Registration No.33-31270
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
POST-EFFECTIVE AMENDMENT NO. 2 TO
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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UNUM CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 01-0405657
(State or other jurisdiction of (I.R.S. Identification No.)
incorporation or organization)
2211 Congress Street, Portland, Maine 04122
(Address of Principal Executive Offices) (Zip Code)
UNUM EMPLOYEES RETIREMENT SAVINGS PLAN AND TRUST
and
COLONIAL COMPANIES, INC. SECURITY SAVER PLAN
(Full title of plans)
----------
Kevin J. Tierney, Senior Vice President and Secretary
UNUM CORPORATION
2211 Congress Street
Portland, Maine 04122
(Name and address of agent for service)
(207) 770-2211
(Telephone number, including area code, of agent for
service)
AMENDMENT TO REGISTRATION STATEMENT NO. 33-31270;
INCORPORATION OF REGISTRATION STATEMENT NO. 33-60124 BY
REFERENCE
Form S-8 Registration Statement No. 33-31270, relating to the
UNUM Employees Retirement Savings Plan and Trust (the "UNUM
Plan"), was originally filed October 4, 1989 and subsequently
amended October 23, 1989. Such Registration Statement as so
amended (this "Registration Statement") is hereby further
amended for the following purposes:
1. Pursuant to Rule 429, to include the Colonial
Companies, Inc. Security Saver Plan (the "Colonial Plan")
within this Registration Statement. Form S-8 Registration
Statement No. 33-60124, originally filed March 26, 1993 (the
"Colonial Registration Statement"), is hereby incorporated by
reference into this Registration Statement, subject to the
amended information set forth below.
2. To include certain material amendments to the UNUM
Plan and the Colonial Plan as exhibits to this Registration
Statement. Effective January 1, 1997, the Colonial Plan will
be merged with the UNUM Plan, and the separate existence of
the Colonial Plan will thereby terminate as of such date.
The UNUM Plan will continue in existence following the
merger, as set forth in the amended and restated UNUM
Employees Retirement Savings Plan, filed herewith.
3. To delete the UNUM Plan prospectus previously filed
as Part I of this Registration Statement. Prospectus
materials are being distributed to persons eligible to
participate in the UNUM Plan but, as currently permitted by
Form S-8, such materials are not being filed herewith.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
With regard to the UNUM Plan, Part II of this Registration
Statement is amended to include the information set forth
below. With regard to the Colonial Plan, no amendment is
made to Part II of Registration Statement No. 33-60124.
Item 3. Incorporation of Documents by Reference.
The following documents filed with the Securities and
Exchange Commission are incorporated herein by reference:
1. The Annual Report of UNUM Corporation (the
"Company") on Form 10-K for the year ended December 31, 1995.
2. All other reports filed by the Company pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") since December 31,
1995.
3. The description of the Company's Common Stock
contained in the registration statement filed with the
Securities and Exchange Commission under the Exchange Act,
including any amendment or report filed for the purpose of
updating such description.
The UNUM Plan hereby incorporates by reference its Annual
Report on Form 11-K for the year ended December 31, 1995.
All documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act (and,
in the case of the UNUM Plan, all documents subsequently
filed by such plan pursuant to Section 15(d) of the Exchange
Act) prior to the filing of a post-effective amendment which
indicates that all securities offered hereby have been sold
or which deregisters all securities then remaining unsold
shall be deemed to be incorporated by reference herein by the
Company (or the UNUM Plan, as the case may be) and to be a
part hereof from the date of filing of such document.
Item 6. Indemnification of Directors and Officers.
See Item 6 of the Registration Statement 33-60124,
incorporated herein by reference.
Item 8. Exhibits.
See the attached Index to Exhibits.
Item 9. Undertakings.
See Item 9 of Registration Statement No. 33-60124,
incorporated herein by reference.
SIGNATURES
THE REGISTRANT. Pursuant to the requirements of the
Securities Act of 1933, the Registrant certifies that it has
reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this
Post-Effective Amendment to Registration Statement to be
signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Portland, State of Maine, on
December 19, 1996.
UNUM CORPORATION
By: /s/ James F. Orr III
James F. Orr III, President
Pursuant to the requirements of the Securities Act of 1933,
this Post-Effective Amendment to Registration Statement has
been signed by the following persons in the capacities and on
the date(s) indicated.
Signature Title Date
/s/ James F. Orr III Chairman of the Board, December 19, 1996
James F. Orr III President, and Chief
Executive Officer
/s/ Robert W. Crispin Executive Vice December 19, 1996
Robert W. Crispin President and Chief
Financial Officer
/s/ Stephen D. Roberts Vice President and December 19, 1996
Stephen D. Roberts Corporate Controller
* Director December 13, 1996
Gayle O. Averyt
* Director December 13, 1996
Robert E. Dillon, Jr.
* Director December 13, 1996
Gwain H. Gillespie
* Director December 13, 1996
Ronald E. Goldsberry
Donald W. Harward Director
* Director December 13, 1996
George J. Mitchell
Director
Cynthia A. Montgomery
* Director December 13, 1996
James L. Moody, Jr.
* Director December 13, 1996
Lawrence R. Pugh
* Director December 13, 1996
Lois Dickson Rice
* Director December 13, 1996
John W. Rowe
* John-Paul DeRosa, by signing his name hereto, does sign
this document on behalf of the person indicated above
pursuant to a power of attorney duly executed by such person
and filed as an exhibit to this Registration Statement.
/s/ John-Paul DeRosa
John-Paul DeRosa
Assistant Secretary
Attorney-in-Fact
Dated: December 20, 1996
THE PLANS. Pursuant to the requirements of the Securities
Act of 1933, each Plan has duly caused this Post-Effective
Amendment to Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the
City of Portland, State of Maine, on the date(s) indicated.
UNUM EMPLOYEES RETIREMENT
SAVINGS
PLAN AND TRUST
By: *
Eileen C. Farrar, Trustee
Date: December 17, 1996
COLONIAL COMPANIES, INC.
SECURITY SAVER PLAN
By: *
Paul H. Clifton, Jr.
Member of the Retirement
Committee
Date: December 16, 1996
* John-Paul DeRosa, by signing his name hereto, does sign
this document on behalf of the person indicated above
pursuant to a power of attorney duly executed by such person
and filed as an exhibit to this Registration Statement.
/s/ John-Paul DeRosa
John-Paul DeRosa
Assistant Secretary
Attorney-in-Fact
Dated: December 20, 1996
INDEX TO EXHIBITS
Number Description Method of Filing
4.1 UNUM Employees Retirement Savings Filed herewith
Plan and Trust, as amended and
restated effective January 1, 1994
4.1A First Amendment to UNUM Employees Filed herewith
Retirement Savings Plan and Trust,
effective September 15, 1995
4.1B Second Amendment to UNUM Employees Filed herewith
Retirement Savings Plan and Trust,
effective September 15, 1995
4.1C Amended and Restated Trust Filed herewith
Agreement for the UNUM Plan,
effective October 1, 1995
4.1D First Amendment to the Trust Filed herewith
Agreement Under the UNUM
Employees Retirement Savings
Plan and Trust and the
Duncanson& Holt, Inc. Employee
Profit Participation and
Savings Plan
4.1E Form of UNUM Employees Retirement Filed herewith
Savings Plan, amended and restated
effective January 1, 1997
4.2 Colonial Companies, Inc. Security Filed as Exhibit
Saver Plan 4 to
Statement
No. 33-60124 and
incorporated
herein by
reference
4.3 Certificate of Incorporation of Filed as Exhibit
UNUM Corporation, as amended 3.1 to
the Registrant's
Annual
Report on Form
10-K dated
March 25, 1992
and
incorporated
herein by
reference
4.4 By-laws of UNUM Corporation Filed as Exhibit
3.2 to
the Registrant's
Annual
Report on Form
10-K dated
March 25, 1992
and
incorporated
herein by
reference
4.5 Rights Agreement, dated as of Filed as Exhibit
March 13, 1992, between UNUM 4 to
Corporation and First Chicago the Registrant's
Trust Company of New York, as Current
Rights Agent Report on Form 8-K
March 18, 1992
and incorporated
herein by
reference
4.5A First Amendment to Rights Filed as Exhibit
Agreement, dated as of June 19, 2 to the
1996 Registrant's
Amendment
No. 1 to Form 8-A
dated
June 21, 1996 and
incorporated
herein by
reference
5 Opinion of Counsel regarding the Filed as Exhibit
UNUM Plan 5 to
Registration
Statement No.
33-31270 and
incorporated
herein by
reference
15 Acknowledgment of Independent Filed herewith
Accountants
23.1 Consent of Independent Filed herewith
Accountants
23.2 Consent of Counsel Included in
Exhibit 5
24 Powers of Attorney Filed herewith
<PAGE>
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.
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 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)l(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.
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.
1.22 "Employer Contribution" shall mean any Elective
Contribution, Matching Contribution or Discretionary
Contribution made in accordance with the teens 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;
(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.
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.
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 (.5%) 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 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(1) of the Code) of at least ten percent
(10%) of compensation, as defined in Section 415(c)(3) of the
Code, but including amounts excludable from gross income
under Sections 125, 402(a)(8), 402(h)(1)(B) or 403(b) of the
Code;
(ii) immediate participation; and
(iii) full and immediate vesting; and
(e) Leased Employees do not constitute more
than twenty percent (20%) of the Employer's nonhighly
compensated work force.
1.37 "Limitation Year" shall mean a Plan Year.
1.38 "Matching Contribution" shall mean a
contribution made by an Employer in accordance with Section
3.1(b) on behalf of a Participant who has made a Deferral
Election.
1.39 "Named Fiduciary" shall mean with respect to
the operation and administration of the Plan, the Benefits
Committee and the Appellate Committee, and with respect to
the management of the Trust Fund, the Trustee.
1.40 "Non-Key Employee" shall mean any Employee who
is not a Key Employee.
1.41 "Normal Retirement Age" shall mean age sixty-
five (65).
1.42 "Participant" shall mean an Eligible Employee
who elects to participate in the Plan in accordance with
Section 5.1 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.
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 (17.5) hours per week;
(c) Employees who normally work less than six
(6) months during any year;
(d) Employees who have not attained age twenty-
one (21);
(e) Employees who are nonresident aliens and
who receive no earned income (within the meaning of Section
911(d)(2) of the Code) from the Employer that constitutes
income from sources within the United States (within the
meaning of Section 861(a)(3) of the Code).
The Employer may elect to apply subsections (a), (b), (c) or
(d) by substituting a shorter period of service, a smaller
number of 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. 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. l 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
Contributions and Discretionary Contributions, if any, with
respect to any Plan Year shall be paid to the Trust at such
time or times as may be determined by 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:
(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.
(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 (2.5)
months after the end of such year, distribute the Excess
Contributions (plus any income and minus any loss allocable
thereto) to such Highly Compensated Eligible Employees on the
basis of the 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(4) of the Code) from an employee's trust
described in Section 401(a) of the Code which is exempt from
tax under Section 501(a) of the Code may transfer all or any
portion of such distribution to the Trust, provided the
transfer is made to the Trust not later than the sixtieth
(60th) day following the day on which the Employee received
such distribution. In addition, an Employee who receives a
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 transfa, 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.
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 S. 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 Employcr
shall be treated as a single plan if such plans are treated
as one plan for purposes of Section 401(a)(4) or Section
410(b) of the Code or if a Highly Compensated Eligible
Employee participates in such other plan. For Plan Years
beginning after December 31, 1989, plans may be aggregated to
satisfy Section 401(k) of the Code only if such plans have
the same plan year.
(a) The Actual Deferral Percentage for Highly
Compensated Eligible Employees for any Plan Year commencing
after December 31, 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 on behalf of
any Participant that are taken into account for purposes of
this Section shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
5.4 RESTRICTIONS AND ADJUSTMENTS. The Benefits
Committee may restrict the deferral percentages elected by
Participants if the Benefits Committee determines such
restriction is necessary to comply with Section 3.4, Section
5.3, Article VI or Article VII.
In the event that the Actual Deferral Percentage of the
Highly Compensated Eligible Employees for any Plan Year
exceeds the limitations prescribed in Section 5.3(a), the
Benefits Committee shall, within two and one-half (2.5) months
after the end of such year, distribute the Excess Elective
Contributions (plus any income and minus any loss allocable
thereto) to such Highly Compensated Eligible Employees on the
basis of the 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 (2.5) 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 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(e)(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.
The amount of Excess Deferral with respect to a
Participant for any calendar year shall be reduced by the
amount of any Excess Elective Contributions previously
distributed to such Participant for the Plan Year beginning
with or within the calendar year.
6.3 NOTICE BY PARTICIPANT. It shall be the
responsibility of the Participant to notify the Benefits
Committee of any Excess Deferral for a calendar year. Such
notice shall be made by such written, telephonic or
electronic means as shall be prescribed by the Benefits
Committee; shall specify the amount of the Excess Deferral;
shall state that if the Excess Deferral is not distributed,
such excess shall be includable in the Participant's gross
income under Section 402(g) of the Code; and shall be
submitted to the Benefits Committee not later than March 1 of
the following calendar year. A Participant shall be deemed to
have notified the Benefits Committee of an Excess Deferral to
the extent such Participant has an Excess Deferral for a
calendar year, taking into account only Elective
Contributions under the Plan and any other plans of the
Employer subject to Section 402(g) of the Code.
ARTICLE VII
LIMITATION ON ANNUAL ADDITIONS
7.1 LIMITATION FOR DEFINED CONTRIBUTION PLANS.
Except as hereinafter provided, the provisions of this
Article shall be effective January 1, 1987. The Annual
Additions which may be allocated to the Account of a
Participant for a Limitation Year shall not exceed the lesser
of:
(a) Thirty Thousand Dollars ($30,000.00) (or,
if greater, one-fourth (1/4) of the dollar limitation in
effect under Section 415(b)(1)(A) of the Code); or
(b) Twenty-five percent (25%) of the
Participant's compensation (as defined in Section 7.5) for
the Limitation Year,
reduced by the sum of (i) the annual additions allocated
within such Limitation Year to the accounts of such
Participant under all other qualified defined contribution
plans maintained by the Employer and (ii) the contributions
on behalf of such Participant to welfare benefit funds (as
defined in Section 419(e) of the Code) and individual medical
benefit accounts (as defined in Section 415(1)(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(1)(2) of the Code) exceeds the
limitation set forth in this Section, such excess shall be
reduced as hereinafter provided in this Article.
If the allocation of an Annual Addition to a
Participant's Account coincides with the allocation of an
annual addition to such Participant's account or accounts
under one or more other qualified defined contribution plans
maintained by the Employer and/or the allocation of a
contribution on behalf of such Participant to one or more
welfare benefit funds (as defined in Section 419(e) of the
Code) or individual medical benefit accounts (as defined in
Section 415(1)(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(1)(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 deemed 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
(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(1)(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.
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 ai any time during
a Limitation Year pursuant to subsection (d) of this Section,
it shall not participate in the allocation of the Investment
Funds' income, expenses, gains and losses. If a suspense
account is in existence at any time during a particular
Limitation Year, all amounts in the suspense account must be
allocated and reallocated to Participants' Accounts before
any Employer Contributions may be made to the Plan for that
Limitation Year. For purposes of subsection (c) and (d),
excess amounts may not be distributed to Participants or
Former Participants.
7.5 DEFINITION OF COMPENSATION. Except as
hereinafter provided, for purposes of applying the
limitations of this Article, the term "compensation" shall
mean, with respect to a Plan Year, the total compensation
paid by 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(1)(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:
(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 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.S 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.
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.
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
ha 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.
(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 Panicipant 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,
gams and losses attributable thereto in the same manner
provided for adjustment of Accounts. On the Valuation Date
coinciding with the last day of the next succeeding Plan
Year, the excess forfeiture account shall be closed and
treated as a forfeiture occurring in such Plan Year. This
procedure shall be repeated for each Plan Year in which
forfeitures occurring during sueh year exceed the sum of the
amount required to make restoration, the amount required to
be contributed by sueh Employer for sueh year, and the amount
of Plan expenses for sueh year, subject, however, to sueh
modifications as may be required by the Seetion 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 (5.5) may elect to
receive all or a portion of his or her Eleetive Contributions
Account (reduced by the outstanding balance of any low made
to the Participant from such Account) in a lump sum as of any
Valuation Date. Sueh election may be made onee every twelve
(12) months and must be received by the Benefits Committee at
least fifteen (15) days in advance ofthe 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:
(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 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 Comminee 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
(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 receiving the balance of the
payments which would otherwise have become payable to such
Beneficiary, the balance of the monthly payments shall be
commuted to a single sum and shall be paid to the
Beneficiary's estate.
(iii) YEARS CERTAIN ANNUITY OPTION. A
Participant who elects a years certain annuity option shall
receive monthly payments during the period elected by the
Participant, with payments ceasing at the end of such period.
Under this option, if a Participant survives beyond the
period elected, he or she shall receive no further payments.
In the event of the death of the Participant or the death of
the Participant and the designated Beneficiary before the
period elected has expired, payments shall be made in
accordance with the provisions of subparagraph (ii) above
governing such events.
(iv) FULL CASH REFUND ANNUITY OPTION. A
Participant who elects a full cash refund annuity option
shall receive monthly payments during his or her life, and in
the event the Participant dies before receiving monthly
payments equaling, in the aggregate, the amount paid to
purchase the annuity, the excess of said amount over the
total of all payments received shall be paid in a single sum
to the Beneficiary designated by the Participant. If the
Beneficiary is not living at the time of the Participant's
death, the excess shall be paid in a single sum to the
Participant's estate. No death benefit shall be payable under
this option if the Participant dies after receiving monthly
payments that equal, in the aggregate, the amount paid to
purchase the annuity.
(v) CONTINGENT ANNUITANT OPTION. A
Participant who elects a contingent annuitant option shall
receive monthly payments during his or her life, and
following the Participant's death, monthly payments in the
same amount (or 50% or 66 2/3% of said amount, as elected by
the Participant) shall continue to the person designated by
the Participant ("Contingent Annuitant") at the time of
making the election for the life of the Contingent Annuitant.
If an electing Participant dies after the commencement of
benefit payments, the Contingent Annuitant designated by the
electing Participant shall receive during his or her life the
monthly benefit payable to the Contingent Annuitant under
this option. Monthly payments to the Contingent Annuitant
shall commence on the first day of the month immediately
following the Participant's death, if the Contingent
Annuitant is then living, and shall cease with the monthly
payment coinciding with or immediately preceding the date of
the Contingent Annuitant's death. If the Contingent Annuitant
dies before the commencement of payments to the Participant,
the Participant's election under this subparagraph shall be
void and the Participant shall be entitled to make another
election with respect to the method of distribution of 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 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;
(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.
(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 (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 (70.5).
(d) Notwithstanding the foregoing provisions of
this Section to the contrary, distribution to a Participant
who has attained age seventy and one-half (70.5) 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 (70.5) 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 (66.5) 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 (70.5), shall not be less
than the quotient obtained by dividing the Participant's
Account balance at the beginning of such year by the life
expectancy of the Participant (or the joint life and last
survivor expectancy of the Participant and his or her
Beneficiary) determined as of the beginning of such year and
reduced by one (1) for each year thereafter. The required
minimum distribution with respect to the calendar year in
which the Participant attains age seventy and one-half (70.5)
shall be made no later than April l 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.
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 (70.5).
(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 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 ha 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 manna 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 ma' 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
(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.
(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.
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;
(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;
(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 Hcavy 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 Employee by the first
One Hundred Fifty Thousand Dollars (S150,000.00) 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.
ARTICLE XI
PLAN ADMINISTRATION
11.1 APPOINTMENT OF BENEFITS COMMITTEE. The Board
(or any person or persons to whom the Board delegates its
authority) shall appoint at least three (3) persons to
administer the Plan, and they shall be known as the Benefits
Committee. The Benefits Committee shall act by a majority of
its members either by a meeting or in a writing without a
meeting. Any member may participate in a meeting by means of
a conference telephone or similar communications equipment by
means of which all persons participating in the meeting can
hear each other. Any person appointed to serve as a member of
the Benefits Committee shall signify his or her acceptance in
writing to the Board (or to such person or persons specified
by the Board).
11.2 RESIGNATION AND REMOVAL. Any member of the
Benefits Committee may resign at any time by delivering to
the Board (or to such person or persons specified by the
Board) a written notice of resignation, to take effect at a
date specified therein, which shall not be less than thirty
(30) days after the delivery thereof, unless such notice
shall, in writing, be waived by the Board (or such
person(s)). Each member of the Benefits Committee shall serve
at the pleasure of the Board (or such person or persons to
whom the Board delegates its authority) and may be removed by
delivery of written notice of removal, to take effect at a
date specified therein.
The Board (or such person or persons to whom the Board
delegates its authority) as soon as practicable following
receipt of a written notice of resignation or delivery of a
written notice of removal of the Benefits Committee, shall
consider the appointment of a successor. In the event the
Board (or such person(s)) fails to appoint a successor to
serve as a member of the Benefits Committee, the remaining
members of the Benefits Committee shall constitute the
Benefits Committee.
11.3 POWERS AND DUTIES. The Benefits Committee shall
be a Named Fiduciary for purposes of Section 402(a)(1) of
ERISA with the following powers and complete discretionary
authority to control and manage the operation and
administration of the Plan:
(a) To determine all questions concerning the
eligibility of Employees to participate in and receive
benefits under the Plan.
(b) To compute the amount of benefits payable
to any Participant or Beneficiary.
(c) To authorize and direct the Trustee with
respect to payment of benefits.
(d) To furnish the Trustee with such
information, statements and reports as will enable the
Trustee to comply with the reporting and disclosure
requirements under ERISA and the Code.
(e) To interpret the provisions of the Plan and
to make rules and regulations for the administration of the
Plan.
(f) To maintain all the necessary records for
the administration of the Plan.
(g) To employ or retain counsel, accountants,
actuaries or such other consultants as may be required to
assist in administering the Plan.
(h) To act as agent for service of legal
process.
(i) To give written notice to all interested
parties (as defined in the regulations prescribed under
Section 7476(b)(1) of the Code), in the form and manner, and
at such time as prescribed by such regulations, of an
application for an advance determination with respect to the
initial qualification of the Plan or to the effect of an
amendment or termination of the Plan.
The Benefits Committee shall have no power or authority
over the investment of the assets of the Trust and nothing in
this Section 11.3 shall be construed as granting such power
and authority.
11.4 REPORTING AND DISCLOSURE. The Benefits
Committee shall furnish to each Participant and to each
Beneficiary who is receiving benefits under the Plan, and
shall file with the Secretary of Labor and the Secretary of
Treasury all reports, disclosures and notifications as are
required under the Code and ERISA.
11.5 DELEGATION OF MINISTERIAL DUTIES. The Benefits
Committee may delegate to any other person or persons,
severally or jointly, the authority to perform any
ministerial act in connection with the administration of the
Plan.
