
Except as hereinafter provided, the provisions of this
Article shall be effective January 1, 1987. The Annual
Additions which may be allocated to the Account of a
Participant for a Limitation Year shall not exceed the lesser
of:
(a) Thirty Thousand Dollars ($30,000.00) (or,
if greater, one-fourth (1/4) of the dollar limitation in
effect under Section 415(b)(1)(A) of the Code); or
(b) Twenty-five percent (25%) of the
Participant's compensation (as defined in Section 7.5) for
the Limitation Year,
reduced by the sum of (i) the annual additions allocated
within such Limitation Year to the accounts of such
Participant under all other qualified defined contribution
plans maintained by the Employer and (ii) the contributions
on behalf of such Participant to welfare benefit funds (as
defined in Section 419(e) of the Code) and individual medical
benefit accounts (as defined in Section 415(l)(2) of the
Code) which, as hereinafter provided, are treated as annual
additions to a defined contribution plan. The dollar
limitation of this Section shall be automatically adjusted to
reflect any cost of living adjustment made under Section
415(d) of the Code.
If an Annual Addition allocated to a Participant's
Account for a Limitation Year when added to the sum of (i)
the Annual Additions previously allocated within such year to
the Participant's Account, (ii) the annual additions
previously allocated within such year to the Participant's
accounts under all other qualified defined contribution plans
maintained by the Employer and (iii) the aforesaid
contributions to welfare benefit funds (as defined in Section
419(e) of the Code) and individual medical benefit accounts
(as defined in Section 415(l)(2) of the Code) exceeds the
limitation set forth in this Section, such excess shall be
reduced as hereinafter provided in this Article.
If the allocation of an Annual Addition to a
Participant's Account coincides with the allocation of an
annual addition to such Participant's account or accounts
under one or more other qualified defined contribution plans
maintained by the Employer and/or the allocation of a
contribution on behalf of such Participant to one or more
welfare benefit funds (as defined in Section 419(e) of the
Code) or individual medical benefit accounts (as defined in
Section 415(l)(2) of the Code) which, as hereinafter
provided, are treated as an annual addition to a defined
contribution plan and such allocations exceed the limitation
set forth in this Section, the excess attributable to this
Plan, which shall be reduced as hereinafter provided in this
Article, shall be equal to the product determined by
multiplying the total excess by a fraction, the numerator of
which is the Annual Additions previously allocated to the
Participant's Account within such Limitation Year and the
denominator of which is the sum of the Annual Additions
previously allocated to the Participant's Account within such
Limitation Year and the annual additions previously allocated
to the Participant's accounts under such other plans within
such Limitation Year.
The limitation set forth in this Section may be applied
on the basis of reasonable estimates of compensation for the
Limitation Year, provided such estimates are uniformly
determined for all Participants. As soon as practicable
after the end of each Limitation Year, the limitation shall
be applied on the basis of actual compensation.
Notwithstanding the foregoing, the compensation
limitation of Section 7.1(b) shall not apply to any
contribution for medical benefits (within the meaning of
Section 401(h) or Section 419A(f)(2) of the Code) which is
otherwise treated as an Annual Addition under Section
415(l)(1) or Section 419A(d)(2) of the Code.
7.2 LIMITATION FOR DEFINED CONTRIBUTION PLAN AND
DEFINED BENEFIT PLAN. If a Participant also participates or
has participated in a qualified defined benefit plan
maintained by an Employer, then in addition to the limitation
set forth in the preceding Section, the sum of the fractions
determined under subsections (a) and (b) below for any
Limitation Year shall not exceed 1.0.
(a) A fraction, the numerator of which is the
sum of the Participant's projected annual benefits under all
qualified defined benefit plans (whether or not terminated)
maintained by the Employer and the denominator of which is
the lesser of (i) the dollar limitation in effect under
Section 415(b)(1)(A) of the Code for such year multiplied by
1.25, or (ii) the amount which may be taken into account
under Section 415(b)(1)(B) of the Code with respect to the
Participant for such year multiplied by 1.4.
For purposes of this subsection (a), "projected
annual benefits" shall mean the annual retirement benefit
(adjusted to an actuarially equivalent straight life annuity,
if such benefit is expressed in a form other than a straight
life annuity, or qualified joint and survivor annuity) to
which the Participant would be entitled under the terms of
the plan, assuming:
(i) the Participant will continue
employment until normal retirement age under the plan (or
current age, if later); and
(ii) the Participant's compensation for the
current Limitation Year and all other relevant factors used
to determine benefits under the plan will remain constant for
all future Limitation Years.
Notwithstanding the foregoing, if the Participant
participated as of the first day of the first Limitation Year
beginning after December 31, 1986, in one or more qualified
defined benefit plans maintained by an Employer which were in
existence on May 6, 1986, the denominator of this fraction
shall not be less than one hundred twenty-five percent (125%)
of the sum of the annual benefits which the Participant
accrued under such plans as of the close of the last
Limitation Year beginning before January 1, 1987,
disregarding any changes in the terms and conditions of the
Plan after May 5, 1986. The preceding sentence applies only
if the qualified defined benefit plans individually and in
the aggregate satisfied the requirements of Section 415 of
the Code for all Limitation Years beginning before January 1,
1987.
(b) A fraction, the numerator of which is the
sum of the annual additions to the Participant's accounts
under all qualified defined contribution plans (whether or
not terminated) maintained by an Employer for the current and
all prior Limitation Years (including the annual additions
attributable to the Participant's nondeductible voluntary
contributions under all qualified defined benefit plans,
whether or not terminated, maintained by an Employer) and the
contributions on behalf of the Participant to all welfare
benefit funds (as defined in Section 419(e) of the Code) and
individual medical benefit accounts (as defined in Section
415(l)(2) of the Code) maintained by an Employer which, as
hereinafter provided, are treated as annual additions to a
defined contribution plan and the denominator of which is the
sum of the lesser of the following amounts determined for the
current Limitation Year and all prior Limitation Years in
which the Participant performed service for an Employer
(regardless of whether a defined contribution plan was
maintained by the Employer): (i) the dollar limitation in
effect under Section 415(c)(1)(A) of the Code for such year
multiplied by 1.25, or (ii) thirty-five percent (35%) of the
Participant's compensation for such year.
If an Employee was a participant as of the end of
the first day of the first Limitation Year beginning after
December 31, 1986, in one or more qualified defined
contribution plans maintained by an Employer which were in
existence on May 6, 1986, the numerator of this fraction
shall be adjusted if the sum of the fractions under this
Section would otherwise exceed 1.0 under the terms of this
Plan. Under the adjustment, an amount equal to the product
of (i) the excess of the sum of said fractions over 1.0
multiplied by (ii) the denominator of this fraction, shall be
permanently subtracted from the numerator of this fraction.
The adjustment shall be calculated using the fractions as
they would be computed as of the end of the last Limitation
Year beginning before January 1, 1987, and disregarding any
changes in the terms and conditions of the Plan made after
May 5, 1986, but using the Section 415 limitation applicable
to the first Limitation Year beginning on or after January 1,
1987.
The Annual Addition for any Limitation Year beginning
before January 1, 1987, shall not be recomputed to treat all
Employee contributions as Annual Additions.
If the sum of said fractions for any Limitation Year
exceeds 1.0, the Annual Additions allocated to the
Participant's Account for such Limitation Year shall be
reduced, as hereinafter provided in this Article, until the
sum of the fractions does not exceed 1.0 or the rate of
accrual of the Participant's accrued benefit under the
defined benefit plan shall be reduced until the sum of the
fractions does not exceed 1.0.
7.3 COMBINING AND AGGREGATING PLANS. For purposes
of applying the limitations described in this Article:
(a) All qualified defined benefit plans
(without regard to whether a plan has been terminated) ever
maintained by an Employer shall be treated as one defined
benefit plan; and
(b) All qualified defined contribution plans
(without regard to whether a plan has been terminated) ever
maintained by an Employer shall be treated as one defined
contribution plan.
7.4 REDUCTION OF EXCESS ANNUAL ADDITIONS. If, as a
result of a reasonable error in estimating a Participant's
annual compensation (as defined in Section 7.5), a reasonable
error in determining the amount of elective deferrals (within
the meaning of Section 402(g)(3) of the Code) that may be
made with respect to any Participant under the limitations of
Section 415 of the Code, or under other limited facts and
circumstances that the Commissioner of the Internal Revenue
Service finds justify the availability of the rules set forth
below, the Annual Additions allocated to the Account of any
Participant would cause the limitations set forth in the
preceding Sections of this Article for any Limitation Year to
be exceeded, the following rules shall apply to the extent
necessary to reduce such excess, and the excess amounts shall
not be deemed Annual Additions in such Limitation Year:
(a) Any nondeductible voluntary employee
contributions (and the earnings thereon) to the extent they
would reduce the excess amount, shall be returned to the
Participant;
(b) Any Elective Contributions (and, effective
for Limitation Years beginning after December 31, 1995, the
earnings thereon) to the extent they would reduce the excess
amount, shall be returned to the Participant;
(c) If after the application of subsections (a)
and (b) an excess amount still exists and the Participant is
covered by the Plan at the end of the Limitation Year, the
excess amount allocated to the Participant's Account for such
year shall be used to reduce Employer Contributions for the
next Limitation Year and for each succeeding Limitation Year,
if necessary, for such Participant;
(d) If after the application of subsections (a)
and (b) an excess amount still exists and the Participant is
not covered by the Plan at the end of the Limitation Year,
the excess amount allocated to the Participant's Account for
such Limitation Year shall be held unallocated in a suspense
account. The suspense account shall be applied to reduce
Employer Contributions for all remaining Participants in the
next Limitation Year and each succeeding Limitation Year, if
necessary.
If a suspense account is in existence at any time during
a Limitation Year pursuant to subsection (d) of this Section,
it shall not participate in the allocation of the Investment
Funds' income, expenses, gains and losses. If a suspense
account is in existence at any time during a particular
Limitation Year, all amounts in the suspense account must be
allocated and reallocated to Participants' Accounts before
any Employer Contributions may be made to the Plan for that
Limitation Year. For purposes of subsection (c) and (d),
excess amounts may not be distributed to Participants or
Former Participants.
7.5 DEFINITION OF COMPENSATION. Except as
hereinafter provided, for purposes of applying the
limitations of this Article, the term "compensation" shall
mean, with respect to a Plan Year, the total compensation
paid by an Employer to an Employee for services rendered
while an Employee that constitutes wages as defined in
Section 3401(a) of the Code and all other payments by an
Employer to an Employee for services rendered while an
Employee for which an Employer is required to furnish the
Employee a written statement under Sections 6041(d),
6051(a)(3) and 6052 of the Code without regard to any rules
that limit the remuneration included in wages based on the
nature or location of the employment or services performed.
Notwithstanding the foregoing to the contrary, effective
January 1, 1998, "compensation" shall include any elective
deferrals within the meaning of Section 402(g)(3) of the Code
and any amount which is contributed or deferred by an
Employer at the election of an Employee and which is not
includable in the gross income of the Employee by reason of
Section 125 or 457 of the Code.
For Limitation Years beginning after December 31, 1991,
for purposes of applying the limitations of this Article,
"compensation" for a Limitation Year shall mean the
compensation actually paid or includable in gross income
during such Limitation Year. Notwithstanding the preceding
sentence, "compensation" with respect to a Participant who is
permanently and totally disabled (within the meaning of
Section 22(e)(3) of the Code) shall mean the compensation
such Participant would have received for the Limitation Year
if he or she had been paid at the rate of compensation paid
immediately before becoming permanently and totally disabled;
provided, such imputed compensation may be taken into account
only if the Participant is not a Highly Compensated Employee
and contributions made on behalf of such Participant are
nonforfeitable when made.
Notwithstanding the foregoing to the contrary, for
purposes of Sections 1.2, 1.11 and 10.3(b), effective January
1, 1994, the annual "compensation" of any Employee in excess
of One Hundred Fifty Thousand Dollars ($150,000.00) (or such
higher amount as the Secretary of the Treasury may prescribe)
shall not be taken into account. In the event "compensation"
is determined based on a period of time which contains fewer
than twelve (12) calendar months, the annual compensation
limit shall be an amount equal to the annual compensation
limit for the Limitation Year in which the period begins
multiplied by a fraction, the numerator of which is the
number of full calendar months in the period and the
denominator of which is twelve (12). If "compensation" for a
prior Limitation Year is taken into account for any
Limitation Year, such compensation shall be subject to the
annual compensation limit in effect for such prior Limitation
Year.
7.6 CERTAIN CONTRIBUTIONS TREATED AS ANNUAL
ADDITIONS. For purposes of this Article:
(a) Excess Contributions and Excess Elective
Contributions shall be treated as Annual Additions;
(b) amounts derived from contributions which
are paid or accrued in taxable years ending after December
31, 1985, and which are attributable to post-retirement
medical benefits allocated to the separate account of a Key
Employee (as defined in Section 419A(d) of the Code) under a
welfare benefit fund (as defined in Section 419(e) of the
Code) maintained by an Employer, shall be treated as annual
additions to a defined contribution plan; and
(c) contributions allocated after March 31,
1984, to an individual medical benefit account (as defined in
Section 415(l)(2) of the Code) which is part of a defined
benefit plan maintained by an Employer shall be treated as
annual additions to a defined contribution plan.
ARTICLE VIII
ACCOUNTS AND VALUATION
8.1 PARTICIPANTS' ACCOUNTS. The Benefits Committee
shall direct the Trustee to establish and maintain a separate
Account for each Participant which shall separately reflect:
(a) the Participant's Elective Contributions
and the income, expenses, gains and losses of the Trust Fund
attributable thereto and his or her Qualified Nonelective
Contributions pursuant to Section 3.7(i) or Section 5.4, if
any, and the income, expenses, gains and losses of the Trust
Fund attributable thereto (such portion of a Participant's
Account shall be referred to as his or her "Elective
Contributions Account");
(b) the Participant's Matching Contributions,
if any, and the income, expenses, gains and losses of the
Trust Fund attributable thereto (such portion of a
Participant's Account shall be referred to as his or her
"Matching Contributions Account");
(c) the Participant's share of Discretionary
Contributions, if any, and the income, expenses, gains and
losses of the Trust Fund attributable thereto (such portion
of a Participant's Account shall be referred to as his or her
"Discretionary Contributions Account");
(d) the Participant's Rollover Contributions
and the income, expenses, gains and losses of the Trust Fund
attributable thereto (such portion of a Participant's Account
shall be referred to as his or her "Rollover Contributions
Account");
(e) the assets transferred from another
qualified plan on behalf of the Participant in accordance
with Section 4.1 or Article XVI and the income, expenses,
gains and losses of the Trust Fund attributable thereto (such
portion of a Participant's Account shall be referred to as
his or her "Transfer Account"); and
(f) for Plan Years prior to January 1, 1989,
the Participant's after-tax contributions and Employer
matching contributions made thereon, if any, and the income,
expenses, gains and losses of the Trust Fund attributable
thereto (such portion of a Participant's Account shall be
referred to as his or her "After-Tax Contributions Account").
8.2 ADJUSTMENTS. Effective July 1, 1996, as of each
Valuation Date, the Participants' Accounts shall be adjusted
as follows:
(a) First, determine the fair market value of
each Investment Fund and Participant-Directed Brokerage
Account as of the close of business on such date.
(b) Second, allocate the income, expenses,
gains and losses of each Investment Fund and Participant-
Directed Brokerage Account among the Accounts in proportion
to the Account balances (to the extent invested therein).
(c) Third, reduce the separate Account of each
Participant to reflect all distributions, withdrawals and
loans made from such Account, since the last preceding
Valuation Date.
(d) Fourth, credit to the separate Account of
each Participant the Elective Contributions, Matching
Contributions, Qualified Nonelective Contributions,
Discretionary Contributions, Rollover Contributions, and the
assets transferred from another qualified plan in accordance
with Section 4.1 or Article XVI made on his or her behalf and
the Participant's loan repayments since the preceding
Valuation Date.
(e) Fifth, adjust each Participant's Account to
reflect transfers among the Investment Funds and between the
Investment Funds and such Participant's Participant-Directed
Brokerage Account, if any.
In the event no adjustment to any separate Account is
required under subsection (c) above as of any Valuation Date
(other than the last Valuation Date of a Plan Year), no
adjustments of the separate Accounts of the Participants
shall be required except as of the last Valuation Date of the
Plan Year.
Notwithstanding the foregoing provisions of this Section
to the contrary, the Benefits Committee may direct the
Trustee to debit the Account of any Participant or Former
Participant as of any Valuation Date in the amount of any
reasonable expense attributable to such Participant's or
Former Participant's exercise of control over his or her
Account since the preceding Valuation Date. The Benefits
Committee shall establish, in writing, reasonable procedures
to inform Participants and Former Participants that such
expenses may be charged to their Account pursuant to this
paragraph, to inform each Participant or Former Participant
at least annually of the actual expenses incurred with
respect to his or her Account, and to otherwise carry out
this paragraph. The Benefits Committee shall follow a
uniform and nondiscriminatory policy in charging reasonable
expenses to the Account of a Participant or Former
Participant pursuant to this paragraph. For purposes of this
paragraph, a Participant's or Former Participant's "exercise
of control over his or her Account" shall include but not be
limited to the following:
(f) a request for a loan pursuant to Section
9.6;
(g) a request for a withdrawal pursuant to
Section 9.5 or 9.9; and
(h) any election with respect to the investment
of contributions made on his or her behalf (or an election
with respect to the reinvestment of his or her Account)
pursuant to Section 13.7 or 13.8.
8.3 ALLOCATION OF DISCRETIONARY CONTRIBUTIONS. As
of the last Valuation Date of each Plan Year, the Trustee
shall allocate and credit the Discretionary Contribution, if
any, for such Plan Year to the separate Accounts of the
Eligible Employees entitled to share therein in proportion to
their respective amounts of compensation for such Plan Year.
For purposes of this Section, "compensation" shall have the
meaning given such term in Section 1.10, except that it shall
include compensation paid for services rendered while an
Eligible Employee.
8.4 ELIGIBLE EMPLOYEES ENTITLED TO SHARE IN
DISCRETIONARY CONTRIBUTIONS. An Eligible Employee shall be
entitled to share in the Discretionary Contributions made by
or with respect to his or her Employer for a Plan Year if he
or she is credited with at least one thousand (1,000) Hours
of Service during such Plan Year, and remains in the employ
of such Employer on the last business day of such Plan Year,
or if he or she dies, retires after having attained Normal
Retirement Age or becomes Disabled during such Plan Year
while in the employ of such Employer. For purposes of this
Section, "Hours of Service" shall mean only Hours of Service
credited with the Employer who is making the Discretionary
Contribution.
In the event application of the preceding sentence would
cause the Plan to fail to satisfy the requirements of Section
410(b) of the Code for any Plan Year, the following
provisions shall apply:
(a) An Eligible Employee shall be entitled to
share in the Discretionary Contributions made by or with
respect to his or her Employer for a Plan Year if he or she
is credited with more than five hundred (500) Hours of
Service during such Plan Year and remains in the employ of
such Employer on the last business day of such Plan Year, or
if he or she dies, retires after having attained Normal
Retirement Age or becomes Disabled during such Plan Year
while in the employ of such Employer.
(b) If after applying subsection (a) above the
Plan would fail to satisfy the requirements of Section
410(b) of the Code, an Eligible Employee shall be entitled to
share in the Discretionary Contributions made by or with
respect to his or her Employer for a Plan Year if he or she
remains in the employ of such Employer on the last business
day of such Plan Year, without regard to the number of Hours
of Service credited during such year, or if he or she dies,
retires after having attained normal Retirement Age or
becomes Disabled during such Plan Year while in the employ of
such Employer.
