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UNUM Corporation
As filed with the Securities and Exchange Commission on June [ ], 1995
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11 - K
|X| ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1994
Commission File Number 33-31270
UNUM Employees Retirement Savings Plan and Trust
2211 Congress Street
Portland, Maine 04122
(Full title of the plan and the address of the plan)
UNUM CORPORATION
2211 Congress Street
Portland, Maine 04122
(Name of issuer of the securities held pursuant to the
plan and the address of its principal executive office)
Exhibit Index Appears on Page 2 of 104
Page 1 of 104
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Table of Contents
Page(s)
Audited Financial Statements, Schedules and Exhibits
Report of Independent Accountants 6
Financial Statements:
1. Statement of Net Assets Available for Plan
Benefits - December 31, 1994 and 1993 7
2. Statements of Changes in Net Assets Available
for Plan Benefits for the years ended
December 31, 1994 and 1993 8-9
3. Notes to Financial Statements 10-13
Supplemental Schedules:
1. Item 27a - Schedule of Assets Held for Investment
Purposes at December 31, 1994 14
2. Item 27d - Schedule of Reportable Transactions
for the year ended December 31, 1994 15
Exhibits:
1. Consent of Independent Accountants 16
2. UNUM Employees Retirement Savings Plan and Trust 17-104
Note: Report of Independent Accountants, Financial Statements
and Supplemental Schedules filed on FORM SE.
Page 2 of 104
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Trustees of UNUM Employees Savings Plan and Trust, have duly caused this
annual report to be signed on their behalf by the undersigned hereunto duly
authorized.
UNUM EMPLOYEES RETIREMENT
SAVINGS PLAN AND TRUST
June 27, 1995 By: /s/ Robert Cornett
Robert Cornett
Vice President
Human Resources Benefits
Page 3 of 104
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Exhibit 1
Consent of Independent Accountants
We consent to the incorporation by reference in the registration statement of
the UNUM Employees Retirement Savings Plan and Trust on Form S-8 (File
No. 33-31270) of our report, dated June 23, 1995, on our audit of the
statements of net assets available for plan benefits as of December 31, 1994
and 1993, and the related statements of changes in net assets available for
plan benefits for the years then ended of the UNUM Employees Retirement
Savings Plan and Trust, which report is included in this Annual Report on
Form 11-K.
/s/ Coopers & Lybrand L.L.P.
Portland, Maine
June 27, 1995
Page 16 of 104
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UNUM EMPLOYEES RETIREMENT SAVINGS PLAN AND TRUST
Page 17 of 104
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Table of Contents
Page
ARTICLE I Definitions 1
ARTICLE II Participation 12
2.1 Date of Participation 12
2.2 Participation Requirement 12
2.3 Reemployed Eligible Employee 13
ARTICLE III Contributions 13
3.1 Employer Contributions 13
3.2 Timing of Employer Contributions 13
3.3 Form of Contributions 14
3.4 Maximum Contributions 14
3.5 Return of Contributions 14
3.6 Nonforfeitable Contributions 14
3.7 Special Rules for Matching Contributions 14
3.8 Rollover Contributions 16
ARTICLE IV Direct Transfers 17
4.1 Direct Transfers 17
ARTICLE V Deferral Elections 18
5.1 Time and Method 18
5.2 Amendment or Termination by Participant 18
5.3 Limitations on Actual Deferral Percentage 18
5.4 Restrictions and Adjustments 20
ARTICLE VI Excess Deferrals 21
6.1 Limitation on Elective Contributions 21
6.2 Distribution of Excess Deferral 21
6.3 Notice by Participant 22
ARTICLE VI Limitation on Annual Additions 22
7.1 Limitation For Defined Contribution Plans 22
7.2 Limitation For Defined Contribution Plan
and Defined Benefit Plan 23
7.3 Combining and Aggregating Plans 25
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7.4 Reduction of Excess Annual Additions 25
7.5 Definition of Compensation 26
7.6 Certain Contributions Treated as Annual
Additions 26
ARTICLE VIII Accounts and Valuation 26
8.1 Participants' Accounts 26
8.2 Adjustments 27
8.3 Allocation of Discretionary Contributions 28
8.4 Eligible Employees Entitled to Share in
Discretionary Contributions 28
8.5 Allocation of Elective Contributions and
Matching Contributions 29
8.6 Participants Entitled to Share in
Matching Contributions 29
8.7 Allocation of Rollover Contributions 29
8.8 Allocation of Asset Transfers 29
8.9 Reports to Participants 30
ARTICLE IX Distributions and Loans 30
9.1 Retirement 30
9.2 Disability 30
9.3 Death 30
9.4 Termination of Employment 30
9.5 In-Service Distributions 32
9.6 Participant Loans 32
9.7 Distributions to Participants 34
9.8 Special Rules for Annuity Option 35
9.9 Special Rules for Periodic Payments Option 38
9.10 Commencement of Distributions to
Participants 39
9.11 Minimum Amounts to be Distributed to
Participants 40
9.12 Distributions to Spouse or Beneficiary 41
9.13 Hardship Withdrawals 42
9.14 Distribution to Alternate Payee 44
9.15 Distributions to Minors and Incompetent
Persons 44
9.16 Direct Rollovers 45
9.17 Form of Distribution 47
9.18 Purchasing Annuities 47
ARTICLE X Top Heavy Provisions 47
10.1 Top Heavy Requirements 47
10.2 Minimum Vesting Requirements 47
10.3 Minimum Contribution Requirement 47
10.4 Modified Limitation on Allocations 48
10.5 Present Value Factors 48
10.6 Benefit Accrual 48
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ARTICLE XI Plan Administration 49
11.1 Appointment of Benefits Committee 49
11.2 Resignation and Removal 49
11.3 Powers and Duties 49
11.4 Reporting and Disclosure 50
11.5 Delegation of Ministerial Duties 50
11.6 Payment of Plan Expenses 50
11.7 Compensation and Reimbursement of
Expenses 50
11.8 Uniformity of Rules and Regulations 50
11.9 Reliance on Reports 51
11.10 Multiple Signatures 51
ARTICLE XII Claims Procedures 51
12.1 Filing a Claim for Benefits 51
12.2 Denial of Claim 51
12.3 Appeal of Denied Claim 51
12.4 Decision on Appeal 52
ARTICLE XIII Trustee 52
13.1 Duties 53
13.2 Investment Funds 53
13.3 UNUM Stock Fund 53
13.4 Investment of Contributions 55
13.5 Reinvestment of Account 55
13.6 Custodian 56
13.7 Investment Manager 56
13.8 Trustee Powers 56
13.9 Distributions and Participant Loans 58
13.10 Voting Rights 58
13.12 Accounts 60
13.13 Compensation and Expenses of Trustee 60
13.14 Reliance by Trustee 60
13.15 Reliance by Others 60
13.16 Merger or Consolidation of Trustee 60
13.17 Resignation or Removal of Trustee 60
13.18 Fiscal Year of Trust 61
ARTICLE XIV Amendment and Termination 61
14.1 Amendment 61
14.2 Accounts Not to be Decreased by Amendment 62
14.3 Termination 62
14.5 Notice of Amendment or Termination 63
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ARTICLE XV Nonalienability of Benefits; Qualified
Domestic Relations Orders 63
15.1 Nonalienability of Benefits 63
15.2 Qualified Domestic Relations Orders 63
15.3 Notice 63
15.4 Representative 63
15.5 Separate Account 63
15.6 Determination by Benefits Committee 64
15.7 Definitions 65
ARTICLE XVI Mergers 66
16.1 Merger or Consolidation of Plan 66
16.2 Merger with First UNUM Employees Savings
and Investment Plan and Trust 66
16.3 Merger with Preferred Benefits Corporation
Profit Sharing and 401(k) Plan 67
16.4 Thomas L. Jacobs and Associates, Inc.
Merger Provisions 80
ARTICLE XVIII Miscellaneous 81
17.1 Fiduciary Responsibility 81
17.2 Prohibited Transactions 82
17.3 Delegation of Authority by Adopting
Employers 82
17.4 Transfers of Employment 82
17.5 Initial Plan Qualification 82
17.6 Exclusive Benefit 83
17.7 Service With Predecessor Employer 83
17.8 Employment 83
17.9 Gender 83
17.10 Governing Law 83
17.11 Article and Section Headings and Table
of Contents 83
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UNUM EMPLOYEES RETIREMENT SAVINGS PLAN AND TRUST
The UNUM Employees Retirement Savings Plan and Trust (the "Plan"),
originally adopted effective January 1, 1984, was last amended and restated
effective January 1, 1990. The Plan is hereby further amended and restated
effective generally January 1, 1994. 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 by the Trustee for each Participant which shall reflect the
Participant's share of the Trust Fund; provided such Account shall, in
accordance with Section 1, reflect separately the Participant's
(a) Elective Contributions, (b) Matching Contributions,
(c) Discretionary Contributions, (d) Rollover Contributions and (e) 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 (excluding the Elective Contributions, if
any, taken into account under Section 1.9) 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); provided, however, that
such term may, at the election of an Employer, include Matching Contributions.
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 the 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 the 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 the 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.
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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, effective January 1, 1991, 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 two hundred and fifty
(250) Hours of Service (five hundred (500) Hours of Service, effective January
1, 1995).
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 the 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 the 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 the Employer as a result of sales
contest participation. Notwithstanding the foregoing to the contrary,
Compensation (i) shall include elective contributions made by the Employer on
behalf of an Employee that are not includable in income under Section
402(e)(3) of the Code; and (ii) shall be reduced by flex cash (except with
respect to Employees of Commercial Life Insurance Company), extended pay,
overtime pay, incentive plan pay, varicomp, actuarial bonus payments, stock
options, prizes, awards, field transition plan payouts, termination pay,
commission fees, consultants fees, other irregular payments (other than
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,
1989, the annual Compensation of any Employee in excess of Two Hundred
Thousand Dollars ($200,000.00) (or such higher amount as the Secretary of the
Treasury may prescribe) shall not be taken into account under the Plan, and,
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
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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). For purposes of the annual
Compensation limit, any Compensation paid to an Employee who is the spouse or
a lineal descendant (who has not attained age nineteen (19) by the close of
the Plan Year) of an Employee who is a Five Percent Owner or one of the ten
(10) Highly Compensated Employees paid the highest compensation (as defined
in Section 7.5) for the Plan Year shall be treated as paid to or on behalf
of such Five Percent Owner or Highly Compensated Employee. If the annual
Compensation limit is exceeded as a result of the application of the
preceding sentence, then the limit shall be prorated among the affected
Employees' Compensation as determined prior to the application of the
annual Compensation limit. 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.
Notwithstanding the foregoing to the contrary, for purposes of the
Discretionary Contribution, if any, for a Plan Year, "Compensation" shall mean
Compensation paid for services rendered while an Eligible Employee.
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 to such Employee's compensation for such year; provided, however,
that such term may, at the election of an Employer, include Elective
Contributions. 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 to the
contrary, with respect to Plan Years beginning after December 31, 1986, and
before January 1, 1989, "Contribution Percentage" shall mean for any such Plan
Year the average of the ratios, calculated separately for each Eligible
Employee, of the sum 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 the amount of after-tax
contributions, if any, made by such Employee (and the employer matching
contributions made thereon, if any) for such year to such Employee's
compensation for such year; provided, however, that such term may, at the
election of an Employer, include Elective Contributions.