11.6 PAYMENT OF PLAN EXPENSES. Notwithstanding any
provision of the Plan or Trust to the contrary, payment of
any reasonable expenses of administering the Plan, as
determined by the Benefits Committee, shall be made from the
Trust Fund, unless paid by the Employers. If such expenses
are incurred as a result of services provided to the Plan or
Trust by a party in interest (as defined in Section 3(14) of
ERISA), no payment shall be made from the Trust Fund unless
the payment (a) satisfies the applicable requirements of
Section 408 of ERISA and the regulations thereunder; or (b)
is otherwise exempt from the applicable prohibited
transaction rules of the Code and ERISA.
11.7 COMPENSATION AND REIMBURSEMENT OF EXPENSES. The
Benefits Committee shall be entitled to reasonable
compensation for services rendered and to reimbursement of
expenses properly and actually incurred in the performance of
its duties on behalf of the Plan, but no person so serving
who already receives compensation from an Employer for
services rendered as an Employee shall receive compensation
from the Plan, except reimbursement of expenses properly and
actually incurred and not otherwise reimbursed.
11.8 UNIFORMITY OF RULES AND REGULATIONS. In the
administration of the Plan and the interpretation and
application of its provisions, the Benefits Committee shall
exercise its powers and authority in a nondiscriminatory
manner, and shall apply uniform administrative rules and
regulations in order to assure substantially the same
treatment to Participants in similar circumstances.
11.9 RELIANCE ON REPORTS. The Benefits Committee
shall be entitled to rely upon all certificates and reports
made by any counsel, accountant, actuary or other consultant
employed or retained to assist in administering the Plan.
11.10 MULTIPLE SIGNATURES. A majority of the members
of the Benefits Committee or any one member authorized by the
Benefits Committee shall have authority to execute all
documents, reports or other memoranda necessary or
appropriate to carry out the actions and decisions of the
Benefits Committee. The Trustee or any other interested party
may rely upon any document, report or other memorandum so
executed as evidence of the Benefits Committee action or
decision indicated thereby.
ARTICLE XII
CLAIMS PROCEDURE
12.1 FILING A CLAIM FOR BENEFITS. A Plan Participant
or other person entitled to benefits under the Plan may make
a claim for Plan benefits by filing a written request with
the Benefits Committee.
12.2 DENIAL OF CLAIM. If a claim is wholly or
partially denied, the Benefits Committee shall furnish the
claimant with written notice setting forth in a manner
calculated to be understood by the claimant:
(a) the specific reason or reasons for the
denial;
(b) specific reference to pertinent Plan
provisions on which the denial is based;
(c) a description of any additional material or
information necessary for the claimant to perfect his or her
claim and an explanation why such material or information is
necessary; and
(d) appropriate information as to the steps to
be taken if the claimant wishes to submit his or her claim
for review.
Such notice shall be furnished to the claimant within ninety
(90) days after receipt of his or her claim, unless special
circumstances require an extension of time for processing
such claim. If an extension of time for processing is
required, the Benefits Committee shall, prior to the
termination of the initial ninety (90) day period, furnish
the claimant with written notice indicating the special
circumstances requiring an extension and the date by which
the Benefits Committee expects to render its decision. ln no
event shall an extension exceed a period of ninety (90) days
from the end of the initial ninety (90) day period.
12.3 APPEAL OF DENIED CLAIM. A claimant may request
the Appellate Committee to review a denied claim. Such
request shall be in writing and must be delivered to the
Appellate Committee within sixty (60) days after receipt by
the claimant of written notification of denial of claim. A
claimant or his or her duly authorized representative may:
(a) review pertinent documents, and
(b) submit issues and comments in writing.
For purposes of this Section and Section 12.4,
"Appellate Committee" shall mean a committee of no less than
five (5) and no more than seven (7) persons appointed by the
Board (or any person or persons to whom the Board delegates
its authority) to review any denied claims. The Appellate
Committee shall be a named fiduciary for the purpose of
reviewing denied claims and shall have the powers identified
in subsections 11.3(a)-(g) and complete discretionary
authority in reviewing denied claims.
The Appellate Committee shall act by a majority of its
members either by a meeting or in a writing without a
meeting. Any member may participate in a meeting by means of
a conference telephone or similar communications equipment by
means of which all persons participating in the meeting can
hear each other. Any person appointed to serve as a member of
the Appellate Committee shall signify his or her acceptance
in writing to the Board (or such person or persons specified
by the Board).
Any member of the Appellate Committee may resign at any
time by delivering to the Board (or such person or persons
specified by the Board) a written notice of resignation, to
take effect at a date specified therein, which shall not be
less than thirty (30) days after the delivery thereof, unless
such notice shall, in writing, be waived by the Board (or
such person or persons specified by the Board). Each member
of the Appellate Committee shall serve at the pleasure of the
Board (or such person or persons specified by the Board) and
may be removed by delivery of written notice of removal, to
take effect at a date specified therein.
The Board (or such person or persons specified by the
Board), as soon as practical following receipt of a written
notice of resignation or delivery of a written notice of
removal of any member of the Appellate Committee, shall
consider the appointment of a successor. In the event the
Board (or such person or persons specified by the Board)
fails to appoint a successor to serve as a member of the
Appellate Committee, the remaining members of the Appellate
Committee shall constitute the Appellate Committee.
12.4 DECISION ON APPEAL. The Appellate Committee
shall notify the claimant of its decision on review not later
than sixty (60) days after receipt of a request for review,
unless special circumstances require an extension of time for
processing, in which case a decision shall be rendered as
soon as possible, but not later than one hundred twenty (120)
days after receipt of a request for review. If an extension
of time for review is required because of special
circumstances, written notice of the extension must be
furnished to the claimant prior to the commencement of the
extension. The Appellate Committee's decision on review shall
be in writing and shall include specific reasons for the
decision, as well as specific references to the pertinent
Plan provisions on which the decision is based.
ARTICLE XIII
TRUSTEE
13.1 DUTIES. The Trustee shall receive and hold all
contributions made by an Employer together with such other
assets as may be transferred to it in accordance with the
provisions of the Plan. In addition, the Trustee shall make
distributions as directed by the Benefits Committee in
accordance with the provisions of Article IX.
13.2 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 "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)-l(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 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 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 POWERS. 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.
(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 de&cd 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 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 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. Section
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. Section
2550.404c-l(d)(2)(ii)(E)(4)(ix), the Benefits Committee shall
promptly 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. Section 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 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.
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.
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 jurisdiction, or
otherwise), the Benefits Committee shall direct the Trustee
to segregate in a separate interest-bearing account in the
Trust or m 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 order is a qualified domestic
relations order; then, upon expiration of said period, the
Benefits Committee shall direct the Trustee to pay any such
segregated amount (plus any interest thereon) to the person
or persons who would have been entitled to such amounts if
there had been no order.
15.7 DEFINITIONS. As used in this Article, the
following terms shall have the meanings hereinafter set
forth:
(a) "Alternate payee" shall mean any spouse,
former spouse, child or other dependent of a Participant who
is recognized by a domestic relations order as having a right
to receive all, or a portion of, the benefits payable under
the Plan with respect to such Participant.
(b) "Domestic relations order" shall mean any
judgment, decree or order (including approval of property
settlement agreement) which relates to the provisions of
child support, alimony payments or marital property rights to
a spouse, former spouse, child or other dependent of a
Participant, and is made pursuant to a state domestic
relations law (including a community property law).
(c) "Earliest retirement age" shall mean the
earlier of:
(i) the date on which the Participant is
entitled to a distribution under the Plan, or
(ii) the later of the date the Participant
attains age fifty (50), or the earliest date on which the
Participant could begin receiving payments under the Plan if
he or she separated from service.
(d) "Qualified domestic relations order" shall
mean a domestic relations order which:
(i) creates or recognizes the existence of
an alternate payee's right to, or assigns to an alternate
payee the right to, receive all or a portion of the benefits
payable with respect to a Participant under the Plan; and
(ii) clearly specifies:
(aa) the name and the last known
mailing address (if any) of the Participant and the name and
mailing address of each alternate payee covered by the order;
(bb) the amount or percentage of the
Participant's benefits to be paid by the Plan to each such
alternate payee, or the manner in which such amount or
percentage is to be determined;
(cc) the number of payments or period
to which such order applies; and
(dd) each plan to which such order
applies; and
(iii) does not require the Plan to:
(aa) provide any type or form of
benefits, or any option, not otherwise provided under the
Plan;
(bb) provide increased benefits
(determined on the basis of actuarial value); or
(cc) pay benefits to an alternate
payee which are to be paid to another alternate payee under
another order previously determined to be a qualified
domestic relations order.
In the case of any payment to an alternate payee before
a Participant has separated from service, a domestic
relations order shall not be treated as failing to meet the
requirements of clause (aa) of subparagraph (iii) solely
because such order requires that payment of benefits be made
to an alternate payee:
(iv) on or after the date on which the
Participant attains (or would have attained) the earliest
retirement age;
(v) as if the Participant has retired on
the date on which such payment is to begin under such order;
and
(vi) in any form in which such benefits
may be paid under the Plan to the Participant (other than in
the form of a joint and survivor annuity with respect to the
alternate payee and his or her subsequent spouse).
ARTICLE XVI
MERGERS
16.1 MERGER OR CONSOLIDATION OF PLAN. In case of any
merger or consolidation of the Plan with, or transfer of
assets and liabilities of the Plan to, any other plan
qualified under Section 401(a) and Section 501(a) of the
Code, provision must be made so that each Participant would,
if the Plan then terminated, receive a benefit immediately
after the merger, consolidation or transfer which is equal to
or greater than the benefit he would have been entitled to
receive immediately before the merger, consolidation or
transfer if the Plan had then terminated.
16.2 MERGER WITH 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;
(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).
(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.
(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
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 Employee 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 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 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.
(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 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 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 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 (.5) 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.
(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 Comrnittee 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 ha 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, 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 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.
(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;
(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;
(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 XVII
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;
(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
the 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.
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
Its Senior Vice President
_____________________________ ______________________________
Terry Cohen, Trustee
_____________________________ ______________________________
Peter Moynihan, Trustee
_____________________________ ______________________________
Steven Bonville, Trustee
_____________________________ ______________________________
Michael Cowell, Trustee
_____________________________ ______________________________
Kennedy Lane, Trustee
_____________________________ ______________________________
Peter Adams, Trustee
_____________________________ ______________________________
Robert Daigle, Trustee
<PAGE>
FIRST AMENDMENT TO THE
UNUM EMPLOYEES RETIREMENT SAVINGS PLAN AND TRUST
The UNUM Employees Retirement Savings Plan and Trust
(the "Plan") was last amended and restated effective
generally January 1, 1994. The Plan is hereby amended in
the following respects:
1. The terms used in this Amendment shall have the
meanings set forth in the Plan unless the context indicates
otherwise.
2. Article XVII is hereby amended by adding the
following new Section at the end thereof:
"17.12 IMPERMISSIBLE ACTIONS FROM SEPTEMBER 15,
1995, TO DECEMBER 4, 1995. Notwithstanding any other
provision of this Plan to the contrary, during the period
beginning September 15, 1995, and ending on the later of
December 4, 1995, or the date Participant records are
reconciled and updated by State Street Bank and Trust
Company, the following actions shall not be permitted:
(a) An amendment to a Deferral Election
pursuant to Section 5.2;
(b) A reinstatement of a Deferral
Election pursuant to the last paragraph of Section 5.1;
(c) An in-service distribution pursuant
to Section 9.5;
(d) An investment direction pursuant to
Section 13.4 or 13.5;
(e) A loan pursuant to Section 9.6 (other
than a loan made solely on account of an unforeseeable
immediate and heavy financial need within the meaning of
Section 9.13(c)(i)); and
(f) A hardship withdrawal pursuant to
Section 9.13 (other than a hardship withdrawal made solely
on account of an unforeseeable immediate and heavy financial
need within the meaning of Section 9.13(c)(i))."
3. This Amendment shall be effective September 15,
1995.
IN WITNESS WHEREOF, the Employer has caused this
Amendment to be executed this 6th day of October, 1995.
WITNESS: UNUM CORPORATION
/s/ Marie A. Fogg By: /s/ Eileen C. Farrar
Its Senior Vice President
<PAGE>
SECOND AMENDMENT TO THE
UNUM EMPLOYEES RETIREMENT SAVINGS PLAN AND TRUST
The UNUM Employees Retirement Savings Plan and Trust
(the "Plan") was last amended and restated effective
generally January 1, 1994. The Plan was further amended by a
First Amendment, effective September 15, 1995. The Plan is
hereby further amended in the following respects:
1. The terms used in this Amendment shall have the
meanings set forth in the Plan unless the context indicates
otherwise.
2. Section 1.51 is hereby amended to read as
follows:
"1.51 'Trust' shall mean the Trust Agreement
under the UNUM Employees Retirement Savings Plan and Trust
and the Duncanson & Holt, Inc. Employee Profit Participation
and Savings Plan, as amended from time to time."
3. Section 1.52 is hereby amended to read as
follows:
"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."
4. Article I is hereby amended by adding the
following new Section 1.56 at the end thereof:
"1.56 'Participant-Directed Brokerage Account'
shall mean a brokerage account established and maintained
under the Trust for the benefit of a Participant as provided
in Section 13.7."
5. Section 8.2 is hereby amended to read as follows:
"8.2 ADJUSTMENTS. Effective July 1, 1996, as
of each Valuation Date, the Participants' Accounts shall be
adjusted as follows:
(a) First, determine the fair market value
of each Investment Fund and Participant-Directed Brokerage
Account as of the close of business on such date.
(b) Second, allocate the income, expenses,
gains and losses of each Investment Fund and Participant-
Directed Brokerage Account among the Accounts in proportion
to the Account balances (to the extent invested therein).
(c) Third, reduce the separate Account of
each Participant to reflect all distributions, withdrawals
and loans made from such Account, since the last preceding
Valuation Date.
(d) Fourth, credit to the separate Account
of each Participant the Elective Contributions, Matching
Contributions, Qualified Nonelective Contributions,
Discretionary Contributions, Rollover Contributions, and the
assets transferred from another qualified plan in accordance
with Section 4.1 or Article XVI made on his or her behalf and
the Participant's loan repayments since the preceding
Valuation Date.
(e) Fifth, adjust each Participant's
Account to reflect transfers among the Investment Funds and
between the Investment Funds and such Participant's
Participant-Directed Brokerage Account, if any.
In the event no adjustment to any separate Account
is required under subsection (c) above as of any Valuation
Date (other than the last Valuation Date of a Plan Year), no
adjustments of the separate Accounts of the Participants
shall be required except as of the last Valuation Date of the
Plan Year.
Notwithstanding the foregoing provisions of this
Section to the contrary, the Benefits Committee may direct
the Trustee to debit the Account of any Participant or Former
Participant as of any Valuation Date in the amount of any
reasonable expense attributable to such Participant's or
Former Participant's exercise of control over his or her
Account since the preceding Valuation Date. The Benefits
Committee shall establish, in writing, reasonable procedures
to inform Participants and Former Participants that such
expenses may be charged to their Account pursuant to this
paragraph, to inform each Participant or Former Participant
at least annually of the actual expenses incurred with
respect to his or her Account, and to otherwise carry out
this paragraph. The Benefits Committee shall follow a
uniform and nondiscriminatory policy in charging reasonable
expenses to the Account of a Participant or Former
Participant pursuant to this paragraph. For purposes of this
paragraph, a Participant's or Former Participant's "exercise
of control over his or her Account" shall include but not be
limited to the following:
(f) a request for a loan pursuant to
Section 9.6;
(g) a request for a withdrawal pursuant
to Section 9.5 or 9.13; and
(h) any election with respect to the
investment of contributions made on his or her behalf (or an
election with respect to the reinvestment of his or her
Account) pursuant to Section 13.7 or 13.8."
6. Section 7.4 is hereby amended to read as follows:
"7.4 REDUCTION OF EXCESS ANNUAL ADDITIONS. If,
as a result of a reasonable error in estimating a
Participant's annual compensation (as defined in Section
7.5), a reasonable error in determining the amount of
elective deferrals (within the meaning of Section 402(g)(3)
of the Code) that may be made with respect to any Participant
under the limitations of Section 415 of the Code, or under
other limited facts and circumstances that the Commissioner
of the Internal Revenue Service finds justify the
availability of the rules set forth below, the Annual
Additions allocated to the Account of any Participant would
cause the limitations set forth in the preceding Sections of
this Article for any Limitation Year to be exceeded, the
following rules shall apply to the extent necessary to reduce
such excess, and the excess amounts shall not be deemed
Annual Additions in such Limitation Year:
(a) Any nondeductible voluntary employee
contributions (and the earnings thereon) to the extent they
would reduce the excess amount, shall be returned to the
Participant;
(b) Any Elective Contributions (and,
effective for Limitation Years beginning after December 31,
1995, the earnings thereon) to the extent they would reduce
the excess amount, shall be returned to the Participant;
(c) If after the application of
subsections (a) and (b) an excess amount still exists and the
Participant is covered by the Plan at the end of the
Limitation Year, the excess amount allocated to the
Participant's Account for such year shall be used to reduce
Employer Contributions for the next Limitation Year and for
each succeeding Limitation Year, if necessary, for such
Participant;
(d) If after the application of
subsections (a) and (b) an excess amount still exists and the
Participant is not covered by the Plan at the end of the
Limitation Year, the excess amount allocated to the
Participant's Account for such Limitation Year shall be held
unallocated in a suspense account. The suspense account
shall be applied to reduce Employer Contributions for all
remaining Participants in the next Limitation Year and each
succeeding Limitation Year, if necessary.
If a suspense account is in existence at any time
during a Limitation Year pursuant to subsection (d) of this
Section, it shall not participate in the allocation of the
Investment Funds' income, expenses, gains and losses. If a
suspense account is in existence at any time during a
particular Limitation Year, all amounts in the suspense
account must be allocated and reallocated to Participants'
Accounts before any Employer Contributions may be made to the
Plan for that Limitation Year. For purposes of subsection
(c) and (d), excess amounts may not be distributed to
Participants or Former Participants."
7. Article IX is hereby amended by adding the
following new Section 9.19 at the end thereof:
"9.19 DISTRIBUTION RULES FOR TSA PARTICIPANTS.
The provisions of this Section shall be effective October 1,
1996.
(a) For purposes of this Section 9.19, the
following terms shall have the following meanings unless the
context clearly indicates otherwise:
(i) 'Closing Date' shall mean October
1, 1996.
(ii) 'Lincoln' shall mean The Lincoln
National Life Insurance Company, any other corporation, trade
or business organization that, at the time of reference,
controls, is controlled by, or is under common control with
The Lincoln National Life Insurance Company, and any
successor to The Lincoln National Life Insurance Company or
to such other corporation, trade or business organization
that assumes the obligations of The Lincoln National Life
Insurance Company under Asset Transfer and Acquisition
Agreement By and Between UNUM Life Insurance Company of
America and The Lincoln National Life Insurance Company Dated
as of January 24, 1996.
(iii) 'Transition Period' shall mean,
with respect to a TSA Participant, the period beginning on
the Closing Date and ending on the earlier of (i) the date on
which the TSA Participant terminates employment with Lincoln
and is not thereupon reemployed by an Employer and (ii) the
date that is twenty (20) months after the Closing Date.
(iv) 'TSA Participant' shall mean a
Participant in the Plan who (i) is an Eligible Employee
immediately before the Closing Date; (ii) becomes employed by
Lincoln as of the Closing Date or, in the case of a
Participant who on the Closing Date is receiving benefits
under an Employer's short-term disability plan or is absent
from service with an Employer on account of an approved leave
of absence, becomes employed by Lincoln immediately after the
period of disability or approved leave of absence; and (iii)
is employed by Lincoln as an employee at will and not as a
contract employee.
(b) Notwithstanding Sections 9.6(h)(i) and
9.17 to the contrary, in the event that a TSA Participant
elects to receive distribution of his or her Account in the
form of a direct rollover (as described in Section 9.16) to
the Lincoln National Corporation Employees' Savings and
Profit Sharing Plan (the "Lincoln 401(k) Plan") and at the
time of such distribution there remain outstanding any unpaid
loans with respect to his or her Account that are not in
default, such unpaid loans shall not be treated as due and
payable immediately as of the date such distribution is made
and instead shall be transferred to the Lincoln 401(k) Plan.
The promissory note evidencing such loan(s) shall be assigned
to the Lincoln 401(k) Plan, and the TSA Participant's
obligation to this Plan shall be deemed to be paid in full as
of the date the distribution is made. Such TSA Participant
shall be treated as receiving a distribution of his or her
entire Account.
(c) During his or her Transition Period,
Section 9.10(a) shall not apply with respect to a TSA
Participant, and, subject to Section 9.10(b), (c), and (d),
the TSA Participant shall be permitted to maintain his or her
Account under the Plan, or to elect to receive or to commence
receiving distribution of his or her Account as of any
Valuation Date that occurs after the Closing Date, without
regard to the value of his or her Account as of the Valuation
Date following the Closing Date or any subsequent Valuation
Date that falls within such Transition Period. Beginning
with the first Valuation Date following the end of his or her
Transition Period, Section 9.10(a) shall once again apply to
a TSA Participant."
8. Article XIII is hereby amended in its entirety to
read as follows:
ARTICLE XIII
TRUST FUND INVESTMENTS
13.1 EFFECTIVE DATE. Except as hereinafter
provided, the provisions of this Article shall be effective
October 1, 1995.
13.2 DUTIES OF TRUSTEE. The Trustee shall
receive and hold all contributions made by an Employer
together with such other assets as may be transferred to it
in accordance with the provisions of the Plan. In addition,
the Trustee shall make distributions as directed by the
Benefits Committee in accordance with the provisions of
Article IX.
13.3 INVESTMENT FUNDS. The Trustee shall
establish a UNUM Stock Fund, a Fixed Income Fund, one or more
other Investment Funds and, effective July 1, 1996,
Participant-Directed Brokerage Accounts as the Individual
Trustees (as defined in Section 1.11 of the Trust) may from
time to time direct. The Individual Trustees shall direct
that each Investment Fund, other than the UNUM Stock Fund and
any Participant-Directed Brokerage Account, shall be
invested:
(a) at the discretion of the Trustee in
accordance with such investment guidelines and objectives as
it may establish; or
(b) at the discretion of a duly appointed
Investment Manager in accordance with such investment
guidelines and objectives as may be established by the
Trustee.
The Individual Trustees may from time to time
change their direction with respect to any Investment Fund
and may, at any time, eliminate any Investment Fund.
Whenever an Investment Fund is eliminated, the Trustee shall
promptly liquidate the assets of such Investment Fund and
reinvest the proceeds thereof in such other Investment Fund
as the Benefits Committee may direct, unless a Participant or
Former Participant, pursuant to Section 13.7 or 13.8, elects
to reinvest all or a portion of the balance of his or her
Account which had been invested in the eliminated Investment
Fund in one or more of the other available Investment Funds
or through a Participant-Directed Brokerage Account.