(c) If after applying subsections (a) and (b)
of this Section the Plan would fail to satisfy the
requirements of Section 410(b) of the Code, an Eligible
Employee shall be entitled to share in the Discretionary
Contributions made by or with respect to his or her Employer
for a Plan Year if he or she is credited with more than five
hundred (500) Hours of Service during such Plan Year,
regardless of whether he or she remains in the employ of such
Employer on the last business day of such year, or if he or
she dies, retires after having attained Normal Retirement Age
or becomes Disabled during such Plan Year while in the employ
of such Employer.
If after applying subsections (a), (b) and (c) of this
Section the Plan would fail to satisfy the requirements of
Section 410(b) of the Code, the Board shall amend the Plan in
accordance with, and within the time period prescribed by,
Treasury Regulation Section 1.401(a)(4)-11(g) to the extent
necessary to comply with Section 410(b) of the Code.
8.5 ALLOCATION OF ELECTIVE CONTRIBUTIONS AND
MATCHING CONTRIBUTIONS. Any Elective Contributions and
Matching Contributions made on behalf of a Participant shall
be allocated to his or her Account as of the Valuation Date
coinciding with or next following the date on which such
contributions are received by the Trustee.
8.6 PARTICIPANTS ENTITLED TO SHARE IN MATCHING
CONTRIBUTIONS. A Participant shall be entitled to share in
the Matching Contribution, if any, for a Plan Year, if
Elective Contributions are made on his or her behalf for such
year.
8.7 ALLOCATION OF QUALIFIED NONELECTIVE
CONTRIBUTIONS. As of the last Valuation Date of the Plan
Year, the Trustee shall allocate and credit the Qualified
Nonelective Contributions, if any, for such Plan Year to the
separate Accounts of the Eligible Employees entitled to share
therein, as determined in accordance with Sections 3.7(i) and
5.4.
8.8 ALLOCATION OF ROLLOVER CONTRIBUTIONS. Any
Rollover Contribution by an Employee shall be allocated to
his or her Account as of the Valuation Date coinciding with
or next following the date on which such contribution is
received by the Trustee.
8.9 ALLOCATION OF ASSET TRANSFERS. Any direct
transfer of plan assets made on behalf of an Employee in
accordance with Section 4.1 or Article XVI shall be allocated
to his or her Account as of the Valuation Date coinciding
with or next following the date on which such transfer is
made to the Trustee.
8.10 REPORTS TO PARTICIPANTS. The Trustee shall, at
least annually, determine each Participant's share of the
Trust Fund and furnish each Participant with a statement
summarizing his or her Account.
ARTICLE IX
DISTRIBUTIONS AND LOANS
9.1 RETIREMENT. When a Participant attains Normal
Retirement Age, he or she shall have a fully vested and
nonforfeitable right to his or her Account. Following
retirement, such Participant shall receive distribution of
his or her Account in such manner and at such time as
hereinafter provided.
9.2 DISABILITY. If a Participant becomes Disabled,
such Participant shall have a fully vested and nonforfeitable
right to his or her Account. Such Participant shall receive
distribution of his or her Account in such manner and at such
time as hereinafter provided.
9.3 DEATH. If a Participant dies before the
complete distribution of his or her Account, the balance of
such Account shall be distributed, in such manner and at such
time as hereinafter provided, to his or her surviving spouse,
or if the Participant is not survived by a spouse or the
Participant's spouse consents, to his or her designated
Beneficiary. To be effective, the consent of the
Participant's surviving spouse must be in writing, must
acknowledge the effect thereof and must be witnessed by a
notary public.
Subject to the preceding provisions of this Section,
each Participant from time to time may designate any person
or persons (who may be designated concurrently, contingently
or successively) to receive any benefits payable upon his or
her death. Each beneficiary designation shall revoke all
prior designations by the Participant and shall be effective
only when filed with the Benefits Committee or its designated
representative during the Participant's lifetime by such
written, telephonic or electronic means as shall be
prescribed by the Benefits Committee. If a Participant fails
to designate a Beneficiary, distribution shall be made to his
or her surviving spouse, but if the Participant is not
survived by a spouse, to such of the Participant's issue who
survive him or her, such issue to take equal shares of such
distribution, but if the Participant is not survived by a
spouse or any issue, then to the Participant's estate.
9.4 TERMINATION OF EMPLOYMENT. If a Participant
ceases to be employed by an Employer or an Affiliated
Employer and is no longer employed by any of them prior to
attaining Normal Retirement Age for any reason other than
Disability or death, such Participant shall nevertheless have
a fully vested and nonforfeitable right to his or her
Account. Following termination of employment, such
Participant shall receive distribution of his or her Account
in such manner and at such time as hereinafter provided.
9.5 IN-SERVICE DISTRIBUTIONS. Subject to the
provisions of Section 16.2, once every twelve (12) months, an
Employee may elect to receive all or a portion of his or her
After-Tax Contributions Account or Rollover Contributions
Account (reduced by the outstanding balance of any loans made
to the Participant from such Account) in a lump sum. The
Employee's After-Tax Contributions Account or Rollover
Contributions Account shall be valued as of the first
Valuation Date which is administratively practicable
following receipt of such election by the Benefits Committee
or its designated representative, and distribution shall be
made as soon as practicable thereafter.
Effective January 1, 1989, and subject to the provisions
of Section 16.2, once every twelve (12) months, a
Participant who has attained age fifty-nine and one-half
(59.5) may elect to receive all or a portion of his or her
Elective Contributions Account (reduced by the outstanding
balance of any loans made to the Participant from such
Account) in a lump sum. The Participant's Elective
Contributions Account shall be valued as of the first
Valuation Date which is administratively practicable
following receipt of such election by the Benefits Committee
or its designated representative, and distribution shall be
made as soon as practicable thereafter.
Any election pursuant to this Section 9.5 shall be made
by such written, telephonic or electronic means as the
Benefits Committee may prescribe. The Benefits Committee may
from time to time establish rules governing distributions
pursuant to this Section 9.5. Such rules shall be applied on
a uniform and nondiscriminatory basis.
9.6 PARTICIPANT LOANS. The Benefits Committee may,
upon the request of a Participant or Beneficiary who is a
"party in interest" as defined in Section 3(14) of ERISA,
direct the Trustee to make a loan or loans to such
Participant or Beneficiary from the Participant's Elective
Contributions Account and, effective December 4, 1995,
Rollover Contributions Account, subject to the following:
(a) The amount of each loan shall be determined
with reference to the fair market value of the Participant's
Account as of the most recent Valuation Date for which
valuation data has been received by the Benefits Committee.
(b) Any loan made on or after January 1, 1987,
when added to the balance of all other outstanding loans with
respect to a Participant's Account from the Plan, shall not
exceed the lesser of:
(i) Fifty Thousand Dollars ($50,000.00),
reduced by the excess, if any, of:
(aa) the Participant's highest
outstanding loan balance under the Plan for the one (1) year
period ending on the day before such loan is made, over
(bb) the Participant's loan balance
under the Plan on the day such loan is made, or
(ii) Fifty percent (50%) of the sum of the
Participant's Elective Contributions Account, Matching
Contributions Account and, effective December 4, 1995,
Rollover Contributions Account.
The total unpaid balance of all loans (including accrued
but unpaid interest) made with respect to a Participant's
Account under the Plan and all other qualified plans
maintained by his or her Employer shall not exceed the
maximum amount permitted under Section 72(p) of the Code.
(c) Effective December 1, 1989, no loan shall
be made in an amount less than One Thousand Dollars
($1,000.00).
(d) Each loan shall be evidenced by a
promissory note bearing a reasonable rate of interest as
determined by the Benefits Committee taking into
consideration interest rates currently being charged by
commercial lenders for loans made under similar circumstances
and shall be adequately secured in such manner as the
Benefits Committee may determine. Subject to the provisions
of Section 16.2, collateral for a loan may consist of an
assignment of not more than fifty percent (50%) of a
Participant's vested interest in his or her Account, provided
such collateral adequately secures repayment of the loan. In
the event of a default on a loan, the Benefits Committee
shall, after giving the Participant or Beneficiary written
notice of the default and an opportunity to cure the default,
in accordance with the terms and conditions of such loan,
foreclose upon the collateral to the extent necessary to
satisfy the Participant's obligation. If the collateral for
such loan is the Participant's interest in his or her
Account, such foreclosure may not occur prior to the
Participant's termination of employment.
(e) Each loan shall be made for such term and,
subject to (d) above, upon such terms and conditions as the
Benefits Committee shall determine; provided that
substantially level amortization, with payments not less
frequently than quarterly, shall be required over the term of
any loan, and further provided that the term shall not exceed
five (5) years.
(f) Each loan to a Participant or Beneficiary
shall be treated and accounted for as an investment of such
Participant's Account, and loans shall be charged against the
Investment Funds in which the Participant's Account is
invested in proportion to the amounts invested in such funds
as of the date such loan is made. Effective October 1, 1995,
amounts of principal and interest paid on any loan shall be
transferred to the Investment Funds in accordance with the
Participant's investment direction in effect at the time of
payment.
(g) No loan shall be made to any owner-employee
or shareholder-employee. For purposes of this subsection
(g), an "owner-employee" means a self-employed individual who
is a sole proprietor or who is a partner in an Employer who
owns more than ten percent (10%) of either the capital or
profits interest in such Employer, and a "shareholder-
employee" means an employee or officer of an electing small
business corporation (S corporation) who owns (or is
considered as owning within the meaning of Section 318(a)(1)
of the Code), on any day during the taxable year of such
corporation, more than five percent (5%) of the outstanding
stock of the corporation.
(h) No distribution (other than a deemed
distribution under Section 72(p) of the Code) shall be made
to any Participant or Former Participant or to a Beneficiary
of any Participant until all unpaid loans with respect to the
Participant's Account, including accrued interest thereon,
have been paid in full. Notwithstanding the preceding
sentence to the contrary, in the event a Participant or
Beneficiary receives distribution of his or her Account
pursuant to Section 9.7 or 9.9 of the Plan, and at the time
of such distribution there remains outstanding any unpaid
loans with respect to his or her Account, then
(i) such unpaid loan shall be treated as
due and payable immediately as of the date distribution is
made or commences;
(ii) the Account of the Participant or
Beneficiary shall be reduced prior to any such distribution
by the amount of the principal and accrued interest
outstanding on such loan;
(iii) the loan shall be deemed to be paid in
full as of the date the distribution is made or commences;
and
(iv) such Participant or Beneficiary shall be
treated as receiving or commencing to receive a distribution
of his or her entire Account.
(i) The Benefits Committee shall suspend the
obligation to repay any loan made to a Participant pursuant
to this Section 9.6 for any period during which such
Participant is performing service in the uniformed services
(as defined in USERRA), whether or not such service is
"qualified military service" within the meaning of Section
3.9, and such suspension shall not be taken into account for
purposes of Sections 72(p), 401(a), or 4975(d)(1) of the
Code.
(j) The Benefits Committee shall follow a
uniform and nondiscriminatory policy in making loans to
assure that loans are available to all Participants and
Beneficiaries who are "parties in interest" on a reasonably
equivalent basis as required under 29 C.F.R. Section
2550.408b-1 and to further assure that the Plan meets the
requirements of Section 401(a)(4) of the Code.
(k) A request for a loan shall be made by such
written, telephonic or electronic means as may be prescribed
by the Benefits Committee.
(l) The Benefits Committee shall establish, in
writing, administrative procedures to carry out the
provisions of this Section 9.6.
9.7 DISTRIBUTIONS TO PARTICIPANTS. Effective
January 1, 1997, and subject to the provisions of Section
16.2 and Exhibit A hereto, each Participant's Account shall
be distributed in a lump sum. Subject to the provisions of
subsections (a), (b) and (c) below, a Participant may elect
to receive distribution of his or her Account as of any
Valuation Date which occurs after the date he or she becomes
Disabled or ceases to be employed by an Employer or an
Affiliated Employer and is no longer employed by any of them.
The Participant's Account shall be valued as of the first
Valuation Date which is administratively practicable
following receipt of such election by the Benefits Committee
or its designated representative or the Valuation Date
specified in said election, if later, and distribution shall
be made in a lump sum as soon as practicable thereafter.
(a) Notwithstanding the foregoing provisions of
this Section to the contrary (other than the provisions of
Section 16.2 and Exhibit A hereto), if the value of a
Participant's Account does not exceed Three Thousand Five
Hundred Dollars ($3,500.00) as of the Valuation Date
following the date that he or she ceases to be employed by an
Employer or an Affiliated Employer and is no longer employed
by any of them (and did not exceed Three Thousand Five
Hundred Dollars ($3,500.00) as of the date of any prior
distribution), his or her Account shall be distributed in a
lump sum as soon as practicable thereafter.
(b) Notwithstanding the foregoing provisions of
this Section to the contrary, unless a Participant otherwise
elects, distribution shall be made (or commence, with respect
to the portion of a Participant's Account which is subject to
the provisions of Section 16.2 or Exhibit A and not
distributed in a lump sum) not later than the sixtieth (60th)
day after the later of the close of the Plan Year in which
the Participant attains the Normal Retirement Age or in which
the Participant ceases to be employed by an Employer or an
Affiliated Employer and is no longer employed by any of them.
(c) Notwithstanding the foregoing provisions of
this Section to the contrary, effective January 1, 1997:
(i) distribution of the Account of a
Participant who is not a Five Percent Owner shall be made in
a lump sum (or commence, with respect to the portion of the
Participant's Account which is subject to the provisions of
Section 16.2 or Exhibit A and not distributed in a lump sum)
not later than April 1 of the calendar year following the
later of the calendar year in which the Participant attains
age seventy and one-half (70.5) or the calendar year in which
the Participant retires; and
(ii) distribution of the Account of a
Participant who is a Five Percent Owner shall be made (or
commence with respect to the portion of the Participant's
Account which is subject to the provisions of Section 16.2 or
Exhibit A and not distributed in a lump sum) not later than
April 1 of the calendar year following the calendar year in
which the Participant attains age seventy and one-half (70.5).
For purposes of this subsection (c), a Five Percent
Owner shall mean a Participant who is a Five Percent Owner
with respect to the Plan Year ending with or within the
calendar year in which such Participant attains age seventy
and one-half (70.5).
Any election pursuant to this Section 9.7 shall be made
by such written, telephonic or electronic means as may be
prescribed by the Benefits Committee.
9.8 DISTRIBUTIONS TO SPOUSE OR BENEFICIARY. Subject
to the provisions of Section 16.2 and Exhibit A hereto, upon
the death of a Participant, the balance of the Participant's
Account shall be distributed to his or her surviving spouse
or, if the Participant is not survived by a spouse or the
Participant's surviving spouse consents in the manner
provided in Section 9.3, to the Participant's designated
Beneficiary. Distribution shall be made in a lump sum by
December 31 of the calendar year which contains the fifth
(5th) anniversary of the date of the Participant's death.
If a Participant fails to designate a Beneficiary and is
not survived by a spouse, distribution of the Participant's
Account shall be made in the a lump sum to the distributee
determined under Section 9.3, provided such distribution must
be made by December 31 of the calendar year which contains
the fifth (5th) anniversary of the date of the Participant's
death.
9.9 HARDSHIP WITHDRAWALS. Effective January 1,
1989, and subject to the provisions of Section 16.2, the
Benefits Committee may direct the Trustee to make a hardship
withdrawal distribution to a Participant from his or her
Elective Contributions Account and Matching Contributions
Account subject to the following:
(a) Each request for a hardship withdrawal
shall be made by such written, telephonic or electronic means
as may be prescribed by the Benefits Committee. The request
shall specify the reason for such withdrawal and shall
include such other information and documentation as the
Benefits Committee may request.
(b) A hardship withdrawal may be made only in
cash and may not exceed the sum of the Elective Contributions
(and income allocable thereto as of December 31, 1988) and
Matching Contributions (and income allocable thereto)
allocated to the Participant's Account.
(c) A hardship withdrawal shall be permitted
only if the distribution is on account of an immediate and
heavy financial need of the Participant and is necessary to
satisfy such financial need.
(i) A financial need may qualify as
immediate and heavy without regard to whether such need was
foreseeable or voluntarily incurred by the Participant. The
following shall be deemed immediate and heavy financial
needs:
(aa) Payment of medical expenses
described in Section 213(d) of the Code previously incurred
by the Participant, his or her spouse or dependent (within
the meaning of Section 152 of the Code) or payment necessary
for such persons to obtain medical care as described in
Section 213(d) of the Code;
(bb) Costs directly related to the
purchase (excluding mortgage payments) of a principal
residence of the Participant;
(cc) Payment of tuition, related
educational fees and room and board expenses for the next
twelve (12) months of post-secondary education for the
Participant, his or her spouse or dependent (within the
meaning of Section 152 of the Code); and
(dd) Payment to prevent eviction of
the Participant from his or her principal residence or
foreclosure on the mortgage of the Participant's principal
residence.
The above list of deemed immediate and heavy financial
needs shall not be exclusive, and other needs may qualify as
immediate and heavy financial needs.
(ii) A distribution shall be treated as
necessary to satisfy an immediate and heavy financial need of
the Participant only to the extent the amount of such
distribution is not reasonably available to the Participant
from other resources. The Benefits Committee may reasonably
rely on the Participant's representations that the need
cannot be relieved by insurance, by reasonable liquidation of
the Participant's assets, by termination of the Participant's
Deferral Election or by other distributions or loans from the
Plan or from commercial lenders. A Participant's resources
shall be deemed to include those assets of his or her spouse
and minor children that are reasonably available to the
Participant. A distribution shall be deemed necessary to
satisfy an immediate and heavy financial need provided each
of the following requirements is satisfied:
(aa) The distribution is not in excess
of the amount of the immediate and heavy financial need of
the Participant;
(bb) The Participant has obtained all
distributions, other than a distribution pursuant to this
Section 9.10, and all loans available under this Plan and all
other plans maintained by the Employer;
(cc) Elective Contributions made on
behalf of a Participant under this Plan and all other plans
maintained by the Employer are suspended for a period of
twelve (12) months beginning on the date such Participant
receives a hardship distribution; and
(dd) The Participant may not make a
Deferral Election for his or her taxable year immediately
following the taxable year of the hardship withdrawal under
this Plan and all other plans maintained by the Employer in
excess of the applicable limit under Section 402(g) of the
Code for such next taxable year less the amount of the
Elective Contributions made on his or her behalf for the
taxable year of the hardship withdrawal.
A Participant shall not cease to be treated as an
Eligible Employee because his or her Elective Contributions
are suspended in accordance with subsection (c)(ii)(cc)
above.
(iii) The amount of an immediate and heavy
financial need may include any amounts necessary to pay any
federal, state or local income taxes or penalties reasonably
anticipated to result from the distribution.
(d) Withdrawals shall be charged against the
Investment Funds in which the withdrawing Participant's
Account is invested in proportion to the amounts invested in
such funds as of the date such withdrawal is made.
(e) A request for a hardship distribution shall
be treated as a claim for benefits under Article XII. A
hardship withdrawal shall be made as soon as practicable
following approval of the request by the Benefits Committee.
(f) The Benefits Committee may from time to
time establish rules governing withdrawals. Such rules shall
be applied on a uniform and nondiscriminatory basis.
9.10 DISTRIBUTION TO ALTERNATE PAYEE. In the event
that all or a portion of a Participant's Account is
immediately distributable to an alternate payee pursuant to a
qualified domestic relations order, the Benefits Committee
shall distribute the amount payable to such alternate payee
in a lump sum as soon as practicable after determining that
such order is qualified in accordance with Article XV.
Except as otherwise provided in the domestic relations order,
such distribution shall be made as of the Valuation Date
coinciding with or next following the date that it is
determined that the order is qualified. If the amount to be
distributed under this Section exceeds Three Thousand Five
Hundred Dollars ($3,500.00), distribution shall not be made
without the written consent of the alternate payee.