1.12 "Deferral Election" shall mean an election made by an Eligible
Employee in accordance with Section 5.1.
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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
incapacity to engage in any substantial gainful activity by reason of any
medically determined physical or mental impairment which can reasonably
be expected to result in death or be of long-continued and indefinite duration
as certified by a licensed physician approved by the Employer.
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, 1994.
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,
excluding pool temporary employees, Leased Employees, any individual
compensated exclusively on a commission basis, and, 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.
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.
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1.22 "Employer Contribution" shall mean any Elective Contribution,
Matching Contribution or Discretionary 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 the 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 the Employer or stock possessing
more than five percent (5%) of the total combined voting power of all stock of
the Employer.
1.29 "Former Participant" shall mean any individual who ceases to be
employed by the Employer 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,
during the Plan Year or the preceding Plan Year:
(a) was at any time a Five Percent Owner;
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(b) received compensation from the Employer in excess of
Seventy-Five Thousand Dollars ($75,000.00) or such higher amount in
effect under Section 414(q) of the Code;
(c) received compensation from the Employer in excess of Fifty
Thousand Dollars ($50,000.00) or such higher amount in effect under
Section 414(q) of the Code, and was in the Top-Paid Group for such year;
or
(d) was at any time an officer and received compensation
greater than fifty percent (50%) of the amount in effect under
Section 415(b)(1)(A) of the Code for such year, but
(i) in no event shall more than fifty (50) Employees
or, if less, ten percent (10%) of all Employees, be treated as
officers under this Section, and
(ii) if for any determination year no officer of the
Employer is described in this subsection, the officer of the
Employer receiving the greatest compensation for such year shall
be treated as a Highly Compensated Employee under this subsection.
For any Plan Year in which an Employee is not a member of the
group consisting of the one hundred (100) Employees receiving the greatest
compensation from the Employer during such year, he or she shall not be
treated as a Highly Compensated Employee under subsections (b), (c) or (d) of
this Section unless such Employee was treated as a Highly Compensated Employee
under one of such subsections for the preceding Plan Year, without regard to
this sentence. 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).
If an Employee is a family member of a Five Percent Owner or of one
of the ten (10) Highly Compensated Employees receiving the greatest
compensation from the Employer during the Plan Year, then such Employee shall
not be considered a separate Employee and the compensation paid by the
Employer to such Employee (and any contribution or benefit on his or her
behalf) shall be treated as if it were paid to (or on behalf of) the Five
Percent Owner or Highly Compensated Employee. For purposes of this Section,
"family member" shall mean a spouse, lineal ascendant, lineal descendant and
the spouses of such lineal ascendants and descendants.
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(a)(8) 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 amounts in subsections (b) and (c) of this Section shall
be increased at the same time and in the same manner as the dollar limitation
under Section 415(b)(1)(A) of the Code.
<PAGE>
The determination of who is a Highly Compensated Employee, including
the determinations of the number and identity of Employees in the Top-Paid
Group, the top one hundred (100) Employees, the number of Employees treated as
officers and the compensation that is considered, shall be made in accordance
with Section 414(q) of the Code and the regulations thereunder.
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 two hundred and fifty-one (251) Hours of
Service (five hundred and one (501) Hours of Service, effective January
1, 1995) 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.
All hours of service credited to an Employee under the First UNUM
Employee Savings and Investment Plan and Trust prior to January 1, 1989, shall
be considered Hours of Service with respect to such Employee under this Plan;
provided, however, that no duplication of Hours of Service shall be permitted.
<PAGE>
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 two hundred and fifty-
one (251) (five hundred and one (501), effective January 1 , 1995). 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 year solely because the Employee is
credited with such Hours of Service or, in all other cases, in the immediately
following computation period.
1.33 "Investment Fund" shall mean an investment fund described in
Section 13.2.
1.34 "Investment Manager" shall mean any fiduciary, other than the
Trustee 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 the Employer having annual compensation
(within the meaning of Section 7.5) from the 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 (1/2%)
interest, as well as one of the ten largest interests in the Employer,
and having annual compensation (within the meaning of Section 7.5) from
<PAGE>
the 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 the 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 the 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 of a type historically performed, in
the business field of the Employer, by employees.
Contributions or benefits provided to a Leased Employee by the
leasing organization which are attributable to services performed for the
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.
<PAGE>
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 and each other Eligible
Employee on whose behalf the Employer makes a Discretionary Contribution.
1.43 "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 the 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.
1.44 "Plan" shall mean the UNUM Employees Retirement Savings Plan
and Trust.
1.45 "Plan Year" shall mean the calendar year.
1.46 "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.
1.47 "Rollover Contributions" shall mean the cash contributions made
by an Employee in accordance with Section 3.8.
1.48 "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.
<PAGE>
1.49 "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.
1.50 "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 the 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 1/2) 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).
<PAGE>
The 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.
1.51 "Trust" shall mean the trust created by the Employer in
accordance with the provisions of the Plan.
1.52 "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.
1.53 "Trust Fund" shall mean the property held in Trust for the
benefit of the Participants and their Beneficiaries.
1.54 "Valuation Date" shall mean the last business day of any month,
and such additional dates as the Trustee and Benefits Committee may designate.
1.55 "Year of Participation Service" shall mean an Eligibility
Computation Period during which the Employee has completed five hundred and
one (501) or more Hours of Service (one thousand (1,000) Hours of Service,
effective January 1, 1995).
ARTICLE II
Participation
2.1 Date of Participation. Except as hereinafter provided, each
Employee who is in the employ of the 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 the first day of the first payroll
period coinciding with or next following the date on which the Employee
meets said requirement, or the first day of any subsequent payroll period,
provided he or she is still in the employ of his or her Employer on said
date. Notwithstanding the foregoing, each Employee who had completed at
least 1,000 hours of service with First Commercial Life Insurance Company
prior to the date of the merger with First UNUM Life Insurance Company,
shall be eligible to participate in the Plan as of the first day of the
first payroll period coinciding with or next following such merger, or the
first day of any subsequent payroll period, provided he or she is still
in the employ of his or her Employer on said date; each Employee who had
completed at least 1,000 hours of service with Commercial Life Insurance
Company prior to January 1, 1989, shall be eligible to participate in
the Plan as of the first day of the first payroll period coinciding with
or next following January 1, 1989, or the first day of any subsequent
payroll period, provided he or she is still in the employ of his or her
Employer on said date; and each Employee who was a member of the First
UNUM Employees Savings and Investment Plan on December 31, 1988, shall be
eligible to participate in the Plan effective January 1, 1989.
2.2 Participation Requirement. Each Employee who has completed one
(1) Year of Participation Service and who is scheduled to work forty (40)
or more hours bi-weekly shall be eligible to participate in the Plan.
<PAGE>
Effective January 1, 1995, 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 his or her prior service with an
Affiliated Employer since the date such employer became an Affiliated
Employer, and, effective January 1, 1994, 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, the Employer
shall contribute to the Plan:
(a) the Elective Contributions to be made in accordance with
Section 5.1 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 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); and
(c) the Discretionary Contributions, if any, in such amount
as may be determined by the Board.
3.2 Timing of Employer Contributions. The Elective Contributions
for the payroll periods ending within any calendar month shall be paid to the
Trust as soon as practicable after the end of such month. Matching
<PAGE>
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 the Employer, but not
later than the date prescribed by law for filing the Employer's 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.
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 Employer
Contribution for any Plan Year exceed the maximum amount which the
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 the 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 the Employer, any
contributions made by it (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 the 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 the 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 the 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, 1986,
shall not exceed the greater of:
<PAGE>
(i) the Contribution Percentage for all other Eligible
Employees multiplied by 1.25; or
(ii) the lesser of the Contribution Percentage for all
other Eligible Employees multiplied by 2, or the Contribution
Percentage for such Eligible Employees 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) If an Employee is a family member within the meaning of
Section 1.31 of a Five Percent Owner or of one of the ten (10) Highly
Compensated Employees receiving the greatest compensation from the
Employer during the Plan Year, then the individual contribution
percentage attributable to such Employee shall be treated as if it were
attributable to the Five Percent Owner or Highly Compensated Employee.
An Employee who is a family member with respect to a Five Percent Owner
or one of the ten (10) Highly Compensated Employees receiving the
greatest compensation from the Employer shall not be considered a
separate Employee for purposes of determining the Contribution
Percentage for Highly Compensated Eligible Employees and the
Contribution Percentage for all other Eligible Employees.
(d) 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.
(e) 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.
(f) For purposes of this Section, Matching Contributions
shall be treated as made for a Plan Year 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. The Employer shall maintain
records sufficient to demonstrate satisfaction of this Section and the
amount of any Elective 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.
<PAGE>
(g) 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 1/2) 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 respective portions of the Excess Contributions attributable to each
such Employee and shall designate such distribution as a distribution of
Excess Contributions (plus any income and minus any loss allocable
thereto).
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.
For purposes of this subsection, the term "qualified
nonelective contribution" shall have the meaning given such term in
Section 5.4.
(h) Excess Contributions shall be allocated to Participants
who are subject to the family aggregation rules of Section 414(q)(6) of
the Code in the manner prescribed by regulations.
(i) 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.
(j) The amount of any Highly Compensated Eligible Employee's
Excess Contributions shall be determined by reducing contributions on
behalf of all such Employees in the order of their respective
contribution percentages, beginning with the highest such percentage.
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 and second determining the amount of Excess
Elective Contributions under Section 5.3.
3.8 Rollover Contributions. An Employee who has received
a qualified total 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)
<PAGE>
day following the day on which the Employee received such distribution. In
addition, an Employee who receives a total 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. Notwithstanding the foregoing to the
contrary, an Employee may not borrow any amounts which have been credited to
his or her Rollover Contributions Account.
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. 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. Notwithstanding the foregoing provisions of
this Section to the contrary, this Plan shall not accept any direct or
indirect transfers after December 31, 1984, from a plan which is subject to
Section 401(a)(11) of the Code.
Effective May 1, 1992, 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 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.
<PAGE>
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, 1989, an Eligible
Employee may not defer less than two percent (2%) nor more than ten percent
(10%) 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 was 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.
If a Participant terminates a Deferral Election in accordance with
Section 5.2, such Participant may subsequently make another Deferral Election,
provided such election shall not become effective prior to the first day of
the first payroll period that begins at least ninety (90) days after the date
the Deferral Election was terminated.
5.2 Amendment or Termination by Participant. A Participant may amend
his or her Deferral Election to increase or decrease the deferral
percentage within the limits of Section 5.1, provided at least 90 days
elapse between such amendment and the later of (i) the date of the most
recent amendment pursuant to this Section 5.2 (or the date of the
Deferral Election, in the event such amendment is the first amendment
to the Participant's Deferral Election), and (ii) the date of
the Participant's most recent election with respect to the investment of
future contributions made on his or her behalf pursuant to Section 13.4. A
Participant 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 on 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.