The Trustee shall transfer to each Investment Fund
or Participant-Directed Brokerage Account such portion of the
assets of the Trust as the Benefits Committee may from time
to time direct in accordance with the terms of the Plan. All
interest, dividends and other income received with respect
to, and any proceeds realized from the sale or other
disposition of, assets held in any Investment Fund shall be
credited to and reinvested in such Investment Fund, and all
expenses properly attributable to any Investment Fund shall
be paid therefrom unless paid by the Employers.
13.4 UNUM STOCK FUND. Effective December 1,
1989, the Trustee shall establish a UNUM Stock Fund which
shall be invested solely in shares of common stock of UNUM
Corporation and any other qualifying employer security within
the meaning of Section 407(d)(5) of ERISA ('Employer Stock').
The Trustee shall, as soon as practicable, apply amounts
allocated to the UNUM Stock Fund to purchase Employer Stock
on the open market or in private transactions, from UNUM
Corporation or otherwise, at current market value. Any
purchase of Employer Stock directly from the UNUM Corporation
shall be made without commission. Pending investment in
Employer Stock, the Trustee shall invest amounts allocated to
and dividends or other amounts received by the UNUM Stock
Fund in cash or short-term cash equivalents including, but
not limited to, short-term debt obligations issued or
guaranteed by the United States government, money market
funds and savings accounts. Notwithstanding the provisions
of this Section 13.4 to the contrary, the Trustee shall have
no authority to invest any assets of the Trust in shares of
Employer Stock unless (i) such shares constitute 'qualifying
employer securities' within the meaning of Section 407 of
ERISA and (ii) such investment is not prohibited by Section
404, 406 or 407 of ERISA.
Upon the purchase of any Employer Stock by the
Trustee, the purchase price chargeable to the Account of each
Participant shall be its proportionate share (based upon the
number of shares purchased and the number of shares allocable
to such Account) of the entire amount paid by the Trustee
taking into account all brokerage fees, transfer taxes, the
additional cost incurred on purchase of odd lots and other
expenses incurred in connection with the purchase and
transfer of such stock.
Employer Stock acquired by the Plan shall be
accounted for as provided under Treasury Regulation Section
1.402(a)-1(b)(2)(ii), and the Benefits Committee shall
maintain adequate records of the cost basis of all shares of
the Employer Stock allocated to each Participant's Account.
Cash dividends received by the Trustee upon
Employer Stock allocated to a Participant's Account shall be
allocated and credited to such Account as of the payment date
and applied to the purchase of additional Employer Stock.
Stock dividends received by the Trustee upon Employer Stock
allocated to a Participant's Account shall be allocated and
credited to such Account as of the payment date. If Employer
Stock held in the UNUM Stock Fund is split, the new or
additional shares shall be credited as of the record date to
the Accounts of Participants in proportion to the number of
shares credited to their respective Account, as compared to
the total number of shares in the UNUM Stock Fund,
immediately prior to such date.
13.5 FIXED INCOME FUND. The Trustee shall
establish a Fixed Income Fund which shall, in accordance with
Section 13.3, be invested primarily in securities expected to
produce a fixed income, including, but not limited to debt
obligations issued or guaranteed by the United States
government or its agencies, debt obligations of corporations,
bank certificates of deposit, money market funds, savings
accounts and other cash equivalents, or a deposit
administration, investment or group annuity contract issued
by a legal reserve life insurance company.
13.6 INVESTMENT OF MATCHING CONTRIBUTIONS.
Effective for Plan Years beginning on or after January 1,
1997, the first one percent (1%) of any Matching
Contributions made on behalf of a Participant for such year
shall be invested in the UNUM Stock Fund; provided, however,
a Participant who has attained age fifty-five (55) shall have
the right to direct that all or a portion of his or her
Matching Contributions Account that is invested in the UNUM
Stock Fund pursuant to this Section be reinvested in any one
or more of the other Investment Funds pursuant to Section
13.7 or reinvested in his or her Participant-Directed
Brokerage Account pursuant to Section 13.8. Matching
Contributions for any Plan Year in excess of the first one
percent (1%) of a Participant's Compensation for such year
shall be invested in accordance with the provisions of
Sections 13.7 and 13.8.
13.7 INVESTMENT FUNDS-PARTICIPANT DIRECTIONS.
(a) INVESTMENT OF CONTRIBUTIONS. Except
as provided in Section 13.6, each Participant may direct that
contributions made on his or her behalf shall be invested in
any one or more of the Investment Funds. Effective December
4, 1995, the percentage of contributions to be invested in
any Investment Fund shall be five percent (5%), or a multiple
thereof. An investment direction shall be made by such
written, telephonic or electronic means as shall be
prescribed by the Benefits Committee.
A Participant's investment direction, if
received by the Benefits Committee prior to the date he or
she commences participation, shall be effective as of said
date. If a Participant does not make an investment direction
or an investment direction is not received by the Benefits
Committee before the Participant commences participation, the
contributions on behalf of such Participant shall be invested
in the fund which presents the least risk of loss as
determined by the Trustee. An investment direction received
by the Benefits Committee after the date a Participant
commences participation shall be effective as of the later of
the first 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 at any time an
investment direction to have future contributions on his or
her behalf (other than the first one percent (1%) of any
Matching Contributions made for any Plan Year beginning on or
after January 1, 1997) invested in the Investment Funds in
proportions other than those previously elected. An election
modifying a previous investment direction shall be made in
multiples of five percent (5%) of such contributions and
shall be made by such written, telephonic or electronic means
as shall be prescribed by the Benefits Committee. A
modification shall be effective as soon as practicable after
receipt by the Benefits Committee (or by the person or
persons specified by the Benefits Committee). The provisions
of this paragraph shall be effective December 4, 1995.
(b) REINVESTMENT OF ACCOUNT. Except as
provided in Section 13.6, a Participant may elect at any
time to reinvest all or a portion of the balance of his or
her Account in any one or more of the Investment Funds. A
Former Participant may elect at any time to reinvest all or a
portion of the balance of his or her Account, including all
or a portion of his or her Matching Contributions Account
that is invested in the UNUM Stock Fund pursuant to Section
13.6, in any one or more of the Investment Funds. An
election to reinvest an Account balance shall be made in five
percent (5%) multiples of such balance and shall be made by
such written, telephonic or electronic means as shall be
prescribed by the Benefits Committee. An election to
reinvest shall be effective as soon as practicable after
receipt by the Benefits Committee (or by the person or
persons specified by the Benefits Committee). The provisions
of this subsection (b) shall be effective December 4, 1995.
13.8 PARTICIPANT-DIRECTED BROKERAGE ACCOUNTS.
Effective July 1, 1996, and except as provided in Section
13.6, each Participant shall have the right to direct that
contributions made on his or her behalf, or such portion
thereof as the Participant shall designate, and that his or
her Account, or such portion thereof as the Participant shall
designate, shall be invested or reinvested through a
Participant-Directed Brokerage Account in such investments as
the Participant shall choose, subject to such restrictions,
applied in a uniform and nondiscriminatory manner, as the
Benefits Committee may determine; provided that (a) no
portion of a Participant's Account may be invested in
collectibles (as defined in Section 408(m)(2) of the Code);
and (b) no portion of a Participant's Account may be invested
in any investment which does not have a fair market value
that is readily determinable on an established market.
An investment (or reinvestment) direction under
this Section 13.8 shall be made by such written, telephonic
or electronic means as shall be prescribed by the Benefits
Committee and shall be effective as soon as practicable after
receipt by the Benefits Committee (or the person or persons
designated by the Benefits Committee).
Expenses attributable to a Participant's investment
direction under his or her Participant-Directed Brokerage
Account, including any applicable fees, commissions, load
amounts or service charges, shall be charged to such
Participant's Account.
For purposes of this Section, the term
"Participant" shall include a Former Participant with respect
to the Participant's right to direct that his or her Account,
or such portion thereof as he or she shall designate, shall
be invested or reinvested through a Participant-Directed
Brokerage Account in such investments as the Participant
shall choose; provided, a Former Participant shall also have
the right to direct that all or a portion of his or her
Matching Contributions Account that is invested in the UNUM
Stock Fund pursuant to Section 13.6 shall be reinvested
through a Participant-Directed Brokerage Account in such
investments as the Former Participant shall choose.
13.9 NO FIDUCIARY STATUS. A Participant or
Former Participant who directs the investment of his or her
Account shall not by reason thereof be deemed a fiduciary
with respect to the Plan, and the Employer, Trustee, Benefits
Committee, and other fiduciaries, and any custodian acting as
an agent thereof, shall not be liable for any losses
resulting from the purchase, sale or retention of any assets
which are purchased, sold or retained at the direction of a
Participant or Former Participant. Once a Participant or
Former Participant assumes responsibility for direction of
the investment of his or her Account or any portion thereof,
the fiduciaries shall not thereafter be responsible for the
investment thereof except to the extent otherwise required by
applicable law.
13.10 CUSTODIAN. The Board may from time to
time appoint one or more banks, insurance companies, third
party plan administrators or brokers to serve as custodian of
all or any portion of the Trust Fund.
13.11 INVESTMENT MANAGER. The Board may from
time to time appoint one or more Investment Managers to
direct the investment and reinvestment of the Trust Fund or
such portion thereof as may be designated by the Board. Such
appointment shall be in writing and shall be effective upon
receipt by the Board of the Investment Manager's written
acceptance and acknowledgment that he or she is a fiduciary
with respect to the Plan and Trust. The Board shall give
prompt written notice of such appointment to the Trustee.
The Board may revoke the appointment of any Investment
Manager by furnishing such Investment Manager and the Trustee
with written notice setting forth the effective date of such
revocation. The Trustee shall be fully protected in relying
upon the effectiveness of such appointment until such time as
it receives written notice from the Board to the contrary.
For purposes of this Section 13.11, 'Board' shall
mean the Board of Directors of UNUM Corporation or any person
or persons to whom the Board delegates all or a part of its
authority under this Section.
13.12 RECORDKEEPER. The Board may from time to
time appoint one or more persons, corporations or business
organizations to perform recordkeeping and other
administrative services with respect to the Plan and the
Accounts established under the Plan.
13.13 VOTING RIGHTS. Stock held in the UNUM
Stock Fund shall be voted by the Trustee."
9. Section 17.1 is hereby amended to read as
follows:
"17.1 FIDUCIARY DUTIES. All fiduciaries with
respect to the Plan and Trust shall discharge their
respective duties under the Plan and Trust solely in the
interest of the Participants, their surviving spouses and
their Beneficiaries and:
(a) for the exclusive purpose of providing
benefits to Participants, their surviving spouses and their
Beneficiaries, and defraying reasonable expenses of
administering the Plan;
(b) with the care, skill, prudence, and
diligence under the circumstances then prevailing that a
prudent person acting in like capacity and familiar with such
matters would use in the conduct of an enterprise of a like
character and with like aims; and
(c) by diversifying the investments of the
Plan so as to minimize the risk of large losses, unless under
the circumstances it is clearly prudent not to do so."
10. Article XVII is hereby amended by adding the
following new Section 17.13 at the end thereof:
"17.13 ADDITIONAL CONTRIBUTIONS. An Employer
shall contribute such amounts as may be necessary to
implement a decision of the Benefits Committee or Appellate
Committee regarding the failure of a Former Participant or
Beneficiary to receive distribution of his or her Account in
accordance with the provisions of Article IX within a
reasonable period of time due to inadvertent administrative
error or such other circumstances as the Benefits Committee
or Appellate Committee may designate."
11. Parts 2, 3, 8 and 9 of this Amendment shall be
effective October 1, 1995, except to the extent otherwise
specifically provided therein; Parts 4 and 5 of this
Amendment shall be effective July 1, 1996; Part 6 of this
Amendment shall be effective January 1, 1996; and Parts 7 and
10 of this Amendment shall be effective October 1, 1996.
IN WITNESS WHEREOF, the Employer has caused this
Amendment to be executed by its duly authorized officer this
16th day of December, 1996.
WITNESS: UNUM CORPORATION
/s/ Marie A. Fogg By: /s/ Eileen C. Farrar
<PAGE>
FIRST AMENDMENT TO THE TRUST AGREEMENT
UNDER THE UNUM EMPLOYEES RETIREMENT SAVINGS PLAN
AND TRUST AND THE
DUNCANSON & HOLT,INC. EMPLOYEE PROFIT PARTICIPATION
AND SAVINGS PLAN
This Amendment is made this day of , 1996, by and
between UNUM Corporation, a corporation organized and
and existing under the laws of the State of Maine
(hereinafter the
"Company"); Duncanson & Holt, Inc., a corporation
organized and existing under the laws of the State of
New York and a wholly-owned subsidiary of the Company
(hereinafter "Duncanson & Holt"); State Street Bank and
Trust Company, a trust company organized under the laws
of the Commonwealth of Massachusetts; Kevin P. Walker
of Bergen County in the State of New Jersey; Thomas
G. Brown, of Collier County in the State of Florida;
Michael Cowell, of Cumberland County in the State of
Maine; Margaret Downing, of Cumberland County in the
State of Maine; Eileen Farrar, of Cumberland County
in the State of Maine; Ruth Greene, of Cumberland
County in the State of Maine; and Edward Hillman, of
Westchester County in the State of New York (herein-
after collectively the "Trustees").
Witnesseth:
Whereas, the parties hereto entered into a Trust
Agreement, as amended and restated effective
October 1, 1995, to amend and restate the trust
provisions appearing in the UNUM Employees Retirement
Savings Plan and Trust and the Duncanson & Holt, Inc.
Employee Profit Participation and Savings Plan (the
"Plans") and the Master Trust Agreement for the Plans;
and
Whereas, Section 8.1 of said Agreement provides that the
Trust Agreement may be amended from time to time by the
Board of Directors of the Company; and
Whereas, the Company wishes to amend the Trust Agreement
to reflect the availability of participant-directed
brokerage accounts as investment vehicles under the
Plans and Trust and to consolidate the provisions
appearing in the Plans and Trust Agreement regarding
the exercise of voting, tender or similar rights with
respect to Company securities allocated to participants'
accounts;
Now, Therefore, the parties hereto hereby amend the
Trust Agreement in the following respects:
1. The terms used herein shall have the meanings set
forth in the Trust Agreement, as amended and restated
effective October 1, 1995.
2. Article I is hereby amended by adding the following
new Section 1.16, and existing Sections 1.16 through 1.21
are hereby redesignated accordingly as Sections 1.17
through 1.22:
"1.16 `Participant-Directed Brokerage Account' means a
brokerage account established and maintained under the
Trust for the benefit of a Participant as provided in
Section 13.8 of the UNUM Plan and Section 13.5 of the
Duncanson & Holt, Inc. Plan."
3. The first clause of subsection (j) of Section 3.2 is
hereby amended to read as follows:
"(j) Subject to Section 3.6 and Section 3.16, to exercise
all voting rights, tender or exchange rights, any
conversion privileges, subscription rights and other
rights and powers available in connection with any
securities or other property at any time held by the
Trustee;"
4. Section 3.6 is hereby amended to read as follows:
"3.6 Company Securities. In the event of a Tender Offer
for any equity or debt securities issued by the Company
("Company Securities"), and except to the extent that ERISA
shall otherwise require, unless otherwise provided in an
investment manager agreement, the Trustee shall exercise no
discretion to tender, sell or exchange any such securities
that are allocated to a Participant's or Beneficiary's
account, but instead (i) shall follow the instructions of
such person as to whether Company Securities allocated to
his or her account shall be tendered, sold or exchanged
pursuant to the Tender Offer (and shall follow any further
instructions of such person concerning any related elections
to be made) or (ii) if no such instructions are received
within the prescribed time period, shall not tender, sell or
exchange any Company Securities allocated to his or her
account.
Except to the extent that ERISA shall otherwise require, and
unless otherwise provided in an investment manager
agreement, with respect to any matter duly submitted for
action to the holders of any class or series of Company
Securities the Trustee shall exercise no voting discretion
with respect to Company Securities that are allocated to a
Participant's or Beneficiary's account, but instead (i)
shall follow the instructions of such person as to how
Company Securities allocated to his or her account shall
be voted or (ii) if no such instructions are received
within the prescribed time period, shall vote the Company
Securities allocated to such person's account in the same
proportion as it will vote Company Securities for which it
has received timely instructions.
Except to the extent that ERISA shall otherwise require, and
unless otherwise provided in an investment manager
agreement, with respect to any other rights similar to
tender or voting rights, the Trustee shall exercise no
discretion with respect to Company Securities that are
allocated to a Participant's or Beneficiary's account, but
instead (i) shall follow the instructions of such person as
to the exercise of such rights or (ii) if no such
instructions are received within the prescribed time period,
shall not exercise any such rights with respect to Company
Securities allocated to such person's account.
The Administrator or Recordkeeper shall provide to each
Participant or Beneficiary who has Company Securities
allocated to his or her account:
(a) a copy of all solicitation or disclosure materials
distributed generally to Company security holders (other
than by publication) in connection with any Tender Offer
and received by the Trustee in its capacity as such; and
advise each such person in connection with the Tender
Offer, that he or she has discretion over the disposition
of Company Securities allocated to his or her account and,
in the absence of timely instructions from him or her
concerning the disposition of such securities, the
securities shall not be tendered, sold or exchanged;
(b) a copy of all solicitation or disclosure materials
distributed generally to Company security holders (other
than by publication) in connection with any stock matter
duly submitted for action to the holders of any class or
series of Company Securities and received by the Trustee
in its capacity as such; and advise each such person that
he or she has voting discretion on such matter with
respect to Company Securities allocated to his or her
account and in the absence of timely instructions from him
or her concerning the voting of such securities, the
securities shall be voted as to such matter in the same
proportion as the Trustee will vote Company Securities for
which it has received timely instructions; and
(c) all solicitation or disclosure materials distributed
generally to Company security holders (other than by
publication) in connection with the exercise of any rights
similar to tender or voting rights and received by the
Trustee in its capacity as such; and advise each such
person that he or she has discretion over the exercise of
such rights with respect to Company Securities allocated to
his or her account and, in the absence of timely
instructions from him or her concerning the exercise of
such rights, such rights shall not be exercised.
The Administrator or Recordkeeper shall furnish the
Trustee with the name of each affected Participant or
Beneficiary and with the number of shares of Company
Securities allocated to such Participant's or
Beneficiary's Account as close in time as practicable to
the record date fixed for the determination of
shareholders entitled to tender or vote and shall provide
such other information and assistance as the Trustee shall
reasonably request. A Participant or Beneficiary may
instruct the Recordkeeper, in accordance with the provisions
of this Section 3.6, by such written, telephonic or
electronic means and within such time period as may be
prescribed by the Administrator or Recordkeeper (or the
independent fiduciary in the case of a matter determined by
the Administrator to involve the potential for undue
employer influence). The Trustee shall act in accordance
with appropriate instructions received from the
Recordkeeper, pursuant to the provisions of this Section
3.6, by such written, telephonic or electronic means and
within such time period as may be prescribed by the
Trustee (or the independent fiduciary, in the case of a
matter determined by the Administrator to involve the
potential for undue employer influence).
With respect to any unallocated Company Securities, except
to the extent ERISA shall otherwise require and unless
otherwise provided in an investment manager agreement, the
Trustee shall vote such Company Securities in the same
proportion as Company Securities allocated to Participant's
or Beneficiary's accounts for which it has received timely
voting instructions and shall not tender, sell or exchange
any unallocated Company Securities (or make any related
elections) in the event of a Tender Offer for any Company
Securities, nor exercise other rights similar to voting or
tender rights.
The Administrator shall establish procedures designed to
safeguard the confidentiality of information relating to
the purchase, holding and sale of Company Securities, and
the exercise of voting, tender and similar rights with
respect thereto, by Participants and Beneficiaries. The
Administrator shall be responsible for ensuring that such
procedures meet the requirements of ERISA Reg. Section
2550.404c-1(d)(2). In the event the Administrator
determines that a particular situation involves a potential
for undue employer influence upon Participants and
Beneficiaries within the meaning of ERISA Reg. Section
2550.404c-1(d)(2), the Administrator shall promptly appoint
an independent fiduciary to perform the role of the
Administrator to 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. Section 2550.404c-1(e)(3). Except as the Administrator
shall otherwise determine, a Tender Offer shall be deemed
to involve a potential for undue employer influence upon
Participants or Beneficiaries.
As used in this Section, `Tender Offer' means (a) a tender
offer, or a request or invitation for tenders, which is
subject to Section 14(d)(1) of the Securities Exchange Act
of 1934, as amended, or (b) an issuer tender offer which is
the subject of an issuer tender offer statement pursuant to
Rule 13e-4 of the United States Securities and Exchange
Commission (or any successor regulation)."
5. Article III is hereby amended by adding the following
new Section 3.16 at the end thereof:
"3.16 Participant-Directed Brokerage Accounts. A
Participant or Beneficiary shall exercise all voting,
tender or exchange rights, any conversion privileges,
subscription rights and any other rights and powers
available in connection with any securities held in his
or her Participant-Directed Brokerage Account."
IN WITNESS WHEREOF, UNUM Corporation, Duncanson & Holt,
Inc., and the Trustee have caused this Amendment to be
executed as of the day and year first above written.
WITNESS: UNUM CORPORATION
____________________________ By:_________________________
Its
DUNCANSON & HOLT, INC.
____________________________ By:_________________________
Its
STATE STREET BANK AND
TRUST COMPANY
____________________________ By:_________________________
Its Vice President,
Trustee
____________________________ ____________________________
Kevin P. Walker, Trustee
under the Duncanson & Holt,
Inc. Employee Profit
Participation and Savings
Plan
____________________________ ____________________________
Thomas G. Brown, Trustee
under the Duncanson & Holt,
Inc. Employee Profit
Participation and Savings
Plan
____________________________ ____________________________
Michael Cowell, Trustee
under the UNUM Employees
Retirement Savings Plan
and Trust
____________________________ ____________________________
Margaret Downing, Trustee
under the UNUM Employees
Retirement Savings Plan
and Trust
____________________________ ____________________________
Eileen Farrar, Trustee
under the UNUM Employees
Retirement Savings Plan
and Trust
____________________________ ____________________________
Ruth Greene, Trustee
under the UNUM Employees
Retirement Savings Plan
and Trust
____________________________ ____________________________
Edward Hillman, Trustee
under the UNUM Employees
Retirement Savings Plan
and Trust
<PAGE>
TRUST AGREEMENT
UNDER THE
UNUM EMPLOYEES RETIREMENT SAVINGS PLAN AND TRUST
AND THE
DUNCANSON & HOLT, INC. EMPLOYEE PROFIT PARTICIPATION
AND SAVINGS PLAN
AS AMENDED AND RESTATED EFFECTIVE OCTOBER 1, 1995
TRUST AGREEMENT
UNDER THE
UNUM EMPLOYEES RETIREMENT SAVINGS PLAN AND TRUST
AND THE
DUNCANSON & HOLT, INC. EMPLOYEE PROFIT PARTICIPATION
AND SAVINGS PLAN
This Trust Agreement is made this ____ day of _________,
1995, but effective October 1, 1995, by and between UNUM
CORPORATION, a corporation organized and existing under the
laws of the State of Maine (hereinafter the "Company");
DUNCANSON & HOLT, INC., a corporation organized and existing
under the laws of the State of New York and a wholly-owned
subsidiary of the Company (hereinafter "Duncanson & Holt");
STATE STREET BANK AND TRUST COMPANY, a trust company
organized under the laws of the Commonwealth of
Massachusetts; KEVIN P. WALKER, of Bergen County in the State
of New Jersey; THOMAS G. BROWN, of Collier County in the
State of Florida; STEVEN BONVILLE, of Cumberland County in
the State of Maine; MICHAEL COWELL, of Cumberland County in
the State of Maine; MARGARET DOWNING, of Cumberland County in
the State of Maine; EILEEN FARRAR, of Cumberland County in
the State of Maine; RUTH GREENE, of Cumberland County in the
State of Maine; LINDA GUYDEN, of Bergen County in the State
of New Jersey; and EDWARD HILLMAN, of Westchester County in
the State of New York (hereinafter collectively the
"Trustees").