In the event that all or a portion of a Participant's
Account is payable to an alternate payee pursuant to a
qualified domestic relations order, but is not immediately
distributable under such order, the Benefits Committee shall
direct the Trustee to establish a separate account within the
meaning of Section 15.5(b) on behalf of the alternate payee
as soon as practicable after determining that such order is
qualified in accordance with Article XV. The Benefits
Committee shall distribute the amount payable from such
account to such alternate payee in such form and at such time
as is provided by the terms of such order. Distribution of a
separate account pursuant to this Section 9.10 may be made
prior to the Participant's "earliest retirement age" as
defined in Section 15.7.
9.11 DISTRIBUTIONS TO MINORS AND INCOMPETENT
PERSONS. If any person to whom benefits shall be distributed
under the Plan shall be a minor, or if the Benefits Committee
shall determine that such person is incompetent by reason of
mental or physical disability, the Benefits Committee may
direct the Trustee to distribute such benefits in one or more
of the following ways to be determined by the Benefits
Committee:
(a) directly to such minor or incompetent
person; or
(b) to a legal or natural guardian or other
relative of such minor, or to the legal guardian or
conservator of such incompetent person or to any adult person
with whom such incompetent person temporarily or permanently
resides.
The receipt by such minor, incompetent person, guardian,
conservator, relative or other person shall be a complete
discharge of the Trustee, the Benefits Committee and the
Trust Fund, and the Trustee and Benefits Committee shall be
without any responsibility to see to the application of any
such distributions.
9.12 DISTRIBUTION RULES FOR TSA PARTICIPANTS. The
provisions of this Section shall be effective October 1,
1996.
(a) For purposes of this Section 9.12, the
following terms shall have the following meanings unless the
context clearly indicates otherwise:
(i) "Closing Date" shall mean October 1,
1996.
(ii) "Lincoln" shall mean The Lincoln
National Life Insurance Company, any other corporation, trade
or business organization that, at the time of reference,
controls, is controlled by, or is under common control with
The Lincoln National Life Insurance Company, and any
successor to The Lincoln National Life Insurance Company or
to such other corporation, trade or business organization
that assumes the obligations of The Lincoln National Life
Insurance Company under Asset Transfer and Acquisition
Agreement By and Between UNUM Life Insurance Company of
America and The Lincoln National Life Insurance Company Dated
as of January 24, 1996.
(iii) "Transition Period" shall mean, with
respect to a TSA Participant, the period beginning on the
Closing Date and ending on the earlier of (i) the date on
which the TSA Participant terminates employment with Lincoln
and is not thereupon reemployed by an Employer and (ii) the
date that is twenty (20) months after the Closing Date.
(iv) "TSA Participant" shall mean a
Participant in the Plan who (i) is an Eligible Employee
immediately before the Closing Date; (ii) becomes employed by
Lincoln as of the Closing Date or, in the case of a
Participant who on the Closing Date is receiving benefits
under an Employer's short-term disability plan or is absent
from service with an Employer on account of an approved leave
of absence, becomes employed by Lincoln immediately after the
period of disability or approved leave of absence; and (iii)
is employed by Lincoln as an employee at will and not as a
contract employee.
(b) Notwithstanding Sections 9.6(h)(i) and 9.14
to the contrary, in the event that a TSA Participant elects
to receive distribution of his or her Account in the form of
a direct rollover (as described in Section 9.13) to the
Lincoln National Corporation Employees' Savings and Profit
Sharing Plan (the "Lincoln 401(k) Plan") and at the time of
such distribution there remain outstanding any unpaid loans
with respect to his or her Account that are not in default,
such unpaid loans shall not be treated as due and payable
immediately as of the date such distribution is made and
instead shall be transferred to the Lincoln 401(k) Plan.
The promissory note evidencing such loan(s) shall be assigned
to the Lincoln 401(k) Plan, and the TSA Participant's
obligation to this Plan shall be deemed to be paid in full as
of the date the distribution is made. Such TSA Participant
shall be treated as receiving a distribution of his or her
entire Account.
(c) During his or her Transition Period,
Section 9.7(a) shall not apply with respect to a TSA
Participant, and, subject to Section 9.7(b) and (c), the TSA
Participant shall be permitted to maintain his or her Account
under the Plan, or to elect to receive distribution of his or
her Account as of any Valuation Date that occurs after the
Closing Date, without regard to the value of his or her
Account as of the Valuation Date following the Closing Date
or any subsequent Valuation Date that falls within such
Transition Period. Beginning with the first Valuation Date
following the end of his or her Transition Period, Section
9.7(a) shall once again apply to a TSA Participant.
9.13 DIRECT ROLLOVERS.
(a) Effective January 1, 1993, a Participant
who is entitled to receive an eligible rollover distribution
may elect to have such distribution (or a portion thereof not
less than Five Hundred Dollars ($500.00)) made directly to an
eligible retirement plan ("direct rollover election").
An alternate payee who is entitled to receive an
eligible rollover distribution pursuant to a qualified
domestic relations order under Article XV and who is the
spouse or a former spouse of a Participant may make a direct
rollover election as if such alternate payee were the
Participant.
A surviving spouse who is entitled to receive an
eligible rollover distribution by reason of the Participant's
death may make a direct rollover election; provided that such
election is restricted to an eligible retirement plan that is
an individual retirement account described in Section 408(a)
of the Code or an individual retirement annuity described in
Section 408(b) of the Code.
(b) No earlier than ninety (90) days and no
later than thirty (30) days before an eligible rollover
distribution is to be made, the Benefits Committee shall
provide the Participant, alternate payee, or surviving
spouse, as the case may be, with a written explanation of:
(i) the rules under which he or she may make
a direct rollover election;
(ii) the legal requirement that federal
income tax be withheld from the distribution if he or she
does not elect a direct rollover;
(iii) the rules under which the amount that
he or she actually receives will not be subject to federal
income tax if such amount is transferred ("rolled over")
within sixty (60) days after being received pursuant to
Section 402(c) of the Code;
(iv) the rules, if applicable, for
receiving special income tax averaging, or capital gain
treatment, under Section 402(d) of the Code; and
(v) the Plan provisions under which a
direct rollover election with respect to one payment in a
series of periodic payments will apply to all subsequent
payments until such election is changed.
Notwithstanding the foregoing to the contrary, if
an eligible rollover distribution is one of a series of
periodic payments, the explanation required by this
subsection shall be provided annually as long as such
payments continue.
(c) A direct rollover election shall be made in
such manner and at such time as the Benefits Committee shall
prescribe, and shall include:
(i) the name of the eligible retirement
plan;
(ii) a statement that such plan is an
eligible retirement plan; and
(iii) any other information necessary to
permit a direct rollover by the means selected by the
Benefits Committee.
An election to make a direct rollover with respect
to one payment in a series of periodic payments shall apply
to all subsequent payments in the series until such election
is changed; such change with respect to subsequent payments
may be made at any time.
(d) Notwithstanding subsection (b) to the
contrary, if an individual, after receiving the written
explanation required by subsection (b), affirmatively elects
to make or not make a direct rollover, an eligible rollover
distribution may be made less than thirty (30) days after the
date such written explanation was given, provided the
Benefits Committee has informed such individual, in writing,
of his or her right to a period of at least thirty (30) days
to make such election.
(e) As used in this Section, the following
terms shall have the following meanings:
(i) "Eligible retirement plan" shall mean
(A) an individual retirement account,
described in Section 408(a) of the Code;
(B) an individual retirement annuity
described in Section 408(b) of the Code (other than an
endowment contract);
(C) a trust described in Section
401(a) of the Code which is exempt from tax under Section
501(a) of the Code and which is part of a defined
contribution plan described in Section 414(i) of the Code
that permits rollover contributions; or
(D) an annuity plan described in
Section 403(a) of the Code.
(ii) "Eligible rollover distribution"
shall mean a distribution from the Plan of Two Hundred
Dollars ($200.00) or more, excluding the following:
(A) a distribution that is one of a
series of periodic payments (not less frequently than
annually) made for a specified period of ten (10) years or
longer, for the distributee's life expectancy (or the joint
life expectancy of the distributee and his or her designated
Beneficiary), or for the distributee's life (or the joint
lives of the distributee and his or her designated
Beneficiary);
(B) a required distribution pursuant
to Section 9.7;
(C) a return of Elective
Contributions pursuant to Section 7.4;
(D) a corrective distribution
pursuant to Section 3.7, 5.4 or 6.2; and
(E) a distribution of after-tax
contributions.
9.14 FORM OF DISTRIBUTION. Distribution of a
Participant's Account shall be made in cash; provided,
however, a Participant may elect that distribution of the
portion of his or her Account which is invested in the UNUM
Stock Fund be made, in whole or in part, in whole shares of
common stock of UNUM Corporation. Such election shall be
made by such written, telephonic or electronic means, and at
such time, as shall be prescribed by the Benefits Committee.
In the event of the death of a Participant, his or her
surviving spouse or Beneficiary may make the same election as
permitted with respect to a Participant pursuant to this
Section.
ARTICLE X
TOP HEAVY PROVISIONS
10.1 TOP HEAVY REQUIREMENTS. Notwithstanding any
provision of this Plan to the contrary, if the Plan is or
becomes Top Heavy in any Plan Year beginning after December
31, 1983, then the provisions of this Article shall become
applicable and supersede any conflicting provisions of this
Plan.
10.2 MINIMUM VESTING REQUIREMENTS. Each Participant
shall continue to have a fully vested and nonforfeitable
interest in his or her Account.
10.3 MINIMUM CONTRIBUTION REQUIREMENT. Except as
hereinafter provided, for each Plan Year in which the Plan is
Top Heavy, each Employer shall contribute, on behalf of each
Eligible Employee who is a Non-Key Employee and who has not
separated from its employ by the end of such Plan Year, an
amount, which when added to the Discretionary Contributions
allocated to such Eligible Employee's Account, shall be equal
to the lesser of:
(a) three percent (3%) of such Eligible
Employee's compensation (as defined in Section 7.5); or
(b) the percentage of such Eligible Employee's
compensation (as so defined) which is equal to the largest
percentage determined by dividing the Employer Contributions
allocated to the Account of each Key Employee by such Key
Employee's compensation (as so defined).
The preceding sentence shall be applied by substituting four
percent (4%) for three percent (3%) for each Plan Year in
which:
(i) the Plan is included in a Required
Aggregation Group or a Permissive Aggregation Group which
includes a qualified defined benefit plan and the Top Heavy
Ratio does not exceed ninety percent (90%); and
(ii) the limitation set forth in Section 7.2
would be exceeded if 1.0 is substituted for 1.25 wherever
1.25 appears in said limitation.
The minimum contribution shall be made on behalf of each
Eligible Employee who is a Non-Key Employee and who remains
in the service of the Employer on the last day of the Plan
Year, regardless of the number of Hours of Service such
Eligible Employee is credited with during such Plan Year.
Notwithstanding any provision of this Section to the
contrary, for each Plan Year in which the Plan is Top Heavy,
an Eligible Employee who is a Non-Key Employee and who is
also covered by a qualified defined benefit plan maintained
by the Employer, shall accrue a minimum benefit (as required
by Section 416(c)(1) of the Code and the regulations
thereunder) under such plan (unless such plan is terminated),
and a minimum contribution shall not be made on behalf of
such Eligible Employee under this Plan. The preceding
sentence shall be applied by substituting "three percent
(3%)" for "two percent (2%)" in Section 416(c)(1)(B)(i) of
the Code and by increasing (but not by more than ten
percentage points) the percentage provided in Section
416(c)(1)(B)(ii) of the Code for each Plan Year in which:
(i) the Plan is included in a Required
Aggregation Group or a Permissive Aggregation Group which
includes a qualified defined benefit plan and the Top Heavy
Ratio does not exceed ninety percent (90%); and
(ii) the limitation set forth in Section
7.2 would be exceeded if 1.0 is substituted for 1.25 wherever
1.25 appears in said limitation.
For purposes of satisfying the minimum contribution
requirement of this Section, Elective Contributions and
Matching Contributions shall not be taken into account.
10.4 MODIFIED LIMITATION ON ALLOCATIONS. The
limitation of Section 7.2 shall be applied by substituting
1.0 for 1.25 wherever 1.25 appears in said limitation for
each Plan Year in which the Plan is included in a Required
Aggregation Group or a Permissive Aggregation Group which
includes a qualified defined benefit plan and the Top Heavy
Ratio exceeds ninety percent (90%).
10.5 PRESENT VALUE FACTORS. For purposes of
determining the Top Heavy Ratio, the present value of accrued
benefits under all defined benefit plans included in a
Required Aggregation Group or a Permissive Aggregation Group
shall be based on the following factors:
Interest: six and one-half percent (6.5%)
Mortality: 1971 Group Annuity Mortality Table, using
male rates for all individuals.
10.6 BENEFIT ACCRUAL. For purposes of determining
the Top Heavy Ratio, the accrued benefit of any Non-Key
Employee under all defined benefit plans included in a
Required Aggregation Group or a Permissive Aggregation Group
shall be determined under the method used for accrual
purposes for all such plans of an Employer or, if no method
is prescribed, as if such benefit accrued no more rapidly
than the slowest rate permitted under Section 411(b)(1)(C) of
the Code.
ARTICLE XI
PLAN ADMINISTRATION
11.1 APPOINTMENT OF BENEFITS COMMITTEE. The Board
(or any person or persons to whom the Board delegates its
authority) shall appoint at least three (3) persons to
administer the Plan, and they shall be known as the Benefits
Committee. The Benefits Committee shall act by a majority of
its members either by a meeting or in a writing without a
meeting. Any member may participate in a meeting by means of
a conference telephone or similar communications equipment by
means of which all persons participating in the meeting can
hear each other. Any person appointed to serve as a member
of the Benefits Committee shall signify his or her acceptance
in writing to the Board (or to such person or persons
specified by the Board).
11.2 RESIGNATION AND REMOVAL. Any member of the
Benefits Committee may resign at any time by delivering to
the Board (or to such person or persons specified by the
Board) a written notice of resignation, to take effect at a
date specified therein, which shall not be less than thirty
(30) days after the delivery thereof, unless such notice
shall, in writing, be waived by the Board (or such
person(s)). Each member of the Benefits Committee shall
serve at the pleasure of the Board (or such person or persons
to whom the Board delegates its authority) and may be removed
by delivery of written notice of removal, to take effect at a
date specified therein.
The Board (or such person or persons to whom the Board
delegates its authority) as soon as practicable following
receipt of a written notice of resignation or delivery of a
written notice of removal of the Benefits Committee, shall
consider the appointment of a successor. In the event the
Board (or such person(s)) fails to appoint a successor to
serve as a member of the Benefits Committee, the remaining
members of the Benefits Committee shall constitute the
Benefits Committee.
11.3 POWERS AND DUTIES. The Benefits Committee
shall be a Named Fiduciary for purposes of Section 402(a)(1)
of ERISA with the following powers and complete discretionary
authority to control and manage the operation and
administration of the Plan:
(a) To determine all questions concerning the
eligibility of Employees to participate in and receive
benefits under the Plan.
(b) To compute the amount of benefits payable
to any Participant or Beneficiary.
(c) To authorize and direct the Trustee with
respect to payment of benefits.
(d) To furnish the Trustee with such
information, statements and reports as will enable the
Trustee to comply with the reporting and disclosure
requirements under ERISA and the Code.
(e) To interpret the provisions of the Plan and
to make rules and regulations for the administration of the
Plan.
(f) To maintain all the necessary records for
the administration of the Plan.
(g) To employ or retain counsel, accountants,
actuaries or such other consultants as may be required to
assist in administering the Plan.
(h) To act as agent for service of legal
process.
(i) To give written notice to all interested
parties (as defined in the regulations prescribed under
Section 7476(b)(1) of the Code), in the form and manner, and
at such time as prescribed by such regulations, of an
application for an advance determination with respect to the
initial qualification of the Plan or to the effect of an
amendment or termination of the Plan.
The Benefits Committee shall have no power or authority
over the investment of the assets of the Trust and nothing in
this Section 11.3 shall be construed as granting such power
and authority.
11.4 REPORTING AND DISCLOSURE. The Benefits
Committee shall furnish to each Participant and to each
Beneficiary who is receiving benefits under the Plan, and
shall file with the Secretary of Labor and the Secretary of
Treasury all reports, disclosures and notifications as are
required under the Code and ERISA.
11.5 DELEGATION OF MINISTERIAL DUTIES. The Benefits
Committee may delegate to any other person or persons,
severally or jointly, the authority to perform any
ministerial act in connection with the administration of the
Plan.
11.6 PAYMENT OF PLAN EXPENSES. Notwithstanding any
provision of the Plan or Trust to the contrary, payment of
any reasonable expenses of administering the Plan, as
determined by the Benefits Committee, shall be made from the
Trust Fund, unless paid by the Employers. If such expenses
are incurred as a result of services provided to the Plan or
Trust by a party in interest (as defined in Section 3(14) of
ERISA), no payment shall be made from the Trust Fund unless
the payment (a) satisfies the applicable requirements of
Section 408 of ERISA and the regulations thereunder; or (b)
is otherwise exempt from the applicable prohibited
transaction rules of the Code and ERISA.
11.7 COMPENSATION AND REIMBURSEMENT OF EXPENSES.
The Benefits Committee shall be entitled to reasonable
compensation for services rendered and to reimbursement of
expenses properly and actually incurred in the performance of
its duties on behalf of the Plan, but no person so serving
who already receives compensation from an Employer or any
Affiliated Employer for services rendered as an Employee
shall receive compensation from the Plan, except
reimbursement of expenses properly and actually incurred and
not otherwise reimbursed.
11.8 UNIFORMITY OF RULES AND REGULATIONS. In the
administration of the Plan and the interpretation and
application of its provisions, the Benefits Committee shall
exercise its powers and authority in a nondiscriminatory
manner, and shall apply uniform administrative rules and
regulations in order to assure substantially the same
treatment to Participants in similar circumstances.
11.9 RELIANCE ON REPORTS. The Benefits Committee
shall be entitled to rely upon all certificates and reports
made by any counsel, accountant, actuary or other consultant
employed or retained to assist in administering the Plan.
11.10 MULTIPLE SIGNATURES. A majority of the
members of the Benefits Committee or any one member
authorized by the Benefits Committee shall have authority to
execute all documents, reports or other memoranda necessary
or appropriate to carry out the actions and decisions of the
Benefits Committee. The Trustee or any other interested
party may rely upon any document, report or other memorandum
so executed as evidence of the Benefits Committee action or
decision indicated thereby.
ARTICLE XII
CLAIMS PROCEDURE
12.1 FILING A CLAIM FOR BENEFITS. A Plan
Participant or other person entitled to benefits under the
Plan may make a claim for Plan benefits by filing a written
request with the Benefits Committee.
12.2 DENIAL OF CLAIM. If a claim is wholly or
partially denied, the Benefits Committee shall furnish the
claimant with written notice setting forth in a manner
calculated to be understood by the claimant:
(a) the specific reason or reasons for the
denial;
(b) specific reference to pertinent Plan
provisions on which the denial is based;
(c) a description of any additional material or
information necessary for the claimant to perfect his or her
claim and an explanation why such material or information is
necessary; and
(d) appropriate information as to the steps to
be taken if the claimant wishes to submit his or her claim
for review.
Such notice shall be furnished to the claimant within ninety
(90) days after receipt of his or her claim, unless special
circumstances require an extension of time for processing
such claim. If an extension of time for processing is
required, the Benefits Committee shall, prior to the
termination of the initial ninety (90) day period, furnish
the claimant with written notice indicating the special
circumstances requiring an extension and the date by which
the Benefits Committee expects to render its decision. In no
event shall an extension exceed a period of ninety (90) days
from the end of the initial ninety (90) day period.
12.3 APPEAL OF DENIED CLAIM. A claimant may request
the Appellate Committee to review a denied claim. Such
request shall be in writing and must be delivered to the
Appellate Committee within sixty (60) days after receipt by
the claimant of written notification of denial of claim. A
claimant or his or her duly authorized representative may:
(a) review pertinent documents, and
(b) submit issues and comments in writing.