<PAGE>
(a) The Actual Deferral Percentage for Highly Compensated
Eligible Employees for any Plan Year commencing after December 31, 1986,
shall not exceed the greater of:
(i) the Actual Deferral Percentage for all other Eligible
Employees multiplied by 1.25; or
(ii) the lesser of the Actual Deferral Percentage for all
other Eligible Employees multiplied by 2, or the Actual Deferral
Percentage for such Eligible Employees 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, 1986, shall not exceed the greater of:
(i) the sum of (1) the greater of the Actual Deferral
Percentage for all other Eligible Employees multiplied by 1.25 or
the Contribution Percentage for all other Eligible Employees
multiplied by 1.25, and (2) the lesser of the Actual Deferral
Percentage for all other Eligible Employees plus 2 or the
Contribution Percentage for all other Eligible Employees 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 multiplied by 1.25 or
the Contribution Percentage for all other Eligible Employees
multiplied by 1.25, and (2) the greater of the Actual Deferral
Percentage for all other Eligible Employees plus 2 or the
Contribution Percentage for all other Eligible Employees 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 does not exceed the respective Actual Deferral
Percentage and Contribution Percentage of all other Eligible Employees
multiplied by 1.25.
For purposes of this Section, Elective Contributions and Matching
Contributions must be made before the last day of the twelve (12) month period
immediately following the Plan Year to which such contributions relate. If a
Highly Compensated Eligible Employee is subject to the family aggregation
provisions of Section 1.31, the individual deferral percentage for such
Employee shall be determined in accordance with the applicable regulations
under Section 401(k) 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 Employer shall maintain records sufficient to demonstrate
compliance with this Section and the amount of any Matching Contributions used
to satisfy this Section. The determination and treatment of the contributions
<PAGE>
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 1/2) 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 respective portions
of the Excess Elective Contributions attributable to each such Employee and
shall designate such distribution as a distribution of Excess Elective
Contributions (plus any income and minus any loss allocable thereto). Excess
Elective Contributions shall be allocated to Participants who are subject to
the family aggregation rules of Section 414(q)(6) of the Code in the manner
prescribed by regulations.
The amount of any Highly Compensated Eligible Employee's Excess
Elective Contributions shall be determined by reducing contributions on behalf
of all such Employees in the order of their respective individual deferral
percentages, beginning with the highest such percentage. 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 1/2) months after the end of such year, reduce the Contribution
Percentage for Highly Compensated Employees in the manner prescribed in
subsections (g) and (j) 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 Matching
Contribution Percentage for Highly Compensated Employees in the manner
prescribed in subsections (g) and (j) of Section 3.7 in order to comply with
Section 5.3(b) for any Plan Year, an Employer may make qualified nonelective
<PAGE>
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.
For purposes of this Section, the term "qualified nonelective
contribution" shall mean an Employer contribution, other than an Elective
Contribution or Matching Contribution, which:
(a) is treated as an Elective Contribution;
(b) is nonforfeitable when made;
(c) is distributable only in accordance with
Article IX; and
(d) satisfies the requirements of Section 401(a)(4)
of the Code.
ARTICLE VI
Excess Deferrals
6.1 Limitation on Elective Contributions. Effective January 1, 1994,
the Elective Contributions that may be allocated to a Participant's Account
for any calendar year shall not exceed Nine Thousand Two Hundred Forty
Dollars ($9,240.00), 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 and a salary reduction agreement for the
purchase of an annuity contract under Section 403(b) 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.
<PAGE>
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 VI
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.
<PAGE>
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 the 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
<PAGE>
(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 the 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 the
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 the 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 the 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 the 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 the
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.
<PAGE>
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 the 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 the Employer
shall be treated as one defined contribution plan.
7.4 Reduction of Excess Annual Additions. If for any Limitation
Year the Annual Additions allocated to the Account of any Participant
exceed the limitations set forth in the preceding Sections of this Article,
the following rules apply to the extent necessary to reduce such excess:
(a) Any nondeductible voluntary employee contributions to the
extent they would reduce the excess amount, shall be returned to the
Participant;
(b) Any Elective Contributions 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 (including any allocation of forfeitures) 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
<PAGE>
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 the 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 the Employer to an Employee for
services rendered while an Employee 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.
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.
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 the 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 the
Employer shall be treated as annual additions to a defined contribution
plan.
ARTICLE VIII
Accounts and Valuation
8.1 Participants' Accounts. The Trustee shall establish and maintain
a separate Account for each Participant which shall separately reflect:
<PAGE>
(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(g) 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 and
forfeitures, 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 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. The Trustee shall adjust the Participants' Accounts
as of each Valuation Date as follows:
(a) First, determine the fair market value of each Investment
Fund as of the close of business on such date or, if that date is not a
business day, as of the close of business on the last preceding business
day.
(b) Second, allocate the income, expenses, gains and losses of
each Investment Fund among the Accounts in proportion to the Account
balances (to the extent invested in such fund).
(c) Third, reduce the separate Account of each Participant to
reflect all distributions 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, Discretionary
Contributions, Rollover Contributions, if any, and the assets
<PAGE>
transferred from another qualified plan in accordance with Section 4.1
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.
The Trustee shall not be required to adjust the separate Accounts of
the Participants as of any Valuation Date other than the last Valuation Date
of each Plan Year if no adjustment to any Account is required under
subsection (c) above as of such date.
(f) 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 Section 8.2(f), 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 subsection (f). 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
subsection (f). For purposes of this subsection (f), a Participant's or
Former Participant's "exercise of control over his or her Account" shall
include but not be limited to the following:
(i) a request for a loan pursuant to Section 9.6;
(ii) a request for a withdrawal pursuant to
Section 9.5 or 9.13; and
(iii) 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).
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.
8.4 Eligible Employees Entitled to Share in Discretionary
Contributions. An Eligible Employee shall be entitled to share in the
Discretionary Contributions for a Plan Year if he or she is credited with at
least five hundred and one (501) Hours of Service during such Plan Year (one
thousand (1,000) Hours of Service during such Plan Year, effective January 1,
1995), and remains in the employ of the 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. For purposes of
this Section, "Hours of Service" shall mean only Hours of Service credited
with an Employer.
<PAGE>
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 for a Plan Year if he or she is credited
with more than two hundred and fifty (250) Hours of Service during such
Plan Year (five hundred (500) Hours of Service during such Plan Year,
effective January 1, 1995) and remains in the employ of the 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.
(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 for a Plan Year if he or she remains in the employ of the
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.
(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 for a Plan Year if he or she is credited
with more than two hundred and fifty (250) Hours of Service during such
Plan Year (five hundred (500) Hours of Service during such Plan Year,
effective January 1, 1995), regardless of whether he or she remains in
the employ of the 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.
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 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.
8.8 Allocation of Asset Transfers. Any direct transfer of plan assets
made on behalf of an Employee in accordance with Section 4.1 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.
<PAGE>
8.9 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
by electronic transmittal (or in writing on a form furnished by the Benefits
Committee, in the case of a married Participant or in the event electronic
transmittal is not available) with the Benefits Committee or its designated
representative during the Participant's lifetime. 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.
(a) Terminations after December 31, 1988. With respect to
any Plan Year commencing after December 31, 1988, if a Participant
ceases to be employed by the Employer 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.
<PAGE>
(b) Terminations before January 1, 1989. With respect to any
Plan Year commencing prior to January 1, 1989, if a Participant ceases
to be employed by the Employer prior to attaining Normal Retirement Age
for any reason other than Disability or death, such Participant shall
receive distribution of the vested portion of his or her Account in such
manner and at such time as provided by the terms of the Plan in effect
as of the date he or she ceases to be employed by the Employer. The
vested portion of such Participant's Account shall be determined in
accordance with the provisions of the Plan in effect as of the date he
or she ceases to be employed by the Employer.
The portion of such Participant's Account which is not vested
in accordance with such Plan provisions at the time he or she ceases to
be employed by the Employer shall be forfeited as of the date he or she
receives distribution of the vested portion, provided if the Participant
receives less than the entire vested portion of his or her 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 the Participant from such Account and
the denominator of which is the value of the vested portion of such
Account at the time of distribution. If such Participant is not vested
in any portion of his or her Account at the time he or she ceases to be
employed, the balance of his or her Account shall be forfeited as of the
date he or she ceases to be employed by the Employer.
In the event that a Participant who ceases to be employed by
the Employer prior to January 1, 1989, is reemployed prior to incurring
five (5) consecutive Breaks in Service:
(i) If the Participant was not vested in any portion of
his or her Account at the time he or she ceased to be employed,
the balance of his or her Account as of the Valuation Date
coinciding with or next following the date he or she ceased to be
employed shall be restored, or
(ii) If the Participant was vested in any portion of
his or her Account at the time he or she ceased to be employed,
the amount forfeited shall be restored.
Restoration shall be made by the end of the Plan Year
following the Plan Year in which the Participant is reemployed by the
Employer. Restoration shall first be made out of forfeitures and to the
extent forfeitures are insufficient, then out of Employer Contributions.
The amounts forfeited by Participants in any Plan Year shall
be used to make restoration and, to the extent forfeitures exceed the
amounts required to make restoration, to reduce Matching Contributions
or to pay Plan expenses. The amount, if any, by which forfeitures
occurring during a Plan Year exceed the sum of the amount required to
make restoration, the amount required to be contributed by the Employer
for such Plan Year and the amount of Plan expenses 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
<PAGE>
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, the
amount required to be contributed by such Employer for such year, and
the amount of Plan expenses for such year, subject, however, to such
modifications as may be required by the Section governing termination of
the Plan.
9.5 In-Service Distributions. 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 in a lump sum
as of any Valuation Date. An election must be received by the Benefits
Committee at least fifteen (15) days in advance of the Valuation Date
specified in the election, as of which distribution is to be made. The
Employee's After-Tax Contributions Account or Rollover Contributions Account
shall be valued as of the Valuation Date elected by the Employee and
distribution shall be made as soon as practicable thereafter.
Effective January 1, 1989, a Participant who has attained age fifty-
nine and one-half (59 1/2) 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 as of any
Valuation Date. Such election may be made once every twelve (12) months and
must be received by the Benefits Committee at least fifteen (15) days in
advance of the Valuation Date specified in the election, as of which
distribution is to be made. The Participant's Elective Contributions Account
shall be valued as of the Valuation Date elected by the Participant 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, 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:
<PAGE>
(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 and Matching 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. 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. Amounts of
principal and interest paid on any loan shall be transferred to the
Investment Fund which presents the least risk of loss as determined by
the Trustee.
(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
<PAGE>
partner in the Employer who owns more than ten percent (10%) of either
the capital or profits interest in the 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 or commences to receive a distribution of his or her Account
pursuant to Section 9.9 or 9.11 of the Plan, and at the time of such
distribution or commencement thereof 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 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 CFR
Section 2550.408b-1 and to further assure that the Plan meets the
requirements of Section 401(a)(4) of the Code.
(j) A request for a loan shall be made by such written,
telephonic or electronic means as may be prescribed by the Benefits
Committee.
(k) The Benefits Committee shall establish, in writing,
administrative procedures to carry out the provisions of this Section
9.6.
9.7 Distributions to Participants. Each Participant may elect to have
his or her Account distributed in one of the following methods:
(a) a lump sum; or
<PAGE>
(b) 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
(c) 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.
9.8 Special Rules for Annuity Option. In the event a Participant
elects to have his or her Account distributed in the form of an annuity, the
following provisions shall apply.
(a) Except as hereinafter provided in subsection (b), a
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 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. 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
<PAGE>
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 equalling, 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 his or her Account. 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
<PAGE>
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 who is married when distribution of his or
her Account 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
Participant's vested Account balance at the time distribution of said
Account is to be made or commence. 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 his or her Account. 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 who is married
when distribution of his or her Account 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;
<PAGE>
(bb) the Participant's right to elect to have the
vested portion of his or her Account balance 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 his or her Account balance
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 9.8 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 vested portion 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.