W I T N E S S E T H :
WHEREAS, the Company established, effective January 1,
1984, and maintains the UNUM Employees Retirement Savings
Plan and Trust for the exclusive benefit of certain of its
employees; and Duncanson & Holt established, effective
January 1, 1976, and maintains the Duncanson & Holt, Inc.
Employee Profit Participation and Savings Plan for the
exclusive benefit of certain of its employees (hereinafter
collectively the "Plans");
WHEREAS, in accordance with the provisions of their
respective Plans, the Company and Duncanson & Holt have
established trusts to serve as the funding vehicles for such
Plans;
WHEREAS, the Company has appointed State Street Bank and
Trust Company to serve as successor Trustee to Steven
Bonville, Michael Cowell, Margaret Downing, Eileen Farrar,
Ruth Greene, Linda Guyden and Edward Hillman with respect to
the property held in trust under the UNUM Employees
Retirement Savings Plan and Trust that is invested in the
UNUM stock fund and the fixed income fund, effective October
1, 1995; and to serve as custodian with respect to the
property held in trust under the Plan that is not invested in
the UNUM stock fund or the fixed income fund, for which
Steven Bonville, Michael Cowell, Margaret Downing, Eileen
Farrar, Ruth Greene, Linda Guyden and Edward Hillman serve as
Trustee, effective October 1, 1995;
WHEREAS, Duncanson & Holt has appointed State Street
Bank and Trust Company to serve as successor Trustee to Kevin
P. Walker and Thomas G. Brown with respect to the property
held in trust under the Duncanson & Holt, Inc. Employee
Profit Participation and Savings Plan that is invested in the
fixed income fund, effective October 1, 1995; to serve as
Trustee with respect to the property held in trust under the
Plan invested in the UNUM stock fund, effective December 4,
1995; and to serve as custodian with respect to the property
held in trust under the Plan that is not invested in the UNUM
stock fund or the fixed income fund, for which Kevin P.
Walker and Thomas G. Brown serve as Trustee, effective
October 1, 1995;
WHEREAS, UNUM, Duncanson & Holt, and State Street Bank &
Trust Company entered into a Master Trust Agreement for the
Plans to reflect the appointment of State Street Bank and
Trust Company as a trustee of each Plan, effective October 1,
1995;
WHEREAS, Section 14.1 of each of the Plans provides that
the Plan may be amended from time to time by the Board of
Directors of the Company or the Board of Directors of
Duncanson & Holt, as the case may be;
WHEREAS, UNUM, Duncanson & Holt, and the Trustees wish
to amend and restate the trust provisions appearing in the
respective Plan documents and the Master Trust Agreement in
their entirety; and
WHEREAS, the Trustees are willing to act as Trustees of
the Trust pursuant to the provisions of this amended and
restated Trust Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
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 "Administrator" means, in the case of the UNUM
Plan, the Benefits Committee appointed by the Board of
Directors and, in the case of the Duncanson & Holt Plan, the
Plan Administrator appointed by Duncanson & Holt, Inc..
1.2 "Beneficiary" means the person or persons
entitled to receive benefits payable under a Plan following
the death of a Participant.
1.3 "Board of Directors" means the Board of
Directors of UNUM Corporation or any person or persons to
whom the Board of Directors delegates all or a part of its
authority under this Trust Agreement.
1.4 "Code" means the Internal Revenue Code of 1986,
as from time to time amended.
1.5 "Company" means UNUM Corporation or any
corporation with or into which it may be merged or
consolidated and, with respect to the Duncanson & Holt Plan,
Duncanson & Holt, Inc..
1.6 "Company Stock Fund" means the Investment Fund
established by the Institutional Trustee in accordance with
Section 5.2.
1.7 "Duncanson & Holt Plan" means the Duncanson &
Holt, Inc. Employee Profit Participation and Savings Plan, as
from time to time amended.
1.8 "Employer" means UNUM Corporation, Duncanson &
Holt, Inc. or any other corporation or business organization
that has adopted a Plan with the consent of a Company, if the
Company and such other corporation or business organization
are members of a controlled group of corporations; trades or
businesses (whether or not incorporated) under common
control; or members of an affiliated service group, within
the meaning of Sections 414(b), (c), and (m) of the Code,
respectively.
1.9 "ERISA" means the Employee Retirement Income
Security Act of 1974, as it may from time to time be amended.
1.10 "Fixed Income Fund" means a fixed income
Investment Fund established by the Institutional Trustee in
accordance with Section 5.1.
1.11 "Individual Trustee" means a Trustee of a Plan
who is a natural person.
1.12 "Institutional Trustee" means State Street Bank
& Trust Company as trustee of the portion of the Trust Fund
that is invested in the Company Stock Fund or the Fixed
Income Fund.
1.13 "Investment Fund" means an investment fund
described in Section 5.1.
1.14 "Investment Manager" means any fiduciary (other
than a Trustee acting in such capacity or a named fiduciary
as defined in Section 402(a)(2) of ERISA):
(a) who is appointed by the Board of Directors
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) a
bank, as defined in said Act; or (iii) 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 it
is a fiduciary with respect to the Plans and Trust.
1.15 "Participant" means an individual who is a
participant in a Plan, including any former employee of an
Employer who has an account balance under a Plan.
1.16 "Plan" means the UNUM Plan or the Duncanson &
Holt Plan, and "Plans" means the UNUM Plan or the Duncanson &
Holt Plan, as each may be from time to time amended.
1.17 "Recordkeeper" means any person or persons,
corporation, or business organization that is appointed by
the Company to perform recordkeeping and other administrative
services with respect to a Plan and the accounts of the
Participants and Beneficiaries thereunder. If State Street
Bank and Trust Company is not the Recordkeeper (pursuant to a
separate written agreement with the Company), then the
Company shall give prompt written notice of the appointment
of the Recordkeeper to the Trustee.
1.18 "Trust" means this Trust Agreement under the
UNUM Employees Retirement Savings Plan and Trust and the
Duncanson & Holt, Inc. Employee Profit Participation and
Savings Plan, as from time to time amended.
1.19 "Trust Fund" means the assets held by the
Trustee in trust pursuant to the provisions of this Trust
Agreement.
1.20 "Trustee" means:
(a) State Street Bank and Trust Company in its
role as Institutional Trustee and in its role as custodian of
the portion of the Trust Fund that is not invested in the
Company Stock Fund or the Fixed Income Fund;
(b) With respect to the portion of the Trust
Fund that is attributable to the UNUM Plan and which is not
invested in the Company Stock Fund or the Fixed Income Fund,
Steven Bonville, Michael Cowell, Margaret Downing, Eileen
Farrar, Ruth Greene, Linda Guyden, and Edward Hillman; and
(c) With respect to the portion of the Trust
Fund that is attributable to the Duncanson & Holt Plan and
which is not invested in the Company Stock Fund or the Fixed
Income Fund, Kevin P. Walker and Thomas G. Brown.
1.21 "UNUM Plan" means the UNUM Employees Retirement
Savings Plan and Trust, as from time to time amended.
ARTICLE II
CREATION OF TRUST
2.1 ACCEPTANCE OF TRUSTEE. The Trustee hereby
accepts the Trust established hereunder and agrees to perform
the respective duties of the Trustee set forth herein.
2.2 EFFECTIVE DATE. This Trust Agreement is an
amendment and restatement of the original trust provisions of
the Plans, initially effective January 1, 1984, in the case
of the UNUM Plan, and initially effective January 1, 1976, in
the case of the Duncanson & Holt Plan, and as thereafter
amended and restated from time to time, and of the Master
Trust Agreement effective October 1, 1995. The effective
date of this amendment and restatement is October 1, 1995.
ARTICLE III
TRUSTEE PROVISIONS
3.1 ALLOCATION OF TRUSTEE RESPONSIBILITIES. The
Institutional Trustee and the Individual Trustees, and each
of them, shall be required to meet the fiduciary
responsibilities described in Article VI and by applicable
law to the extent such requirements and responsibilities
apply to them, provided each Trustee shall be responsible for
carrying out only the requirements, responsibilities and
duties placed upon such Trustee by this Trust Agreement.
(a) The Institutional Trustee shall serve as
sole Trustee with respect to those assets of the Trust
comprising the Company Stock Fund and the Fixed Income Fund.
(b) Steven Bonville, Michael Cowell, Margaret
Downing, Eileen Farrar, Ruth Greene, Linda Guyden and Edward
Hillman shall serve as Trustee with respect to the property
held in trust under the UNUM Plan that is not invested in the
Company Stock Fund or the Fixed Income Fund, provided that
the Institutional Trustee shall serve solely as custodian
with respect to such assets.
(c) Kevin P. Walker and Thomas G. Brown shall
serve as Trustee with respect to the property held in trust
under the Duncanson & Holt Plan that is not invested in the
Company Stock Fund or the Fixed Income Fund, provided that
the Institutional Trustee shall serve solely as custodian
with respect to such assets.
3.2 GENERAL POWERS AND DUTIES. Except as otherwise
provided in this Agreement, the Trustees shall have, in
addition to the other powers and duties conferred upon them
elsewhere in this Agreement, the following general powers and
duties, provided that the Institutional Trustee shall
exercise such powers and duties subject to the direction of
the fiduciary having full investment responsibility with
respect to any portion of the assets of the Trust Fund,
except with respect to assets of the Trust Fund for which the
Institutional Trustee serves as Investment Manager pursuant
to Section 4.2.
(a) To invest and reinvest the Trust Fund,
without distinction between principal and income, in stocks,
bonds or other securities, mortgages, notes, mutual fund
shares, certificates of deposit, 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 common,
commingled or collective trust fund or pooled investment fund
maintained by the Institutional Trustee or any Investment
Manager 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.
(b) To maintain one or more checking accounts
in the name of the Trust at a bank designated by the Trustee
as a depository of the Trust and to make deposits thereto and
to designate one or more individuals who shall have the right
to draw checks thereon to make distributions or loans
directed by the Administrator.
(c) To establish one or more Investment Funds,
to monitor the performance of each Investment Fund, and to
change or eliminate any such Investment Fund as the Company
may from time to time direct in accordance with Article V.
(d) To transfer assets invested in an
Investment Fund to one or more other Investment Funds as from
time to time directed by the Administrator.
(e) To invest the assets of an Investment Fund,
when directed by the Company, 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.
(f) To invest the assets of an Investment Fund,
when directed by the Company, in mutual fund shares or in
such other investments as the Company may specify.
(g) To establish one or more separate interest-
bearing accounts and to segregate such amount or amounts
therein as the Administrator 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.
(h) 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.
(i) 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 by any such action.
(j) Subject to Section 3.6, to exercise all
voting rights, tender or exchange rights, any conversion
privileges, subscription rights and other rights and powers
available in connection with any securities or other property
at anytime held by the Trustee; to oppose or to consent to
the reorganization, consolidation, merger, or readjustment of
the finances of any corporation, company or association, or
to the sale, mortgage, pledge or lease of the property of any
corporation, company or association, any of the securities of
which may at any time be held by it and to do any act with
reference thereto, including the exercise of options, the
making of agreements or subscriptions and the payment of
expenses, assessments or subscriptions, which may be deemed
necessary or advisable by an Investment Manager or the
Company, in the case of the Institutional Trustee, or by the
Individual Trustees in connection therewith, and to hold and
retain any securities or other property which it may so
acquire; and to deposit any property with any protective,
reorganization or similar committee, and to pay and agree to
pay part of the expenses and compensation of any such
committee and any assessments levied with respect to property
so deposited.
(k) To perform any and all other acts which are
necessary for the proper administration and investment of the
Trust Fund.
Notwithstanding any other provisions of this Trust,
Trust assets may be invested in any collective investment
fund or funds, including common and group trust funds
presently in existence or hereafter established which are
maintained by a bank or trust company supervised by a state
or federal agency, notwithstanding that the bank or trust
company is a Trustee, Investment Manager, or is otherwise a
party-in-interest to one of the Plans. The assets so
invested shall be subject to all the provisions of the
instruments establishing such funds as they may be amended
from time to time. Such instruments establishing group
trusts exempt from taxation under Section 501 of the Code (by
qualifying under Section 401 of the Code), as they may be
amended from time to time, are hereby incorporated and made a
part of this Trust as if fully set forth herein. The
combining of money and other assets of this Trust with money
and other assets of other trusts and accounts in such fund or
funds is specifically authorized.
If the Trustee is directed by the Administrator or an
Investment Manager or other fiduciary having full investment
responsibilities with respect to a portion of the assets of
the Trust Fund to purchase securities issued by any foreign
government or agency thereof, or by any corporation or other
entity domiciled outside of the United States, it shall be
the responsibility of the Administrator or such fiduciary, as
the case may be, to advise the Trustee in writing with
respect to any laws or regulations of any foreign countries
or any United States territory or possession which shall
apply in any manner whatsoever to such securities, including,
without limitation, receipt by the Trustee of dividends,
interest or other distributions on such securities.
3.3 NOTICES AND EXERCISE OF RIGHTS. The Trustee
shall transmit promptly to the Administrator or the
Investment Manager or other fiduciary having full investment
responsibilities for a portion of the assets of the Trust
Fund, as the case may be, all notices of conversion,
redemption, tender, exchange, subscription, class action,
claim in insolvency proceedings or other rights or powers
relating to any of such assets, which notices are received by
the Trustee from its agents or custodians, from issuers of
the affected securities and from the party (or its agents)
extending such rights. The Trustee shall have no obligation
to determine the existence of any conversion, redemption,
tender, exchange, subscription, class action, claim in
insolvency proceedings or other right or power relating to
any of the securities in the Trust Fund of which notice was
given prior to the purchase of such securities by the Trust
Fund, and shall have no obligation to exercise any such right
or power unless the Trustee is informed of the existence of
the right or power.
The Trustee shall not be liable for any untimely
exercise or assertion of such rights or powers described in
the foregoing paragraph in connection with securities or
other property of the Trust Fund at any time held by it
unless (a) it or its agents or custodians are in actual
possession of such securities or property; (b) it receives
directions to exercise any such rights or powers from the
Administrator or the Investment Manager, as the case may be;
and (c) both (a) and (b) occur at least one business day
(three business days, in the case of foreign securities)
prior to the date on which such rights or powers are to be
exercised.
All shares of a registered investment company, the
prospectus of which offers its shares under a Plan
("Investment Company Shares"), shall be registered in the
name of the Trustee or its nominee. Subject to any
requirement of applicable law, the Trustee shall transmit to
the Administrator or Recordkeeper, as the case may be, copies
of any notices of shareholders' meetings, proxies and proxy-
soliciting materials, prospectuses and the annual or other
reports to shareholders, with respect to Investment Company
Shares held in the Trust Fund. The Trustee shall act in
accordance with appropriate instructions received from the
Administrator or Recordkeeper, as the case may be, with
respect to matters to be voted upon by shareholders of the
investment company, by such written, telephonic or electronic
means and within such time period as may be prescribed by the
Trustee. If no such instructions are received within the
prescribed time period with respect to any Investment Company
Shares, the Trustee shall not vote such shares.
3.4 ADMINISTRATIVE POWERS. Notwithstanding any
other provision of this Agreement to the contrary, the
Trustee shall have and shall exercise, in its sole
discretion, the following powers and duties with respect to
the Trust Fund:
(a) To employ suitable agents, custodians and
counsel and to pay their reasonable expenses and
compensation.
(b) To appoint ancillary trustees to hold any
portion of the assets of the trust and to pay their
reasonable expenses and compensation.
(c) To register any securities held by it
hereunder in its own name or in the name of a nominee with or
without the addition of words indicating that such securities
are held in a fiduciary capacity and to hold any securities
in bearer form and to deposit any securities or other
property in a depository or clearing corporation.
(d) To make, execute and deliver, as Trustee,
any and all deeds, leases, mortgages, conveyances, waivers,
releases or other instruments in writing necessary or
desirable for the accomplishment of any of the foregoing
powers.
(e) Generally to do all ministerial acts,
whether or not expressly authorized, which the Trustee may
deem necessary or desirable in carrying out its duties under
this Trust Agreement.
The Trustee may consult with legal counsel (who may but
need not be counsel for the Company) concerning any question
which may arise with respect to its rights and duties under
this Trust Agreement. The written opinion of such counsel
will, to the extent permitted by law, be full and complete
protection in respect of any action taken or omitted by the
Trustee hereunder in good faith and in accordance with said
opinion.
3.5 DISBURSEMENTS. The Trustee shall, from time to
time, make or cause distributions, Participant loans, or
other disbursements to be made out of the Trust Fund to such
persons, in such manner and in such amount or amounts, in
cash or in kind or partly in each, as the Administrator or
Recordkeeper, as the case may be, may from time to time
direct. The Administrator or Recordkeeper, as the case may
be, shall be responsible to ensure that any such direction
conforms to the applicable provisions of the Plans, this
Trust Agreement, and ERISA. The Trustee shall be entitled to
rely upon the written directions of the Administrator or
Recordkeeper and shall not be under any liability for any
distribution, Participant loan, or other disbursement made in
accordance therewith.
3.6 COMPANY SECURITIES. In the event of a Tender
Offer for any equity or debt securities issued by the Company
("Company Securities"), and except to the extent that ERISA
shall otherwise require, unless otherwise provided in an
investment manager agreement, the Trustee shall exercise no
discretion to tender, sell or exchange any such securities
that are allocated to a Participant's or Beneficiary's
account, but instead (i) shall follow the instructions of
such person as to whether Company Securities allocated to his
or her account shall be tendered, sold or exchanged pursuant
to the Tender Offer (and shall follow any further
instructions of such person concerning any related elections
to be made) or (ii) if no such instructions are received
within the prescribed time period, shall not tender, sell or
exchange any Company Securities allocated to his or her
account.
Except to the extent that ERISA shall otherwise require,
and unless otherwise provided in an investment manager
agreement, with respect to any matter duly submitted for
action to the holders of any class or series of Company
Securities the Trustee shall exercise no voting discretion
with respect to Company Securities that are allocated to a
Participant's or Beneficiary's account, but instead (i) shall
follow the instructions of such person as to how Company
Securities allocated to his or her account shall be voted or
(ii) if no such instructions are received within the
prescribed time period, shall vote the Company Securities
allocated to such person's account in the same proportion as
it will vote Company Securities for which it has received
timely instructions.
Except to the extent that ERISA shall otherwise require,
and unless otherwise provided in an investment manager
agreement, with respect to any other rights similar to tender
or voting rights, the Trustee shall exercise no discretion
with respect to Company Securities that are allocated to a
Participant's or Beneficiary's account, but instead (i) shall
follow the instructions of such person as to the exercise of
such rights or (ii) if no such instructions are received
within the prescribed time period, shall not exercise any
such rights with respect to Company Securities allocated to
such person's account.
The Administrator or Recordkeeper shall furnish the
Trustee with the name of each affected Participant or
Beneficiary and with the number of shares of Company
Securities allocated to such Participant's or Beneficiary's
Account as close in time as practicable to the record date
fixed for the determination of shareholders entitled to
tender or vote and shall provide such other information and
assistance as the Trustee shall reasonably request. The
Trustee shall act in accordance with appropriate instructions
received from the Administrator or Recordkeeper, as the case
may be, pursuant to the provisions of this Section, by such
written, telephonic or electronic means and within such time
period as may be prescribed by the Trustee (or an independent
fiduciary, in the case of a matter determined by the
Administrator to involve the potential for undue employer
influence).
With respect to any unallocated Company Securities,
except to the extent ERISA shall otherwise require and unless
otherwise provided in an investment manager agreement, the
Trustee shall vote such Company Securities in the same
proportion as Company Securities allocated to Participant's
or Beneficiary's accounts for which it has received timely
voting instructions and shall not tender, sell or exchange
any unallocated Company Securities (or make any related
elections) in the event of a Tender Offer for any Company
Securities, nor exercise other rights similar to voting or
tender rights.
The Administrator shall establish procedures designed to
safeguard the confidentiality of information relating to the
purchase, holding and sale of Company Securities, and the
exercise of voting, tender and similar rights with respect
thereto, by Participants and Beneficiaries. The
Administrator shall be responsible for ensuring that such
procedures meet the requirements of ERISA Reg. Section
2550.404c-1(d)(2). In the event the Administrator determines
that a particular situation involves a potential for undue
employer influence upon Participants and Beneficiaries within
the meaning of ERISA Reg. Section 2550.404c-1(d)(2), the
Administrator shall promptly appoint an independent fiduciary
to perform the role of the Administrator to 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. Section 2550.404c-1(e)(3).
Except as the Administrator shall otherwise determine, a
Tender Offer shall be deemed to involve a potential for undue
employer influence upon Participants or Beneficiaries.
As used in this Section, "Tender Offer" means (a) a
tender offer, or a request or invitation for tenders, which
is subject to Section 14(d)(1) of the Securities Exchange Act
of 1934, as amended, or (b) an issuer tender offer which is
the subject of an issuer tender offer statement pursuant to
Rule 13e-4 of the United States Securities and Exchange
Commission (or any successor regulation).
3.7 RECORDS AND ACCOUNTS. The Trustee shall
maintain or cause to be maintained suitable records, data and
information relating to its functions hereunder. The Trustee
shall keep accurate and detailed accounts of all investments,
receipts, disbursements, and other actions hereunder, and
such other records as the Administrator may from time to time
direct, as agreed to by the Trustee. The books and records
of the Trustee relating thereto shall be open to inspection
and audit at all reasonable times by the Administrator or its
duly authorized representatives and each Investment Manager.
All transfers to, withdrawals from, and other
transactions regarding the Trust Fund shall be conducted in
such a way that the proportionate interest in the Trust Fund
of each Plan and the fair market value of that interest may
be determined at any time. Whenever the assets of more than
one Plan are commingled in the Trust Fund or in any
Investment Fund, the undivided interest therein of that Plan
shall be debited or credited (as the case may be) (i) for the
entire amount of every contribution received on behalf of
that Plan, every benefit payment, or other expense
attributable solely to that Plan, and every other transaction
relating only to that Plan; and (ii) for its proportionate
share of every item of collected or accrued income, gain or
loss, and general expense; and other transactions
attributable to the Trust Fund or that Investment Fund as a
whole. As of each date when the fair market value of the
investments held in the Trust Fund or an Investment Fund are
determined as provided for in the preceding paragraph, the
Trustee shall adjust the value of each Plan's interest
therein to reflect the net increase or decrease in such
values since the last such date.