For purposes of this Section and Section 12.4,
"Appellate Committee" shall mean a committee of no less than
five (5) and no more than seven (7) persons appointed by the
Board (or any person or persons to whom the Board delegates
its authority) to review any denied claims. The Appellate
Committee shall be a named fiduciary for the purpose of
reviewing denied claims and shall have the powers identified
in subsections 11.3(a)-(g) and complete discretionary
authority in reviewing denied claims.
The Appellate Committee shall act by a majority of its
members either by a meeting or in a writing without a
meeting. Any member may participate in a meeting by means of
a conference telephone or similar communications equipment by
means of which all persons participating in the meeting can
hear each other. Any person appointed to serve as a member
of the Appellate Committee shall signify his or her
acceptance in writing to the Board (or such person or persons
specified by the Board).
Any member of the Appellate Committee may resign at any
time by delivering to the Board (or such person or persons
specified by the Board) a written notice of resignation, to
take effect at a date specified therein, which shall not be
less than thirty (30) days after the delivery thereof, unless
such notice shall, in writing, be waived by the Board (or
such person or persons specified by the Board). Each member
of the Appellate Committee shall serve at the pleasure of the
Board (or such person or persons specified by the Board) and
may be removed by delivery of written notice of removal, to
take effect at a date specified therein.
The Board (or such person or persons specified by the
Board), as soon as practical following receipt of a written
notice of resignation or delivery of a written notice of
removal of any member of the Appellate Committee, shall
consider the appointment of a successor. In the event the
Board (or such person or persons specified by the Board)
fails to appoint a successor to serve as a member of the
Appellate Committee, the remaining members of the Appellate
Committee shall constitute the Appellate Committee.
12.4 DECISION ON APPEAL. The Appellate Committee
shall notify the claimant of its decision on review not later
than sixty (60) days after receipt of a request for review,
unless special circumstances require an extension of time for
processing, in which case a decision shall be rendered as
soon as possible, but not later than one hundred twenty (120)
days after receipt of a request for review. If an extension
of time for review is required because of special
circumstances, written notice of the extension must be
furnished to the claimant prior to the commencement of the
extension. The Appellate Committee's decision on review
shall be in writing and shall include specific reasons for
the decision, as well as specific references to the pertinent
Plan provisions on which the decision is based.
ARTICLE XIII
TRUST FUND INVESTMENTS
13.1 EFFECTIVE DATE. Except as hereinafter
provided, the provisions of this Article shall be effective
October 1, 1995.
13.2 DUTIES OF TRUSTEE. The Trustee shall receive
and hold all contributions made by an Employer together with
such other assets as may be transferred to it in accordance
with the provisions of the Plan. In addition, the Trustee
shall make distributions as directed by the Benefits
Committee in accordance with the provisions of Article IX.
13.3 INVESTMENT FUNDS. The Trustee shall establish
a UNUM Stock Fund, a Fixed Income Fund, one or more other
Investment Funds and, effective July 1, 1996, Participant-
Directed Brokerage Accounts as the Individual Trustees (as
defined in Section 1.11 of the Trust) may from time to time
direct. The Individual Trustees shall direct that each
Investment Fund, other than the UNUM Stock Fund and any
Participant-Directed Brokerage Account, shall be invested:
(a) at the discretion of the Trustee in
accordance with such investment guidelines and objectives as
it may establish; or
(b) at the discretion of a duly appointed
Investment Manager in accordance with such investment
guidelines and objectives as may be established by the
Trustee.
The Individual Trustees may from time to time change
their direction with respect to any Investment Fund and may,
at any time, eliminate any Investment Fund. Whenever an
Investment Fund is eliminated, the Trustee shall promptly
liquidate the assets of such Investment Fund and reinvest the
proceeds thereof in such other Investment Fund as the
Benefits Committee may direct, unless a Participant or Former
Participant, pursuant to Section 13.7 or 13.8, elects to
reinvest all or a portion of the balance of his or her
Account which had been invested in the eliminated Investment
Fund in one or more of the other available Investment Funds
or through a Participant-Directed Brokerage Account.
The Trustee shall transfer to each Investment Fund or
Participant-Directed Brokerage Account such portion of the
assets of the Trust as the Benefits Committee may from time
to time direct in accordance with the terms of the Plan. All
interest, dividends and other income received with respect
to, and any proceeds realized from the sale or other
disposition of, assets held in any Investment Fund shall be
credited to and reinvested in such Investment Fund, and all
expenses properly attributable to any Investment Fund shall
be paid therefrom unless paid by the Employers.
13.4 UNUM STOCK FUND. Effective December 1, 1989,
the Trustee shall establish a UNUM Stock Fund which shall be
invested solely in shares of common stock of UNUM Corporation
and any other qualifying employer security within the meaning
of Section 407(d)(5) of ERISA ("Employer Stock"). The
Trustee shall, as soon as practicable, apply amounts
allocated to the UNUM Stock Fund to purchase Employer Stock
on the open market or in private transactions, from UNUM
Corporation or otherwise, at current market value. Any
purchase of Employer Stock directly from the UNUM Corporation
shall be made without commission. Pending investment in
Employer Stock, the Trustee shall invest amounts allocated to
and dividends or other amounts received by the UNUM Stock
Fund in cash or short-term cash equivalents including, but
not limited to, short-term debt obligations issued or
guaranteed by the United States government, money market
funds and savings accounts. Notwithstanding the provisions
of this Section 13.4 to the contrary, the Trustee shall have
no authority to invest any assets of the Trust in shares of
Employer Stock unless (i) such shares constitute "qualifying
employer securities" within the meaning of Section 407 of
ERISA and (ii) such investment is not prohibited by Section
404, 406 or 407 of ERISA.
Upon the purchase of any Employer Stock by the Trustee,
the purchase price chargeable to the Account of each
Participant shall be its proportionate share (based upon the
number of shares purchased and the number of shares allocable
to such Account) of the entire amount paid by the Trustee
taking into account all brokerage fees, transfer taxes, the
additional cost incurred on purchase of odd lots and other
expenses incurred in connection with the purchase and
transfer of such stock.
Employer Stock acquired by the Plan shall be accounted
for as provided under Treasury Regulation Section 1.402(a)-
1(b)(2)(ii), and the Benefits Committee shall maintain
adequate records of the cost basis of all shares of the
Employer Stock allocated to each Participant's Account.
Cash dividends received by the Trustee upon Employer
Stock allocated to a Participant's Account shall be allocated
and credited to such Account as of the payment date and
applied to the purchase of additional Employer Stock. Stock
dividends received by the Trustee upon Employer Stock
allocated to a Participant's Account shall be allocated and
credited to such Account as of the payment date. If Employer
Stock held in the UNUM Stock Fund is split, the new or
additional shares shall be credited as of the record date to
the Accounts of Participants in proportion to the number of
shares credited to their respective Account, as compared to
the total number of shares in the UNUM Stock Fund,
immediately prior to such date.
13.5 FIXED INCOME FUND. The Trustee shall establish
a Fixed Income Fund which shall, in accordance with Section
13.3, be invested primarily in securities expected to produce
a fixed income, including, but not limited to debt
obligations issued or guaranteed by the United States
government or its agencies, debt obligations of corporations,
bank certificates of deposit, money market funds, savings
accounts and other cash equivalents, or a deposit
administration, investment or group annuity contract issued
by a legal reserve life insurance company.
13.6 INVESTMENT OF MATCHING CONTRIBUTIONS.
Effective for Plan Years beginning on or after January 1,
1997, the first one percent (1%) of any Matching
Contributions made on behalf of a Participant for such year
shall be invested in the UNUM Stock Fund; provided, however,
a Participant who has attained age fifty-five (55) shall have
the right to direct that all or a portion of his or her
Matching Contributions Account that is invested in the UNUM
Stock Fund pursuant to this Section be reinvested in any one
or more of the other Investment Funds pursuant to Section
13.7 or reinvested in his or her Participant-Directed
Brokerage Account pursuant to Section 13.8. Matching
Contributions for any Plan Year in excess of the first one
percent (1%) of a Participant's Compensation for such year
shall be invested in accordance with the provisions of
Sections 13.7 and 13.8.
13.7 INVESTMENT FUNDS-PARTICIPANT DIRECTIONS.
(a) INVESTMENT OF CONTRIBUTIONS. Except as
provided in Section 13.6, each Participant may direct that
contributions made on his or her behalf shall be invested in
any one or more of the Investment Funds. Effective December
4, 1995, the percentage of contributions to be invested in
any Investment Fund shall be five percent (5%), or a multiple
thereof. An investment direction shall be made by such
written, telephonic or electronic means as shall be
prescribed by the Benefits Committee.
A Participant's investment direction, if received
by the Benefits Committee prior to the date he or she
commences participation, shall be effective as of said date.
If a Participant does not make an investment direction or an
investment direction is not received by the Benefits
Committee before the Participant commences participation, the
contributions on behalf of such Participant shall be invested
in the fund which presents the least risk of loss as
determined by the Trustee. An investment direction received
by the Benefits Committee after the date a Participant
commences participation shall be effective as of the later of
the first payroll period following receipt by the Benefits
Committee (or by the person or persons specified by the
Benefits Committee) or the date specified by the Participant
in the investment direction. A deemed investment direction
pursuant to Section 16.2 shall be effective January 1, 1997.
A Participant may modify at any time an investment
direction to have future contributions on his or her behalf
(other than the first one percent (1%) of any Matching
Contributions made for any Plan Year beginning on or after
January 1, 1997) invested in the Investment Funds in
proportions other than those previously elected. An election
modifying a previous investment direction shall be made in
multiples of five percent (5%) of such contributions and
shall be made by such written, telephonic or electronic means
as shall be prescribed by the Benefits Committee. A
modification shall be effective as soon as practicable after
receipt by the Benefits Committee (or by the person or
persons specified by the Benefits Committee). The provisions
of this paragraph shall be effective December 4, 1995.
(b) REINVESTMENT OF ACCOUNT. Except as
provided in Section 13.6, a Participant may elect at any
time to reinvest all or a portion of the balance of his or
her Account in any one or more of the Investment Funds. A
Former Participant may elect at any time to reinvest all or a
portion of the balance of his or her Account, including all
or a portion of his or her Matching Contributions Account
that is invested in the UNUM Stock Fund pursuant to Section
13.6, in any one or more of the Investment Funds. An
election to reinvest an Account balance shall be made in five
percent (5%) multiples of such balance and shall be made by
such written, telephonic or electronic means as shall be
prescribed by the Benefits Committee. An election to
reinvest shall be effective as soon as practicable after
receipt by the Benefits Committee (or by the person or
persons specified by the Benefits Committee). The provisions
of this subsection (b) shall be effective December 4, 1995.
13.8 PARTICIPANT-DIRECTED BROKERAGE ACCOUNTS.
Effective July 1, 1996, and except as provided in Section
13.6, each Participant shall have the right to direct that
his or her Account, or such portion thereof as the
Participant shall designate, shall be reinvested through a
Participant-Directed Brokerage Account in such investments as
the Participant shall choose, subject to such restrictions,
applied in a uniform and nondiscriminatory manner, as the
Benefits Committee may determine; provided that (a) no
portion of a Participant's Account may be invested in
collectibles (as defined in Section 408(m)(2) of the Code);
and (b) no portion of a Participant's Account may be invested
in any investment which does not have a fair market value
that is readily determinable on an established market.
A reinvestment direction under this Section 13.8 shall
be made by such written, telephonic or electronic means as
shall be prescribed by the Benefits Committee and shall be
effective as soon as practicable after receipt by the
Benefits Committee (or the person or persons designated by
the Benefits Committee).
Expenses attributable to a Participant's investment
direction under his or her Participant-Directed Brokerage
Account, including any applicable fees, commissions, load
amounts or service charges, shall be charged to such
Participant's Account.
For purposes of this Section, the term "Participant"
shall include a Former Participant with respect to the
Participant's right to direct that his or her Account, or
such portion thereof as he or she shall designate, shall be
reinvested through a Participant-Directed Brokerage Account
in such investments as the Participant shall choose;
provided, a Former Participant shall also have the right to
direct that all or a portion of his or her Matching
Contributions Account that is invested in the UNUM Stock Fund
pursuant to Section 13.6 shall be reinvested through a
Participant-Directed Brokerage Account in such investments as
the Former Participant shall choose.
13.9 NO FIDUCIARY STATUS. A Participant or Former
Participant who directs the investment of his or her Account
shall not by reason thereof be deemed a fiduciary with
respect to the Plan, and the Employer, Trustee, Benefits
Committee, and other fiduciaries, and any custodian acting as
an agent thereof, shall not be liable for any losses
resulting from the purchase, sale or retention of any assets
which are purchased, sold or retained at the direction of a
Participant or Former Participant. Once a Participant or
Former Participant assumes responsibility for direction of
the investment of his or her Account or any portion thereof,
the fiduciaries shall not thereafter be responsible for the
investment thereof except to the extent otherwise required by
applicable law.
13.10 CUSTODIAN. The Board may from time to time
appoint one or more banks, insurance companies, third party
plan administrators or brokers to serve as custodian of all
or any portion of the Trust Fund.
13.11 INVESTMENT MANAGER. The Board may from time
to time appoint one or more Investment Managers to direct the
investment and reinvestment of the Trust Fund or such portion
thereof as may be designated by the Board. Such appointment
shall be in writing and shall be effective upon receipt by
the Board of the Investment Manager's written acceptance and
acknowledgment that he or she is a fiduciary with respect to
the Plan and Trust. The Board shall give prompt written
notice of such appointment to the Trustee. The Board may
revoke the appointment of any Investment Manager by
furnishing such Investment Manager and the Trustee with
written notice setting forth the effective date of such
revocation. The Trustee shall be fully protected in relying
upon the effectiveness of such appointment until such time as
it receives written notice from the Board to the contrary.
For purposes of this Section 13.11, "Board" shall mean
the Board of Directors of UNUM Corporation or any person or
persons to whom the Board delegates all or a part of its
authority under this Section.
13.12 RECORDKEEPER. The Board may from time to time
appoint one or more persons, corporations or business
organizations to perform recordkeeping and other
administrative services with respect to the Plan and the
Accounts established under the Plan.
13.13 VOTING RIGHTS. Stock held in the UNUM Stock
Fund shall be voted by the Trustee.
ARTICLE XIV
AMENDMENT AND TERMINATION
14.1 AMENDMENT. The Board reserves the right to
amend the Plan from time to time, provided that no amendment
shall, except as otherwise provided in the Plan or authorized
by law, permit any part of the Trust Fund to revert to an
Employer, or permit any part of the Trust Fund to be used or
diverted to purposes other than the exclusive benefit of
Employees, their surviving spouses or Beneficiaries.
If the vesting schedule in effect under the Plan is
amended, each Participant who has completed at least three
(3) years of vesting service, may elect to have the vested
percentage of such portion of his or her Account determined
without regard to such amendment. The Benefits Committee
shall promptly give each such Participant written notice of
the adoption of any such amendment and the availability of
the election to have the vested percentage of such portion of
his or her Account determined without regard to such
amendment. An election by a Participant shall be in writing
and shall be effective if filed with the Benefits Committee
at any time during the period beginning with the date such
amendment is adopted and ending on the later of (i) the date
which is sixty (60) days after the day such amendment is
adopted, (ii) the date which is sixty (60) days after the day
such amendment becomes effective, or (iii) the date which is
sixty (60) days after the day the Participant receives
written notice of such amendment. An election once made
shall be irrevocable. For purposes of this Section, a "year
of vesting service" shall mean a Plan Year in which the
Participant is credited with one thousand (1,000) or more
Hours of Service. Further, a Participant shall be considered
to have completed three (3) years of vesting service if the
Participant has completed three (3) years of vesting service
prior to the expiration of the period in which an election
could be made.
14.2 ACCOUNTS NOT TO BE DECREASED BY AMENDMENT. No
amendment shall, except to the extent permitted under Section
412(c)(8) of the Code, decrease a Participant's Account
balance or, except to the extent permitted by regulations,
eliminate an optional form of benefit. In addition, no
amendment shall have the effect of decreasing a Participant's
vested interest determined without regard to such amendment
as of the later of the date such amendment is adopted or the
date it becomes effective.
14.3 TERMINATION. The Board may terminate the Plan
at any time in its entirety or with respect to any Employer
and shall deliver written notice thereof to the Trustee. The
Plan shall terminate with respect to any Employer on the
earliest of the following dates:
(a) The date the Employer is judicially declared
bankrupt or insolvent;
(b) The date the Employer permanently discontinues
contributions under the Plan;
(c) The date the Employer is merged or
consolidated with another corporation and the Employer is not
the surviving corporation or substantially all its assets are
sold, unless the surviving or purchasing corporation
continues the Plan with the consent of the Board; or
(d) The date the Employer withdraws from the Plan.
If an Employer permanently discontinues contributions or
the Plan is otherwise completely or partially terminated for
any other reason, each affected Participant shall have a
fully vested and nonforfeitable interest in his or her
Account and the Trustee shall make distributions in such
manner and at such time as directed by the Benefits Committee
in accordance with the terms of the Plan. Notwithstanding
any provision of the Plan to the contrary, distribution of a
Participant's Account shall be made without the Participant's
or Former Participant's consent following termination of the
Plan, unless applicable regulations require that the Account
of a Participant who does not consent to a distribution be
transferred to another qualified plan maintained by his or
her Employer.
14.4 NOTICE OF AMENDMENT OR TERMINATION. In the
case of an application for an advance determination as to
whether a Plan amendment or termination affects the
continuing qualification of the Plan, the Benefits Committee
shall furnish each interested party (as defined by the
regulations prescribed under Section 7476(b)(1) of the Code)
with written notice, in the form and manner, and at such time
as prescribed by such regulations, of the adoption of any
amendment or Plan termination.
ARTICLE XV
NONALIENABILITY OF BENEFITS; QUALIFIED DOMESTIC RELATIONS
ORDERS
15.1 NONALIENABILITY OF BENEFITS. Except as
expressly provided below, the benefits provided under the
Plan shall not be subject to alienation, assignment,
garnishment, attachment, execution (other than the collection
by the United States on a judgment resulting from an unpaid
tax assessment) or levy of any kind (other than a federal tax
levy made pursuant to Section 6331 of the Code), and any
attempt to cause such benefits to be so subjected will not be
recognized.
15.2 QUALIFIED DOMESTIC RELATIONS ORDERS. The
provisions of the immediately preceding Section shall apply
to the creation, assignment or recognition of a right to any
benefit payable with respect to a Participant pursuant to a
domestic relations order, except that said immediately
preceding Section shall not apply if the order is determined
to be a qualified domestic relations order.
15.3 NOTICE. Upon the receipt of any domestic
relations order by the Plan, the Benefits Committee shall
promptly notify, in writing, the Participant and any
alternate payee named in the domestic relations order (at the
address included in the domestic relations order) of the
receipt of such order and the Plan's procedures for
determining the qualified status of such domestic relations
order.
15.4 REPRESENTATIVE. Any alternate payee named in a
domestic relations order received by the Plan shall have the
right to designate, by notice in writing to the Benefits
Committee, a representative for the receipt of copies of
notices that are sent to the alternate payee with respect to
such domestic relations order.
15.5 SEPARATE ACCOUNT.
(a) During any period in which the issue of
whether a domestic relations order is a qualified domestic
relations order is being determined (by the Benefits
Committee, by a court of competent jurisdiction, or
otherwise), the Benefits Committee shall direct the Trustee
to separately account for the amounts, if any, which would
have been payable to any alternate payee during such period
if the order had been determined to be a qualified domestic
relations order.
(b) In the event an alternate payee does not
receive an immediate distribution pursuant to a domestic
relations order which is determined by the Benefits Committee
or by a court of competent jurisdiction to be a qualified
domestic relations order, the Benefits Committee shall direct
the Trustee to establish a separate account in the Plan in
the name of the alternate payee as soon as practicable
following such determination. An alternate payee shall have
the same rights and protections as a Participant with respect
to such account and shall be entitled to receive distribution
of such account in accordance with Section 9.10.