9.9 Special Rules for Periodic Payments Option. Effective
January 1, 1995, in the event a Participant who meets the requirements of
subsection 9.7(c) elects to have his or her Account distributed in
the form of periodic payments, the following provisions shall apply.
<PAGE>
(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 subsection
9.7(c), 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
his or her Account balance on the next scheduled payment date, provided
he or she notifies the Benefits Committee of such election at least
thirty (30) days in advance of the next scheduled payment date.
(d) At the time of making the election pursuant to
subsection 9.7(c), a 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 in which the Participant's Account is invested in proportion to
the amounts invested in such funds as of the date such payment is to be
made.
(e) Any election, specification or notification in accordance
with the provisions of this Section 9.9 shall be made by such written,
telephonic or electronic means that the Benefits Committee may
prescribe.
9.10 Commencement of Distributions to Participants. Subject to the
provisions of subsections (a), (b), (c) and (d) below, a Participant
may elect to receive or commence receiving distribution of his or her Account
as of any Valuation Date which occurs after the date he or she ceases to be
employed by his or her Employer or becomes Disabled. An election must be
received by the Benefits Committee at least fifteen (15) days in advance
of the Valuation Date, specified in the election, as of which distribution
is to be made or commence. The Participant's Account shall be valued as of
the Valuation Date elected by the Participant and distribution shall be
made or commence as soon as practicable thereafter.
(a) Notwithstanding the foregoing provisions of this Section
and Section 9.7 to the contrary, if the value of the vested portion 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 the Employer, 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 not later than the sixtieth
<PAGE>
(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 the Employer.
(c) Notwithstanding the foregoing provisions of this Section
to the contrary, effective January 1, 1989, distribution to a
Participant shall be made or commence not later than April 1 of the
calendar year following the calendar year in which the Participant
attains age seventy and one-half (70 1/2).
(d) Notwithstanding the foregoing provisions of this Section
to the contrary, distribution to a Participant who has attained age
seventy and one-half (70 1/2) before January 1, 1988, and is not a Five
Percent Owner shall be made or commence 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 1/2) or the calendar year
in which the Participant retires.
For purposes of this subsection (d), a Five Percent Owner shall mean a
Participant who is a Five Percent Owner at any time during the Plan Year
ending with or within the calendar year in which such Participant
attains age sixty-six and one-half (66 1/2) or any subsequent Plan Year.
Any election pursuant to this Section 9.10 shall be made by such
written, telephonic or electronic means as may be prescribed by the Benefits
Committee.
9.11 Minimum Amounts to be Distributed to Participants.
The amount to be distributed each year to a Participant, beginning with
the calendar year in which he or she attains age seventy and one-half (70 1/2),
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 1/2) 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 9.10 or
Section 9.12, 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.
<PAGE>
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 inconsistent
therewith.
9.12 Distributions to Spouse or Beneficiary. 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 the following manner:
(a) In the event the Participant dies before distribution of
his or her Account has commenced:
(i) If distribution is to be made to the Participant's
surviving spouse, 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; 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 1/2).
(ii) If distribution is to be made to a designated
Beneficiary other than the Participant's spouse:
(aa) distribution 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 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 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 Participant's Account to such spouse
begins, the provisions of this subsection (a), with the exception of
<PAGE>
subsection (a)(i), shall be applied as if the surviving spouse were the
Participant.
(b) In the event the Participant dies after distribution of
his or her Account has commenced, distribution shall continue at least
as rapidly as under the method of distribution in effect prior to 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 manner elected by 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.
9.13 Hardship Withdrawals. Effective January 1, 1989, 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 Matching
Contributions 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 and related educational
fees 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
<PAGE>
(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 9.12, 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.
<PAGE>
(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.
9.14 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 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 in such time as is provided by the terms
of such order. Distribution of a separate account pursuant to this Section
9.14 may be made prior to the Participant's "earliest retirement age" as
defined in Section 15.7.
9.15 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.
<PAGE>
9.16 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;
<PAGE>
(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
9.10 or 9.12;
(C) a return of Elective Contributions pursuant
to Section 7.4;
<PAGE>
(D) a corrective distribution pursuant to
Section 3.7, 5.4 or 6.2; and
(E) a distribution of after-tax contributions.
9.17 Form of Distribution. Distribution of a Participant's Account
shall be made in cash; provided, however, effective January 1, 1991,
in the event a Participant elects to receive distribution of his or her
Account in a lump sum, he or she 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. Effective January 1, 1991, in the event a
Participant's surviving spouse or Beneficiary is entitled to receive a lump
sum distribution by reason of the Participant's death, he or she may make the
same election as permitted with respect to a Participant pursuant to this
Section.
9.18 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. The terms of any annuity required or permitted to be purchased
and distributed under this Article shall comply with the applicable
requirements of the Plan.
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, the Employer
shall contribute, on behalf of each Eligible Employee who is a Non-Key
Employee and who has not terminated employment 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
<PAGE>
Employee by the first One Hundred Fifty Thousand Dollars ($150,000.00)
of 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.
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 the 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.
<PAGE>
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.
<PAGE>
(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 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.
<PAGE>
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:
<PAGE>
(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.
<PAGE>
ARTICLE XIII
Trustee
13.1 Duties. The Trustee shall receive and hold all contributions
made by an employer together with 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.
13.2 Investment Funds. The Trustee shall establish a UNUM Stock Fund
and one or more other Investment Funds. The Trustee shall direct that
each Investment Fund, other than the UNUM Stock Fund, 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 Trustee may from time to time change its 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 it deems appropriate, unless a Participant or
Former Participant, pursuant to Section 13.5, 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.
The Trustee shall transfer to each Investment Fund 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.
13.3 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 13.3 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
<PAGE>
"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.
In the event that any rights, warrants, or options for the
acquisition of additional shares of Employer Stock are distributed with
respect to shares of Employer Stock held in the UNUM Stock Fund, each
Participant or Former Participant (or his or her surviving spouse or
Beneficiary, in the event of the Participant's or Former Participant's death)
shall have the right to instruct the Trustee in writing as to whether or not
to exercise such rights, warrants, or options attributable to the Account of
each Participant to the extent that there is a cash balance in such Account
sufficient for such purpose. The Trustee shall use its best efforts to timely
distribute or cause to be distributed to each Participant or Former
Participant (or surviving spouse or Beneficiary) information in connection
with any such distribution of rights, warrants or options for the acquisition
of additional shares of Employer Stock held in the UNUM Stock Fund, together
with a request for confidential instructions on how to respond. Upon timely
receipt of such instructions, the Trustee shall respond as instructed with
respect to such shares of Employer Stock. If, and to the extent that, the
Trustee shall not have received timely instructions from any individual given
a right to instruct the Trustee with respect to shares of Employer Stock, such
individual shall be deemed to have timely instructed the Trustee not to
exercise such rights, warrants or options.
A Participant, Former Participant, surviving spouse or Beneficiary
may instruct the Trustee, in accordance with the provisions of this Section
13.3, by any written, telephonic, or electronic means that the Benefits
Committee may prescribe. Any instructions received by the Trustee from
Participants, Former Participants, surviving spouses or Beneficiaries pursuant
to this Section 13.3 shall be held by the Trustee in strict confidence in
<PAGE>
accordance with the procedures established by the Benefits Committee pursuant
to Section 13.11, except to the extent necessary to comply with Federal laws
or state laws not preempted by the ERISA.
If, and to the extent that, other property is received or rights,
warrants or options are not exercised, the Trustee shall sell such property or
any remaining rights, warrants or options in the open market, provided there
is a market therefor, and shall credit the proceeds to the Account of such
Participant.
13.4 Investment of Contributions. Each Participant may direct that
contributions made on his or her behalf shall be invested in any one or
more of the Investment Funds. The percentage of contributions to be
invested in any Investment Fund must be ten percent (10%), 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 pay 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 Participant may modify an investment direction to have future
contributions on his or her behalf invested in the Investment Funds in
proportions other than those previously elected; provided that at least ninety
(90) days elapse between modifications. An election modifying a previous
investment direction shall be made in multiples of ten percent (10%) 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).
13.5 Reinvestment of Account. A Participant or Former
Participant may elect, to reinvest all or a portion of the balance of his or
her Account in any one or more of the Investment Funds; provided that
at least ninety (90) days elapse between such elections. An election
to reinvest an Account balance shall be made in ten percent (10%)
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).
Notwithstanding the foregoing, a Participant who is subject to
Section 16 of the Securities Exchange Act of 1934 because of his or her
position with UNUM Corporation or one of its subsidiaries may not transfer any
amount credited to his or her Elective Contributions Account or After-Tax
Contributions Account from the UNUM Stock Fund to another Investment Fund or
from another Investment Fund to the UNUM Stock Fund or change his or her
<PAGE>
previously elected investment options with respect to future Elective
Contributions or make any other investment election under the Plan except in
accordance with rules and regulations adopted by the Securities and Exchange
Commission and in effect at the time such Participant desires to make any such
transfer, change or other election (collectively, "investment elections").
The Benefits Committee shall adopt such rules (and amendments thereto) from
time to time as are necessary to permit such Participants to make investment
elections no less frequently than is permitted under the aforementioned rules
and regulations of the Securities and Exchange Commission, including, without
limitation, setting dates on which investment elections may be made by such
Participants, limiting the number of such elections that may be made by them
in any year or other applicable calendar period, and setting dates on which
such an election will become effective.
13.6 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.
13.7 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. Such appointment shall be in writing and
shall be effective upon receipt by the Trustee 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 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 comply with the directions of an Investment
Manager regarding the investment or reinvestment of the Trust Fund or such
portion thereof as shall be under management by the Investment Manager. Once
an Investment Manager has assumed direction of all or a portion of the Trust
Fund, the Trustee shall be under no duty to review any investment to be
acquired, held or disposed of pursuant to such directions, nor to make any
recommendations with regard to the acquisition, disposition or continued
retention of any assets under management by the Investment Manager. Until
such time as the Trustee is notified, in writing, by the Employer that the
Trustee shall again assume exclusive authority and discretion with regard to
the portion of the Trust Fund previously under management by the Investment
Manager, the Trustee shall not have any responsibility for investments which
are managed by an Investment Manager and shall not be liable for making or
retaining any investments or for any failure to invest in the absence of
direction by an Investment Manager.
13.8 Trustee Powerss. In addition to and not in limitation of
such powers as the Trustee has by law or under any other provisions of
the Plan, the Trustee shall have the following powers subject to the
provisions of Sections 13.4, 13.5, and 13.7:
(a) to establish and maintain a separate Account for each
Participant in accordance with Section 8.1.
(b) to adjust the Participant's Accounts in accordance with
Section 8.2.
(c) to allocate and credit Employer Contributions to the
Accounts of Participants entitled to share therein in accordance with
Article VIII.
<PAGE>
(d) to invest and reinvest the Trust Fund, without
distinction between principal and income, in any shares of stock, bonds,
mortgages, notes, mutual fund shares, deposit administration, investment
or group annuity contracts issued by a legal reserve life insurance
company, qualifying employer securities as defined in Section 407(d)(4)
of ERISA, or other property of any kind, real or personal, including any
certificate of deposit or common, commingled or collective trust fund or
pooled investment fund maintained by the Trustee or by another bank if
such bank and the Trustee are members of the same affiliated group
(within the meaning of Section 1504 of the Code) which provides for the
pooling of assets of plans which are described in Section 401(a) of the
Code and exempt from taxation under Section 501(a) of the Code.