The Trustee shall determine the fair market value of
assets of the Trust Fund based upon valuations provided by
Investment Managers, information and financial publications
of general circulation, statistical and valuation services,
records of security exchanges, appraisals by qualified
persons, transactions and bona fide offers in assets of the
type in question and other information customarily used in
the valuation of property.
Within sixty (60) days after the close of each fiscal
year of the Trust and at more frequent intervals if agreed to
by the parties hereto, and within sixty (60) days after the
removal or resignation of the Trustee in accordance with this
Agreement, the Trustee shall render to the Company a written
statement and account showing in reasonable summary the
investments, receipts, disbursements, and other transactions
engaged in during the preceding fiscal year or period, and
setting forth the assets, at cost and current fair market
value, and liabilities of the Trust. Accounts maintained by
the Administrator or Recordkeeper, if any, may be
incorporated into Trustee reports. Unless the Company shall
have filed with the Trustee written exceptions or objections
to any such statement and account within one hundred twenty
(120) days after receipt thereof, the Company shall be deemed
to have approved such statement and account. In such case or
upon written approval by the Company of any such statement
and account, the approval by the Company shall be final and
binding as to all matters stated therein, upon the Company,
the Employers, and all persons who then are or thereafter
become interested in the Trust.
The Company or its delegate, each Investment Manager,
and the Trustee shall file such descriptions and reports and
make such other publications, disclosures, registrations and
other filings as are required of them respectively by ERISA.
Nothing contained in this Trust Agreement or in the
Plans shall deprive the Trustee of the right to have a
judicial settlement of its account. In any proceeding for a
judicial settlement of the Trustee's accounts or for
instructions in connection with the Trust, the only necessary
party thereto in addition to the Trustee shall be the
Company, and no Participant, Beneficiary, or other person
having or claiming any interest in the Trust Fund shall be
entitled to any notice or service of process (except as
required by law). Any judgment, decision or award entered in
any such proceeding or action shall be conclusive upon all
interested persons.
3.8 COMPENSATION AND EXPENSES. The Trustee shall be
entitled to such reasonable compensation for services
rendered as may from time to time be agreed upon, in writing,
by the Board of Directors and to reimbursement of expenses
properly and actually incurred in the performance of their
respective duties hereunder, provided that no person serving
as Trustee who already receives compensation from an Employer
or related employer for services rendered as an employee
shall receive remuneration for services hereunder except for
reimbursement of expenses properly and actually incurred and
not otherwise reimbursed. The portion of Trustee
compensation and expenses properly attributable to an
Investment Fund shall be paid therefrom unless paid by the
Company.
3.9 RELIANCE BY TRUSTEE. To the extent permitted by
law --
(a) the Trustee may rely and act upon the
written directions of the Board of Directors, the
Administrator or Recordkeeper, or any duly appointed
Investment Manager, or other person authorized in writing by
the Board of Directors or the Administrator 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 this Trust Agreement in
taking or failing to take any such action;
(b) the Trustee may rely and act upon the
instructions of any Participant, Beneficiary, or the
Administrator or Recordkeeper, made in accordance with
Section 3.6, and may rely upon and be protected in acting
upon such instructions reasonably believed by it to have been
made by such person, so long as the Trustee acts in good
faith and in accordance with the provisions of this Trust
Agreement, in taking or failing to take any such action;
(c) the Trustee need not inquire into the
source of any money or property transferred to the Trust Fund
nor into the authority or right of the transferor of such
money or property to transfer such money or property to the
Trustee; and
(d) the Trustee shall not be under any duty to
require payment of any contributions to the Trust Fund, or to
see that any payment made to it is computed in accordance
with the provisions of the Plans, or otherwise be responsible
for the adequacy of the Trust Fund to meet and discharge any
liabilities under the Plans.
3.10 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.
3.11 RESIGNATION OR REMOVAL OF TRUSTEE.
(a) INSTITUTIONAL TRUSTEE. If a Trustee is a
bank, trust company or other institution, the Trustee may
resign at any time by delivering to the Board of Directors 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 of Directors. If the Trustee resigns,
the Board of Directors shall appoint a successor Trustee in a
written instrument, copies of which shall be delivered to the
Trustee and the successor Trustee. The Trustee may be
removed by the Board of Directors 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 of Directors 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 TRUSTEE. If a committee of
individuals is appointed to serve as Trustee, any such
individual may resign at any time by delivering to the Board
of Directors 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 of Directors. If such
individual resigns, the Board of Directors may appoint an
individual to serve as successor Trustee. In the event the
Board of Directors fails to appoint an individual to serve as
successor Trustee, the remaining individuals serving as
Trustee shall constitute the Trustee. The Board of Directors
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 of Directors 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 of
Directors may appoint an individual to serve as successor
Trustee. In the event the Board of Directors fails to
appoint an individual to serve as successor Trustee, the
remaining individuals serving as Trustee shall constitute the
Trustee. The Board of Directors 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.
As used in this Section 3.11(b), in the case of an
Individual Trustee serving as a Trustee of the Duncanson &
Holt Plan, each reference to the Board of Directors shall be
deemed to be a reference to the Board of Directors of
Duncanson & Holt, Inc..
3.12 MANNER OF ACTION FOR INDIVIDUAL TRUSTEES. The
Individual Trustees shall act by a majority of the
individuals so serving voting at a meeting or signing written
consents without holding a meeting. Any individual serving
as Trustee may participate in a Trustee meeting by means of a
conference telephone or similar communications device by
which all persons participating in the meeting can hear each
other.
3.13 DELEGATION. The Trustee 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 Plans.
3.14 SIGNATURES FOR INDIVIDUAL TRUSTEES. A majority
of the Individual Trustees or any one individual so serving
who is authorized by all of the individuals so serving shall
have the authority to execute all instruments, reports or
other documents necessary or appropriate to carry out the
action and decisions of the Individual Trustees. Any such
document may be executed by facsimile signature. The
Institutional Trustee, any Investment Manager or any other
interested party may rely upon any document, report or other
instrument so executed as evidence of action of or a decision
by the Individual Trustees.
3.15 INDEMNIFICATION. To the extent permitted by
applicable law, and, in the case of the Individual Trustees,
the bylaws of the Company, the Company agrees to indemnify
and save harmless the Trustee against all liability or
expense (including reasonable attorneys' fees) arising (a)
out of any matter as to which this Trust Agreement provides
that the Trustee is directed, protected, not liable, or not
responsible; or (b) by reason of any breach of any statutory
duty owed to the Plans by the Company, any Employer, the
Individual Trustees (in the case of the Institutional
Trustee) or the Institutional Trustee (in the case of the
Individual Trustees), the Administrator or Recordkeeper, any
Investment Manager, or any delegate of any of them (and for
the purposes of this sentence the Trustee shall not be
considered to be such a delegate), provided, however, that
the Trustee shall not be indemnified for any liability or
expense (including reasonable attorneys' fees) arising from
such Trustee's negligence or bad faith in performing or
failing to perform its duties under this Trust Agreement or
from breach of any statutory duty owed to the Plans by such
Trustee under applicable law.
ARTICLE IV
INVESTMENT MANAGERS
4.1 APPOINTMENT. The Board of Directors may from
time to time appoint one or more Investment Managers to
direct the investment of the assets of the Trust or such
portion thereof as may be designated by the Board of
Directors. Such appointment shall be in writing and shall be
effective only upon receipt by the Board of Directors of the
written acceptance of the Investment Manager and
acknowledgement, in writing, by the Investment Manager that
the Investment Manager is a fiduciary with respect to the
Plans and Trust. The Board of Directors shall give prompt
written notice of such appointment to the Trustee. The
Trustee shall be fully protected in relying upon the
effectiveness of such appointment until such time as it
receives written notice from the Board of Directors to the
contrary.
4.2 TRUSTEE AS AN INVESTMENT MANAGER. The
Institutional Trustee shall have no duty or responsibility to
direct the investment and reinvestment of the Trust Fund, or
any portion thereof, unless such investment responsibilities
are expressly agreed to in writing between the Board of
Directors and the Institutional Trustee in accordance with
the provisions of this Article. In the event that the Board
of Directors and the Institutional Trustee enter into such an
agreement, the Institutional Trustee shall have the powers
and duties of an Investment Manager under this Trust
Agreement with respect to the portion of the assets of the
Trust Fund designated therein.
4.3 INVESTMENT DIRECTIONS. The Trustee shall, as
promptly as possible, comply with the directions of an
Investment Manager regarding the investment or reinvestment
of Trust assets which are under the investment direction of
such Investment Manager. Directions of an Investment Manager
may be verbal unless written direction or confirmation is
required by the Trustee. The Trustee may conclusively
presume that an Investment Manager is entitled to act, in
directing the investment and reinvestment of Trust assets for
which it is responsible, in its sole and independent
discretion and without limitation, except for any limitations
with respect to which the Board of Directors provides written
notice to the Trustee. The Trustee shall have no liability
(a) for the acts or omissions of any Investment Manager; (b)
for complying with the investment directions of the fiduciary
having full investment responsibility with respect to any
portion of the assets of the Trust Fund; (c) for failing to
act in the absence of Investment Manager direction; or (d)
for any loss that may result by reason of the manner of
division of the Trust Fund by the Company for purposes of
investment.
The Trustee may request an Investment Manager to certify
the value of any securities or other property held in the
portion of the Trust Fund under the investment direction of
such Investment Manager, and such certification shall be
regarded as a direction with regard to such valuation. The
Trustee shall be entitled to conclusively rely upon such
valuation for all purposes under this Trust Agreement.
If the fiduciary having full investment responsibility
with respect to a portion of the assets of the Trust Fund
shall issue orders for the purchase or sale of securities
directly to a broker, unless otherwise directed by such
fiduciary, written notification of the issuance of each such
order (or confirmation thereof) shall be authority for the
Institutional Trustee to pay for securities purchased or to
deliver securities sold, as the case may be. Upon the
direction of such fiduciary, the Institutional Trustee shall
execute and deliver appropriate trading authorizations,
provided that no such authorization shall be deemed to
increase the liability or responsibility of the Trustee under
this Trust Agreement.
4.4 RESIGNATION AND REVOCATION OF APPOINTMENT. An
Investment Manager may resign at any time upon thirty (30)
days' written notice to the Board of Directors and the Board
of Directors may remove an Investment Manager at any time
upon thirty (30) days' written notice to the Investment
Manager, provided the Board of Directors and the Investment
Manager may by written instrument waive such notice. In the
event an Investment Manager resigns or is removed, the
Trustee shall, unless a successor Investment Manager is
appointed, invest such assets in accordance with the
direction of the Company.
ARTICLE V
INVESTMENT OF FUNDS
5.1 ESTABLISHMENT OF INVESTMENT FUNDS. The
Institutional Trustee shall establish a Company Stock Fund
(as described in Section 5.2) and the Trustees shall
establish one or more other Investment Funds as the Company
may from time to time direct. The Company shall direct that
each Investment Fund, other than the Company Stock Fund,
shall be invested:
(a) at the discretion of the Individual
Trustees in accordance with such investment guidelines and
objectives as may be established by the Company for such
Investment Fund; 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
Company; or
(c) in such investments as the Company may
specify for such Investment Fund.
The Company 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 accordance with the direction of the Company.
The Trustee shall transfer to each Investment Fund such
portion of the assets of the Trust as the Administrator may
from time to time direct in accordance with the terms of the
Plans. 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 Company.
5.2 COMPANY STOCK FUND. The Trustee shall establish
a Company Stock Fund which shall be invested primarily in
shares of common stock of UNUM Corporation and any other
qualifying employer security within the meaning of Section
407(d)(5) of ERISA. The Trustee shall, as soon as
practicable, apply amounts allocated to the Company Stock
Fund to purchase Company stock on the open market or in
private transactions, from the Company or otherwise, at
current market value. Pending investment in Company stock,
the Trustee shall invest amounts allocated to and dividends
or other amounts received by the Company Stock Fund in 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 5.2 to
the contrary, the Trustee shall be under no duty or
obligation to invest any assets of the Trust in shares of
common stock of the Company unless the Company shall
determine that (a) such shares constitute "qualifying
employer securities" within the meaning of Section 407 of
ERISA and (b) such investment is not prohibited by Section
404, 406 or 407 of ERISA.
ARTICLE VI
FIDUCIARY RESPONSIBILITY
6.1 ALLOCATION OF FIDUCIARY RESPONSIBILITIES. All
fiduciaries with respect to the 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 this Trust Agreement. In particular, except as
otherwise provided by law:
(a) 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.
The other fiduciaries, including but not limited to the
Trustee, 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.
(b) Steven Bonville, Michael Cowell, Margaret
Downing, Eileen Farrar, Ruth Greene, Linda Guyden and Edward
Hillman shall serve as Trustee with respect to the property
held in trust under the UNUM Plan that is not invested in the
Company Stock Fund or the Fixed Income Fund, provided that
the Institutional Trustee shall serve solely as custodian
with respect to such assets. The Individual Trustees shall
have full investment responsibility with respect to such
assets of the Trust that are not invested in the Company
Stock Fund or the Fixed Income Fund, are not invested
pursuant to the direction of the Board of Directors, and are
not subject to the investment direction of an Investment
Manager. Other fiduciaries, including, but not limited to,
the Institutional Trustee, shall have no duty or
responsibility with respect to the investment of such assets.
(c) Kevin P. Walker and Thomas G. Brown shall
serve as Trustee with respect to the property held in trust
under the Duncanson & Holt Plan that is not invested in the
Company Stock Fund or the Fixed Income Fund, provided that
the Institutional Trustee shall serve solely as custodian
with respect to such assets. The Individual Trustees shall
have full investment responsibility with respect to such
assets of the Trust that are not invested in the Company
Stock Fund or the Fixed Income Fund, are not invested
pursuant to the direction of the Board of Directors, and are
not subject to the investment direction of an Investment
Manager. Other fiduciaries, including, but not limited to,
the Institutional Trustee, shall have no duty or
responsibility with respect to the investment of such assets.
(d) The Institutional Trustee shall serve as
sole Trustee with respect to those assets of the Trust
comprising the Company Stock Fund and the Fixed Income Fund.
The Institutional Trustee shall have no duty or
responsibility with respect to the investment of such assets
unless such investment responsibilities are expressly agreed
to in writing between the Board of Directors and the
Institutional Trustee in accordance with the provisions of
Article IV for the appointment of Investment Managers. The
Board of Directors shall have full investment
responsibilities with respect to the investment of such
assets that are not subject to the direction of an Investment
Manager (including the Institutional Trustee, if appointed in
accordance with the preceding sentence). Other fiduciaries,
including, but not limited to, the Individual Trustees, shall
have no duty or responsibility with respect to the investment
of such assets.
(e) The Individual Trustees 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
Board of Directors or a duly appointed Investment Manager,
and the Institutional Trustee shall have no duty or
responsibility with respect to the investment of assets of
the Trust except as provided in subsection (d).
(f) The Administrator shall have no duty or
responsibility with respect to the investment of the assets
of the Trust.
(g) The fiduciaries, including, but not limited
to, the Trustee, the Employers, the Administrator, and any
Investment Manager shall have no responsibility for the
investment elections made by Participants or Beneficiaries,
or for the exercise of voting, tender or similar rights by
Participants or Beneficiaries.
A fiduciary with respect to the Plans and Trust may
employ or retain others to advise or perform services within
respect to its responsibilities hereunder, including but not
limited to actuaries, attorneys, accountants, investment
advisers, administrators and consultants; provided, however,
that no person other than a fiduciary shall carry out
fiduciary responsibilities.
6.2 FIDUCIARY RESPONSIBILITY. Each fiduciary shall
exercise the powers granted to it and discharge the duties
placed upon it by this Trust Agreement solely in the interest
of the Participants and their Beneficiaries and:
(a) for the exclusive purposes of (i) providing
benefits to the Participants and their Beneficiaries, and
(ii) defraying reasonable expenses of administering the Plans
and Trust;
(b) with the care, skill, prudence and
diligence under the circumstances then prevailing that a
prudent person acting in like capacity and familiar with such
matters would use in the conduct of an enterprise of like
character and with like aims; and
(c) with respect to any assets of the Trust
Fund subject to its investment direction, by diversifying the
investments of the Trust so as to minimize the risk of large
losses, unless under the circumstances it is clearly prudent
not to do so.
6.3 PROHIBITED TRANSACTIONS. The Individual
Trustees, the Institutional Trustee, the Company, any
Employer, and any Investment Manager shall not, with respect
to the Trust, engage in a transaction which it 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.
ARTICLE VII
DELEGATION OF AUTHORITY BY EMPLOYERS
Each Employer other than the Company shall automatically
be or become upon adoption of a Plan a party to this
Agreement. Each such Employer irrevocably grants to the
Company exclusive authority to exercise all the powers
conferred upon it by the terms of this Agreement, including
the power to amend or to terminate this Agreement, and hereby
irrevocably appoints the Company as its agent for all such
purposes.
ARTICLE VIII
AMENDMENT AND TERMINATION
8.1 AMENDMENT. This Trust Agreement may be amended
from time to time by the Board of Directors, provided (i) the
duties and liabilities of the Trustee shall not be increased
without its written consent and (ii) no amendment shall,
except as permitted by law, authorize or permit any portion
of the Trust Fund to be used for or diverted to purposes
other than for the exclusive benefit of the Participants and
their Beneficiaries. Each amendment shall be effective with
respect to and binding upon each Employer without further
action by such Employer.
8.2 TERMINATION. With the consent of UNUM
Corporation, this Trust Agreement may be terminated at any
time by an Employer (by resolution of its Board of Directors
or the person or persons to whom such Board delegates its
authority) with respect to its Participants and their
Beneficiaries. Upon termination, the Trustee shall, if
directed by the Administrator, liquidate all or any
designated portion of the Trust Fund and, after approval of
the Trustee's final account, distribute the Trust Fund as
directed by the Administrator in accordance with the
provisions of the applicable Plan.
ARTICLE IX
MISCELLANEOUS
9.1 NONALIENABILITY OF BENEFICIAL INTERESTS. Except
as expressly provided in the Plans, the beneficial interests
of Participants and their Beneficiaries shall not be subject
to alienation, assignment, garnishment, attachment, execution
or levy of any kind, and any attempt to cause a beneficial
interest to be so subjected shall not be recognized.
9.2 RESTRICTION AS TO REVERSION OF TRUST ASSETS.
Except as hereinafter provided and permitted by law, 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 Participants and their Beneficiaries.
(a) If the Internal Revenue Service initially
determines that a Plan does not meet the requirements of
Section 401(a) of the Code, the assets of the Trust
attributable to contributions made to that Plan and any
earnings thereon shall be returned to the contributing
Employers within one (l) year of the denial of qualification.
(b) Contributions by each Employer are
conditioned upon the initial qualification of the applicable
Plan under Section 401(a) of the Code, and upon deductibility
under Section 404 of the Code. Upon the request of the
Company, any contributions attributable to an Employer (i)
which are made by reason of a mistake of fact, (ii) which are
conditioned upon the initial qualification of the applicable
Plan, or (iii) for which a deduction is disallowed shall be
returned to such Employer within one (l) year of the mistaken
payment of the contribution, denial of qualification or
disallowance of the deduction. In the event of a denial of
qualification, the amount contributed for the period during
which a Plan was not qualified may be returned. In the event
of a mistake of fact or a disallowance of deduction, the
amount which may be returned to such Employer is the excess
of the amount contributed over the amount which would have
been contributed had there not occurred a mistake of fact or
a mistake in determining the deduction. Earnings
attributable to any excess contribution shall not be
returned, but losses attributable thereto shall reduce the
amount which may be returned.
9.3 INVESTMENT GUIDELINES AND OBJECTIVES. The
Company may from time to time establish investment guidelines
and objectives which shall be communicated, in writing, to
the Trustee and each Investment Manager appointed in
accordance with Section 4.1. The Trustee and each such
Investment Manager shall invest and reinvest the portion of
the Trust Fund over which it has investment authority
consistent with such guidelines and objectives.
9.4 COMPUTERIZED REPORTING SERVICES.
(a) The Company agrees to use the equipment,
computer programs and other information supplied by the
Institutional Trustee under this Agreement solely for its own
internal use and benefit and not for resale or other transfer
or disposition to, or use by or for the benefit of, any other
person or organization other than an Employer without the
prior written approval of the Trustee.
The Company acknowledges that the data bases, computer
programs, screen formats, screen designs, report formats,
interactive design techniques, and other information
furnished to the Company by the Institutional Trustee
constitute copyrighted trade secrets or proprietary
information of substantial value to the Institutional
Trustee. Such data bases, programs and other information are
collectively referred to below as "Proprietary Information".
The Company agrees that it shall treat all Proprietary
Information as proprietary to the Institutional Trustee and
that it shall not divulge any Proprietary Information to any
person or organization except as expressly permitted
hereunder. Without limiting the foregoing, the Company
agrees for itself and its employees and agents:
(b) to use such programs and data bases (i)
solely on the Institutional Trustee's approved computers,
(ii) solely from equipment at Company or Employer locations
agreed to between the Company and the Institutional Trustee
and (iii) solely in accordance with the Institutional
Trustee's applicable user's documentation;
(c) to use equipment supplied or approved by
the Institutional Trustee solely with programs supplied by
the Institutional Trustee and no other programs or software;
(d) to refrain from copying or duplicating in
any way (other than in the normal course of performing
processing on the Institutional Trustee's computers) any part
of any Proprietary Information;
(e) to refrain from obtaining unauthorized
access to any programs, data or other information not owned
by the Company, and if such access is accidentally obtained,
to respect and safeguard the same as Proprietary Information;
(f) to refrain from causing or allowing
information transmitted from the Institutional Trustee's
computer to the Company's or an Employer's terminals to be
retransmitted to another computer, terminal or other device;
(g) that the Company or any Employer shall have
access to only those authorized transactions as agreed to
between the Company and the Institutional Trustee;
(h) to honor reasonable written requests made
by the Institutional Trustee to protect at the Institutional
Trustee's expense the rights of the Institutional Trustee in
Proprietary Information at common law, under the federal
copyright statutes and under other federal and state
statutes.
(i) The Company hereby acknowledges that the
data and information it will be accessing from Institutional
Trustee is unaudited and may not be accurate due to
inaccurate pricing of securities, delays of a day or more in
updating the Account and other causes for which Trustee will
not be liable to the Company.
9.5 SECURITY CODES. If the Institutional Trustee
has issued to the Company, or to any Investment Manager
appointed by the Company, security codes or passwords in
order that the Institutional Trustee may verify that certain
transmissions of information, including directions or
instructions, have been originated by the Company or the
Investment Manager, as the case may be, the Institutional
Trustee shall be kept indemnified by and be without liability
to the Company for any action taken or omitted by it in
reliance upon receipt by the Institutional Trustee of
transmissions of information with the proper security code or
password, including communications purporting to be
directions or instructions, which the Institutional Trustee
reasonably believes to be from the Company or Investment
Manager.