15.6 DETERMINATION BY BENEFITS COMMITTEE.
(a) Within ninety (90) days after receipt of a
domestic relations order, the Benefits Committee shall
determine whether such order is a qualified domestic
relations order and shall notify, in writing, the Participant
and each alternate payee named in such order of such
determination.
(b) If the Benefits Committee shall determine
that the domestic relations order is a qualified domestic
relations order and such order provides that the benefits
required to be paid thereunder are immediately distributable,
the Benefits Committee shall direct the Trustee to pay to
each alternate payee named in such order, the benefits
required to be paid thereunder, including any amounts
segregated in accordance with Section 15.5(a) (plus any
interest thereon). If the Benefits Committee shall determine
that the domestic relations order is a qualified domestic
relations order and such order does not provide that the
benefits required to be paid thereunder are immediately
distributable, the Benefits Committee shall direct the
Trustee to establish a separate account in accordance with
Section 15.5(b).
(c) If the Benefits Committee shall determine
that the domestic relations order is not a qualified domestic
relations order, the notice required by the first paragraph
of this Section shall include a statement of the specific
reason or reasons for the Benefits Committee's determination
and the Benefits Committee shall direct the Trustee to
continue to segregate, in accordance with Section 15.5(a),
during the eighteen (18) month period beginning with the date
on which the first payment would be required to be made under
such domestic relations order, any amounts which would have
been payable to any alternate payee during such eighteen (18)
month period if the order had been determined to be a
qualified domestic relations order, unless such order shall
sooner be determined, by the Benefits Committee or a court of
competent jurisdiction, to be a qualified domestic relations
order, in which event the Benefits Committee shall direct the
Trustee to make payment of any such segregated amount (plus
any interest thereon) to each alternate payee named in the
order in accordance with subsection (b) above. If neither
the Benefits Committee nor a court of competent jurisdiction
shall determine within said period of eighteen (18) months
that such domestic relations order is a qualified domestic
relations order; then, upon expiration of said period, the
Benefits Committee shall direct the Trustee to pay any such
segregated amount (plus any interest thereon) to the person
or persons who would have been entitled to such amounts if
there had been no order.
15.7 DEFINITIONS. As used in this Article, the
following terms shall have the meanings hereinafter set
forth:
(a) "Alternate payee" shall mean any spouse,
former spouse, child or other dependent of a Participant who
is recognized by a domestic relations order as having a right
to receive all, or a portion of, the benefits payable under
the Plan with respect to such Participant.
(b) "Domestic relations order" shall mean any
judgment, decree or order (including approval of property
settlement agreement) which relates to the provisions of
child support, alimony payments or marital property rights to
a spouse, former spouse, child or other dependent of a
Participant, and is made pursuant to a state domestic
relations law (including a community property law).
(c) "Earliest retirement age" shall mean the
earlier of:
(i) the date on which the Participant is
entitled to a distribution under the Plan, or
(ii) the later of the date the Participant
attains age fifty (50), or the earliest date on which the
Participant could begin receiving payments under the Plan if
he or she separated from service.
(d) "Qualified domestic relations order" shall
mean a domestic relations order which:
(i) creates or recognizes the existence of
an alternate payee's right to, or assigns to an alternate
payee the right to, receive all or a portion of the benefits
payable with respect to a Participant under the Plan; and
(ii) clearly specifies:
(aa) the name and the last known
mailing address (if any) of the Participant and the name and
mailing address of each alternate payee covered by the order;
(bb) the amount or percentage of the
Participant's benefits to be paid by the Plan to each such
alternate payee, or the manner in which such amount or
percentage is to be determined;
(cc) the number of payments or period
to which such order applies; and
(dd) each plan to which such order
applies; and
(iii) does not require the Plan to:
(aa) provide any type or form of
benefits, or any option, not otherwise provided under the
Plan;
(bb) provide increased benefits
(determined on the basis of actuarial value); or
(cc) pay benefits to an alternate
payee which are to be paid to another alternate payee under
another order previously determined to be a qualified
domestic relations order.
In the case of any payment to an alternate payee before
a Participant has separated from service, a domestic
relations order shall not be treated as failing to meet the
requirements of clause (aa) of subparagraph (iii) solely
because such order requires that payment of benefits be made
to an alternate payee:
(iv) on or after the date on which the
Participant attains (or would have attained) the earliest
retirement age;
(v) as if the Participant has retired on
the date on which such payment is to begin under such order;
and
(vi) in any form in which such benefits
may be paid under the Plan to the Participant (other than in
the form of a joint and survivor annuity with respect to the
alternate payee and his or her subsequent spouse).
ARTICLE XVI
MERGERS
16.1 MERGER OR CONSOLIDATION OF PLAN. In case of
any merger or consolidation of the Plan with, or transfer of
assets and liabilities of the Plan to, any other plan
qualified under Section 401(a) and Section 501(a) of the
Code, provision must be made so that each Participant would,
if the Plan then terminated, receive a benefit immediately
after the merger, consolidation or transfer which is equal to
or greater than the benefit he would have been entitled to
receive immediately before the merger, consolidation or
transfer if the Plan had then terminated.
16.2 MERGER WITH DUNCANSON & HOLT, INC. EMPLOYEE
PROFIT PARTICIPATION AND SAVINGS PLAN. Effective January 1,
1997, the Plan shall be merged with the Duncanson & Holt,
Inc. Employee Profit Participation and Savings Plan (the
"Duncanson & Holt, Inc. Plan"). The provisions of this
Section shall be applicable to such merger and shall
supersede any conflicting provisions of this Plan.
(a) The assets of the Duncanson & Holt, Inc.
Plan shall be directly transferred to the Plan as of January
1, 1997. Upon receipt, the Benefits Committee shall direct
the Trustee to establish and maintain an account on behalf of
each participant and former participant under the Duncanson &
Holt, Inc. Plan and shall direct the Trustee to credit such
account with the portion of the transferred assets standing
to the credit of such participant or former participant under
the Duncanson & Holt, Inc. Plan immediately prior to such
transfer, provided such amount shall be separately accounted
for in accordance with Section 8.1. With respect to a
participant in the Duncanson & Holt, Inc. Plan who has an
outstanding loan balance under such plan at the time of the
transfer, the promissory note evidencing such loan shall be
transferred to this Plan and the outstanding loan balance
shall be treated in accordance with the provisions of Section
9.6 as an outstanding loan balance under this Plan.
(b) Each elective, matching or other type of
contribution comprising the transfer account created pursuant
to subsection (a) above shall be administered, invested and
distributed in accordance with the provisions of this Plan
applicable to such type of contribution. Each type of
contribution comprising the transfer account of an individual
who is a participant in the Duncanson & Holt, Inc. Plan as of
December 31, 1996, and which is not fully vested under such
plan as of December 31, 1996, shall become fully vested under
this Plan as of January 1, 1997. Each type of contribution
comprising the transfer account of an individual who is a
former participant in the Duncanson & Holt, Inc. Plan as of
December 31, 1996, and which is not fully vested under such
plan as of December 31, 1996, shall remain subject to the
vesting schedule set forth in Section 9.4 of the Duncanson &
Holt, Inc. Plan, which is reproduced below:
VESTED PERCENTAGE OF
NUMBER OF PARTICIPANT'S MATCHING CONTRIBUTIONS ACCOUNT
AND
YEARS OF VESTING SERVICE DISCRETIONARY CONTRIBUTIONS
ACCOUNT
Less than 1 20%
1 but less than 2 40%
2 but less than 3 60%
3 but less than 4 80%
4 or more 100%
The portion of such former participant's transfer
account which is not vested in accordance with the preceding
sentence as of December 31, 1996, shall be forfeited as of
the date he or she receives distribution of the vested
portion, provided if such former participant receives less
than the entire vested portion of his or her transfer
account, the forfeiture shall be limited to the nonvested
portion of such account at the time of distribution
multiplied by a fraction, the numerator of which is the
amount distributed to such former participant from such
account and the denominator of which is the value of the
vested portion of such account at the time of distribution.
In the event that such former participant is
reemployed prior to incurring five (5) consecutive Breaks in
Service, the amount forfeited shall be restored to his or her
transfer account if he or she repays the full amount of the
vested portion of his or her transfer account distributed to
him or her before the earlier of (a) five (5) years from the
date he or she is again employed by an Employer, or (b) the
close of the first period of five (5) consecutive Breaks in
Service commencing after the date of distribution.
In the event that an individual who was a
participant in the Duncanson & Holt, Inc. Plan and who was
not vested in any portion of his or her matching
contributions account and discretionary contributions account
under that plan at the time he or she ceased to be employed
is reemployed prior to incurring five (5) consecutive Breaks
in Service, the balance of his or her matching contributions
account and discretionary contributions account as of the
Valuation Date coinciding with or next following the date he
or she ceased to be employed shall be restored, and the
Benefits Committee shall direct the Trustee to establish and
maintain an account on behalf of such individual and shall
direct the Trustee to credit such account with such balance.
Restoration shall be made by the end of the Plan
Year following the Plan Year in which such individual is
reemployed by an Employer or, if restoration is conditioned
upon repayment by a former participant, the end of the Plan
Year following the Plan Year in which repayment is made.
Restoration shall first be made out of forfeitures and to the
extent forfeitures are insufficient, then out of Employer
Contributions.
The amounts forfeited by such former participants
in any Plan Year shall be used to make restoration in
accordance with this subsection and, to the extent
forfeitures exceed the amounts required to make restoration,
to reduce Employer Contributions. The amount, if any, by
which forfeitures occurring during a Plan Year exceed the sum
of the amounts required to make restoration and the amount
required to be contributed by the Employer for such Plan Year
shall be credited to an excess forfeiture account, which
shall be adjusted for the income, expenses, gains and losses
attributable thereto in the same manner provided for
adjustment of Accounts. On the Valuation Date coinciding
with the last day of the next succeeding Plan Year, the
excess forfeiture account shall be closed and treated as a
forfeiture occurring in such Plan Year. This procedure shall
be repeated for each Plan Year in which forfeitures occurring
during such year exceed the sum of the amount required to
make restoration and the amount required to be contributed by
such Employer for such year, subject, however, to such
modification as may be required by the Section governing
termination of the Plan.
(c) The deferral election and investment
direction of a participant (and former participant, in the
case of an investment direction) in effect under the
Duncanson & Holt, Inc. Plan as of December 31, 1996, shall be
deemed a Deferral Election under Section 5.1 and an
investment direction under Section 13.7 or 13.8, as the case
may be, of this Plan.
(d) Notwithstanding the foregoing provisions of
this Plan to the contrary, a participant or former
participant in the Duncanson & Holt, Inc. Plan may elect to
have the vested portion of the balance of the transfer
account created pursuant to Section 16.2(a) of this Plan as
of January 1, 1997, distributed in such form as set forth in
Article I of Exhibit B to this Plan.
(e) Notwithstanding any provision of this Plan
to the contrary, any participant or former participant in the
Duncanson & Holt, Inc. Plan who is subject to the provisions
of Article XVI of said plan shall remain subject to such
provisions, which are set forth in Article II of Exhibit B to
this Plan.
(f) Notwithstanding any provision of this Plan
to the contrary, if a participant or former participant in
the Duncanson & Holt, Inc. Plan has made a designation
pursuant to Section 242(b) of the Tax Equity and Fiscal
Responsibility Act of 1982, distribution of his or her
Account shall be made in accordance with such designation.
16.3 MERGER WITH COLONIAL COMPANIES, INC. SECURITY
SAVER PLAN. Effective January 1, 1997, the Plan shall be
merged with the Colonial Companies, Inc. Security Saver Plan
(the "Colonial Plan"). The provisions of this Section shall
be applicable to such merger and shall supersede any
conflicting provisions of this Plan.
(a) The assets of the Colonial Plan shall be
directly transferred to the Plan as of January 1, 1997. Upon
receipt, the Benefits Committee shall direct the Trustee to
establish and maintain an account on behalf of each
participant and former participant under the Colonial Plan
and shall direct the Trustee to credit such account with the
portion of the transferred assets standing to the credit of
such participant or former participant under the Colonial
Plan immediately prior to such transfer, provided such amount
shall be separately accounted for in accordance with Section
8.1. With respect to a participant in the Colonial Plan who
has an outstanding loan balance under such plan at the time
of the transfer, the promissory note evidencing such loan
shall be transferred to this Plan and the outstanding loan
balance shall be treated in accordance with the provisions of
Section 9.6 as an outstanding loan balance under this Plan.
(b) Except as hereinafter provided, each
elective, matching or other type of contribution comprising
the transfer account created pursuant to subsection (a) above
shall be administered, invested and distributed in accordance
with the provisions of this Plan applicable to such type of
contribution. Each type of contribution comprising the
transfer account of an individual who is a participant in the
Colonial Plan as of December 31, 1996, and which is not fully
vested under such plan as of December 31, 1996, shall become
fully vested under this Plan as of January 1, 1997. Each
type of contribution comprising the transfer account of an
individual who is a former participant in the Colonial Plan
as of December 31, 1996, and which is not fully vested under
such plan as of December 31, 1996, shall remain subject to
the vesting schedule set forth in Section 7.3 of the Colonial
Plan, which is reproduced below:
NUMBER OF PARTICIPANT'S VESTED PERCENTAGE OF
YEARS OF VESTING SERVICE MATCHING CONTRIBUTIONS
ACCOUNT
Less than 1 0%
1 but less than 20%
2 but less than 40%
3 but less than 4 60%
4 but less than 5 80%
5 or more 100%
The portion of such former participant's transfer
account which is not vested in accordance with the preceding
sentence as of December 31, 1996, shall be forfeited as of
the date he or she receives distribution of the vested
portion, provided if such former participant receives less
than the entire vested portion of his or her transfer
account, the forfeiture shall be limited to the nonvested
portion of such account at the time of distribution
multiplied by a fraction, the numerator of which is the
amount distributed to such former participant from such
account and the denominator of which is the value of the
vested portion of such account at the time of distribution.
In the event that such former participant is
reemployed prior to incurring five (5) consecutive Breaks in
Service, the amount forfeited shall be restored to his or her
transfer account if he or she repays the full amount of the
vested portion of his or her transfer account distributed to
him or her before the earlier of (a) five (5) years from the
date he or she is again employed by an Employer, or (b) the
close of the first period of five (5) consecutive Breaks in
Service commencing after the date of distribution.
In the event that an individual who was a
participant in the Colonial Plan and who was not vested in
any portion of his or her matching contributions account
under that plan at the time he or she ceased to be employed
is reemployed prior to incurring five (5) consecutive Breaks
in Service, the balance of his or her matching contributions
account as of the Valuation Date coinciding with or next
following the date he or she ceased to be employed shall be
restored, and the Benefits Committee shall direct the Trustee
to establish and maintain an account on behalf of such former
participant and shall direct the Trustee to credit such
account with such balance.
Restoration shall be made by the end of the Plan
Year following the Plan Year in which such individual is
reemployed by an Employer or, if restoration is conditioned
upon repayment by a former participant, the end of the Plan
Year following the Plan Year in which repayment is made.
Restoration shall first be made out of forfeitures and to the
extent forfeitures are insufficient, then out of Employer
Contributions.
The amounts forfeited by such former participants
in any Plan Year shall be used to make restoration in
accordance with this subsection and, to the extent
forfeitures exceed the amounts required to make restoration,
to reduce Employer Contributions. The amount, if any, by
which forfeitures occurring during a Plan Year exceed the sum
of the amounts required to make restoration and the amount
required to be contributed by the Employer for such Plan Year
shall be credited to an excess forfeiture account, which
shall be adjusted for the income, expenses, gains and losses
attributable thereto in the same manner provided for
adjustment of Accounts. On the Valuation Date coinciding
with the last day of the next succeeding Plan Year, the
excess forfeiture account shall be closed and treated as a
forfeiture occurring in such Plan Year. This procedure shall
be repeated for each Plan Year in which forfeitures occurring
during such year exceed the sum of the amount required to
make restoration and the amount required to be contributed by
such Employer for such year, subject, however, to such
modification as may be required by the Section governing
termination of the Plan.
(c) The deferral election of a participant in
effect under the Colonial Plan as of December 31, 1996, shall
be deemed a Deferral Election under Section 5.1 of this Plan.
During the period beginning January 1, 1997, and ending on
the later of February 1, 1997, or the date participant
records under the Colonial Plan are reconciled and updated by
State Street Bank and Trust Company, the balance of each
transfer account created pursuant to subsection (a) above,
and, except as provided in Section 13.6 of this Plan, any
contributions made on behalf of a Participant who was a
participant in the Colonial Plan as of December 31, 1996,
shall be invested in such Investment Fund(s) as the plan
fiduciary of the Colonial Plan who is responsible for
investment decisions shall determine. Effective as of the
first day immediately following the end of the period
described in the preceding sentence, each participant and
former participant in the Colonial Plan as of December 31,
1996, shall be permitted to make investment directions as
provided in Section 13.7 or Section 13.8 of this Plan. If a
participant or former participant in the Colonial Plan does
not make an investment direction, in accordance with the
preceding sentence, the balance of his or her transfer
account (and any contributions made on his or her behalf
under this Plan, in the case of a participant) shall continue
to be invested in accordance with investment instructions in
effect for the period described in the second sentence of
this subsection (c). Any investment direction pursuant to
this subsection (c) shall be made by such written, telephonic
or electronic means as shall be prescribed by the Benefits
Committee.
ARTICLE XVII
MISCELLANEOUS
17.1 FIDUCIARY DUTIES. All fiduciaries with respect
to the Plan and Trust shall discharge their respective duties
under the Plan and Trust solely in the interest of the
Participants, their surviving spouses and their Beneficiaries
and:
(a) for the exclusive purpose of providing
benefits to Participants, their surviving spouses and their
Beneficiaries, and defraying reasonable expenses of
administering the Plan;
(b) with the care, skill, prudence, and
diligence under the circumstances then prevailing that a
prudent person acting in like capacity and familiar with such
matters would use in the conduct of an enterprise of a like
character and with like aims; and
(c) by diversifying the investments of the Plan
so as to minimize the risk of large losses, unless under the
circumstances it is clearly prudent not to do so.
17.2 PROHIBITED TRANSACTIONS. Neither the Trustee,
nor any Investment Manager, nor any Participant (or Former
Participant) who directs the investment of his or her Account
shall engage in a transaction which the Trustee, Investment
Manager or Participant (or Former Participant) knows or
should know is prohibited by Section 406 or 407(a) of ERISA
or by Section 4975 of the Code, unless an appropriate
exemption or exemptions have been granted by the Department
of Labor under Section 408 of ERISA and the Department of the
Treasury under Section 4975(c)(2) of the Code.
17.3 DELEGATION OF AUTHORITY BY ADOPTING EMPLOYERS.
Each employer that adopts the Plan with the consent of the
Board hereby irrevocably grants to the Board, the Benefits
Committee, the Appellate Committee, and the Trustee exclusive
authority to exercise all the powers conferred on them by the
terms of the Plan, including the power vested in the Board to
amend or terminate the Plan and Trust, and each adopting
employer irrevocably appoints the Board, the Benefits
Committee, the Appellate Committee and the Trustee as its
agents for such purposes. In addition, each employer that
adopts the Plan shall automatically become a party to the
Trust without further action on its part.
17.4 TRANSFERS OF EMPLOYMENT. If any Employee
transfers employment from one Employer to another Employer,
his or her employment shall not be considered interrupted or
terminated. Upon such transfer, the Employee's new Employer
shall assume the obligations of this Plan with respect to
such Employee. A Participant's transfer from one Employer to
another Employer shall not affect his or her rights under the
Plan, and all amounts allocated and credited to his or her
Account as well as all of his or her Years of Participation
Service with the transferor Employer as of the date of such
transfer shall continue to his or her credit.