(e) to allocate and credit Rollover Contributions and
assets transferred in accordance with Section 4.1 to the Accounts of
Participants in accordance with Article VIII.
(f) to maintain one or more checking accounts, including
checking accounts offered by the Trustee, in the name of the Trust and
to make deposits thereto and draw checks thereon to make distributions
or loans directed by the Benefits Committee.
(g) to establish one or more Investment Funds and to change
or eliminate any such Investment Fund from time to time.
(h) to transfer assets invested in an Investment Fund to one
or more other Investment Funds as from time to time directed by the
Benefits Committee.
(i) to invest the assets of an Investment Fund in a deposit
administration, investment or group annuity contract issued by a
legal reserve life insurance company pursuant to an agreement between
the Trustee, as contractholder, and such insurance company.
(j) to invest the assets of an Investment Fund in mutual
fund shares.
(k) to establish one or more separate interest-bearing
accounts and to segregate such amount or amounts therein as the Benefits
Committee may direct pending the determination of whether a domestic
relations order with respect to a Participant is a qualified domestic
relations order within the meaning of Section 414(p)(1)(A) of the Code.
(l) to sell, exchange, mortgage, lease and to make contracts
concerning real and personal property for such considerations and upon
such terms and conditions as the Trustee may determine, which leases and
contracts may extend beyond the terms of the Trust and to execute deeds,
transfers, mortgages, releases, assignments, and discharges of
mortgages, leases and other instruments of any kind.
(m) to vote (as provided in Section 13.10), in person or by
proxy, any corporate stock or other assets having voting rights; to
exercise any conversion privilege, subscription right or any other right
<PAGE>
or option given to the Trustee as the owner of any asset of the Trust
Fund.
(n) to consent to, take any action in connection with, and
receive and retain any securities resulting from any reorganization,
consolidation, or merger affecting any assets of the Trust Fund.
(o) to cause title to the assets of the Trust Fund to be
registered in the name of the Trustee, or the name of any nominee or to
retain such assets unregistered or in form permitting transferability by
delivery, provided the records of the Trustee shall at all times
indicate that all such assets are part of the Trust Fund.
(p) to borrow such sum or sums as the Trustee may consider
necessary or desirable to administer the Trust, provided the Trustee
shall not borrow from any person, corporation, partnership or other
entity described as a "party in interest" as defined in Section 3(14) of
ERISA.
(q) to employ such agents and counsel as may be reasonably
necessary in collecting, managing, administering, investing, and
distributing the assets of the Trust Fund.
(r) to settle, compromise, arbitrate or contest any claim by
or against the Trust or any other matter directly or indirectly
affecting the Trust, provided the Trustee need not, except at its
option, enter into or maintain any litigation relative thereto until the
Trustee shall have been indemnified to its satisfaction against all
expenses and liabilities to which it may in its judgment be subject to
any such action.
(s) to make, execute, acknowledge and deliver any and all
documents that may be necessary or appropriate to carry out the powers
herein granted.
(t) to exercise any of the powers and rights of an
individual owner with respect to any assets of the Trust Fund.
(u) to perform any and all other acts which are necessary
for the proper administration and investment of the Trust Fund.
13.9 Distributions and Participant Loans. The Trustee shall, from
time to time, make, or cause to be made, distributions or Participant
loans from the Trust Fund to such persons, in such manner and in such
amount or amounts as the Benefits Committee may from time to time
direct. Except as otherwise provided herein, distributions shall be
made in cash. The Trustee shall be entitled to rely upon the written
directions of the Benefits Committee and shall not be under any liability
for any distribution or Participant loan made in accordance therewith.
13.10 Voting Rights. Stock held in any Investment Fund other
than the UNUM Stock Fund shall be voted by the Trustee. Each
Participant or Former Participant (or his or her surviving spouse or
Beneficiary, in the event of the Participant's or Former Participant's death)
shall have the right to instruct the Trustee as to the manner in which to vote
<PAGE>
shares of Employer Stock allocated to his or her Account. The Trustee shall
vote all shares of Employer Stock allocated to Participants' Accounts for
which no instructions are received in the same proportion as it will vote
shares for which it has received instructions.
The Trustee shall use its best efforts to timely distribute or cause
to be distributed to each Participant or Former Participant (or surviving
spouse or Beneficiary) the information distributed to shareholders of UNUM
Corporation in connection with any shareholders' meeting, together with a
request for confidential instructions on how such shares of stock shall be
voted on each matter subject to a vote of the shareholders. Upon timely
receipt of such instructions, the Trustee shall, on each such matter, vote as
directed the appropriate number of shares of Employer Stock.
Each Participant or Former Participant (or, in the event of his or
her death, his or her surviving spouse or Beneficiary) shall have the right to
instruct the Trustee in writing as to the manner in which to respond to a
tender or exchange offer with respect to shares of Employer Stock allocated to
his or her Account. The Trustee shall use its best efforts to timely
distribute or cause to be distributed to each such Participant or Former
Participant (or surviving spouse or Beneficiary) the information distributed
to shareholders of UNUM Corporation in connection with any such tender
or exchange offer, together with a request for confidential instructions
for the Trustee on how to respond to such tender or exchange offer.
Upon timely receipt of such instructions, the Trustee shall respond as
instructed with respect to such shares of Employer Stock. If, and to the
extent that, the Trustee shall not have received timely instructions from any
individual given a right to instruct the Trustee with respect to shares of
Employer Stock, such individual shall be deemed to have timely instructed the
Trustee not to tender or exchange such shares of Employer Stock.
The exercise of any other incidents of ownership over Employer Stock
shall be provided on a pass-through basis in a manner similar to the voting
and tendering of Employer Stock allocated to Participants' Accounts.
A Participant, Former Participant, surviving spouse or Beneficiary
may instruct the Trustee, in accordance with the provisions of this Section
13.10, by any written, telephonic or electronic means that the Benefits
Committee may prescribe. Any instructions received by the Trustee from
Participants, Former Participants, surviving spouses or Beneficiaries pursuant
to this Section 13.10 shall be held by the Trustee in strict confidence in
accordance with the procedures established by the Benefits Committee pursuant
to Section 13.11, except to the extent necessary to comply with Federal laws
or state laws not preempted by ERISA.
13.11 Confidentiality of Participant Decisions. The Benefits
Committee shall establish procedures designed to safeguard the confidentiality
of information relating to the purchase, holding and sale of Employer Stock,
and the exercise of voting, tender and similar rights with respect thereto, by
Participants, Former Participants, surviving spouses and Beneficiaries. The
Benefits Committee shall be responsible for ensuring that such procedures meet
the requirements of ERISA Reg. 2550.404c-1(d)(2)(ii)(E)(4)(vii). In the
event that the Benefits Committee determines that a particular situation
involves a potential for undue Employer influence upon Participants, Former
Participants, surviving spouses and Beneficiaries within the meaning of ERISA
Reg. 2550.404c-1(d)(2)(ii)(E)(4)(ix), the Benefits Committee shall promptly
<PAGE>
appoint an independent fiduciary to perform the role of the Benefits Committee
and carry out activities with respect to such situation. Such independent
fiduciary shall not be a person affiliated with an Employer within the meaning
of ERISA Reg. 2550.404c-1(e)(3).
13.12 Accounts. The Trustee shall furnish the Board with annual
statements of account which shall, with respect to the Trust Fund and
each Investment Fund, show all receipts, disbursements and other
transactions since the last accounting and the investments, at cost and
current fair market value, at the end of the period for which such account is
rendered. To the extent permitted by law, the written approval of any account
by the Board shall be final and binding, as to all matters stated therein,
upon the Board and all persons who then are or thereafter become interested in
the Trust.
13.13 Compensation and Expenses of Trustee. The Trustee shall be
entitled to such reasonable compensation as may from time to time be
agreed upon, in writing, by the Board and shall be entitled to
reimbursement for its reasonable expenses incurred in connection with
the administration of the Trust Fund. The portion of the Trustee's
compensation and expenses properly attributable to an Investment Fund
shall be paid therefrom unless paid by the Employers. Notwithstanding the
foregoing provisions of this Section to the contrary, no person serving as
Trustee who receives compensation from any 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.
13.14 Reliance by Trustee. To the extent permitted by law, the
Trustee may rely and act upon the written directions of the Board,
the Benefits Committee, or any duly appointed Investment Manager, or
other person authorized in writing by the Board or the Benefits
Committee and may rely upon and be protected in acting upon such directions
reasonably believed by it to have been executed by a duly authorized
person, so long as the Trustee acts in good faith and in accordance
with the provisions of the Plan.
13.15 Reliance by Others. No person dealing with the Trustee shall be
bound to see to the application of any money or property paid or delivered
to the Trustee or to inquire into the validity or propriety of any
transactions, except as otherwise required by law.
13.16 Merger or Consolidation of Trustee. If the Trustee is a bank
or trust company, then any corporation into which the Trustee may merge
or with which it may be consolidated shall become the Trustee hereunder
without the execution or filing of any additional instrument or the
performance of any further act.
13.17 Resignation or Removal of Trustee.
(a) Institutional Trustee. If the Trustee is a bank, trust
company or other institution, the Trustee may resign at any time by
delivering to the Board (or the 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 sixty (60) days after
the delivery thereof, unless such notice shall be waived by the Board
(or the person or persons specified by the Board). If the Trustee
resigns, the Board shall appoint a successor Trustee in a written
<PAGE>
instrument, copies of which shall be delivered to the Trustee and the
successor Trustee. The Trustee may be removed by the Board by
delivering to the Trustee a written notice of removal to take effect at
a date specified therein, which shall not be less than thirty (30) days
after delivery thereof, unless such notice shall be waived by the
Trustee. In the event of such removal, the Board shall appoint a
successor Trustee in a written instrument, copies of which shall be
delivered to the Trustee and the successor Trustee.
In the case of the resignation or removal of the Trustee, the
Trustee shall transfer all right, title and interest in the assets of
the Trust Fund to the successor Trustee. Any successor Trustee shall
have the same powers and duties hereunder as those conferred upon the
initial Trustee.
(b) Individual Trustees. If a committee of individuals is
appointed to serve as Trustee, any such individual may resign at any
time by delivering to the Board (or the 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
delivery thereof, unless such notice shall be waived by the Board (or
the person or persons specified by the Board). If such individual
resigns, the Board (or the person or persons specified by the Board) may
appoint an individual to serve as successor Trustee. In the event the
Board (or the person or persons specified by the Board) fails to appoint
an individual to serve as successor Trustee, the remaining individuals
serving as Trustee shall constitute the Trustee. The Board (or the
person or persons specified by the Board) shall appoint a successor
Trustee upon the resignation of the last individual serving as Trustee.
An individual appointed to serve as Trustee may be removed by
the Board (or the person or persons specified by the Board) by
delivering to such individual a written notice of removal to take effect
at a date specified therein, unless such notice shall be waived by such
individual. In the event of such removal, the Board (or the person or
persons specified by the Board) may appoint an individual to serve as
successor Trustee. In the event the Board (or the person or persons
specified by the Board) fails to appoint an individual to serve as
successor Trustee, the remaining individuals serving as Trustee shall
constitute the Trustee. The Board (or the person or persons specified
by the Board) shall appoint a successor Trustee upon the removal of the
last individual serving as Trustee.