9.6 FISCAL YEAR OF TRUST. The fiscal year of the
Trust shall be the twelve (12) month period ending each
December 31.
9.7 BINDING ON SUCCESSORS. This Agreement shall be
binding upon the Company, each Employer, each Trustee, and
their respective successors and assigns.
9.8 GENDER AND NUMBER. When the context requires,
words in any gender shall include the masculine, feminine and
neuter gender. The plural shall include the singular and the
singular shall include the plural.
9.9 GOVERNING LAW. The Trust shall be governed and
construed in accordance with the laws of the United States of
America and to the extent such laws shall not be held to have
preempted local law, by the laws of the Commonwealth of
Massachusetts.
9.10 ARTICLE AND SECTION HEADINGS. The article and
section headings are only intended for convenience of
reference and shall not be considered in the construction of
the Trust.
IN WITNESS WHEREOF, UNUM Corporation, Duncanson & Holt,
Inc. and the Trustee have caused this Agreement to be
executed as of the day and year first above written.
Witness: UNUM CORPORATION
______________________________ By____________________________
Its
DUNCANSON & HOLT, INC.
______________________________ By____________________________
Its
STATE STREET BANK AND TRUST
COMPANY
______________________________ By:___________________________
Its Vice President,
Trustee
______________________________ ______________________________
Kevin P. Walker, Trustee under
the Duncanson & Holt, Inc.
Employee Profit Participation
and Savings Plan
______________________________ ______________________________
Thomas G. Brown, Trustee under
the Duncanson & Holt, Inc.
Employee Profit Participation
and Savings Plan
______________________________ ______________________________
Steven Bonville, Trustee under
the UNUM Employees Retirement
Savings Plan and Trust
______________________________ ______________________________
Michael Cowell, Trustee under
the UNUM Employees Retirement
Savings Plan and Trust
______________________________ ______________________________
Margaret Downing, Trustee
under the UNUM Employees
Retirement Savings Plan and
Trust
______________________________ ______________________________
Eileen Farrar, Trustee under
the UNUM Employees Retirement
Savings Plan and Trust
______________________________ ______________________________
Ruth Greene, Trustee under the
UNUM Employees Retirement
Savings Plan and Trust
______________________________ ______________________________
Linda Guyden, Trustee under
the UNUM Employees Retirement
Savings Plan and Trust
______________________________ ______________________________
Edward Hillman, Trustee under
the UNUM Employees Retirement
Savings Plan and Trust
<PAGE>
UNUM EMPLOYEES RETIREMENT SAVINGS PLAN
The UNUM Employees Retirement Savings Plan (formerly,
the UNUM Employees Retirement Savings Plan and Trust),
originally adopted effective January 1, 1984, was last
amended and restated effective generally January 1, 1994.
The Plan is hereby further amended and restated effective
generally January 1, 1997. The Plan is intended to qualify
as a profit sharing plan under Section 401(a) and Section
401(k) of the Code and to comply with the applicable
provisions of the Code and ERISA, as well as the regulations
and rulings issued thereunder.
ARTICLE I
DEFINITIONS
The following terms, when used herein, shall have the
meanings as hereinafter set forth, unless the context clearly
indicates otherwise:
1.1 "Account" shall mean the account established and
maintained under the Plan and Trust for each Participant
which shall reflect the Participant's share of the Trust
Fund; provided such Account shall, in accordance with Section
8.1, reflect separately the Participant's (a) Elective
Contributions, (b) Matching Contributions, (c) Discretionary
Contributions, (d) Rollover Contributions, (e) any direct
transfer of plan assets made on behalf of a Participant in
accordance with Section 4.1 or Article XVI and (f) for Plan
Years prior to January 1, 1989, his or her after-tax
contributions, if any, and Employer matching contributions
made thereon, if any.
1.2 "Actual Deferral Percentage" for any Plan Year
shall mean the average of the ratios, calculated separately
for each Eligible Employee, of the amount of Elective
Contributions made on behalf of such Employee for such year
and, at the election of an Employer, the amount of any
Matching Contributions and Qualified Nonelective
Contributions made on behalf of such Employee for such year
to such Employee's compensation for such year (whether or not
the Employee was a Participant for the entire Plan Year).
For purposes of this Section, "compensation" shall mean
compensation as defined in Section 7.5 and may, at the
election of an Employer, include amounts excludable from
gross income under Sections 125, 402(e)(3) and 402(h)(1)(B)
of the Code.
1.3 "Affiliated Employer" shall mean any corporation
which is a member of a controlled group of corporations (as
defined in Section 414(b) of the Code) that includes an
Employer; or any trade or business, whether or not
incorporated which is under common control (as defined in
Section 414(c) of the Code) with an Employer; or any service
organization which is a member of an affiliated service group
(as defined in Section 414(m) of the Code) that includes an
Employer; and any successor to any of the foregoing.
1.4 "Annual Addition" shall mean the sum of the
Employer Contributions, Employee contributions and
forfeitures, if any, allocated to the Account of a
Participant for a Limitation Year and the amounts described
in Section 7.6.
1.5 "Beneficiary" shall mean the person or persons
designated by a Participant as provided in Section 9.3 to
receive any benefits payable under the Plan following the
death of the Participant.
1.6 "Benefits Committee" shall mean the committee
appointed in accordance with Section 11.1.
1.7 "Board" shall mean the Board of Directors of
UNUM Corporation.
1.8 "Break in Service" shall mean an Eligibility
Computation Period during which an Employee has not completed
more than five hundred (500) Hours of Service. Effective
with respect to reemployments initiated on or after December
12, 1994, an Employee who is reemployed under USERRA shall be
treated as not having incurred a Break in Service by reason
of his or her period of qualified military service (as
defined in Section 3.9).
1.9 "Code" shall mean the Internal Revenue Code of
1986, as from time to time amended.
1.10 "Compensation" shall mean, with respect to any
Plan Year, the total compensation paid by an Employer to the
Employee (other than an Employee on the Branch or Individual
Compensation Plan) for services rendered while a Participant
that constitutes wages as defined in Section 3401(a) of the
Code and all other payments made by an Employer to an
Employee for services rendered while a Participant for which
the Employer is required to furnish the Employee a written
statement under Sections 6041(d), 6051(a)(3) and 6052 of the
Code without regard to any rules under Section 3401(a) of the
Code that limit the remuneration included in wages based on
the nature or location of the employment or services
performed. "Compensation" shall mean, with respect to an
Employee on the Branch or Individual Compensation Plan,
Compensation as defined in this Section 1.10, including draw
and sales bonus payments received while a Participant, but
excluding amounts held in an income stabilization account and
amounts paid by an Employer as a result of sales contest
participation. Notwithstanding the foregoing to the
contrary, Compensation (i) shall include elective
contributions made by an Employer on behalf of an Employee
that are not includable in income under Sections 125 or
402(e)(3) of the Code; and (ii) shall be reduced by
extended pay, overtime pay, varicomp, actuarial bonus
payments, stock options, prizes, awards, field transition
plan payouts, termination pay, commission fees, consultants
fees, other irregular payments (other than incentive plan pay,
representative's bonus, manager bonus, regional manager
bonus, DIC bonus, career bonus and reinsurance representative
bonus), reimbursements or other expense allowances, fringe
benefits (cash and non-cash), moving expenses, deferred
compensation and welfare benefits.
Notwithstanding the foregoing to the contrary, effective
January 1, 1994, the annual Compensation of any Employee in
excess of One Hundred Fifty Thousand Dollars ($150,000.00)
(or such higher amount as the Secretary may prescribe) shall
not be taken into account under the Plan. In the event
Compensation is determined based on a period of time which
contains fewer than twelve (12) calendar months, the annual
Compensation limit shall be an amount equal to the annual
Compensation limit for the calendar year in which the period
begins multiplied by a fraction, the numerator of which is
the number of full calendar months in the period and the
denominator of which is twelve (12). If Compensation for a
prior Plan Year is taken into account for any Plan Year, such
Compensation shall be subject to the annual Compensation
limit in effect for such prior Plan Year.
The average percentage of total compensation (as defined
in Regulation Section 1.414(s)-1(d)(3)(ii)) included in the
Compensation of Highly Compensated Employees as a group shall
not exceed by more than a de minimis amount the average
percentage of total compensation included in the Compensation
of Non-Highly Compensated Employees as a group. This
determination shall be made in accordance with the provisions
of Regulation Section 1.414(s)-1(d)(3) which is incorporated
herein by reference.
1.11 "Contribution Percentage" shall mean for any
Plan Year the average of the ratios, calculated separately
for each Eligible Employee, of the amount of Matching
Contributions (excluding the Matching Contributions, if any,
taken into account under Section 1.2) made on behalf of such
Employee for such year and, at the election of an Employer,
the amount of Elective Contributions and any Qualified
Nonelective Contributions made on behalf of such Employee to
such Employee's compensation for such year. For purposes of
this Section, "compensation" shall mean compensation as
defined in Section 7.5 and may, at the election of an
Employer, include amounts excludable from gross income under
Sections 125, 402(e)(3) and 402(h)(1)(B) of the Code.
Notwithstanding the foregoing provisions of this Section or
Section 1.2 to the contrary, no Elective Contributions may
be taken into account in calculating the Contribution
Percentage for any Eligible Employee unless the requirement
of Section 5.3(a) is satisfied both with and without the
exclusion of such Elective Contributions in calculating the
Employee's Actual Deferral Percentage.
1.12 "Deferral Election" shall mean an election made
by an Eligible Employee in accordance with Section 5.1 or
3.9.
1.13 "Determination Date" shall mean, with respect
to any Plan Year, the last day of the preceding year or in
the case of the first Plan Year of the Plan, the last day of
such Plan Year.
1.14 "Disabled" or "Disability" shall mean a
Participant's inability, due to injury or sickness, to
perform each of the material duties of his or her regular
occupation.
1.15 "Discretionary Contribution" shall mean a
contribution made by an Employer in accordance with Section
3.1(c).
1.16 "Effective Date" of this amendment and
restatement shall mean, except as otherwise provided herein,
January 1, 1997.
1.17 "Elective Contribution" shall mean a
contribution made by an Employer in accordance with Section
3.1(a) on behalf of a Participant pursuant to a Deferral
Election.
1.18 "Eligibility Computation Period" shall mean the
initial twelve (12) consecutive month period beginning with
the date on which the Employee first performs an Hour of
Service and each successive twelve (12) consecutive month
period beginning on the anniversary thereof. In measuring
completion of a Year of Participation Service upon an
Employee's return after a Break in Service, the term
"Eligibility Computation Period" shall mean the initial
twelve (12) consecutive month period beginning on the
Employee's reemployment commencement date and, where
necessary, each successive twelve (12) consecutive month
period beginning on the anniversary thereof.
1.19 "Eligible Employee" shall mean an Employee who
is eligible to participate in the Plan as provided in Section
2.1.
1.20 "Employee" shall mean any individual employed
by an Employer. A United States citizen or resident who is
employed by a foreign Affiliated Employer (as defined in
Section 3121(l)(8) of the Code) of an Employer shall be
treated as an Employee if:
(a) the Employer has entered into an agreement
under Section 3121(l) of the Code that applies to such
Affiliated Employer; and
(b) contributions under a funded plan of
deferred compensation (whether or not described in Section
401(a) or 403(a) of the Code) are not provided by any other
person with respect to the remuneration paid to such
individual by the foreign Affiliated Employer.
A United States citizen or resident who is employed by a
domestic subsidiary (as defined in Section 407(a)(2)(A) of
the Code) of an Employer shall be treated as an Employee if
contributions under a funded plan of deferred compensation
(whether or not described in Section 401(a) or 403(a) of the
Code) are not provided by any other person with respect to
the remuneration paid to such individual by the domestic
subsidiary. Notwithstanding the foregoing provisions of this
Section to the contrary, the term "Employee" shall exclude
pool temporary employees, Leased Employees, any individual
compensated exclusively on a commission basis, effective
January 1, 1990, any individual who is an employee under the
Deferred Profit Sharing Plan and the Registered Retirement
Savings Plan sponsored by UNUM Life Insurance Company of
America for its Canadian resident citizen employees, and
employees of Colonial Companies, Inc. (or one of its
subsidiaries) who are entitled to receive any form of
vested comissions as defined by Colonial Companies, Inc.
(except regional directors).
1.21 "Employer" shall mean UNUM Corporation and any
Affiliated Employer that adopts the Plan with the consent of
the Board. If an Employer is a member of a group of
employers which constitutes a controlled group of
corporations (as defined in Section 414(b) of the Code),
which constitutes trades or businesses (whether or not
incorporated) which are under common control (as defined in
Section 414(c) of the Code), or which constitutes an
affiliated service group (as defined in Section 414(m) of the
Code and modified in Section 414(o) of the Code), all such
employers shall be considered a single employer as required
by Sections 414(b), 414(c), 414(m) and 414(o) of the Code.
For purposes of applying the limitations of Article VII, the
Section 414(b) definition of a controlled group of
corporations and the Section 414(c) definition of trades or
businesses under common control shall be modified as provided
in Section 415(h) of the Code.
1.22 "Employer Contribution" shall mean any Elective
Contribution, Matching Contribution, Discretionary
Contribution, or Qualified Nonelective Contribution made in
accordance with the terms of the Plan.
1.23 "Employment Commencement Date" shall mean the
date on which an Employee first performs an Hour of Service
for an Employer.
1.24 "ERISA" shall mean the Employee Retirement
Income Security Act of 1974, as it may be amended from time
to time, and any regulations issued pursuant thereto, as such
Act or such regulations affect this Plan.
1.25 "Excess Contributions" shall mean for any Plan
Year the excess of
(a) the aggregate amount of Employer
Contributions taken into account under Section 3.7(a) that
are paid to the Trust on behalf of Highly Compensated
Eligible Employees for such year, over
(b) the maximum amount of such contributions
permitted under Section 3.7(a).
1.26 "Excess Deferral" shall mean Elective
Contributions in excess of the limitation of Section 6.1.
1.27 "Excess Elective Contributions" shall mean for
any Plan Year the excess of
(a) the aggregate amount of Employer
Contributions taken into account under Section 5.3 that are
paid to the Trust on behalf of Highly Compensated Eligible
Employees for such year, over
(b) the maximum amount of such contributions
permitted under Section 5.3.
1.28 "Five Percent Owner" shall mean any person who
owns (or is considered as owning within the meaning of
Section 318 of the Code) more than five percent (5%) of the
outstanding stock of an Employer or stock possessing more
than five percent (5%) of the total combined voting power of
all stock of an Employer.
1.29 "Former Participant" shall mean any individual
who ceases to be employed by an Employer or an Affiliated
Employer and is no longer employed by any of them, and who
has not received full distribution of his or her Account.
1.30 "Highly Compensated Eligible Employee" shall
mean an Employee who is eligible to participate in the Plan
as provided in Section 2.1 and who is a Highly Compensated
Employee.
1.31 "Highly Compensated Employee" shall mean any
Employee who:
(a) was a Five Percent Owner at any time during
the Plan Year or the preceding Plan Year; or
(b) had compensation from an Employer for the
preceding Plan Year in excess of Eighty Thousand Dollars
($80,000.00) or such higher amount in effect under Section
414(q) of the Code and was in the Top-Paid Group for such
year.
A former Employee shall be treated as a Highly
Compensated Employee if he or she was a Highly Compensated
Employee when such Employee separated from service or at any
time after attaining age fifty-five (55). For purposes of
this Section, "compensation" shall have the meaning given
such term under Section 415(c)(3) of the Code, but without
regard to the exclusions provided under Sections 125,
402(e)(3) and 402(h)(1)(B), and, in the case of employer
contributions made pursuant to a salary reduction agreement,
without regard to Section 403(b) of the Code.
The dollar amount in subsection (b) of this Section
shall be increased at the same time and in the same manner as
under Section 415(d) of the Code, except that the base period
shall be the calendar quarter ending September 30, 1996.
The determination of who is a Highly Compensated
Employee, including the determinations of the number and
identity of Employees in the Top-Paid Group, shall be made
in accordance with Section 414(q) of the Code and the
regulations thereunder.
The provisions set forth in this Section shall be
effective for Plan Years beginning after December 31, 1996;
provided, however, in determining whether an Employee is a
Highly Compensated Employee for the Plan Year beginning
January 1, 1997, such provisions shall be treated as having
been in effect for the Plan Year beginning January 1, 1996.
1.32 "Hour of Service" shall mean:
(a) Each hour for which an Employee is paid, or
entitled to payment, for the performance of duties for an
Affiliated Employer. Such hours shall be credited to the
computation period in which such duties are performed.
(b) Each hour for which an Employee is paid, or
entitled to payment, directly or indirectly, by an Affiliated
Employer on account of a period of time during which no
duties were performed (irrespective of whether the employment
relationship has terminated) due to vacation, holiday,
illness, incapacity (including Disability), layoff, jury
duty, military duty, or leave of absence. Notwithstanding
the preceding sentence, (i) no more than (five hundred and
one (501) Hours of Service shall be credited under this
subsection (b) to an Employee on account of any single
continuous period during which he or she performs no duties
(whether or not such period occurs in a single computation
period), (ii) Hours of Service shall not be credited if
payment is made or due under a plan maintained solely for the
purpose of complying with applicable workers' compensation,
unemployment compensation, or disability insurance laws, and
(iii) Hours of Service shall not be credited if payment is
made solely to reimburse an Employee for medical or medically
related expenses incurred by such Employee.
(c) Each hour for which back pay, irrespective
of mitigation of damages, is either awarded or agreed to by
an Affiliated Employer. The same hours shall not be credited
both under subsection (a) or (b) and under this subsection
(c). These hours shall be credited to the Employee for the
computation period or periods to which the award or agreement
pertains rather than the computation period in which the
award, agreement or payment is made.
Each Employee whose Compensation is not determined on an
hourly basis shall be credited with forty-five (45) Hours of
Service for each week such Employee completes at least one
(1) Hour of Service.
The number of Hours of Service to be credited to each
Employee shall be determined in accordance with the
provisions of 29 C.F.R. Sections 2530.200b-2(b), 2(c) and
2530.200b-3(e)(4) which are incorporated herein by reference.
Each Employee who is absent from work for any period (i)
by reason of the pregnancy of the Employee, (ii) by reason of
the birth of a child of the Employee, (iii) by reason of the
placement of a child with the Employee in connection with the
adoption of the child by the Employee, (iv) for purposes of
caring for such child for a period beginning immediately
following such birth or placement, or (v) by reason of an
approved leave of absence pursuant to a nondiscriminatory
policy established by his or her Employer shall, solely for
purposes of determining whether such Employee has incurred a
Break in Service, be credited with the Hours of Service which
would normally have been credited to such Employee but for
such absence or, if such Hours of Service cannot be
determined, eight (8) Hours of Service for each day of such
absence; provided the total number of Hours of Service
credited in accordance with this paragraph on account of such
absence shall not exceed five hundred and one (501). The
Hours of Service described in this paragraph shall be
credited in the computation period in which the absence
begins, if the Employee would be prevented from incurring a
Break in Service in such period solely because the Employee
is credited with such Hours of Service or, in all other
cases, in the immediately following computation period.
Each period of qualified military service (as defined in
Section 3.9) served by an Employee shall be deemed, upon
reemployment under USERRA, to constitute service with his or
her Employer for purposes of determining the
nonforfeitability of the contributions made on behalf of such
individual under the Plan.
1.33 "Investment Fund" shall mean an investment fund
described in Section 13.3.
1.34 "Investment Manager" shall mean any fiduciary,
other than the Trustee acting in such capacity or a named
fiduciary (as defined in Section 402(a)(2) of ERISA):
(a) who is appointed by the Board (or any
person or persons to whom the Board delegates its authority)
to manage, acquire, or dispose of all or any portion of the
Trust Fund;
(b) who is (i) registered as an investment
adviser under the Investment Advisers Act of 1940; (ii) is a
bank, as defined in said Act; or (iii) is an insurance
company qualified to manage, acquire or dispose of all or any
portion of the Trust Fund under the laws of more than one
State; and
(c) who has acknowledged, in writing, that he
or she is a fiduciary with respect to the Plan.
1.35 "Key Employee" shall mean any Employee or
former Employee (and the Beneficiary of such Employee) who at
any time during the Plan Year or the four (4) preceding Plan
Years is:
(a) an officer of an Employer having annual
compensation (within the meaning of Section 7.5) from such
Employer greater than fifty percent (50%) of the amount in
effect under Section 415(b)(1)(A) of the Code for any Plan
Year (but in no event shall more than fifty (50) Employees
or, if less, the greater of three (3) or ten percent (10%) of
all Employees be treated as Key Employees by reason of being
officers);
(b) a person owning (or considered as owning
within the meaning of Section 318 of the Code) more than a
one-half percent (%) interest, as well as one of the ten
largest interests in an Employer, and having annual
compensation (within the meaning of Section 7.5) from such
Employer of more than the limitation in effect under Section
415(c)(1)(A) of the Code for any Plan Year;
(c) a Five Percent Owner; or
(d) a person who has annual compensation (as
defined in Section 7.5) from an Employer of more than One
Hundred Fifty Thousand Dollars ($150,000.00) and who would be
described in subsection (c) above if one percent (1%) were
substituted for five percent (5%).
The determination of who is a Key Employee shall be made
in accordance with Section 416(i)(1) of the Code and the
regulations thereunder, the provisions of which are
incorporated herein by reference. For purposes of
determining annual compensation under this Section, amounts
excluded from gross income under Sections 125, 402(e)(3),
402(h)(1)(B) and 403(b) of the Code shall be taken into
account.
1.36 "Leased Employee" shall mean any person who is
not an Employee and who provides services to an Employer if:
(a) such services are provided pursuant to an
agreement between the Employer and any leasing organization;
(b) such person has performed such services for
the Employer (or for the Employer and any related person
determined in accordance with Section 414(n)(6) of the Code)
on a substantially full-time basis for a period of at least
one (1) year; and
(c) such services are performed under the
primary direction or control by the Employer.
Contributions or benefits provided to a Leased Employee
by the leasing organization which are attributable to
services performed for an Employer shall be treated as
provided by the Employer. A Leased Employee shall not be
considered an Employee if:
(d) he or she is covered by a money purchase
pension plan providing:
(i) an employer contribution rate (without
regard to Section 401(l) of the Code) of at least ten percent
(10%) of compensation, as defined in Section 415(c)(3) of the
Code, but including amounts excludable from gross income
under Sections 125, 402(a)(8), 402(h)(1)(B) or 403(b) of the
Code;
(ii) immediate participation; and
(iii) full and immediate vesting; and
(e) Leased Employees do not constitute more
than twenty percent (20%) of the Employer's nonhighly
compensated work force.
1.37 "Limitation Year" shall mean a Plan Year.