17.5 ADDITIONAL CONTRIBUTIONS. An Employer shall
contribute such amounts as may be necessary to implement a
decision of the Benefits Committee or Appellate Committee
regarding the failure of a Former Participant or Beneficiary
to receive distribution of his or her Account in accordance
with the provisions of Article IX within a reasonable period
of time due to inadvertent administrative error or such other
circumstances as the Benefits Committee or Appellate
Committee may designate.
17.6 INITIAL PLAN QUALIFICATION. All contributions
to the Plan are conditioned on initial qualification of the
Plan under Section 401(a) of the Code. If the Plan does not
initially qualify, the Trustee shall, upon request of the
Employer, return the contributions and any earnings thereon.
17.7 EXCLUSIVE BENEFIT. Except as otherwise
provided in the Plan or authorized by the Code, in no event
shall any part of the Trust Fund be used for, or diverted to,
purposes other than for the exclusive benefit of the
Employees and their Beneficiaries.
17.8 SERVICE WITH PREDECESSOR EMPLOYER. Service
with a predecessor employer shall, to the extent required by
law, be treated as service with an Employer.
17.9 EMPLOYMENT. Participation in the Plan shall
not give any Participant the right to be retained in the
employ of the Employer or any other right not specified
herein.
17.10 GENDER. When necessary to the meaning hereof,
and except when otherwise indicated by the context, either
the masculine or the neuter pronoun shall be deemed to
include the masculine, the feminine, and the neuter.
17.11 GOVERNING LAW. This Plan shall be governed
and construed by the laws of the United States of America.
To the extent that the laws of the United States of America
shall not be held to have preempted local law, the Plan shall
be administered under the laws of the State of Maine.
17.12 ARTICLE AND SECTION HEADINGS AND TABLE OF
CONTENTS. The Article and Section headings and Table of
Contents are inserted for convenience of reference and shall
not be considered in the construction of the Plan.
IN WITNESS WHEREOF, UNUM Corporation has caused this
instrument to be executed by its duly authorized officer this
day of , 1996.
WITNESS: UNUM CORPORATION
____________________________ By:___________________________
Its
EXHIBIT A
UNUM EMPLOYEES RETIREMENT SAVINGS PLAN
The terms used in this Exhibit shall have the meanings
set forth in the Plan unless the context indicates
otherwise. The provisions of this Exhibit A shall apply to the portion
of a Participant's or Former Participant's Account balance
which was allocated to his or her Account under the Plan as
of December 31, 1996.
1.1 OPTIONAL FORMS OF DISTRIBUTION.
Notwithstanding the provisions of Article IX of the Plan to the contrary, a
Participant or Former Participant may elect to have the
portion of his or her Account balance which was allocated to
his or her Account under the Plan as of December 31, 1996,
distributed in one of the following methods:
(a) an annuity providing monthly payments over
a period not to exceed the life (or life expectancy) of the
Participant or the joint life (or joint life and last
survivor expectancy) of the Participant and his or her
Beneficiary, provided such distribution shall be made in
accordance with the requirements of Section 401(a)(9) of the
Code and the regulations thereunder; or
(b) effective January 1, 1995, with respect to
a Participant who has attained age fifty-five (55) and
completed at least five (5) Years of Participation Service
as of the date he or she ceases to be employed by his or her
Employer, periodic payments over a period not to exceed five
(5) years, provided such distribution shall be made in
accordance with the requirements of Section 401(a)(9) of the
Code and the regulations thereunder; or
provided, however, this Section 1.1 shall not apply if such
portion does not exceed Three Thousand Five Hundred Dollars
($3,500.00) (and did not exceed Three Thousand Five Hundred
Dollars ($3,500.00) as of the date of any prior
distribution). For purposes of this Section 1.1, the term
"Participant" shall include an Employee who has made a
Rollover Contribution to the Plan. Distribution shall
commence as soon as practicable following receipt by the
Benefits Committee or its designated representative of an
election pursuant to this Section 1.1.
1.2 SPECIAL RULES FOR ANNUITY OPTION. In the event
a Participant or Former Participant elects to have the
portion of his or her Account balance which was allocated to
his or her Account under the Plan as of December 31, 1996,
distributed in the form of an annuity pursuant to Section
1.1(a) of this Exhibit A, the following provisions shall
apply.
(a) Except as hereinafter provided in
subsection (b), the Participant or Former Participant may
elect the life annuity option described in subparagraph (i)
below; the years certain and life annuity option described
in subparagraph (ii) below; the years certain annuity option
described in subparagraph (iii) below; the full cash refund
annuity described in subparagraph (iv) below; or the
contingent annuitant option described in subparagraph (v)
below. Such election shall be effective upon delivery to
the Benefits Committee within the ninety (90) day period ending
on the date distribution of the Participant's Account is to
be made or commence. If an electing Participant or Former
Participant dies prior to his or her annuity starting date,
such election shall be void, and any death benefit payable
with respect to such Participant shall be determined in
accordance with the provisions of Section 9.3 of the Plan.
The term "annuity starting date" shall mean the date benefit
payments commence.
(i) LIFE ANNUITY OPTION. A Participant who
elects a life annuity option shall receive a benefit which
shall be payable monthly for life, ending with the last
payment due immediately preceding the Participant's date of
death.
(ii) YEARS CERTAIN AND LIFE ANNUITY OPTION.
A Participant who elects a years certain and life annuity
option shall receive monthly payments during his or her
life, and such payments shall be made to the Participant and/or
the Participant's designated Beneficiary for not less than the
five (5) or ten (10) year period elected by the Participant.
If a Participant elects to have his or her Account balance
paid in accordance with this subparagraph (ii) and dies
before the period elected has expired, the balance of the
payments shall be paid to the Participant's designated
Beneficiary. The first such payment shall be made as of the
first day of the month immediately following the
Participant's death.
In the event the Beneficiary designated by the
Participant is not living at the time of the Participant's
death, the balance of the payments which would otherwise have
become payable to the Participant's Beneficiary shall be
commuted to a single sum and shall be paid to the
Participant's estate. If the Beneficiary of the deceased
Participant should die prior to receiving the balance of the
payments which would otherwise have become payable to such
Beneficiary, the balance of the monthly payments shall be
commuted to a single sum and shall be paid to the
Beneficiary's estate.
(iii) YEARS CERTAIN ANNUITY OPTION. A
Participant who elects a years certain annuity option shall
receive monthly payments during the period elected by the
Participant, with payments ceasing at the end of such period.
Under this option, if a Participant survives beyond the
period elected, he or she shall receive no further payments.
In the event of the death of the Participant or the death of
the Participant and the designated Beneficiary before the
period elected has expired, payments shall be made in
accordance with the provisions of subparagraph (ii) above
governing such events.
(iv) FULL CASH REFUND ANNUITY OPTION. A
Participant who elects a full cash refund annuity option
shall receive monthly payments during his or her life, and
in the event the Participant dies before receiving monthly
payments equaling, in the aggregate, the amount paid to
purchase the annuity, the excess of said amount over the
total of all payments received shall be paid in a single sum
to the Beneficiary designated by the Participant. If the
Beneficiary is not living at the time of the Participant's
death, the excess shall be paid in a single sum to the
Participant's estate. No death benefit shall be payable
under this option if the Participant dies after receiving
monthly payments that equal, in the aggregate, the amount
paid to purchase the annuity.
(v) CONTINGENT ANNUITANT OPTION. A
Participant who elects a contingent annuitant option shall
receive monthly payments during his or her life, and
following the Participant's death, monthly payments in the
same amount (or 50% or 66 2/3% of said amount, as elected by
the Participant) shall continue to the person designated by
the Participant ("Contingent Annuitant") at the time of
making the election for the life of the Contingent Annuitant.
If an electing Participant dies after the commencement of
benefit payments, the Contingent Annuitant designated by the
electing Participant shall receive during his or her life the
monthly benefit payable to the Contingent Annuitant under
this option. Monthly payments to the Contingent Annuitant
shall commence on the first day of the month immediately
following the Participant's death, if the Contingent
Annuitant is then living, and shall cease with the monthly
payment coinciding with or immediately preceding the date of
the Contingent Annuitant's death. If the Contingent
Annuitant dies before the commencement of payments to the
Participant, the Participant's election under this
subparagraph shall be void and the Participant shall be
entitled to make another election with respect to the method
of distribution of the portion of his or her Account balance
which was allocated to his or her Account under the Plan as
of December 31, 1996. If the Contingent Annuitant dies after
the commencement of payments to the Participant, such
payments shall cease upon the Participant's death.
If distribution to a Participant commences in
the form of a contingent annuitant option for the joint lives
of the Participant and a Contingent Annuitant other than his
or her spouse, the periodic annuity payment payable to the
Contingent Annuitant must not at any time on and after the
Participant's required beginning date (under Section
401(a)(9) of the Code and the regulations thereunder) exceed
the applicable percentage for such period payable to the
Participant using the table set forth in regulation Section
1.401(a)(9)-2 Q&A-6. For purposes of the preceding sentence,
a former spouse to whom all or a portion of a Participant's
Account balance is payable pursuant to a qualified domestic
relations order (as defined in Section 414(p) of the Code)
shall be treated as a spouse of the Participant. If a
Participant's Account balance is divided and a portion is
allocated to an alternate payee pursuant to a qualified
domestic relations order (as defined in Section 414(p) of the
Code), this paragraph shall not apply to the portion so
allocated.
(b) A Participant or Former Participant who is
married when distribution of the portion of his or her
Account balance which was allocated to his or her Account
under the Plan as of December 31, 1996, is to be made or
commence and who elects to be paid in the form of an annuity
described in subsection (a) above, shall be paid in the form
of a qualified joint and survivor annuity, unless such
Participant waives such form of payment as provided in
subsection (c) below.
A qualified joint and survivor annuity shall be an
immediate annuity for the life of the Participant, with a
survivor annuity for the life of the Participant's spouse
equal to fifty percent (50%) of the amount of the annuity
which is payable during the joint lives of the Participant
and the spouse, and which is the actuarial equivalent of the
portion of the Participant's Account balance which was
allocated to his or her Account under the Plan as of December
31, 1996. Monthly payments to the spouse shall commence on
the first day of the month immediately following the
Participant's death, if the spouse is then living, and shall
cease with the monthly payment coinciding with or immediately
preceding the date of the spouse's death.
If the Participant's spouse dies before the
commencement of benefit payments to the Participant, the
Participant's election to receive a qualified joint and
survivor annuity shall be void, and the Participant shall be
entitled to make another election with respect to the method
of distribution of the portion of his or her Account balance
which was allocated to his or her Account under the Plan as
of December 31, 1996. If the Participant's spouse dies after
the commencement of benefit payments in the form of a
qualified joint and survivor annuity to the Participant, such
payments shall cease upon the death of the Participant.
(c) In lieu of receiving the qualified joint
and survivor annuity described in subsection (b) above, a
Participant or Former Participant who is married when
distribution of the portion of his or her Account balance
which was allocated to his or her Account under the Plan as
of December 31, 1996, is to be made or commence may elect one
of the annuity options described in subsection (a)(i)-(v)
above, provided:
(i) The Benefits Committee has provided such
Participant, no less than thirty (30) and no more than ninety
(90) days prior to the date on which distribution of the
Participant's Account is to be made or to commence, a written
explanation of:
(aa) the terms and conditions of the
qualified joint and survivor annuity;
(bb) the Participant's right to elect to
have the portion of his or her Account balance which was
allocated to his or her Account under the Plan as of December
31, 1996, distributed in one of the methods permitted under
subsection (a)(i)-(v) above, in lieu of receiving a qualified
joint and survivor annuity, and the effect of such election;
(cc) the requirement that a
Participant's spouse consents to such election;
(dd) the Participant's right to make,
and the effect of, a revocation of such an election, as
provided below;
(ii) The Participant's election is made
within the ninety (90) day period ending on the date
distribution of his or her Account is to be made or
commence;
(iii) The Participant's spouse consents in
writing to such election within the ninety (90) day period
ending on the date distribution of the Participant's Account
is to be made or commence;
(iv) The Participant's election designates a
specific beneficiary, including any class of beneficiaries
(or a form of benefits), which may not be changed without
further spousal consent unless expressly permitted by the
initial spousal consent; and
(v) The spouse's consent acknowledges the
effect of such election and is witnessed by a notary public.
An election by the Participant to have the portion of
his or her Account balance which was allocated to his or her
Account under the Plan as of December 31, 1996, distributed
in one of the methods permitted under subsection (a)(i)-(v)
above, in lieu of receiving a qualified joint and survivor
annuity, shall be effective upon receipt by the Benefits
Committee, and any consent by a spouse shall be effective
only with respect to such spouse and shall be effective upon
receipt by the Benefits Committee. Any consent which permits
designations by the Participant without any requirement of
further consent by the Participant's spouse must acknowledge
that the spouse has the right to limit his or her consent to
a specific beneficiary (or a form of benefits) and that the
spouse voluntarily elects to relinquish either or both of
such rights.
Any election permitted under this Section 1.2 may be
revoked by a Participant, without the consent of the
Participant's spouse, if applicable, at any time prior to the
date on which distribution of the Participant's Account
balance is to be made or commence. Any such revocation shall
be in writing, shall be signed by the Participant making such
revocation and shall become effective upon receipt by the
Benefits Committee. A Participant may make an unlimited
number of revocations.
1.3 SPECIAL RULES FOR PERIODIC PAYMENTS OPTION. In
the event a Participant who meets the requirements of Section
1.1(b) elects to have the portion of his or her Account
balance which was allocated to his or her Account under the
Plan as of December 31, 1996, distributed in the form of
periodic payments, the following provisions shall apply.
(a) At the time of making such election, the
Participant shall specify the period over which the payments
shall be made and the frequency of such payments.
(b) Periodic payments shall not be made more
frequently than annually and shall be made on the same date
in each of the applicable years (the "scheduled payment
date").
(c) A Participant's election pursuant to
Section 1.1(b), including specification of the period over
which payments shall be made and the frequency of such
payments, shall be irrevocable, except that such Participant
may elect to receive a lump sum distribution of the portion
of his or her Account balance which was allocated to his or
her Account under this Plan as of December 31, 1996, on the
next scheduled payment date, provided he or she notifies the
Benefits Committee or its designated representative of such
election, by such written, telephonic or electronic means as
shall be prescribed by the Benefits Committee, at least
thirty (30) days in advance of the next scheduled payment
date.
(d) At the time of making the election pursuant
to 1.1(b), the Participant shall specify the Investment Fund
or Funds from which the first periodic payment shall be made.
The Participant may specify the Investment Fund or Funds from
which each subsequent periodic payment shall be made by
delivering instructions to the Benefits Committee at least
thirty (30) days in advance of the applicable scheduled
payment date. In the absence of timely instructions, the
instructions in effect with respect to the immediately
preceding scheduled payment shall apply, unless the
Participant's investment in such Fund(s) no longer supports
such instructions, in which case the periodic payment shall
be charged against the Investment Funds and Self-Directed
Brokerage Account, if any, in which the Participant's Account
is invested in proportion to the amounts invested in such
funds and account as of the date such payment is to be made.
Notwithstanding the foregoing to the contrary, a Participant
may specify, within the time periods set forth above, that
all or a portion of any periodic payment shall be made from
his or her Participant-Directed Brokerage Account.
(e) Any election, specification or notification
in accordance with the provisions of this Section 1.3 shall
be made by such written, telephonic or electronic means as
the Benefits Committee may prescribe.
1.4 SPECIAL RULES FOR LUMP SUM DISTRIBUTION.
Notwithstanding the provisions of Article IX of the Plan to
the contrary, a Participant or Former Participant who has
attained age fifty-five (55) and completed at least five (5)
Years of Participation Service as of the date he or she
ceases to be employed by his or her Employer and whose
Account will be distributed in a lump sum may elect, with
respect to the amount which was allocated to his or her
Account under the Plan as of December 31, 1996, to receive a
portion of such amount in a lump sum as soon as practicable
after the Valuation Date determined in accordance with
Section 9.7 of the Plan (the "initial lump sum distribution
of the pre-1997 Account balance"), and the remainder of such
amount in a lump sum as soon as practicable after any
subsequent Valuation Date, as elected by such Participant or
Former Participant. Notwithstanding the foregoing provisions
of this Section 1.4 to the contrary, this Section shall not
apply if the portion of a Participant's or Former
Participant's Account balance which was allocated to his or
her Account under the Plan as of December 31, 1996, does not
exceed Three Thousand Five Hundred Dollars ($3,500.00) and
did not exceed Three Thousand Five Hundred Dollars
($3,500.00) as of the date of any prior distribution.
At the time of making an election pursuant to this
Section 1.4, the Participant or Former Participant shall
specify the amount of the initial lump sum distribution of
the pre-1997 Account balance and the Investment Fund or Funds
from which such initial lump sum distribution and the lump
sum distribution of the portion of his or her Account balance
which was allocated to his or her Account under the Plan
after December 31, 1996, shall be made. Notwithstanding the
foregoing to the contrary, a Participant or Former
Participant may specify that all or a portion of such lump
sum distributions shall be made from his or her Participant-
Directed Brokerage Account. Any election pursuant to this
Section 1.4 shall be made by such written, telephonic or
electronic means as the Benefits Committee may prescribe.
For purposes of this Section 1.4, the term "Participant"
shall include an Employee who has made a Rollover
Contribution to the Plan.
1.5 DISTRIBUTIONS TO SPOUSE OR BENEFICIARY. Upon
the death of a Participant or Former Participant, the portion
of his or her Account balance which was allocated to his or
her Account under the Plan as of December 31, 1996, shall be
distributed to his or her surviving spouse or, if the
Participant or Former Participant is not survived by a spouse
or the Participant's surviving spouse consents in the manner
provided in Section 9.3, to the Participant's designated
Beneficiary. Distribution of such portion shall be made in
the following manner.
(a) In the event the Participant or Former
Participant dies before distribution of the portion of his or
her Account balance which was allocated to his or her Account
under the Plan as of December 31, 1996, has commenced:
(i) If distribution is to be made to the
Participant's surviving spouse, distribution of such portion
shall be made in a lump sum by December 31 of the calendar
year which contains the fifth (5th) anniversary of the date
of the Participant's death; provided the Participant's
surviving spouse may elect to receive distribution in an
annuity providing monthly payments over a period not to
exceed his or her life expectancy provided distribution
commences not later than the later of December 31 of the
calendar year immediately following the calendar year in
which the Participant died or December 31 of the calendar
year in which the Participant would have attained age seventy
and one-half (70.5).
(ii) If distribution is to be made to a
designated Beneficiary other than the Participant's spouse:
(aa) distribution of such portion
shall be made in such manner as the Participant may elect or,
in the absence thereof, as the Beneficiary may elect,
provided the balance of such portion of the Participant's
Account shall be distributed on or before December 31 of the
calendar year which contains the fifth (5th) anniversary of
the date of the Participant's death; or
(bb) distribution of such portion
shall be made, at the election of the Participant or, in the
absence thereof, at the election of the Beneficiary, in an
annuity providing monthly payments over a period not to
exceed the life expectancy of the Beneficiary, provided
distribution shall commence on or before December 31 of the
calendar year immediately following the calendar year in
which the Participant died.
If the Participant has not made an election
pursuant to this subsection (a)(ii), his or her designated
Beneficiary must elect the method of distribution no later
than the earlier of December 31 of the calendar year in which
distributions would be required to commence under this
Section or December 31 of the calendar year which contains
the fifth (5th) anniversary of the date of the Participant's
death.
In the event the surviving spouse dies after the
Participant but before distribution of the portion of the
Participant's Account balance which was allocated to his or
her Account under the Plan as of December 31, 1996, to such
spouse begins, the provisions of this subsection (a), with
the exception of subsection (a)(i), shall be applied as if
the surviving spouse were the Participant.
(b) In the event the Participant or Former
Participant dies after distribution of the portion of his or
her Account balance which was allocated to his or her Account
under the Plan as of December 31, 1996, has commenced
pursuant to Section 1.1, distribution of such portion shall
continue at least as rapidly as under the method of
distribution in effect prior to the Participant's death.