In the case of the resignation or removal of an individual
appointed to serve as Trustee, such individual, to the extent necessary,
shall transfer all right, title and interest in the assets of the Trust
Fund to the individual appointed to serve as successor Trustee. Any
individual appointed to serve as successor Trustee shall have the same
powers and duties hereunder as those conferred upon the initial
individual serving as Trustee.
13.18 Fiscal Year of Trust. The fiscal year of the Trust shall
coincide with the Plan Year.
<PAGE>
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 five
hundred and one (501) 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 by written notice
delivered 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.
<PAGE>
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.
14.5 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 or levy of any
kind, 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
<PAGE>
jurisdiction, or otherwise), the Benefits Committee shall direct the
Trustee to segregate in a separate interest-bearing account in the Trust
or in an interest-bearing escrow account, 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 9.14.
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 a
separate account or escrow account in accordance with subsection (a) of
Section 15.5 (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 a separate account or escrow
account, 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 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
<PAGE>
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
<PAGE>
(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).
ARTICLES 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 First UNUM Employees Savings and Investment Plan
and Trust. Effective December 31, 1988, the Plan shall be merged with the
First UNUM Employees Savings and Investment Plan and Trust, (the "Prior
Plan"). Pursuant to such merger, the following provisions shall be
applicable:
(a) All company contributions accounts, participant accounts,
outstanding forfeitures, and loans under the Prior Plan shall be
transferred to the Plan;
<PAGE>
(b) All of the Prior Plan's assets shall be transferred to
the Plan;
(c) All of the Prior Plan's benefit obligations shall be
transferred to the Plan and become the responsibility of the Plan;
(d) After December 31, 1988, the rights of participants and
beneficiaries of participants under the Prior Plan shall be determined
strictly in accordance with the terms of the Plan;
(e) On the merger date, the vested interest in the Plan of
each Participant whose Account is transferred from the Prior Plan shall
be no less than his vested company contributions account and his
participant contributions account under the Prior Plan on the date
preceding the merger;
(f) The Trustee shall accept the Prior Plan's assets when
transferred and shall have all the rights, duties, powers and
responsibilities with respect to such assets as prescribed under Article
XIII of the Plan; and
(g) Pursuant to Article XIII of the Plan, each Participant
who has an account transferred from the Prior Plan shall make an
investment election with respect to such Transfer Account which shall be
applicable as of the transfer date.
16.3 Merger with Preferred Benefits Corporation Profit Sharing and
401(k) Plan. Effective December 1, 1989, the Plan shall be merged with the
profit sharing and 401(k) plan of Preferred Benefits Corporation (the "Prior
Plan"). The provisions of this Section shall be applicable to such merger and
shall supersede any conflicting provisions of this Plan.
(a) The following terms, when used in this Article, shall
have the meanings as hereinafter set forth, unless the context clearly
indicates otherwise:
(i) With respect to any Participant who is an Employee
of Preferred Benefits Corporation, "Account" shall mean on any
date of determination the value of such Participant's share of the
Trust Fund.
(aa) "Salary Deferral Account" shall mean the
portion of the Participant's Account derived from company
contributions under subsection (c).
(bb) "Rollover Account" shall mean the portion
of the Participant's Account from amounts transferred to the
Trust Fund under subsection (c).
(cc) "Employer Contribution Account" shall mean
the portion of the Participant's Account derived from
company contributions under subsection (c).
<PAGE>
(dd) "Prior Plan Account" shall mean the portion
of the Participant's Account derived from contributions made
by the Participant prior to January 1, 1985.
(ii) With respect to a Participant who is an Employee
of Preferred Benefits Corporation, "Break in Service" shall mean a
Period of Severance of five (5) years or more.
(iii) "Compensation" for Employees of Preferred
Benefits Corporation shall mean the total cash remuneration for
services paid to an Employee by the Employer in a Plan Year plus
any amounts allocated to an Employee's Salary Deferral Account in
accordance with his or her election authorizing that amounts be
withheld from his or her remuneration and be credited thereto.
(iv) "Employee" shall mean any individual employed by
Preferred Benefits Corporation, excluding Leased Employees,
independent contractors, any director of an Employer who is not an
officer, any individual compensated exclusively on a commission
basis, and, effective January 1, 1990, any individual who is
considered an employee under the terms of the Deferred Profit
Sharing Plan and the Registered Retirement Savings Plan sponsored
by UNUM Life Insurance Company for the majority of its Canadian
resident citizen employees.
(v) Notwithstanding Section 1.21 to the contrary,
"Employer" shall mean Preferred Benefits Corporation.
(vi) Notwithstanding Section 1.32 to the contrary,
with respect to Employees of Preferred Benefits Corporation, "Hour
of Service" shall mean each hour --
(aa) for which an Employee is directly or
indirectly paid, or entitled to payment, by the Employer
(within the meaning of Section 414(b), (c), (m) and (o) of
the Code) for the performance of duties; or
(bb) for which back pay, irrespective of
mitigation of damages, has been either awarded or agreed to
by the Employer (within such meaning).
Such hours shall be credited to the Employee for the period or
periods in which the duties were performed or to which the award
or agreement pertains, irrespective of when payment is made.
(vii) "Investment Category" shall mean with respect to
any Participant who is an Employee of Preferred Benefits
Corporation any separate investment fund which is made available
under the terms of the Plan. With respect to Participants who are
Employees of Preferred Benefits Corporation, all Investment
Categories shall be part of the Trust Fund.
<PAGE>
(viii) "Participant" shall mean an Employee of
Preferred Benefits Corporation who elects to participate in the
Plan in accordance with subsection (c), and "Eligible Employee"
shall mean an Employee of Preferred Benefits Corporation who is
eligible to participate in the Plan as provided in subsection (b).
(ix) "Period of Service" shall mean with respect to an
Employee of Preferred Benefits Corporation the period of time
commencing on the date on which such Employee first is credited
with an Hour of Service or, if applicable, the first date
following a Period of Severance on which an Employee is credited
with an Hour of Service, and ending on the next following
Severance Date. Notwithstanding the foregoing, for purposes of
eligibility to participate under subsection (b) and calculation of
nonforfeitable rights under Section 9.4, a period of Severance of
less than one year shall be included in a Period of Service.
(x) "Period of Severance" shall mean with respect to an
Employee of Preferred Benefits Corporation the period of time
commencing on such Employee's Severance Date and ending on the
date on which such Employee first again is credited with an Hour
of Service.
(xi) "Benefits Committee" shall mean the Administrative
Committee appointed by the Board of Directors of Preferred
Benefits Corporation.
(xii) "Prior Plan" shall mean with respect to Employees
of Preferred Benefits Corporation the Thomas Knox Associates,
Incorporated Profit-Sharing Plan, as amended and restated
effective October 1, 1982, and the predecessors thereto. With
respect to such Employees, this Plan is a continuation of the
Prior Plan.
(xiii) "Service" shall mean with respect to an Employee
of Preferred Benefits Corporation the sum of such Employee's
Periods of Service. Service is measured in completed years and
days, where three hundred sixty-five (365) days of service equal
one year of service.
(xiv) "Severance Date" shall mean with respect to an
Employee of Preferred Benefits Corporation the earlier of:
(aa) the date such Employee quits, is discharged,
retires or dies; or
(bb) the first anniversary of the date such
Employee is absent from the employ of the Employer (within
the meaning of Section 414(b), (c), (m) and (o) of the Code)
for any reason other than an approved leave of absence
granted in writing by the Employer according to a uniform
rule applied without discrimination, provided the Employee
returns to the employ of the Employer (within such meaning)
upon completion of the leave. Notwithstanding the
<PAGE>
foregoing, an Employee who terminates Service to enter the
military service of the United States shall not suffer a
Severance Date as of such date, provided:
(I) such Employee's rights are protected
by federal law; and
(II) such Employee returns to employment
with the Employer (within such meaning) within the
period required by law for preservation of his or
her rights.
Under such circumstances, an Employee shall receive credit
for Service for his or her entire period of absence. If the
Employer does not return to Service within the time
prescribed by law, then the date he or she terminated
employment shall be his or her Severance Date.
In addition, for purposes of subsection (a)(ii)
above, an Employee shall not suffer a Severance Date for any
Plan Year or the immediately following Plan Year during
which such Employee is absent from work --
(I) by reason of the Employee's pregnancy;
(II) by reason of the birth of the
Employee's child;
(III) by reason of the placement of a child
with such Employee in connection with the adoption
of such child by the Employee; or
(IV) for purposes of caring for a child for
a period beginning immediately following birth or
placement.
(xvi) "Valuation Date" shall mean with respect to
Employees of Preferred Benefits Corporation, the last business day
of the Plan Year and the last business day of the sixth (6th)
month in the Plan Year; and if the Trust Fund or any Investment
Category is invested in a manner which permits daily valuation of
the portion of a Participant's Account held therein without
incremental cost or the Benefits Committee otherwise directs, the
date of liquidation of a Participant's investment therein for
distribution or reinvestment shall also be a Valuation Date.
(b) Plan Participation - Preferred Benefits Corporation.
(i) Initial Eligibility. Each Employee who was a
participant in the Preferred Benefits Corporation Employee
Retirement Savings Plan on November 30, 1989, shall be eligible to
participate under this Plan on December 1, 1989. Each and every
other Employee of Preferred Benefits Corporation not excluded
under subsection (b)(ii) below shall be eligible to participate in
<PAGE>
the Plan on the earlier of the January 1 or July 1 next following
the date such Employee completes six (6) months of service,
provided he or she is then employed by the Employer.
(ii) Ineligible Employees. No Employee whose terms and
conditions of employment are determined by a collective bargaining
agreement between Employee representatives and Preferred Benefits
Corporation shall be eligible or qualify for participation unless
such collective bargaining agreement provides to the contrary, in
which case such Employee shall be eligible or shall qualify for
participation upon compliance with such provisions for eligibility
or participation as such agreement shall provide; except that no
Employee who has selected, or in the future selects, a union shall
become ineligible during the period between his or her selection
of the union and the execution of the first collective bargaining
agreement which covers him or her.
(iii) An Employee who satisfies all the requirements
for eligibility under subsection (b)(i) above and is not excluded
under subsection (b)(ii) above shall become a Participant on the
earlier of:
(aa) the January 1 or July 1 following his or her
timely election authorizing amounts to be withheld from his
or her compensation and be credited to his or her Salary
Deferral Account; or
(bb) the January 1 or July 1 on which he or she
first became eligible to share in Employer matching
contributions for the Plan Year in which such January 1 or
July 1 occurs.
(iv) Termination and Requalification. An Employee who
has satisfied the applicable requirements of subsection (b)(i) and
who subsequently suffers a Severance Date or who is transferred to
an ineligible classification under subsection (b)(ii) shall
requalify for participation on the date on which he or she is next
credited with an Hour of Service in an eligible job
classification.
(v) Termination of Participation. An Employee who
becomes a Participant shall remain a Participant as long as he or
she has an Account held under the Plan.
(c) Contributions - Preferred Benefits Corporation
(i) Salary Deferral Contributions. Each Employee who
becomes eligible to participate may elect that his or her Employer
contribute on his or her behalf any whole percentage of such
Employee's Compensation, as the Employee shall elect, subject to
the following rules:
(aa) Amount. The amount of contribution which
may be specified shall be determined by the Benefits
Committee and may be changed from time to time, but for the
first Plan Year and for each subsequent Plan Year prior to
<PAGE>
the beginning of which the Benefits Committee does not
announce a different maximum or minimum, a Participant may
specify any amount equal to any whole percentage of his or
her Compensation, not to exceed eighteen percent (18%)
thereof and not less than two percent (2%) thereof.