1.38 "Matching Contribution" shall mean a
contribution made by an Employer in accordance with Section
3.1(b) on behalf of a Participant who has made a Deferral
Election.
1.39 "Named Fiduciary" shall mean with respect to
the operation and administration of the Plan, the Benefits
Committee and the Appellate Committee, and with respect to
the management of the Trust Fund, the Trustee.
1.40 "Non-Key Employee" shall mean any Employee who
is not a Key Employee.
1.41 "Normal Retirement Age" shall mean age sixty-
five (65).
1.42 "Participant" shall mean an Eligible Employee
who elects to participate in the Plan in accordance with
Section 5.1 or 3.9 and each other Eligible Employee on whose
behalf an Employer makes a Discretionary Contribution.
1.43 "Participant-Directed Brokerage Account" shall
mean a brokerage account established and maintained under the
Trust for the benefit of a Participant as provided in Section
13.7.
1.44 "Permissive Aggregation Group" shall mean each
plan of an Employer which is included in a Required
Aggregation Group and any other plan or plans of such
Employer which, when considered as a group with the Required
Aggregation Group, continues to satisfy the requirements of
Sections 401(a)(4) and 410 of the Code.
1.45 "Plan" shall mean the UNUM Employees Retirement
Savings Plan.
1.46 "Plan Year" shall mean the calendar year.
1.47 "Qualified Nonelective Contribution" shall mean
a contribution, other than an Elective Contribution or
Matching Contribution, made by an Employer in accordance with
Section 3.1(d) which (i) is treated as an Elective
Contribution, (ii) is nonforfeitable when made, (iii) is
distributable only in accordance with the provisions of
Article IX that are applicable to Elective Contributions, and
(iv) satisfies the requirements of Section 401(a)(4) of the
Code.
1.48 "Required Aggregation Group" shall mean each
plan of an Employer in which a Key Employee is a participant
and each other plan of such Employer which enables any plan
of the Employer in which a Key Employee is a participant to
meet the requirements of Sections 401(a)(4) or 410 of the
Code.
1.49 "Rollover Contributions" shall mean the cash
contributions made by an Employee in accordance with Section
3.8.
1.50 "Top Heavy" shall mean that as of the
Determination Date:
(a) the Top Heavy Ratio for the Plan exceeds
sixty percent (60%), if the Plan is not included in a
Required Aggregation Group;
(b) the Top Heavy Ratio for the Required
Aggregation Group which includes the Plan exceeds sixty
percent (60%), if the Plan is included in a Required
Aggregation Group, but is not included in a Permissive
Aggregation Group; or
(c) the Top Heavy Ratio for the Permissive
Aggregation Group which includes the Plan exceeds sixty
percent (60%), if the Plan is included in a Permissive
Aggregation Group.
1.51 "Top Heavy Ratio" shall mean:
(a) if the Plan is not included in a Required
Aggregation Group, a fraction, the numerator of which is the
sum of the Account balances of Key Employees under the Plan
and the denominator of which is the sum of the Account
balances of all Participants under the Plan; or
(b) if the Plan is included in a Required
Aggregation Group or a Permissive Aggregation Group, a
fraction, the numerator of which is the sum of the account
balances of Key Employees under all defined contribution
plans included in such group and the present value of the
accrued benefits of Key Employees under all defined benefit
plans included in such group and the denominator of which is
the sum of the account balances of all Participants under all
defined contribution plans included in such group and the
present values of the accrued benefits of all Participants
under all defined benefit plans included in such group.
The account balances, as well as the present values of
accrued benefits, shall be determined, as of the Valuation
Date coinciding with the Determination Date, in accordance
with the provisions of Section 416(g) of the Code and the
regulations thereunder which are incorporated herein by
reference. In determining the Top Heavy Ratio for any Plan
Year, if an individual is a Non-Key Employee with respect to
the Plan or with respect to any other plan which is included
in the same Required Aggregation Group or Permissive
Aggregation Group as the Plan, but was a Key Employee with
respect to the Plan or such other plan for any prior Plan
Year, any account balance or accrued benefit for such
individual shall not be taken into account. In addition, any
account balance or accrued benefit of any individual who has
not performed services for the Employer at any time during
the five (5) year period ending on the Determination Date
shall not be taken into account.
1.52 "Top-Paid Group" shall mean for any Plan Year
the group of Employees consisting of the top twenty percent
(20%) of Employees based on compensation (as defined in
Section 1.31) received from an Employer during such year.
For purposes of determining the number of Employees in the
Top-Paid Group, the following Employees shall be excluded:
(a) Employees who have not completed six (6)
months of service;
(b) Employees who normally work less than
seventeen and one-half (17.5) hours per week;
(c) Employees who normally work less than six
(6) months during any year;
(d) Employees who have not attained age twenty-
one (21);
(e) Employees who are nonresident aliens and
who receive no earned income (within the meaning of Section
911(d)(2) of the Code) from the Employer that constitutes
income from sources within the United States (within the
meaning of Section 861(a) (3) of the Code).
An Employer may elect to apply subsections (a), (b), (c) or
(d) by substituting a shorter period of service, a smaller
number or hours or months, or a lower age than that specified
in each subsection.
1.53 "Trust" shall mean the Trust Agreement under
the UNUM Employees Retirement Savings Plan and Trust and the
Duncanson & Holt, Inc. Employee Profit Participation and
Savings Plan, as amended from time to time.
1.54 "Trustee" shall mean the person or persons
appointed by the Board (or any person or persons to whom the
Board delegates its authority) to serve as trustee(s) of the
Trust.
1.55 "Trust Fund" shall mean the property held in
Trust for the benefit of the Participants and their
Beneficiaries.
1.56 "USERRA" shall mean the Uniformed Services
Employment and Reemployment Rights Act of 1994, 38 U.S.C.
Section 4301 ET SEQ., as in effect on December 12, 1994
(without regard to any subsequent amendment).
1.57 "Valuation Date" shall mean, effective December
4, 1995, any business day.
1.58 "Year of Participation Service" shall mean an
Eligibility Computation Period during which the Employee has
completed one thousand (1,000) Hours of Service.
ARTICLE II
PARTICIPATION
2.1 DATE OF PARTICIPATION. Except as hereinafter
provided, each Employee who is in the employ of an Employer
on the Effective Date and who meets the requirement of
Section 2.2 on or before such date shall be eligible to
participate in the Plan as of the Effective Date. Each other
Employee who thereafter meets the requirement of Section 2.2
shall be eligible to participate in the Plan as of the first
day of the first payroll period coinciding with or next
following the date on which the Employee meets said
requirement, provided he or she is still in the employ of an
Employer on said date. Notwithstanding the foregoing
provisions to the contrary, each Employee who was a
participant in the Duncanson & Holt, Inc. Employee Profit
Participation and Savings Plan or the Colonial Companies,
Inc. Security Saver Plan as of December 31, 1996, shall be
eligible to participate in the Plan as of the Effective Date,
provided he or she is still in the employ of an Employer on
the Effective Date.
2.2 PARTICIPATION REQUIREMENT. Each Employee who
has completed one (1) Year of Participation Service shall be
eligible to participate in the Plan.
2.3 REEMPLOYED ELIGIBLE EMPLOYEE. An Eligible
Employee who is reemployed by an Employer shall again be
eligible to participate as of the date he or she completes
one (1) Hour of Service.
2.4 SERVICE WITH AFFILIATED EMPLOYERS. In the event
an employee of an Affiliated Employer that has not adopted
the Plan becomes an Employee of an Affiliated Employer that
has adopted the Plan, he or she shall be eligible to
participate in the Plan effective as of the later of the
following dates:
(a) the first day of the first payroll period
coinciding with or next following the date on which he or she
meets the requirements of Section 2.2, taking into account
all of his or her prior service with an Affiliated Employer;
or
(b) the first day of the first payroll period
coinciding with or next following the date on which he or she
becomes an Employee of an Affiliated Employer that has
adopted the Plan.
A Participant who is transferred to an Affiliated
Employer that has not adopted the Plan shall cease to be
eligible to participate in the Plan effective as of the date
of his or her transfer.
ARTICLE III
CONTRIBUTIONS
3.1 EMPLOYER CONTRIBUTIONS. For each Plan Year,
each Employer shall contribute to the Plan:
(a) the Elective Contributions to be made in
accordance with Section 5.1 or 3.9 on behalf of each
Participant in its employ during such year;
(b) the Matching Contributions, if any, to be
made on behalf of each Participant in its employ during such
year who has made a Deferral Election for such year at the
rate determined by the Board; provided, however, no Matching
Contribution may be made with respect to any Excess Deferral
or Excess Elective Contribution or any Elective Contribution
which is returned to the Participant pursuant to Section
7.4(b);
(c) the Discretionary Contributions, if any, in
such amount as may be determined by the Board; and
(d) The Qualified Nonelective Contributions, if
any, to be made in accordance with Section 3.7 or 5.4.
3.2 TIMING OF EMPLOYER CONTRIBUTIONS. Effective
February 3, 1997, Elective Contributions shall be paid to the
Trust as of the earliest date on which such contributions can
reasonably be segregated from the general assets of the
Participant's Employer; provided in no event shall the date
determined pursuant to this sentence occur later than the
fifteenth (15th) business day of the calendar month following
the calendar month in which such contributions would
otherwise have been payable to the Participant in cash (the
"maximum time period"), unless the Employer extends the
maximum time period as provided in 29 C.F.R. Section 2510.3-
102(d). Matching Contributions and Discretionary
Contributions, if any, with respect to any Plan Year shall be
paid to the Trust at such time or times as may be determined
by an Employer, but not later than the date prescribed by law
for filing its federal income tax return for its taxable year
which ends with or within such Plan Year, including
extensions which have been granted for filing such return.
Qualified Nonelective Contributions, if any, with respect to
any Plan Year shall be paid to the Trust within twelve (12)
months after the end of such Plan Year.
3.3 FORM OF CONTRIBUTIONS. Elective contributions
shall be made in cash. Matching Contributions and
Discretionary Contributions may, at the election of the
Board, be made in cash or in shares of common stock of UNUM
Corporation, or in any combination thereof; provided any
contribution made in the form of shares of common stock of
UNUM Corporation shall be valued at its fair market value as
of the date of contribution.
3.4 MAXIMUM CONTRIBUTIONS. In no event shall the
contributions made by an Employer for any Plan Year exceed
the maximum amount which such Employer is permitted to deduct
for federal income tax purposes or cause the Annual Addition
for any Participant to exceed the amount permitted under the
Plan.
3.5 RETURN OF CONTRIBUTIONS. Contributions by each
Employer are conditioned upon the initial qualification of
the Plan under Section 401(a) of the Code and upon their
deductibility under Section 404 of the Code. Upon the
request of any Employer, any contributions attributable to
such Employer (a) which are made by reason of a mistake of
fact, (b) which are conditioned upon the initial
qualification of the Plan, or (c) for which a deduction is
disallowed shall be returned to the Employer within one (1)
year of the mistaken payment of the contribution, denial of
qualification (provided the application for qualification is
made by the time prescribed by law for filing such Employer's
federal income tax return for its taxable year in which the
Plan is adopted, or such later date as the Secretary of the
Treasury may prescribe), or disallowance of the deduction.
In the event of a denial of qualification, the amount
contributed for the period during which the Plan was not
qualified may be returned. In the event of a mistake of fact
or a disallowance of deduction, the amount which may be
returned to such Employer is the excess of the amount
contributed over the amount that would have been contributed
had there not occurred a mistake of fact or an error in
determining the deduction. Earnings attributable to any
excess contribution shall not be returned, and losses
attributable thereto shall reduce the amount which may be
returned.
The portion of any contribution returned to an Employer
in accordance with this Section that represents Elective
Contributions shall be paid promptly to the Participants on
whose behalf such contributions were made.
3.6 NONFORFEITABLE CONTRIBUTIONS. Each Participant
shall have a fully vested and nonforfeitable interest in his
or her Elective Contributions Account, Matching Contributions
Account and Discretionary Contributions Account at all times.
3.7 SPECIAL RULES FOR MATCHING CONTRIBUTIONS.
(a) The Contribution Percentage for Highly
Compensated Eligible Employees for any Plan Year commencing
after December 31, 1996, shall not exceed the greater of:
(i) the Contribution Percentage for all
other Eligible Employees for the preceding Plan Year
multiplied by 1.25; or
(ii) the lesser of the Contribution
Percentage for all other Eligible Employees for the preceding
Plan Year multiplied by 2, or the Contribution Percentage for
such Eligible Employees for the preceding Plan Year plus two
percent (2%).
(b) For purposes of this Section, if two or
more qualified plans maintained by the Employer are treated
as one plan to meet the requirements of Section 401(a)(4),
Section 410(b) or Section 401(m) of the Code, such plans
shall be treated as a single plan. If a Highly Compensated
Eligible Employee participates in any other qualified plan
maintained by the Employer to which Matching Contributions
are made, all such contributions for Plan Years ending with
or within the same calendar year shall be aggregated for
purposes of this Section. If a Highly Compensated Eligible
Employee participates in two or more cash or deferred
arrangements that have different plan years, all cash or
deferred arrangements ending with or within the same calendar
year shall be treated as a single arrangement. For Plan
Years beginning after December 31, 1989, plans may be
aggregated in order to satisfy Section 401(m) of the Code
only if they have the same plan year.
(c) To the extent Elective Contributions are
taken into account under this Section, any Elective
Contributions returned to a Participant pursuant to Section
7.4(b) shall be disregarded.
(d) Any Matching Contribution which is
attributable to an Excess Deferral or Excess Elective
Contribution shall be forfeited and shall be disregarded for
purposes of subsection (a) of this Section. Forfeitures
shall be used to reduce Employer Contributions.
(e) For purposes of this Section, Matching
Contributions (and any Qualified Nonelective Contributions
treated as Matching Contributions) shall be treated as made
for a Plan Year to which they relate if such contributions
are made no later than the end of the twelve (12) month
period beginning on the day after the close of the Plan Year.
Each Employer shall maintain records sufficient to
demonstrate satisfaction of this Section and the amount of
any Elective Contributions or Qualified Nonelective
Contributions taken into account under this Section. The
determination and treatment of the individual contribution
percentage of any Eligible Employee shall satisfy such other
requirements as may be prescribed by the Secretary of the
Treasury.
(f) In the event that the Contribution
Percentage of the Highly Compensated Eligible Employees for
any Plan Year exceeds the limitation of subsection (a) above,
the Benefits Committee shall, within two and one-half (2.5)
months after the end of such year, distribute the Excess
Contributions (plus any income and minus any loss allocable
thereto) to such Highly Compensated Eligible Employees on the
basis of the amount of Employer Contributions made on behalf
of each such Employee and taken into account under Section
1.11 and shall designate such distribution as a distribution
of Excess Contributions (plus any income and minus any loss
allocable thereto).
(g) Excess Contributions shall be adjusted for
any income or loss up to the date of distribution. The
income or loss allocable to Excess Contributions shall be
determined by the same manner in which income or loss is
allocated to Participants' Accounts under Article VIII.
(h) The amount of any Highly Compensated
Eligible Employee's Excess Contributions shall be determined
by reducing contributions on behalf of such Employees in the
order of their respective amounts of Employer Contributions
taken into account under Section 1.11, beginning with the
highest such amount. The determination of the amount of
Excess Contributions with respect to the Plan shall be made
after first determining the amount of Excess Deferrals under
Article VI then second determining the amount of Excess
Elective Contributions under Section 5.3.
(i) Notwithstanding the foregoing provisions of
this Section to the contrary, in lieu of distributing Excess
Contributions (plus any income and minus any loss allocable
thereto) to Highly Compensated Eligible Employees in order to
comply with subsection (a) above for any Plan Year, an
Employer may make Qualified Nonelective Contributions within
twelve (12) months after the end of such year to the Plan on
behalf of each non-Highly Compensated Eligible Employee who
has made a Deferral Election for such year as are necessary
to comply with subsection (a) above. Such Qualified
Nonelective Contributions shall be made on behalf of non-
Highly Compensated Eligible Employees in the order of their
respective Contribution Percentages, beginning with the
lowest such percentage, until one of the limitations of
subsection (a) above is no longer exceeded.
3.8 ROLLOVER CONTRIBUTIONS. An Employee who has
received an eligible rollover distribution (as defined in
Section 402(c)(4) of the Code) from an employee's trust
described in Section 401(a) of the Code which is exempt from
tax under Section 501(a) of the Code may transfer all or any
portion of such distribution to the Trust, provided the
transfer is made to the Trust not later than the sixtieth
(60th) day following the day on which the Employee received
such distribution. In addition, an Employee who receives a
distribution from an individual retirement account (within
the meaning of Section 408(a) of the Code), which account is
attributable solely to a rollover contribution (as defined in
Section 402(c)(5) of the Code) from an employee's trust
described in Section 401(a) of the Code which is exempt from
tax under Section 501(a) of the Code, may transfer the entire
amount distributed to the Trust, provided the transfer is
made to the Trust not later than the sixtieth (60th) day
following the day on which the Employee received such
distribution. Notwithstanding the foregoing to the contrary,
an Employee who has received an eligible rollover
distribution (as hereinabove defined), solely by reason of
the death of his or her spouse, or a distribution from an
individual retirement account (as hereinabove defined), which
account is attributable solely to a rollover contribution (as
hereinabove defined) from an employee's trust described in
Section 401(a) of the Code which is exempt from tax under
Section 501(a) of the Code of amounts received by reason of
the death of his or her spouse, may not transfer any portion
of such distribution to the Trust.
A Rollover Contribution shall be credited to a Rollover
Contributions Account on behalf of the contributing Employee,
and such Employee shall have a fully vested and
nonforfeitable interest in his or her Rollover Contributions
Account. The Rollover Contributions Account of any Employee
who is not a Participant shall be administered, invested and
distributed as if such account constituted an Elective
Contributions Account. The Rollover Contributions Account of
a Participant shall be administered, invested and distributed
in the same manner and at the same time as his or her
Elective Contributions Account.
3.9 USERRA MAKE-UP CONTRIBUTIONS. The provisions of
this Section shall be effective with respect to reemployment
initiated on or after December 12, 1994. In addition to any
Elective Contributions made in accordance with Section 5.1,
an Eligible Employee who is reemployed by his or her Employer
and entitled to benefits under USERRA may elect to have such
Employer make Elective Contributions on his or her behalf in
accordance with this Section; provided, any additional
Elective Contributions made in accordance with this Section
do not exceed the maximum amount of Elective Contributions
that such Employer would have been permitted to make on
behalf of such Eligible Employee in accordance with the
limitations of Articles VI and VII of the Plan and Sections
402(g), 404(a) and 415 of the Code during such Employee's
period of qualified military service if such Employee:
(a) had continued to be employed by such
Employer during such period; and
(b) received Compensation from such Employer
equal to:
(i) the Compensation the Employee would
have received during such period if the Employee were not in
qualified military service, determined based on the rate of
pay the Employee would have received from such Employer but
for the absence; or
(ii) if the Compensation the Employee
would have received during such period was not reasonably
certain, the Employee's average Compensation from the
Employer during the twelve (12) month period immediately
preceding the period of qualified military service (or, the
period of employment immediately preceding the period of
qualified military service, if shorter).
Notwithstanding the foregoing to the contrary, the Benefits
Committee shall adjust the amount of Elective Contributions
made in accordance with this Section for any Elective
Contributions actually made during an Employee's period of
qualified military service. Any Elective Contributions on
behalf of an Eligible Employee pursuant to this Section 3.9
shall be made during the period which begins on the date of
reemployment of such Employee with his or her Employer and
whose duration is equal to the lesser of (i) three (3) times
the period of qualified military service which resulted in
the application of this Section 3.9 to such Employee, and
(ii) five (5) years.
An Employer shall make Matching Contributions with
respect to any additional Elective Contributions made in
accordance with this Section which would have been required
had such Elective Contributions actually been made during the
period of qualified military service which resulted in the
application of this Section to the Employee.
Any Elective Contributions or Matching Contributions
made by an Employer on behalf of an Eligible Employee
pursuant to this Section 3.9 shall not be subject to any
otherwise applicable limitation contained in Section 402(g),
404(a), or 415 of the Code and shall not be taken into
account in applying such limitations to other contributions
or benefits under the Plan or any other plan maintained by
such Employer with respect to the year in which such
contributions are made, but such contributions shall be
subject to such limitations with respect to the year to which
they relate (in accordance with rules prescribed by the
Secretary of the Treasury). Any such Elective Contributions
and Matching Contributions shall not be taken into account,
either for the Plan Year in which they are made or for the
Plan Year to which they relate, for purposes of Sections 3.7,
5.3, or Article X of the Plan and for purposes of Sections
401(a)(4), 401(a)(26), 401(k)(3), 401(k)(11), 401(k)(12),
401(m), 410(b), or 416 of the Code.
No provision of this Section 3.9 shall be construed to
require any crediting of earnings to a Participant's Account
with respect to any Employer Contribution before such
Employer Contribution is actually made or any allocation of
any forfeiture with respect to a period of qualified military
service.
For purposes of this Section, "qualified military
service" shall mean any service in the uniformed services (as
defined in USERRA) by any individual if such individual is
entitled to reemployment rights under USERRA with respect to
such service.
An election by an Eligible Employee to have his or her
Employer make additional Elective Contributions on his or her
behalf pursuant to this Section 3.9 shall be made by such
written, telephonic or electronic means as shall be
prescribed by the Benefits Committee.
ARTICLE IV
DIRECT TRANSFERS
4.1 DIRECT TRANSFERS. The assets of another profit
sharing plan may, with the prior consent of the Benefits
Committee, be directly transferred to the Trust, provided
immediately prior to the transfer, the transferor plan is
qualified under Section 401(a) of the Code and the related
trust is exempt under Section 501(a) of the Code. Upon
receipt, the Benefits Committee shall credit the Account of
each Employee who participated in the transferor plan with
the portion of the transferred assets standing to the credit
of such Employee under the transferor plan immediately prior
to such transfer, provided such amount shall be separately
accounted for in accordance with Section 8.1. Except as
otherwise provided in Article XVI, each elective, matching or
other type of contribution comprising the Transfer Account of
any Employee or any Participant shall be administered,
invested and distributed in accordance with the provisions of
this Plan applicable to such type of contribution, provided,
however, each Employee shall have a fully vested and
nonforfeitable interest in his or her Transfer Account. With
respect to a Participant who has an outstanding loan balance
under the transferor plan at the time of the transfer, the
promissory note evidencing such loan shall be transferred to
this Plan and the outstanding loan balance shall be treated
in accordance with the provisions of Section 9.6 as an
outstanding loan balance under this Plan.
The Benefits Committee may direct the Trustee to
transfer the assets of the Plan credited to the Account of a
Participant or Former Participant to the related trust of
another employer's retirement plan, provided immediately
prior to the transfer the transferee plan contains a
provision permitting such transfer and is qualified under
Section 401(a) of the Code and the related trust is exempt
under Section 501(a) of the Code.