(c) Notwithstanding the foregoing provisions of
this Section 1.5 to the contrary, this Section shall not
apply if the portion of the Participant's or Former
Participant's Account balance which was allocated to his or
her Account under the Plan as of December 31, 1996, does not
exceed Three Thousand Five Hundred Dollars ($3,500.00) (and
did not exceed Three Thousand Five Hundred Dollars
($3,500.00) as of the date of any prior distribution.
If a Participant fails to designate a Beneficiary and is
not survived by a spouse, distribution of the Participant's
Account shall be made in the manner elected by the
distributee determined under Section 9.3 of the Plan,
provided such distribution must be made by December 31 of
the calendar year which contains the fifth (5th) anniversary of
the date of the Participant's death.
For purposes of this Section 1.5, the term "Participant"
or "Former Participant" shall include an Employee who has
made a Rollover Contribution to the Plan.
1.6 PURCHASING ANNUITIES. Any annuity required or
permitted to be purchased under Section 1.2 shall be selected
by the Participant, or the Participant's spouse, as the case
may be, for whom such annuity is to be purchased. The terms
of any annuity required or permitted to be purchased and
distributed under this Exhibit A shall comply with the
applicable requirements of the Plan.
1.7 MINIMUM AMOUNTS TO BE DISTRIBUTED TO
PARTICIPANTS. The amount to be distributed each year
pursuant to Section 9.7(c) of the Plan to a Participant to
whom Section 1.1 of this Exhibit A applies, beginning with
the calendar year in which he or she attains age seventy and
one-half (70.5) (or, with respect to a Participant who is not
a Five Percent Owner, the calendar year in which he or she
retires, if later), shall not be less than the quotient
obtained by dividing the Participant's Account balance at the
beginning of such year by the life expectancy of the
Participant (or the joint life and last survivor expectancy
of the Participant and his or her Beneficiary) determined as
of the beginning of such year and reduced by one (1) for each
year thereafter. The required minimum distribution with
respect to the calendar year in which the Participant attains
age seventy and one-half (70.5) (or, with respect to a
Participant who is not a Five Percent Owner, the calendar
year in which he or she retires, if later) shall be made no
later than April 1 of the next succeeding calendar year.
With respect to any other calendar year, the required minimum
distribution shall be made no later than December 31 of such
year.
Notwithstanding the above, if the Participant (or his or
her spouse, in the event the Participant dies before benefits
have commenced) so elects prior to the time distribution must
commence pursuant to Section 9.7 of the Plan or Section 1.5
of this Exhibit A, the life expectancy of the Participant,
the life expectancy of the spouse or the joint life and last
survivor expectancy of the Participant and his or her spouse
shall be recalculated pursuant to the regulations under
Section 401(a)(9) of the Code. Such election shall be
irrevocable and shall be made by such written, telephonic or
electronic means as may be prescribed by the Benefits
Committee. In the absence of such election, life expectancy
shall not be recalculated. The life expectancy of a
nonspouse Beneficiary may not be recalculated.
Distribution shall be made in accordance with the
regulations under Section 401(a)(9) of the Code, including
Regulation Section 1.401(a)(9)-2, which shall override any
distribution options in the Plan or this Exhibit A
inconsistent therewith.
EXHIBIT B
UNUM EMPLOYEES RETIREMENT SAVINGS PLAN
The terms used in this Exhibit shall have the meanings
set forth in the Plan unless the context indicates otherwise.
The provisions of this Exhibit B shall apply to a Participant
or Former Participant who participated in the Duncanson &
Holt, Inc. Employee Profit Participation and Savings Plan.
ARTICLE I
PRE-1997 OPTIONAL FORMS OF DISTRIBUTION
1.1 ANNUITY OPTION. Notwithstanding the provisions
of Article IX of the Plan to the contrary, and subject to
Article II of this Exhibit B, a Participant or Former
Participant who participated in the Duncanson & Holt, Inc.
Employee Profit Participation and Savings Plan may elect to
have the vested portion of the balance of his or her transfer
account created pursuant to Section 16.2(a) of the Plan as of
January 1, 1997, distributed in an annuity providing monthly
payments over a period not to exceed the life (or life
expectancy) of the Participant or the joint life (or joint
life and last survivor expectancy) of the Participant and his
or her Beneficiary, provided such distribution shall be made
in accordance with the requirements of Section 401(a)(9) of
the Code and the regulations thereunder; provided, however,
this Section 1.1 shall not apply if such vested portion does
not exceed Three Thousand Five Hundred Dollars ($3,500.00)
(and did not exceed Three Thousand Five Hundred Dollars
($3,500.00) as of the date of any prior distribution).
Distribution shall commence as soon as practicable following
receipt by the Benefits Committee or its designated
representative of an election pursuant to this Section 1.1.
1.2 SPECIAL RULES FOR ANNUITY OPTION. In the event
a Participant or Former Participant elects to have the vested
portion of the balance of his or her transfer account created
pursuant to Section 16.2(a) of the Plan as of January 1,
1997, distributed in the form of an annuity pursuant to
Section 1.1 of this Exhibit B, the following provisions shall
apply.
(a) Except as hereinafter provided in
subsection (b), the Participant or Former Participant may
elect the life annuity option described in subparagraph (i)
below; the years certain and life annuity option described in
subparagraph (ii) below; the contingent annuitant option
described in subparagraph (iii) below or the joint lives
annuity described in subparagraph (iv) below. Such election
shall be effective upon delivery to the Benefits Committee
within the ninety (90) day period ending on the date
distribution of the Participant's Account is to be made or
commence. If an electing Participant or Former Participant
dies prior to his or her annuity starting date, such election
shall be void, and any death benefit payable with respect to
such Participant shall be determined in accordance with the
provisions of Section 9.3 of the Plan. The term "annuity
starting date" shall mean the date benefit payments commence.
(i) LIFE ANNUITY OPTION. A Participant who
elects a life annuity option shall receive a benefit which
shall be payable monthly for life, ending with the last
payment due immediately preceding the Participant's date of
death.
(ii) YEARS CERTAIN AND LIFE ANNUITY OPTION.
A Participant who elects a years certain and life annuity
option shall receive monthly payments during his or her life,
and such payments shall be made to the Participant and/or the
Participant's designated Beneficiary for not less than the
five (5) or ten (10) year period elected by the Participant.
If a Participant elects to have his or her Account balance
paid in accordance with this subparagraph (ii) and dies
before the period elected has expired, the balance of the
payments shall be paid to the Participant's designated
Beneficiary. The first such payment shall be made as of the
first day of the month immediately following the
Participant's death.
In the event the Beneficiary designated by the
Participant is not living at the time of the Participant's
death, the balance of the payments which would otherwise have
become payable to the Participant's Beneficiary shall be
commuted to a single sum and shall be paid to the
Participant's estate. If the Beneficiary of the deceased
Participant should die prior to receiving the balance of the
payments which would otherwise have become payable to such
Beneficiary, the balance of the monthly payments shall be
commuted to a single sum and shall be paid to the
Beneficiary's estate.
(iii) CONTINGENT ANNUITANT OPTION. A
Participant who elects a contingent annuitant option shall
receive monthly payments during his or her life, and
following the Participant's death, monthly payments in the
same amount (or 50% or 66 2/3% of said amount, as elected by
the Participant) shall continue to the person designated by
the Participant ("Contingent Annuitant") at the time of
making the election for the life of the Contingent Annuitant.
If an electing Participant dies after the commencement of
benefit payments, the Contingent Annuitant designated by the
electing Participant shall receive during his or her life the
monthly benefit payable to the Contingent Annuitant under
this option. Monthly payments to the Contingent Annuitant
shall commence on the first day of the month immediately
following the Participant's death, if the Contingent
Annuitant is then living, and shall cease with the monthly
payment coinciding with or immediately preceding the date of
the Contingent Annuitant's death. If the Contingent
Annuitant dies before the commencement of payments to the
Participant, the Participant's election under this
subparagraph shall be void and the Participant shall be
entitled to make another election with respect to the method
of distribution of the vested portion of the balance of his
or her transfer account created pursuant to Section 16.2(a)
of the Plan as of January 1, 1997. If the Contingent
Annuitant dies after the commencement of payments to the
Participant, such payments shall cease upon the Participant's
death.
If distribution to a Participant commences in
the form of a contingent annuitant option for the joint lives
of the Participant and a Contingent Annuitant other than his
or her spouse, the periodic annuity payment payable to the
Contingent Annuitant must not at any time on and after the
Participant's required beginning date (under Section
401(a)(9) of the Code and the regulations thereunder) exceed
the applicable percentage for such period payable to the
Participant using the table set forth in regulation Section
1.401(a)(9)-2 Q&A-6. For purposes of the preceding sentence,
a former spouse to whom all or a portion of a Participant's
Account balance is payable pursuant to a qualified domestic
relations order (as defined in Section 414(p) of the Code)
shall be treated as a spouse of the Participant. If a
Participant's Account balance is divided and a portion is
allocated to an alternate payee pursuant to a qualified
domestic relations order (as defined in Section 414(p) of the
Code), this paragraph shall not apply to the portion so
allocated.
(iv) JOINT LIVES ANNUITY OPTION. A
Participant who elects a joint lives annuity option shall
receive monthly payments during the joint lives of the
Participant and the person designated by the Participant
("Joint Annuitant") at the time of making the election, and
following the death of the Participant or Joint Annuitant,
monthly payments in the same amount (or 50% or 66 2/3% of
said amount, as elected by the Participant) shall continue to
the survivor of the two. If an electing Participant dies
after the commencement of benefit payments, the Joint
Annuitant designated by the electing Participant shall
receive during his or her life the monthly benefit payable to
the survivor under this option. Monthly payments to the
Joint Annuitant shall commence on the first day of the month
immediately following the Participant's death, if the Joint
Annuitant is then living, and shall cease with the monthly
payment coinciding with or immediately preceding the date of
the Joint Annuitant's death. If the Joint Annuitant dies
after the commencement of benefit payments, the Participant
shall receive during his or her life the monthly benefit
payable to the survivor under this option. Such monthly
payments shall commence on the first day of the month
immediately following the Joint Annuitant's death, if the
Participant is then living and shall cease with the monthly
payment coinciding with or immediately preceding the date of
the Participant's death. If the Joint Annuitant dies before
the commencement of payments to the Participant, the
Participant's election under this subparagraph shall be void
and the Participant shall be entitled to make another
election with respect to the method of distribution of the
vested portion of the balance of his or her transfer account
created pursuant to Section 16.2(a) of the Plan as January 1,
1997.
If the Joint Annuitant is not the
Participant's spouse, the periodic annuity payment payable to
the Joint Annuitant must not at any time on and after the
Participant's required beginning date (under Section
401(a)(9) of the Code and the regulations thereunder) exceed
the applicable percentage for such period payable to the
Participant using the table set forth in regulation Section
1.401(a)(9)-2 Q&A-6. For purposes of the preceding sentence,
a former spouse to whom all or a portion of a Participant's
Account balance is payable pursuant to a qualified domestic
relations order (as defined in Section 414(p) of the Code)
shall be treated as a spouse of the Participant. If a
Participant's Account balance is divided and a portion is
allocated to an alternate payee pursuant to a qualified
domestic relations order (as defined in Section 414(p) of the
Code), this paragraph shall not apply to the portion so
allocated.
(b) A Participant or Former Participant who is
married when distribution of the vested portion of the
balance of his or her transfer account created pursuant to
Section 16.2(a) of the Plan as of January 1, 1997, is to be
made or commence and who elects to be paid in the form of an
annuity described in subsection (a) above, shall be paid in
the form of a qualified joint and survivor annuity, unless
such Participant waives such form of payment as provided in
subsection (c) below.
A qualified joint and survivor annuity shall be an
immediate annuity for the life of the Participant, with a
survivor annuity for the life of the Participant's spouse
equal to fifty percent (50%) of the amount of the annuity
which is payable during the joint lives of the Participant
and the spouse, and which is the actuarial equivalent of the
vested portion of the balance of the Participant's transfer
account created pursuant to Section 16.2(a) of the Plan as of
January 1, 1997. Monthly payments to the spouse shall
commence on the first day of the month immediately following
the Participant's death, if the spouse is then living, and
shall cease with the monthly payment coinciding with or
immediately preceding the date of the spouse's death.
If the Participant's spouse dies before the
commencement of benefit payments to the Participant, the
Participant's election to receive a qualified joint and
survivor annuity shall be void, and the Participant shall be
entitled to make another election with respect to the method
of distribution of the vested portion of the balance of his
or her transfer account created pursuant to Section 16.2(a)
of the Plan as of January 1, 1997. If the Participant's
spouse dies after the commencement of benefit payments in the
form of a qualified joint and survivor annuity to the
Participant, such payments shall cease upon the death of the
Participant.
(c) In lieu of receiving the qualified joint
and survivor annuity described in subsection (b) above, a
Participant or Former Participant who is married when
distribution of the vested portion of the balance of his or
her transfer account created pursuant to Section 16.2(a) of
the Plan as of January 1, 1997, is to be made or commence may
elect one of the annuity options described in subsection
(a)(i)-(iv) above, provided:
(i) The Benefits Committee has provided such
Participant, no less than thirty (30) and no more than ninety
(90) days prior to the date on which distribution of the
Participant's Account is to be made or to commence, a written
explanation of:
(aa) the terms and conditions of the
qualified joint and survivor annuity;
(bb) the Participant's right to elect to
have the vested portion of the balance of his or her transfer
account created pursuant to Section 16.2(a) of the Plan as of
January 1, 1997, distributed in one of the methods permitted
under subsection (a)(i)-(iv) above, in lieu of receiving a
qualified joint and survivor annuity, and the effect of such
election;
(cc) the requirement that a
Participant's spouse consents to such election;
(dd) the Participant's right to make,
and the effect of, a revocation of such an election, as
provided below;
(ii) The Participant's election is made
within the ninety (90) day period ending on the date
distribution of his or her Account is to be made or commence;
(iii) The Participant's spouse consents in
writing to such election within the ninety (90) day period
ending on the date distribution of the Participant's Account
is to be made or commence;
(iv) The Participant's election designates a
specific beneficiary, including any class of beneficiaries
(or a form of benefits), which may not be changed without
further spousal consent unless expressly permitted by the
initial spousal consent; and
(v) The spouse's consent acknowledges the
effect of such election and is witnessed by a notary public.
An election by the Participant to have the vested
portion of the balance of his or her transfer account created
pursuant to Section 16.2(a) of the Plan as of January 1,
1997, distributed in one of the methods permitted under
subsection (a)(i)-(iv) above, in lieu of receiving a
qualified joint and survivor annuity, shall be effective upon
receipt by the Benefits Committee, and any consent by a
spouse shall be effective only with respect to such spouse
and shall be effective upon receipt by the Benefits
Committee. Any consent which permits designations by the
Participant without any requirement of further consent by the
Participant's spouse must acknowledge that the spouse has the
right to limit his or her consent to a specific beneficiary
(or a form of benefits) and that the spouse voluntarily
elects to relinquish either or both of such rights.
Any election permitted under this Section 1.2 may be
revoked by a Participant, without the consent of the
Participant's spouse, if applicable, at any time prior to the
date on which distribution of the Participant's Account
balance is to be made or commence. Any such revocation shall
be in writing, shall be signed by the Participant making such
revocation and shall become effective upon receipt by the
Benefits Committee. A Participant may make an unlimited
number of revocations.
1.3 DISTRIBUTIONS TO SPOUSE OR BENEFICIARY.
Notwithstanding the provisions of Article IX of the Plan to
the contrary, and subject to Article II of this Exhibit B,
upon the death of a Participant or Former Participant, the
vested portion of the balance of his or her transfer account
created pursuant to Section 16.2(a) of the Plan as of January
1, 1997, shall be distributed to his or her surviving spouse
or, if the Participant or Former Participant is not survived
by a spouse or the Participant's surviving spouse consents in
the manner provided in Section 9.3, to the Participant's
designated Beneficiary. Distribution of such portion shall
be made in the following manner.
(a) In the event the Participant or Former
Participant dies before distribution of the vested portion of
the balance of his or her transfer account created pursuant
to Section 16.2(a) of the Plan as of January 1, 1997, has
commenced:
(i) If distribution is to be made to the
Participant's surviving spouse, distribution of such portion
shall be made in a lump sum by December 31 of the calendar
year which contains the fifth (5th) anniversary of the date
of the Participant's death; provided the Participant's
surviving spouse may elect to receive distribution in an
annuity providing monthly payments over a period not to
exceed his or her life expectancy provided distribution
commences not later than the later of December 31 of the
calendar year immediately following the calendar year in
which the Participant died or December 31 of the calendar
year in which the Participant would have attained age seventy
and one-half (70.5).
(ii) If distribution is to be made to a
designated Beneficiary other than the Participant's spouse:
(aa) distribution of such portion
shall be made in such manner as the Participant may elect or,
in the absence thereof, as the Beneficiary may elect,
provided the balance of such portion of the Participant's
Account shall be distributed on or before December 31 of the
calendar year which contains the fifth (5th) anniversary of
the date of the Participant's death; or
(bb) distribution of such portion
shall be made, at the election of the Participant or, in the
absence thereof, at the election of the Beneficiary, in an
annuity providing monthly payments over a period not to
exceed the life expectancy of the Beneficiary, provided
distribution shall commence on or before December 31 of the
calendar year immediately following the calendar year in
which the Participant died.
If the Participant has not made an election
pursuant to this subsection (a)(ii), his or her designated
Beneficiary must elect the method of distribution no later
than the earlier of December 31 of the calendar year in which
distributions would be required to commence under this
Section or December 31 of the calendar year which contains
the fifth (5th) anniversary of the date of the Participant's
death.
In the event the surviving spouse dies after the
Participant but before distribution of the vested portion of
the balance of his or her transfer account created pursuant
to Section 16.2(a) of the Plan as of January 1, 1997, to such
spouse begins, the provisions of this subsection (a), with
the exception of subsection (a)(i), shall be applied as if
the surviving spouse were the Participant.
(b) In the event the Participant or Former
Participant dies after distribution of the vested portion of
the balance of his or her transfer account created pursuant
to Section 16.2(a) of the Plan as of January 1, 1997, has
commenced pursuant to Section 1.1, distribution of such
portion shall continue at least as rapidly as under the
method of distribution in effect prior to the Participant's
death.
(c) Notwithstanding the foregoing provisions of
this Section 1.3 to the contrary, this Section shall not
apply if the vested portion of the balance of the
Participant's or Former Participant's transfer account
created pursuant to Section 16.2(a) of the Plan as of January
1, 1997, does not exceed Three Thousand Five Hundred Dollars
($3,500.00) (and did not exceed Three Thousand Five Hundred
Dollars ($3,500.00) as of the date of any prior distribution.
If a Participant fails to designate a Beneficiary and is
not survived by a spouse, distribution of the Participant's
Account shall be made in the manner elected by the
distributee determined under Section 9.3 of the Plan,
provided such distribution must be made by December 31 of the
calendar year which contains the fifth (5th) anniversary of
the date of the Participant's death.
1.4 FORM OF DISTRIBUTION. Notwithstanding the
provisions of Article IX of the Plan to the contrary,
distribution of the vested portion of the balance of a
Participant's or Former Participant's transfer account
created pursuant to Section 16.2(a) of the Plan as of January
1, 1997, may be made in cash or in kind, or partly in each;
provided, the particular investment vehicle(s) in which such
portion is invested at the time of distribution permit an in
kind distribution.
1.5 PURCHASING ANNUITIES. Any annuity required or
permitted to be purchased under Section 1.2 shall be selected
by the Participant, or the Participant's spouse, as the case
may be, for whom such annuity is to be purchased. The terms
of any annuity required or permitted to be purchased and
distributed under this Exhibit B shall comply with the
applicable requirements of the Plan.