(bb) Change. A Participant may change the
specified percentage from time to time by making a revised
election; the frequency with which such changes are allowed
shall be specified in rules established by the Benefits
Committee, which rules shall permit a change no less often
than annually.
(cc) Suspension. A Participant may suspend his
or her election at any time.
(dd) Salary Reduction. A Participant's pay for a
Plan Year shall be reduced by the amount of the contribution
that he or she elects for such Plan Year.
(ee) Election. All elections shall be made at the
time, in the manner and subject to the conditions specified
by the Benefits Committee, which shall prescribe uniform and
nondiscriminatory rules for elections. For purposes of the
Code, contributions under this subsection shall be deemed to
be made by the Participant's Employer from its current net
earnings or retained net earnings. The Employer shall pay
over to the Trust Fund all contributions made under this
subsection with respect to a Plan Year no later than the
earlier of:
(I) thirty (30) days after the last day of
such Plan Year; or
(II) the date required under applicable
regulations.
Contributions made by the Employer under this subsection
shall be allocated to the Salary Deferral Accounts of the
Participants from whose Compensation the contributions were
withheld in an amount equal to the amount withheld.
(ii) Salary Deferral Contribution Limitation.
Notwithstanding subsection (c)(i) above, the Benefits Committee
may limit the maximum amount of Salary Deferral Contributions for
all Participants or any class of Participants to the extent it
determines that such limitation is necessary to keep the Plan in
compliance with applicable rules for tax qualification and income
deferral under Sections 401(a), (k) and (m) of the Code. The
Benefits Committee shall establish such limitation in accordance
with the applicable provisions of Articles III and V of the Plan.
<PAGE>
(iii) Employer Matching Contributions. The Employer
shall, out of current or accumulated net earnings, contribute to
the Trust Fund fifty percent (50%) of the first two percent (2%)
of the amount contributed with respect to a Participant under
subsection (c)(i) above and twenty percent (20%) of the next four
percent (4%) of the amount contributed with respect to a
Participant under such subsection. Such matching contributions
shall only be made on account of Participants who are employed by
the Employer on the last business day of the Plan Year. The
Employer shall pay over to the Trustee all contributions under
this section no later than the due date, including extensions, for
filing the Employer's federal income tax return for the taxable
year coincident with or within which the Plan Year with respect to
which such contributions are to be made ended. Such contributions
shall be allocated to the Employer Contribution Accounts of the
Participants with respect to whom they are made.
(iv) Prior Plan Account. A Participant's Prior Plan
Account, as adjusted for investment gain or loss and income and
expenses, shall at all times be nonforfeitable. No additional
contributions may be made to a Participant's Prior Plan Account.
(v) "Fail Safe" Contributions. The Employer may made a
special contribution to be allocated among all Employees who were
eligible to participate in the Plan during the Plan Year and who
are not Highly Compensated Employees in proportion to their
compensation. The amount of the contribution shall not exceed the
amount, determined by the Benefits Committee necessary to satisfy
the discrimination standards under Section 401(k) or (m) of the
Code. Any such contributions shall be treated as an addition to
the Participant's Salary Deferral Account or Employer Contribution
Account, as the case may be, and shall be subject to all
applicable substantive and administrative provisions of the Plan
pertaining thereto.
(d) Notwithstanding the foregoing provisions of Article XIII,
the following provisions shall apply with respect to Participants who
are employed by Preferred Benefits Corporation:
(i) Investment Control. The management and control of
the assets of the Plan shall be vested in the Trustee; provided,
however, the board of directors of Preferred Benefits Corporation,
or the Trustee, may appoint one or more Investment Managers to
manage, acquire or dispose of any assets of the Plan and the
Benefits Committee may instruct the Trustee to establish
Investment Categories for selection by the Participants in
accordance with the Plan, in which case the Benefits Committee may
at any time add to or delete from the Investment Categories.
(ii) Participant Elections. If Investment Categories
are established, then in accordance with uniform rules of general
application established by the Benefits Committee, each
Participant shall have the right to designate the Investment
Category or Categories in which the Trustee is to invest the
<PAGE>
subaccounts which constitute such Participant's Account. Such
rules may permit each Participant to specify separate investments
for any or all of his or her subaccounts or require that all of
the Participant's subaccounts be invested in a uniform manner.
With respect to new contributions, a Participant may elect to have
flat dollar amounts invested under the following subsection (iii)
and the remainder allocated among the Investment Categories in
multiples of twenty-five percent (25%) of the amount of such
remainder. A Participant may elect to transfer amounts among any
of the Investment Categories. Such elections shall be made at
such time, in such manner and in such form as the Benefits
Committee may prescribe through uniform and nondiscriminatory
rules. The minimum amount transferable out of any one Investment
Category shall be twenty-five percent (25%) of the value of that
Participant's Account or, if less, the entire amount invested
under such option. Any designation or change in designation of
Investment Category shall be made in writing on forms provided by
and submitted to the Benefits Committee. Unless the Benefits
Committee provides otherwise, such change in designation shall be
effective as soon after the Valuation Date after which it is
received by the Benefits Committee as is administratively
feasible. Any election of Investment Category by any Participant
shall, on its effective date, cancel any prior election. The
Benefits Committee may limit the right of a Participant to:
(aa) increase or decrease the contributions to a
particular Investment Category,
(bb) transfer amounts to or from a particular
Investment Category, or
(cc) transfer amounts among particular Investment
Categories,
if it determines that any such limitation is necessary or
desirable to establish or maintain an Investment Category. The
Benefits Committee may promulgate separate accounting and
administrative rules to facilitate the establishment or
maintenance of an Investment Category.
(iii) Life Insurance Investment Category. If the
Benefits Committee authorizes an Investment Category limited to
life insurance, it may permit a Participant to direct that a
portion of amounts allocable to his or her Salary Deferral Account
be invested in life insurance in accordance with the following
rules:
(aa) Policies. A Participant may elect to invest
his Salary Deferral Account in individual or group insurance
policies covering the Participant, or his or her spouse or
children, and in individual group annuity contracts issued
by one or more insurance companies. If individual policies
are purchased for a Participant's Salary Deferral Account,
such purchases may be made only with the Participant's
consent. Individual policies shall be considered a separate
Investment Category of the Participant's Salary Deferral
<PAGE>
Account and premiums on such policies shall be charged to
such Salary Deferral Account. A Participant may not borrow
amounts from insurers issuing such policies or use such
policies as security for a loan; however, the Trustee, with
the consent of the Benefits Committee, may borrow against
the policies to fund loans under Section 9.6 hereof.
(bb) Distribution. When a Participant's Salary
Deferral Account is distributed, the Benefits Committee
shall direct the Trustee to convert into cash the entire
value of any individual policies or contracts purchased for
a Participant's Salary Deferral Account and to credit such
amount to the Participant's Salary Deferral Account.
Alternatively, the Trustee, at the election of the
Participant, may distribute any or all of such policies or
contracts in tact to the Participant.
(cc) Beneficiary of Policy on Participant. The
Trustee shall be the beneficiary of any insurance policy on
the Participant's life. The proceeds ultimately shall be
distributed to the beneficiary determined under Section 9.3
hereof.
(dd) Beneficiary of Policy on Spouse or Child.
To the extent that a Participant's Salary Deferral Account
is invested in a life insurance policy on the life of the
Participant's spouse or children, the beneficiary under such
a policy shall be the Participant, to the extent of the
excess of the proceeds over the cash value, if any, at the
time of the death of the insured, and the beneficiary of the
balance of the proceeds shall be the Participant's Salary
Deferral Account.
(ee) Limitation. Not more than forty-nine and
ninety-nine hundredths percent (49.99%) of the aggregate
amount of contributions made on behalf of any Participant
may be invested in ordinary life insurance contracts on the
life of such Participant or his or her spouse or children.
Not more than twenty-four and ninety-nine hundredths percent
(24.99%) of the aggregate amount of contributions on behalf
of any Participant may be invested in term life insurance
contracts on the life of such Participant or his or her
spouse or children. If both ordinary and term life
insurance contracts are purchased on the life of a
Participant or his or her spouse or children, the sum of the
annual term life insurance plus one-half (1/2) of the ordinary
life insurance premium may not exceed twenty-four and ninety-
nine hundredths percent (24.99%) of the contributions made
on behalf of such Participant for the Plan Year in question.
(ff) Policy Dividends. Any dividends that become
payable on any contracts shall be used to provide additional
benefits for the Participant or shall be credited to the
Participant's Salary Deferral Account.
<PAGE>
(iv) No Participant Election. If Investment Categories
are made available and a Participant does not make a written
election of Investment Category, then the Benefits Committee shall
direct the Trustee to invest the account of such Participant in
the Investment Category in which, in the opinion of the Benefits
Committee, protects principal.
(v) Facilitation. Notwithstanding any instruction from
any Participant for investment of funds in an Investment Category,
as provided for herein, the Trustee shall have the right to hold
uninvested or invested in a short-term investment fund any amounts
intended for investment or reinvestment until such time as
investments may be made in accordance with the Plan and Trust.
(vi) Valuations. The Trust Fund and each Investment
Category shall be valued by the Trustee at fair market value as of
each Valuation Date.
(vii) Allocation of Gain or Loss. Any increase or
decrease in the market value of each Investment Category of the
Trust Fund since the preceding Valuation Date and all income
earned, expenses incurred and realized profits and losses, shall
be determined in accordance with accounting methods uniformly and
consistently applied and shall be added to or deducted from the
account of each Participant based on the amount of a Participant's
Account in such Investment Category at the prior Valuation Date in
accordance with nondiscriminatory procedures and rules adopted by
the Benefits Committee. Before reallocation, the accounts of the
Participants shall be reduced by any payments made therefrom in
the period. At the Benefits Committee's discretion, uniformly
applied, administrative expenses directly connected or associated
with a particular Participant's Account may be charged to the
Account. Notwithstanding the foregoing, allocations shall not be
required to the extent the Trust Fund, or any Investment Category
thereof, is administered in a manner which permits separate
valuation of each Participant's interest therein without separate
incremental costs to the Plan or the Benefits Committee otherwise
provides for separate valuation.
(viii) Provisions Optional. Nothing herein shall
require the Benefits Committee to establish Investment Categories.
If no Investment Categories are established, the Trust Fund shall
be administered as a unit.
(e) Vesting on Termination of Employment - Preferred
Benefits Corporation. The following provisions shall apply to
Participants who are Employees of Preferred Benefits Corporation:
(i) Termination of Employment Benefit.
(aa) Valuation. In the event a Participant
terminates employment with the Employer other than by
reason of retirement on or after his or her Normal
Retirement Date, Disability or death, the Participant
shall be entitled to receive a benefit equal to one
hundred percent (100%) of his Salary Deferral Account,
<PAGE>
Prior Plan Account and Rollover Account, and the
nonforfeitable portion (as determined under the
vesting schedule at subsection (bb) below) of his or
her Employer Contribution Account on the Valuation
Date coincident with or last preceding distribution.