ARTICLE II
MINIMUM SURVIVOR ANNUITY REQUIREMENTS
2.1 APPLICATION AND EFFECT OF ARTICLE. The
provisions of this Article shall apply to a Participant or
Former Participant who participated in the Duncanson and
Holt, Inc. Employee Profit Participation and Savings Plan if,
with respect to such Participant or Former Participant, the
Plan is a direct or indirect transferee of:
(a) a defined benefit plan; or
(b) an individual account plan which is subject
to the funding standards of Section 412 of the Code; or
(c) any other individual account plan unless:
(i) such plan provided that the
Participant's nonforfeitable accrued benefit under such plan
was payable in full, on the death of the Participant, to the
Participant's surviving spouse (or, if there was no surviving
spouse or the surviving spouse consented in the manner provid
ed under Section 417(a)(2)(A) of the Code, to a designated
beneficiary);
(ii) the Participant did not elect, under
such plan, a payment of benefits in the form of a life
annuity; and
(iii) with respect to the Participant,
such plan was not a transferee of a plan which is described
in subsections (a) or (b) above or to which this subsection
(c) applies.
In the event that the provisions of this Article shall be
applicable with respect to the Plan, they shall take
precedence over any conflicting provision of the Plan or of
Article I of this Exhibit B.
2.2 QUALIFIED JOINT AND SURVIVOR ANNUITY.
(a) If a Participant is married when
distribution of his or her Account (as defined in Section
2.10(a) of this Exhibit B) is to be made or to commence, his
or her Account shall, except as provided in subsection (b)
below, be used to purchase a Qualified Joint and Survivor
Annuity which shall be distributed to such Participant.
(b) The requirement of subsection (a) above
shall not apply and, therefore, distribution of a
Participant's Account shall be made in accordance with the
provisions of Article IX of the Plan and Article I of this
Exhibit B if:
(i) the Participant elects, within the
ninety (90) day period ending on the date distribution of the
Participant's Account is to be made or to commence, to have
his or her Account distributed in one of the methods
permitted under Article IX of the Plan or Article I of this
Exhibit B, in lieu of receiving said Qualified Joint and
Survivor Annuity, and the Participant's spouse consents to
such election, within said ninety (90) day period, in the
manner set forth below; or
(ii) the Participant's Account balance
does not exceed Three Thousand Five Hundred Dollars
($3,500.00) (and did not exceed Three Thousand Five Hundred
Dollars ($3,500.00) as of the date of any prior
distribution); or
(iii) it is established to the
satisfaction of the Benefits Committee that there is no
spouse or that the Participant's spouse cannot be located at
the time distribution of the Participant's Account is to be
made or to commence.
2.3 QUALIFIED PRERETIREMENT SURVIVOR ANNUITY.
(a) If a Participant is married at the time of
his or her death, and the Participant's death occurs before
distribution of his or her Account (as defined in Section
2.10(a) of this Exhibit B) is made or commences, his or her
Account shall, except as provided in subsection (b) below, be
used to purchase a Qualified Preretirement Survivor Annuity
for the life of the Participant's surviving spouse which
shall be distributed to such Participant's surviving spouse
within a reasonable time after the Participant's death.
(b) The requirement of subsection (a) above
shall not apply and, therefore, distribution of the
Participant's Account shall be made to such Participant's
Beneficiary in accordance with the provisions of Article IX
of the Plan and Article I of this Exhibit B if:
(i) the Participant elects, at any time
within the period which begins on the first day of the Plan
Year in which the Participant attains age thirty-five (35)
(or, if the Participant shall have ceased to be employed by
an Employer or an Affiliated Employer and is no longer
employed by any of them before attaining age thirty-five
(35), then within the period which begins on the date the
Participant ceased to be so employed) and ends on the date of
the Participant's death, to have his or her Account
distributed to his or her Beneficiary in accordance with the
provisions of the Article IX of the Plan and Article I of
this Exhibit B, in lieu of having said Qualified
Preretirement Survivor Annuity purchased for and distributed
to such Participant's spouse, and the Participant's spouse
consents to such election, within the aforesaid period of
time, in the manner set forth below; or
(ii) the Participant's Account balance
does not exceed Three Thousand Five Hundred Dollars
($3,500.00) (and did not exceed Three Thousand Five Hundred
Dollars ($3,500.00) as of the date of any prior
distribution); or
(iii) the Participant and his or her
spouse have been married for less than one (1) year as of the
date of the Participant's death; or
(iv) it is established to the satisfaction
of the Benefits Committee that there is no spouse or that the
Participant's spouse cannot be located at the time of the
Participant's death.
(c) A spouse of a Participant who is entitled
to receive a Qualified Preretirement Survivor Annuity in
accordance with this Section may, at any time prior to the
date on which such annuity is purchased, elect to receive, in
lieu of said Qualified Preretirement Survivor Annuity, the
Participant's Account balance in a lump sum. Such election
shall be effective if delivered to the Benefits Committee
prior to the purchase of said Qualified Preretirement
Survivor Annuity.
2.4 NOTICE TO PARTICIPANTS.
(a) The Benefits Committee shall provide to
each Participant no less than thirty (30) days and no more
than ninety (90) days prior to the date on which distribution
of the Participant's Account (as defined in Section 2.10(a)
of this Exhibit B) is to be made or to commence, a written
explanation of:
(i) the terms and conditions of the
Qualified Joint and Survivor Annuity;
(ii) the Participant's right to elect to
have his or her Account distributed in one of the methods
permitted under Article IX of the Plan and Article I of this
Exhibit B, in lieu of receiving a Qualified Joint and
Survivor Annuity, and the effect of such election;
(iii) the requirement that a Participant's
spouse consents to such election; and
(iv) the Participant's right to make, and
the effect of, a revocation of such an election, as provided
below.
(b) The Benefits Committee shall also provide
to each Participant, within the applicable period described
below, a written explanation with respect to a Qualified
Preretirement Survivor Annuity comparable to that required
under subsection (a) above. For purposes of this subsection
(b), the applicable period means with respect to a
Participant, whichever of the following periods ends last:
(i) the period beginning with the first
day of the Plan Year in which the Participant attains age
thirty-two (32) and ending with the close of the Plan Year
preceding the Plan Year in which the Participant attains age
thirty-five (35);
(ii) a reasonable period ending after the
individual becomes a Participant;
(iii) a reasonable period ending after
Section 417(a)(5) of the Code, if applicable, ceases to apply
to the Participant;
(iv) a reasonable period ending after the
provisions of this Article first become applicable to the
Participant; and
(v) a reasonable period ending after
separation from service in the case of a Participant who
separates before attaining age thirty-five (35).
A reasonable period ending after the date of an
event enumerated in subsection (b)(ii), (b)(iii) or (b)(iv)
shall be the two (2) year period beginning one (1) year prior
to and ending one (1) year after such date. With respect to
a Participant who separates from service with the Employer
before the Plan Year in which he or she attains age thirty-
five (35), written explanation shall be provided within the
two (2) year period beginning one (1) year prior to such
separation and ending one (1) year after such separation. If
such Participant thereafter returns to employment with the
Employer, the applicable period for such Participant shall be
redetermined.
2.5 SPOUSAL CONSENT. An election by a Participant:
(a) to have his or her Account distributed in
one of the methods permitted under Article IX of the Plan or
Article I of this Exhibit B, in lieu of receiving a Qualified
Joint and Survivor Annuity; or
(b) to have his or her Account distributed to
his or her Beneficiary in one of the methods permitted under
Article IX of the Plan or Article I of this Exhibit B, in
lieu of having a Qualified Preretirement Survivor Annuity
purchased for and distributed to his or her spouse;
shall not be effective unless
(i) the spouse of the Participant consents
in writing to such election,
(ii) such election designates a specific
beneficiary, including any class of beneficiaries or any
contingent beneficiaries (or a form of benefits), which may
not be changed without further spousal consent unless
expressly permitted by the initial spousal consent, and
(iii) the spouse's consent acknowledges
the effect of such election and is witnessed by a notary
public.
(c) Notwithstanding Sections 9.5 and 9.10 of
the Plan to the contrary, in the event the Participant's
Account balance exceeds Three Thousand Five Hundred Dollars
($3,500.00), no withdrawal pursuant to Sections 9.5 or 9.10
shall be permitted in the case of a married Participant
without obtaining the consent of his or her spouse during the
ninety (90) day period ending on the date the withdrawal is
to be made. To be effective, such consent must be in
writing, must acknowledge the effect thereof and must be
witnessed by a notary public. Such consent shall take effect
upon delivery thereof to the Benefits Committee.
(d) Notwithstanding Section 9.6 of the Plan to
the contrary, no loan shall be permitted in the case of a
married Participant without obtaining the consent of his or
her spouse to the assignment set forth in Section 9.6(d)
within the ninety (90) day period ending on the date that the
loan is to be so secured. To be effective, such consent must
be in writing, must acknowledge the effect thereof, and must
be witnessed by a notary public. Such consent shall take
effect upon delivery thereof to the Benefits Committee. Such
consent shall remain effective with respect to such loan
notwithstanding remarriage by the Participant; provided
however that a new consent shall be executed, in the manner
herein provided, for any future advance made with respect to
such loan, by such Participant's spouse on the date of such
advance, to the extent such advance shall be secured by an
assignment or further assignment of such Participant's
interest in his or her Account.
In the event a valid spousal consent has been
obtained in accordance with this subsection (d), then,
notwithstanding any other provision of the Plan, the portion
of the Participant's Account which is used as collateral for
an outstanding loan shall be taken into account for purposes
of determining the amount of the Participant's Account which
is payable at the time of distribution, but only after such
portion has been reduced as necessary to repay the loan. In
the event less than one hundred percent (100%) of the
Participant's Account (determined without regard to the
preceding sentence) is payable to the surviving spouse, then
the Account balance shall be adjusted by first reducing the
Account by the amount of the collateral used as repayment of
the loan, and then determining the benefit payable to the
surviving spouse.
Any consent by a spouse under this Section shall be
effective only with respect to such spouse.
2.6 ELECTIONS AND CONSENTS.
(a) Any election or consent permitted or
required under this Article shall be in writing and shall be
signed by the party making such election or granting such
consent. Such election or consent shall become effective
upon delivery thereof to the Benefits Committee.
Notwithstanding the foregoing, no consent shall be valid
unless the Participant has received the written explanation
required under Section 2.4 of this Exhibit B.
(b) Any election permitted under this Article
may be revoked by a Participant, without the consent of the
Participant's spouse, at any time prior to the date on which
distribution of the Participant's Account is to be made or to
commence. Any such revocation shall be in writing and shall
be signed by the Participant making such revocation and shall
become effective upon delivery thereof to the Benefits
Committee. A Participant may make an unlimited number of
revocations.
(c) Any consent which permits designations by
the Participant without any requirement of further consent by
the Participant's spouse must acknowledge that the spouse has
the right to limit his or her consent to a specific
beneficiary (or a form of benefits) and that the spouse
voluntarily elects to relinquish either or both of such
rights.
2.7 PURCHASING ANNUITIES. Any annuity required or
permitted to be purchased under this Article shall be
selected by the Participant, or the Participant's spouse, as
the case may be, for whom such annuity is to be purchased.
If the Participant or the Participant's spouse shall fail to
select the annuity or designate the insurance company as
provided hereinabove within a reasonable period of time prior
to the date on which such annuity is required, under this
Article, to be delivered to such Participant or such
Participant's spouse, then the Benefits Committee shall
select such annuity and the insurance company from which such
annuity shall be purchased. The Benefits Committee shall
notify each Participant, or each Participant's spouse, as the
case may be, within a reasonable period of time prior to the
date on which any such annuity is required to be delivered,
of his or her right, under this Section, to select such
annuity and the insurance company from which such annuity is
to be purchased. The terms of any annuity required or
permitted to be purchased and distributed under this Article
shall comply with the requirements of the Plan.
2.8 QUALIFIED DOMESTIC RELATIONS ORDERS. The
provisions of this Article shall be subject to the terms of
any qualified domestic relations order (as defined by Section
414(p) of the Code) which may be in effect with respect to a
Participant at the time distribution of the Participant's
Account balance is to be made or to commence; and, the former
spouse of a Participant shall be treated, under this Article,
as such Participant's spouse or surviving spouse to the
extent required by any qualified domestic relations order,
and any spouse of the Participant shall not be treated as a
spouse of the Participant for such purpose.
2.9 TRANSITION RULES.
(a) Except as hereinafter provided, the
provisions of this Article shall only be applicable with
respect to Participants who are credited with at least one
(1) Hour of Service on or after August 23, 1984.
(b) Any living Participant to whom distribution
of his or her Account was not made or did not commence on or
before August 23, 1984, and with respect to whom the
provisions of this Article would not apply because such
Participant would not have been credited with at least one
(1) Hour of Service on or after August 23, 1984, shall,
nevertheless, have the right to elect, at any time during the
period beginning on August 23, 1984, and ending on the date
on which distribution of such Participant's Account is to be
made or to commence, to have the provisions of this Article
apply with respect to such Participant if such Participant
was credited with at least one (1) Hour of Service under the
Plan or any predecessor plan in a Plan Year beginning on or
after January 1, 1976, and such Participant had at least ten
(10) years of vesting service when he or she ceased to be
employed by the Employer.
(c) Any living Participant to whom distribution
of his or her Account was not made or did not commence on or
before August 23, 1984, and with respect to whom the
provisions of this Article would not apply because such
Participant would not have been credited with at least one
(1) Hour of Service on or after August 23, 1984, shall have
the right to elect, at any time during the period beginning
on August 23, 1984, and ending on the date on which distribu
tion of such Participant's Account is to be made or to
commence, to have the balance of his or her Account
distributed in accordance with the provisions of subsection
(d) below if such Participant was credited with at least one
(1) Hour of Service under the Plan or any predecessor plan on
or after September 2, 1974, and was not credited with any
Hours of Service in any Plan Year beginning on or after
January 1, 1976.
(d) Any married Participant who has made an
election pursuant to subsection (c) above; and, any married
Participant who meets the requirements of subsection (b)
above but who has not made an election pursuant to subsection
(b); and, any married Participant who meets all the
requirements of subsection (b) above except that such
Participant did not have ten (10) years of vesting service at
the time he or she ceased to be employed by the Employer:
(i) shall have the balance of his or her
Account applied to the purchase of a Qualified Joint and
Survivor Annuity which shall be distributed to such
Participant provided that:
(aa) distribution of any such
Participant's Account shall only be made after such
Participant shall have attained the Normal Retirement Age or
upon the Participant's death after having attained the Normal
Retirement Age; and
(bb) if the balance of any such
Participant's Account had not been applied to the purchase of
a Qualified Joint and Survivor Annuity as provided under this
subsection, such balance would have been applied to the
purchase of an annuity for the life of such Participant; and
(cc) any such Participant shall not
have elected, at any time prior to the date on which
distribution of such Participant's Account is to be made or
to commence, to receive distribution of such Account in a
manner otherwise permitted under the Plan in lieu of
receiving said Qualified Joint and Survivor Annuity.
(ii) shall have the right to elect, at any
time prior to the date of the Participant's death (provided
that in each case distribution of each such Participant's
Account under the Plan would have been made in the form of an
annuity for the life of the Participant), to have the balance
of his or her Account applied, in the event that such
Participant's death shall occur before the date on which
distribution of such Participant's Account is to be made or
to commence, to the purchase of a Qualified Preretirement
Survivor Annuity for the life of such Participant's surviving
spouse which shall be distributed to such Participant's
spouse.
2.10 DEFINITIONS. As used in this Article, the
following terms shall have the meanings hereinafter set
forth:
(a) "Account" or "Account balance" shall mean
the vested portion of the balance of the transfer account
created pursuant to Section 16.2(a) of the Plan of an
individual described in Section 2.1 of this Exhibit B.
(b) "Qualified Joint and Survivor Annuity"
shall mean an immediate annuity for the life of the
Participant, with survivor annuity for the life of the
Participant's spouse (which survivor annuity is not less than
fifty percent (50%) of, nor more than one hundred percent
(100%) of, the amount of the annuity which is payable during
the joint lives of the Participant and the spouse) which is
the actuarial equivalent of the Participant's Account balance
at the time distribution of said Account is to be made or
commence.
(c) "Qualified Preretirement Survivor Annuity"
shall mean a survivor annuity for the life of the surviving
spouse of a Participant which is the actuarial equivalent of
the Participant's Account balance at the time, after such
Participant's death, that distribution of said Account is to
be made or commence.
(d) "Spouse" ("surviving spouse") shall mean
the spouse or surviving spouse of the Participant, provided
that a former spouse shall be treated as the spouse or
surviving spouse and a current spouse shall not be treated as
the spouse or surviving spouse to the extent provided under a
qualified domestic relations order as defined in Section
414(p) of the Code.
ARTICLE III
REQUIRED DISTRIBUTIONS
3.1 MINIMUM AMOUNTS TO BE DISTRIBUTED TO
PARTICIPANTS. The amount to be distributed each year
pursuant to Section 9.7(c) of the Plan to a Participant to
whom Article I or Article II of this Exhibit B applies,
beginning with the calendar year in which he or she attains
age seventy and one-half (70.5) (or, with respect to a
Participant who is not a Five Percent Owner, the calendar
year in which he or she retires, if later), shall not be less
than the quotient obtained by dividing the Participant's
Account balance at the beginning of such year by the life
expectancy of the Participant (or the joint life and last
survivor expectancy of the Participant and his or her
Beneficiary) determined as of the beginning of such year and
reduced by one (1) for each year thereafter. The required
minimum distribution with respect to the calendar year in
which the Participant attains age seventy and one-half (70.5)
(or with respect to a Participant who is not a Five Percent
Owner, the calendar year in which he or she retires, if
later) shall be made no later than April 1 of the next
succeeding calendar year. With respect to any other calendar
year, the required minimum distribution shall be made no
later than December 31 of such year.
Notwithstanding the above, if the Participant (or his or
her spouse, in the event the Participant dies before benefits
have commenced) so elects prior to the time distribution must
commence pursuant to Section 9.7 of the Plan or Section 1.3
of this Exhibit B, the life expectancy of the Participant,
the life expectancy of the spouse or the joint life and last
survivor expectancy of the Participant and his or her spouse
shall be recalculated pursuant to the regulations under
Section 401(a)(9) of the Code. Such election shall be
irrevocable and shall be made by such written, telephonic or
electronic means as may be prescribed by the Benefits
Committee. In the absence of such election, life expectancy
shall not be recalculated. The life expectancy of a
nonspouse Beneficiary may not be recalculated.
Distribution shall be made in accordance with the
regulations under Section 401(a)(9) of the Code, including
Regulation Section 1.401(a)(9)-2, which shall override any
distribution options in the Plan or this Exhibit B
inconsistent therewith.
ARTICLE IV
TEFRA Section 242(B) ELECTIONS
4.1 APPLICATION AND EFFECT OF ARTICLE. The
provisions of this Article shall apply to any Participant or
Former Participant who participated in the Duncanson & Holt,
Inc. Employee Profit Participation and Savings Plan, if, with
respect to such Participant or Former Participant, the Plan
is a direct or indirect transferee of such plan.
4.2 TEFRA Section 242(B) ELECTIONS. Notwithstanding
any provision of Article IX of the Plan or this Exhibit B to
the contrary, distribution shall be made in accordance with a
designation made by a Participant or Former Participant
pursuant to Section 242(b) of the Tax Equity and Fiscal
Responsibility Act of 1982, provided:
(a) The distribution would not have
disqualified the Plan under Section 401(a)(9) of the Code as
in effect prior to amendment by the Tax Equity and Fiscal
Responsibility Act of 1982;
(b) The designation was made by a written
instrument which was signed by the Participant before January
1, 1984;
(c) The designation specifies the time at which
distribution will be made or commence and the period over
which distribution will be made;
(d) The Participant had accrued a benefit under
the Plan as of December 31, 1983; and
(e) The designation has not been revoked or
modified in any way other than the substitution or addition
of a beneficiary which does not alter the period over which
distributions are to be made.