(bb) Vesting Schedule. The
nonforfeitable portion of a Participant's Employer
Contribution Account is as follows:
Years of Service Nonforfeitable Percentage
Less than 1 year 0%
1 year but less than 2 years 25%
2 years but less than 3 years 50%
3 years but less than 4 years 75%
4 year or more 100%
(cc) Crediting Service. For purposes of
subsection (bb) above, a Participant shall receive
credit for all Periods of Service after January 1,
1985.
(I) Complete Loss. If a Participant
who has no nonforfeitable rights under
subsection (bb) has a Break in Service, then
Periods of Service after such Break in Service
shall not be taken into account for purposes of
determining the nonforfeitable percentage of the
Participant's Employer Contribution Account
which accrued prior thereto. In all other
cases, Periods of Service shall be aggregated
for purposes of subsection (bb).
(II) Partial Loss. If a Participant
who has nonforfeitable rights under subsection
(bb) has a Break in Service, then Periods of
Service after such Break in Service shall not be
taken into account for purposes of determining
the nonforfeitable percentage of the
Participant's Employer Contribution Account
which accrued prior thereto.
(III) Cashouts. If distribution is
made to a Participant on account of termination
of employment prior to the date on which the
Participant has a Break in Service and the
Participant returns to employment covered by the
Plan, the Participant's Account shall
subsequently be determined without regard to the
portion thereof derived from predistribution
employment provided the Participant (1) received
distribution of the entire present value of the
nonforfeitable portion of his or her account at
the time of distribution, (2) the amount of the
distribution did not exceed Three Thousand Five
Hundred Dollars ($3,500) or the Participant
<PAGE>
voluntarily elected to receive the distribution,
and (3) the Participant upon return to
employment covered by the Plan does not repay
the full amount of the distribution before the
earlier of suffering a Break in Service or two
(2) years after he or she is next again credited
with an Hour of Service. If timely repayment is
made, the Participant's Account shall equal the
sum of the repayment and the forfeitable portion
of the Participant's Account on the date of
distribution, unadjusted by gains or losses
subsequent to the distribution. Restoration
required due to Trust Fund losses shall be made,
to the extent necessary, first from forfeitures
in the Plan Year of repayment, and second from
contributions which, for this purpose, may be
made without regard to current or accumulated
earnings.
(ii) Recognition of Forfeitures. The nonvested
portion of the Employer Contribution Account of a Participant who
receives a distribution described in subsection (cc)(III) shall be
forfeited on the date of distribution, subject to the right to
restoration hereunder. The nonvested portion of the Employer
Contribution Account of any other Participant shall be forfeited
on the day the Participant suffers a Break in Service.
Forfeitures shall first decrease required contributions, if any,
and then increase discretionary contributions, if any.
(f) Inasmuch as the vesting schedule set forth in Article X
meets the requirements of Section 416(b) of the Code, such schedule will
continue to apply if the Plan becomes Top Heavy.
(g) ERISA Reporting and Disclosure by Benefits Committee.
The Benefits Committee shall file all reports and distribute to
Participants and Beneficiaries reports and other information required
under ERISA and the Code.
(h) Benefits Committee. The Preferred Benefits Corporation,
through its board of directors, shall designate a committee which shall
have the authority to control and manage the operation and
administration of the Plan with respect to Employees of Preferred
Benefits Corporation. The Benefits Committee shall act by majority
vote. The Benefits Committee may:
(i) delegate all or a portion of the responsibility of
controlling and managing the operation and administration of the
Plan to one or more persons; and
(ii) appoint agents, investment advisers, counsel or
other representatives to render advice with regard to any of its
responsibilities under the Plan.
The board of directors of Preferred Benefits Corporation may remove,
with or without cause, the Benefits Committee or any Benefits Committee
member. The Benefits Committee may remove, with or without cause, any
delegate or adviser designated by it.
<PAGE>
(i) Multiple Capacities. Any person may serve in more than
one fiduciary capacity.
(j) Powers. The responsibility and complete discretionary
authority to control and manage the operation and administration of the
Plan shall include, but shall not be limited to, the performance of the
following acts:
(i) the filing of all reports required of the Plan;
(ii) distribution to Participants and Beneficiaries of
all reports and other information required of the Plan;
(iii) the keeping of complete records of the
administration of the Plan;
(iv) the promulgation of rules and regulations for the
administration of the Plan consistent with the terms and
provisions of the Plan; and
(v) the interpretation of the Plan including the
determination of any questions of fact arising under the Plan and
the making of all decisions required by the Plan.
The Benefits Committee's interpretation of the Plan and all
actions and decisions taken in good faith by the Benefits Committee
based on its interpretation shall be final and conclusive. The Benefits
Committee may correct any defect, or supply any omission, or reconcile
any inconsistency in the Plan in such manner and to such extent as shall
be expedient to carry the Plan into effect and shall be the sole judge
of such expediency.
(k) Allocation of Fiduciary Responsibility. The board of
directors of Preferred Benefits Corporation, the Benefits Committee, the
Trustee and the Investment Manager (if any) possess certain specified
powers, duties, responsibilities and obligations under the Plan and
Trust. It is intended under this Plan and the Trust that each be
responsible solely for the proper exercise of its own functions and that
each not be responsible for any act or failure to act of another, unless
otherwise responsible as a breach of its fiduciary duty or for breach of
duty of another fiduciary under ERISA's rules of co-fiduciary
responsibility. In general:
(i) the board of directors of Preferred Benefits
Corporation is responsible for appointing and removing the
Benefits Committee;
(ii) the Benefits Committee is responsible for
administering the Plan, for adopting such rules and regulations as
are necessary or advisable to implement and administer the Plan
and to transact its business, for providing a procedure for
carrying out a funding policy and method consistent with the
objectives of the Plan and the requirements of Title I of ERISA
and the Code, and for discharging the statutory duties of a plan
administrator under ERISA and the Code;
<PAGE>
(iii) the Trustee and the Investment Manager are
responsible for the management and control of the respective
portions of the Trust Fund over which they have control to the
extent provided in the Trust; and
(iv) the Fiduciary appointing an Investment Manager is
responsible for the appointment and retention of the Investment
Manager.
(l) Fiduciary Compensation. A Benefits Committee member,
delegate or adviser who already receives full-time pay from the Employer
shall serve without compensation for his or her services as such, but he
or she shall be reimbursed pursuant to subsection (m) below for any
reasonable expenses incurred by him or her in the administration of the
Plan. A Benefits Committee member, delegate or adviser who is not
already receiving full-time pay from the Employer may be paid such
reasonable compensation as shall be agreed upon.
(m) Plan Expenses. All expenses of administration of the
Plan may be paid by the Employer. If the Employer does not pay such
expenses, then they shall be paid out of the Trust Fund.
(n) Fiduciary Insurance. If the Benefits Committee so
directs, the Plan shall purchase insurance to cover the Plan from
liability or loss occurring by reason of the act or omission of a Plan
fiduciary, provided such insurance permits recourse by the insurer
against the fiduciary in the case of a breach of duty by such fiduciary.
(o) Indemnification. The Employer shall indemnify and hold
harmless to the maximum extent permitted by its bylaws each Plan
fiduciary who is an Employee or who is an officer or director of the
Employer from any claim, damage, loss or expense, including litigation
expenses and attorneys' fees, resulting from such persons's service as a
fiduciary of the Plan, provided the claim, damage, loss or expense does
not result from the fiduciary's gross negligence or intentional
misconduct.
16.4 Thomas L. Jacobs and Associates, Inc. Merger Provisions.
Effective January 1, 1993, the Plan shall be merged with the Thomas L. Jacobs
& Associates, Inc. profit sharing plan (the "Prior Plan"). Pursuant to such
merger the following provisions shall be applicable.
(a) All company contributions accounts, participant
accounts, outstanding forfeitures, and loans under the Prior Plan shall
be transferred to the Plan;
(b) All of the Prior Plan's assets shall be transferred to
the Plan;
(c) All of the Prior Plan's benefit obligations shall be
transferred to the Plan and become the responsibility of the Plan;
(d) After December 31, 1988, the rights of participants and
beneficiaries of participants under the Prior Plan shall be determined
strictly in accordance with the terms of the Plan;
<PAGE>
(e) On the merger date, the vested interest in the Plan of
each Participant whose Account is transferred from the Prior Plan shall
be no less than his vested company contributions account and his
participant contributions account under the Prior Plan on the date
preceding the merger;
(f) The Trustee shall accept the Prior Plan's assets when
transferred and shall have all the rights, duties, powers and
responsibilities with respect to such assets as prescribed under Article
XIII of the Plan; and
(g) Pursuant to Article XIII of the Plan, each Participant
who has an account transferred from the Prior Plan shall make an
investment election with respect to such Transfer Account which shall be
applicable as of the transfer date.
ARTICLE XVIII
Miscellaneous
17.1 Fiduciary Responsibility.
(a) Allocation of Responsibility. All fiduciaries with
respect to the Plan and Trust shall be required to meet the prudence,
diversification and other fiduciary responsibilities of applicable law
to the extent such requirements and responsibilities apply to them,
provided each fiduciary shall be responsible for carrying out only the
requirements, responsibilities and duties placed upon such fiduciary by
provisions of the Plan. In particular:
(i) An Investment Manager shall have full investment
responsibility with respect to the assets of the Trust for which
it has the power of investment direction and except as otherwise
provided by law, the other fiduciaries including, but not limited
to, the Trustee, the Board and the Employer, shall have no duty or
responsibility with respect to the investment of such assets as
long as they are subject to the investment direction of such
Investment Manager;
(ii) The Trustee shall have full investment
responsibility with respect to the assets of the Trust which are
not invested pursuant to the direction of the Employer and are not
subject to the investment direction of an Investment Manager and,
except as otherwise provided by law, the other fiduciaries
including, but not limited to, the Board and the Employer, shall
have no duty or responsibility with respect to the investment of
such assets to the extent that such assets are not invested
pursuant to the direction of such fiduciaries;
(iii) The Trustee shall have no duty or responsibility
with respect to investment of assets of the Trust so long as they
are invested at the direction of the Employer or a duly appointed
Investment Manager;
<PAGE>
(iv) The Benefits Committee shall have no duty or
responsibility with respect to the investment of the assets of the
Trust; and
(v) The fiduciaries, including, but not limited to, the
Trustee, the Board, the Employer, the Benefits Committee and any
Investment Manager shall have no responsibility for the investment
elections made by Participants, Former Participants or
Beneficiaries or for the voting or tendering of Employer Stock by
Participants, Former Participants or Beneficiaries or other
exercise of control over Plan assets in their respective Accounts.
(b) Fiduciary Duties. The Benefits Committee and the Trustee
shall discharge their respective duties under Plan solely in the
interest of the Participants, their surviving spouses and their
Beneficiaries and:
(i) for the exclusive purpose of
(aa) providing benefits to Participants, their
surviving spouses and their Beneficiaries, and
(bb) defraying reasonable expenses of
administering the Plan;
(ii) 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
(iii) 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 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.
<PAGE>
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 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.
17.6 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.
17.7 Service With Predecessor Employer. Service with a predecessor
employer shall, to the extent required by law, be treated as service with
the Employer.
17.8 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.
17.9 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.
17.10 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.
17.11 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, the Employer and the Trustee have caused this
instrument to be executed this 22nd day of December, 1994.
WITNESS: UNUM CORPORATION
/s/ Marie A. Fogg By: /s/ Eileen C. Farrar
Marie A. Fogg Eileen C. Farrar
Its Senior Vice President
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