ARTICLE V
DEFERRAL ELECTIONS
5.1 TIME AND METHOD. An Eligible Employee may
participate in the Plan by electing to defer part of his or
her Compensation each pay period, provided that, effective
January 1, 1997, an Eligible Employee may not defer less than
one percent (1%) nor more than fifteen percent (15%) of his
or her Compensation each pay period. The deferral percentage
must be a whole number. The amount deferred shall be
contributed to the Plan by the Employer on behalf of the
electing Eligible Employee. A Deferral Election shall be
made by such written, telephonic or electronic means as shall
be prescribed by the Benefits Committee.
A Deferral Election shall be effective on the first day
of the first payroll period next following the date on which
such election is received by the Benefits Committee or its
designated representative. A Deferral Election shall remain
in effect until amended or terminated in accordance with
Section 5.2. A deemed Deferral Election pursuant to Section
16.2 or Section 16.3 shall be effective as of January 1,
1997.
If a Participant terminates a Deferral Election in
accordance with Section 5.2, such Participant may
subsequently make another Deferral Election, which, effective
December 4, 1995, shall be effective as of the first day of
the first payroll period next following the date on which
such election is received by the Benefits Committee or its
designated representative.
5.2 AMENDMENT OR TERMINATION BY PARTICIPANT.
Effective December 4, 1995, a Participant may amend his or
her Deferral Election to increase or decrease the deferral
percentage within the limits of Section 5.1 or may terminate
his or her Deferral Election at any time. An amendment or
termination shall be made by such written, telephonic or
electronic means as shall be prescribed by the Benefits
Committee and shall be effective as of the first day of the
first payroll period next following the date on which the
amendment or termination is received by the Benefits
Committee or its designated representative.
5.3 LIMITATIONS ON ACTUAL DEFERRAL PERCENTAGE. In
the event a Highly Compensated Eligible Employee participates
in two or more cash or deferred arrangements (under Section
401(k) of the Code) that have different plan years, for
purposes of this Section, all such arrangements ending with
or within the same calendar year shall be treated as a single
arrangement. For purposes of this Section, this Plan and any
other Code Section 401(k) plan maintained by an Employer
shall be treated as a single plan if such plans are treated
as one plan for purposes of Section 401(a)(4) or Section
410(b) of the Code or if a Highly Compensated Eligible
Employee participates in such other plan. For Plan Years
beginning after December 31, 1989, plans may be aggregated to
satisfy Section 401(k) of the Code only if such plans have
the same plan year.
(a) The Actual Deferral Percentage for Highly
Compensated Eligible Employees for any Plan Year commencing
after December 31, 1996, shall not exceed the greater of:
(i) the Actual Deferral Percentage for all
other Eligible Employees for the preceding Plan Year
multiplied by 1.25; or
(ii) the lesser of the Actual Deferral
Percentage for all other Eligible Employees for the preceding
Plan Year multiplied by 2, or the Actual Deferral Percentage
for such Eligible Employees for the preceding Plan Year plus
two percent (2%).
(b) The sum of the Actual Deferral Percentage
for Highly Compensated Eligible Employees and the
Contribution Percentage for Highly Compensated Eligible
Employees for any Plan Year commencing after December 31,
1996, shall not exceed the greater of:
(i) the sum of (1) the greater of the
Actual Deferral Percentage for all other Eligible Employees
for the preceding Plan Year multiplied by 1.25 or the
Contribution Percentage for all other Eligible Employees for
the preceding Plan Year multiplied by 1.25, and (2) the
lesser of the Actual Deferral Percentage for all other
Eligible Employees for the preceding Plan Year plus 2 or the
Contribution Percentage for all other Eligible Employees for
the preceding Plan Year plus 2, provided that in no event
shall such percentage plus 2 exceed such percentage
multiplied by 2.
(ii) the sum of (1) the lesser of the Actual
Deferral Percentage for all other Eligible Employees for the
preceding Plan Year multiplied by 1.25 or the Contribution
Percentage for all other Eligible Employees for the preceding
Plan Year multiplied by 1.25, and (2) the greater of the
Actual Deferral Percentage for all other Eligible Employees
for the preceding Plan Year plus 2 or the Contribution
Percentage for all other Eligible Employees for the preceding
Plan Year plus 2, provided that in no event shall such
percentage plus 2 exceed such percentage multiplied by 2.
Subsection (b) of this Section shall not apply if the
respective Actual Deferral Percentage and Contribution
Percentage of the Highly Compensated Eligible Employees for
any Plan Year commencing after December 31, 1996, does not
exceed the respective Actual Deferral Percentage and
Contribution Percentage of all other Eligible Employees for
the preceding Plan Year multiplied by 1.25.
For purposes of this Section, Elective Contributions,
Matching Contributions and Qualified Nonelective
Contributions must be made before the last day of the twelve
(12) month period immediately following the Plan Year to
which such contributions relate.
For purposes of this Section, any Elective Contributions
returned to a Participant pursuant to Section 7.4(b) shall be
disregarded.
Each Employer shall maintain records sufficient to
demonstrate compliance with this Section and the amount of
any Matching Contributions or Qualified Nonelective
Contributions used to satisfy this Section. The
determination and treatment of the contributions on behalf of
any Participant that are taken into account for purposes of
this Section shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
5.4 RESTRICTIONS AND ADJUSTMENTS. The Benefits
Committee may restrict the deferral percentages elected by
Participants if the Benefits Committee determines such
restriction is necessary to comply with Section 3.4, Section
5.3, Article VI or Article VII.
In the event that the Actual Deferral Percentage of the
Highly Compensated Eligible Employees for any Plan Year
exceeds the limitations prescribed in Section 5.3(a), the
Benefits Committee shall, within two and one-half (2.5) months
after the end of such year, distribute the Excess Elective
Contributions (plus any income and minus any loss allocable
thereto) to such Highly Compensated Eligible Employees on the
basis of the amount of Employer Contributions made on behalf
of each such Employee and taken into account under Section
1.2 and shall designate such distribution as a distribution
of Excess Elective Contributions (plus any income and minus
any loss allocable thereto).
The amount of any Highly Compensated Eligible Employee's
Excess Elective Contributions shall be determined by reducing
contributions on behalf of such Employees in the order of
their respective amounts of Employer Contributions taken into
account under Section 1.2, beginning with the highest such
amount. The amount of Excess Elective Contributions with
respect to a Highly Compensated Eligible Employee for any
Plan Year shall be reduced by the amount of Excess Deferrals
previously distributed to such Employee under Article VI for
the calendar year ending with or within the Plan Year;
provided, however, that notwithstanding the distribution of
an Excess Deferral in accordance with Section 6.2 to a Highly
Compensated Eligible Employee, such distributed amount shall
be taken into account under Section 5.3.
Excess Elective Contributions shall be adjusted for any
income or loss up to the date of distribution. The income or
loss allocable to Excess Elective Contributions shall be
determined by the same manner in which income or loss is
allocated to Participants' Accounts under Article VIII of the
Plan.
In the event the sum of the Actual Deferral Percentage
for Highly Compensated Eligible Employees and the
Contribution Percentage for Highly Compensated Eligible
Employees for any Plan Year exceeds the limitations
prescribed in Section 5.3(b), the Benefits Committee shall,
within two and one-half (2.5) months after the end of such
year, reduce the Contribution Percentage for Highly
Compensated Employees in the manner prescribed in subsections
(f) through (h) of Section 3.7.
Notwithstanding the foregoing provisions of this Section
to the contrary, in lieu of distributing Excess Elective
Contributions (plus any income and minus any loss allocable
thereto) or reducing the Contribution Percentage for Highly
Compensated Employees in the manner prescribed in subsections
(f) through (h) of Section 3.7 in order to comply with
Section 5.3(b) for any Plan Year, an Employer may make
Qualified Nonelective Contributions to the Plan within twelve
(12) months after the end of such year, on behalf of each non-
Highly Compensated Eligible Employee who has made a Deferral
Election for such year as are necessary to comply with
Section 5.3. Such Qualified Nonelective Contributions shall
be made on behalf of non-Highly Compensated Eligible
Employees in the order of their respective individual
deferral percentages, beginning with the lowest such
percentage, until the limitations of Section 5.3 are no
longer exceeded.
ARTICLE VI
EXCESS DEFERRALS
6.1 LIMITATION ON ELECTIVE CONTRIBUTIONS. Effective
January 1, 1997, the Elective Contributions that may be
allocated to a Participant's Account for any calendar year
shall not exceed Nine Thousand Five Hundred Dollars
($9,500.00), reduced by the amount of any employer
contributions for such year on behalf of such Participant
pursuant to an election to defer compensation under any
qualified cash or deferred arrangement within the meaning of
Section 401(k) of the Code, any simplified employee pension
cash or deferred arrangement within the meaning of Section
402(h)(1)(B) of the Code, any eligible deferred compensation
plan under Section 457 of the Code, any plan within the
meaning of Section 501(c)(18) of the Code, a salary reduction
agreement for the purchase of an annuity contract under
Section 403(b) of the Code, and any elective employer
contribution under Section 408(p)(2)(A)(i) of the Code. For
purposes of this Section, any Elective Contributions returned
to a Participant pursuant to Section 7.4(b) shall be
disregarded. The dollar limitation of this Section shall be
automatically adjusted to reflect any cost of living
adjustment made under Section 402(g)(5) of the Code.
6.2 DISTRIBUTION OF EXCESS DEFERRAL. In the event
that the limitation of Section 6.1 is exceeded with respect
to any Participant, not later than April 15 of the following
calendar year, the Benefits Committee shall distribute the
Excess Deferral (plus any income and minus any loss allocable
thereto) to such Participant and designate such distribution
as a distribution of an Excess Deferral (plus any income and
minus any loss allocable thereto), provided that the Benefits
Committee has received the notice prescribed in Section 6.3.
Excess Deferrals shall be adjusted for any income or loss up
to the date of distribution. The income or loss allocable to
Excess Deferrals shall be determined by the same manner in
which income or loss is allocated to the Participant's
Accounts under Article VIII of the Plan.
The amount of Excess Deferral with respect to a
Participant for any calendar year shall be reduced by the
amount of any Excess Elective Contributions previously
distributed to such Participant for the Plan Year beginning
with or within the calendar year.
6.3 NOTICE BY PARTICIPANT. It shall be the
responsibility of the Participant to notify the Benefits
Committee of any Excess Deferral for a calendar year. Such
notice shall be made by such written, telephonic or
electronic means as shall be prescribed by the Benefits
Committee; shall specify the amount of the Excess Deferral;
shall state that if the Excess Deferral is not distributed,
such excess shall be includable in the Participant's gross
income under Section 402(g) of the Code; and shall be
submitted to the Benefits Committee not later than March 1 of
the following calendar year. A Participant shall be deemed
to have notified the Benefits Committee of an Excess Deferral
to the extent such Participant has an Excess Deferral for a
calendar year, taking into account only Elective
Contributions under the Plan and any other plans of the
Employer subject to Section 402(g) of the Code.
ARTICLE VII
LIMITATION ON ANNUAL ADDITIONS
7.1 LIMITATION FOR DEFINED CONTRIBUTION PLANS.
Except as hereinafter provided, the provisions of this
Article shall be effective January 1, 1987. The Annual
Additions which may be allocated to the Account of a
Participant for a Limitation Year shall not exceed the lesser
of:
(a) Thirty Thousand Dollars ($30,000.00) (or,
if greater, one-fourth (1/4) of the dollar limitation in
effect under Section 415(b)(1)(A) of the Code); or
(b) Twenty-five percent (25%) of the
Participant's compensation (as defined in Section 7.5) for
the Limitation Year,
reduced by the sum of (i) the annual additions allocated
within such Limitation Year to the accounts of such
Participant under all other qualified defined contribution
plans maintained by the Employer and (ii) the contributions
on behalf of such Participant to welfare benefit funds (as
defined in Section 419(e) of the Code) and individual medical
benefit accounts (as defined in Section 415(l)(2) of the
Code) which, as hereinafter provided, are treated as annual
additions to a defined contribution plan. The dollar
limitation of this Section shall be automatically adjusted to
reflect any cost of living adjustment made under Section
415(d) of the Code.
If an Annual Addition allocated to a Participant's
Account for a Limitation Year when added to the sum of (i)
the Annual Additions previously allocated within such year to
the Participant's Account, (ii) the annual additions
previously allocated within such year to the Participant's
accounts under all other qualified defined contribution plans
maintained by the Employer and (iii) the aforesaid
contributions to welfare benefit funds (as defined in Section
419(e) of the Code) and individual medical benefit accounts
(as defined in Section 415(l)(2) of the Code) exceeds the
limitation set forth in this Section, such excess shall be
reduced as hereinafter provided in this Article.
If the allocation of an Annual Addition to a
Participant's Account coincides with the allocation of an
annual addition to such Participant's account or accounts
under one or more other qualified defined contribution plans
maintained by the Employer and/or the allocation of a
contribution on behalf of such Participant to one or more
welfare benefit funds (as defined in Section 419(e) of the
Code) or individual medical benefit accounts (as defined in
Section 415(l)(2) of the Code) which, as hereinafter
provided, are treated as an annual addition to a defined
contribution plan and such allocations exceed the limitation
set forth in this Section, the excess attributable to this
Plan, which shall be reduced as hereinafter provided in this
Article, shall be equal to the product determined by
multiplying the total excess by a fraction, the numerator of
which is the Annual Additions previously allocated to the
Participant's Account within such Limitation Year and the
denominator of which is the sum of the Annual Additions
previously allocated to the Participant's Account within such
Limitation Year and the annual additions previously allocated
to the Participant's accounts under such other plans within
such Limitation Year.
The limitation set forth in this Section may be applied
on the basis of reasonable estimates of compensation for the
Limitation Year, provided such estimates are uniformly
determined for all Participants. As soon as practicable
after the end of each Limitation Year, the limitation shall
be applied on the basis of actual compensation.
Notwithstanding the foregoing, the compensation
limitation of Section 7.1(b) shall not apply to any
contribution for medical benefits (within the meaning of
Section 401(h) or Section 419A(f)(2) of the Code) which is
otherwise treated as an Annual Addition under Section
415(l)(1) or Section 419A(d)(2) of the Code.
7.2 LIMITATION FOR DEFINED CONTRIBUTION PLAN AND
DEFINED BENEFIT PLAN. If a Participant also participates or
has participated in a qualified defined benefit plan
maintained by an Employer, then in addition to the limitation
set forth in the preceding Section, the sum of the fractions
determined under subsections (a) and (b) below for any
Limitation Year shall not exceed 1.0.
(a) A fraction, the numerator of which is the
sum of the Participant's projected annual benefits under all
qualified defined benefit plans (whether or not terminated)
maintained by the Employer and the denominator of which is
the lesser of (i) the dollar limitation in effect under
Section 415(b)(1)(A) of the Code for such year multiplied by
1.25, or (ii) the amount which may be taken into account
under Section 415(b)(1)(B) of the Code with respect to the
Participant for such year multiplied by 1.4.
For purposes of this subsection (a), "projected
annual benefits" shall mean the annual retirement benefit
(adjusted to an actuarially equivalent straight life annuity,
if such benefit is expressed in a form other than a straight
life annuity, or qualified joint and survivor annuity) to
which the Participant would be entitled under the terms of
the plan, assuming:
(i) the Participant will continue
employment until normal retirement age under the plan (or
current age, if later); and
(ii) the Participant's compensation for the
current Limitation Year and all other relevant factors used
to determine benefits under the plan will remain constant for
all future Limitation Years.
Notwithstanding the foregoing, if the Participant
participated as of the first day of the first Limitation Year
beginning after December 31, 1986, in one or more qualified
defined benefit plans maintained by an Employer which were in
existence on May 6, 1986, the denominator of this fraction
shall not be less than one hundred twenty-five percent (125%)
of the sum of the annual benefits which the Participant
accrued under such plans as of the close of the last
Limitation Year beginning before January 1, 1987,
disregarding any changes in the terms and conditions of the
Plan after May 5, 1986. The preceding sentence applies only
if the qualified defined benefit plans individually and in
the aggregate satisfied the requirements of Section 415 of
the Code for all Limitation Years beginning before January 1,
1987.
(b) A fraction, the numerator of which is the
sum of the annual additions to the Participant's accounts
under all qualified defined contribution plans (whether or
not terminated) maintained by an Employer for the current and
all prior Limitation Years (including the annual additions
attributable to the Participant's nondeductible voluntary
contributions under all qualified defined benefit plans,
whether or not terminated, maintained by an Employer) and the
contributions on behalf of the Participant to all welfare
benefit funds (as defined in Section 419(e) of the Code) and
individual medical benefit accounts (as defined in Section
415(l)(2) of the Code) maintained by an Employer which, as
hereinafter provided, are treated as annual additions to a
defined contribution plan and the denominator of which is the
sum of the lesser of the following amounts determined for the
current Limitation Year and all prior Limitation Years in
which the Participant performed service for an Employer
(regardless of whether a defined contribution plan was
maintained by the Employer): (i) the dollar limitation in
effect under Section 415(c)(1)(A) of the Code for such year
multiplied by 1.25, or (ii) thirty-five percent (35%) of the
Participant's compensation for such year.
If an Employee was a participant as of the end of
the first day of the first Limitation Year beginning after
December 31, 1986, in one or more qualified defined
contribution plans maintained by an Employer which were in
existence on May 6, 1986, the numerator of this fraction
shall be adjusted if the sum of the fractions under this
Section would otherwise exceed 1.0 under the terms of this
Plan. Under the adjustment, an amount equal to the product
of (i) the excess of the sum of said fractions over 1.0
multiplied by (ii) the denominator of this fraction, shall be
permanently subtracted from the numerator of this fraction.
The adjustment shall be calculated using the fractions as
they would be computed as of the end of the last Limitation
Year beginning before January 1, 1987, and disregarding any
changes in the terms and conditions of the Plan made after
May 5, 1986, but using the Section 415 limitation applicable
to the first Limitation Year beginning on or after January 1,
1987.
The Annual Addition for any Limitation Year beginning
before January 1, 1987, shall not be recomputed to treat all
Employee contributions as Annual Additions.
If the sum of said fractions for any Limitation Year
exceeds 1.0, the Annual Additions allocated to the
Participant's Account for such Limitation Year shall be
reduced, as hereinafter provided in this Article, until the
sum of the fractions does not exceed 1.0 or the rate of
accrual of the Participant's accrued benefit under the
defined benefit plan shall be reduced until the sum of the
fractions does not exceed 1.0.
7.3 COMBINING AND AGGREGATING PLANS. For purposes
of applying the limitations described in this Article:
(a) All qualified defined benefit plans
(without regard to whether a plan has been terminated) ever
maintained by an Employer shall be treated as one defined
benefit plan; and
(b) All qualified defined contribution plans
(without regard to whether a plan has been terminated) ever
maintained by an Employer shall be treated as one defined
contribution plan.
7.4 REDUCTION OF EXCESS ANNUAL ADDITIONS. If, as a
result of a reasonable error in estimating a Participant's
annual compensation (as defined in Section 7.5), a reasonable
error in determining the amount of elective deferrals (within
the meaning of Section 402(g)(3) of the Code) that may be
made with respect to any Participant under the limitations of
Section 415 of the Code, or under other limited facts and
circumstances that the Commissioner of the Internal Revenue
Service finds justify the availability of the rules set forth
below, the Annual Additions allocated to the Account of any
Participant would cause the limitations set forth in the
preceding Sections of this Article for any Limitation Year to
be exceeded, the following rules shall apply to the extent
necessary to reduce such excess, and the excess amounts shall
not be deemed Annual Additions in such Limitation Year:
(a) Any nondeductible voluntary employee
contributions (and the earnings thereon) to the extent they
would reduce the excess amount, shall be returned to the
Participant;
(b) Any Elective Contributions (and, effective
for Limitation Years beginning after December 31, 1995, the
earnings thereon) to the extent they would reduce the excess
amount, shall be returned to the Participant;
(c) If after the application of subsections (a)
and (b) an excess amount still exists and the Participant is
covered by the Plan at the end of the Limitation Year, the
excess amount allocated to the Participant's Account for such
year shall be used to reduce Employer Contributions for the
next Limitation Year and for each succeeding Limitation Year,
if necessary, for such Participant;
(d) If after the application of subsections (a)
and (b) an excess amount still exists and the Participant is
not covered by the Plan at the end of the Limitation Year,
the excess amount allocated to the Participant's Account for
such Limitation Year shall be held unallocated in a suspense
account. The suspense account shall be applied to reduce
Employer Contributions for all remaining Participants in the
next Limitation Year and each succeeding Limitation Year, if
necessary.
If a suspense account is in existence at any time during
a Limitation Year pursuant to subsection (d) of this Section,
it shall not participate in the allocation of the Investment
Funds' income, expenses, gains and losses. If a suspense
account is in existence at any time during a particular
Limitation Year, all amounts in the suspense account must be
allocated and reallocated to Participants' Accounts before
any Employer Contributions may be made to the Plan for that
Limitation Year. For purposes of subsection (c) and (d),
excess amounts may not be distributed to Participants or
Former Participants.
7.5 DEFINITION OF COMPENSATION. Except as
hereinafter provided, for purposes of applying the
limitations of this Article, the term "compensation" shall
mean, with respect to a Plan Year, the total compensation
paid by an Employer to an Employee for services rendered
while an Employee that constitutes wages as defined in
Section 3401(a) of the Code and all other payments by an
Employer to an Employee for services rendered while an
Employee for which an Employer is required to furnish the
Employee a written statement under Sections 6041(d),
6051(a)(3) and 6052 of the Code without regard to any rules
that limit the remuneration included in wages based on the
nature or location of the employment or services performed.
Notwithstanding the foregoing to the contrary, effective
January 1, 1998, "compensation" shall include any elective
deferrals within the meaning of Section 402(g)(3) of the Code
and any amount which is contributed or deferred by an
Employer at the election of an Employee and which is not
includable in the gross income of the Employee by reason of
Section 125 or 457 of the Code.
For Limitation Years beginning after December 31, 1991,
for purposes of applying the limitations of this Article,
"compensation" for a Limitation Year shall mean the
compensation actually paid or includable in gross income
during such Limitation Year. Notwithstanding the preceding
sentence, "compensation" with respect to a Participant who is
permanently and totally disabled (within the meaning of
Section 22(e)(3) of the Code) shall mean the compensation
such Participant would have received for the Limitation Year
if he or she had been paid at the rate of compensation paid
immediately before becoming permanently and totally disabled;
provided, such imputed compensation may be taken into account
only if the Participant is not a Highly Compensated Employee
and contributions made on behalf of such Participant are
nonforfeitable when made.
Notwithstanding the foregoing to the contrary, for
purposes of Sections 1.2, 1.11 and 10.3(b), effective January
1, 1994, the annual "compensation" of any Employee in excess
of One Hundred Fifty Thousand Dollars ($150,000.00) (or such
higher amount as the Secretary of the Treasury may prescribe)
shall not be taken into account. In the event "compensation"
is determined based on a period of time which contains fewer
than twelve (12) calendar months, the annual compensation
limit shall be an amount equal to the annual compensation
limit for the Limitation Year in which the period begins
multiplied by a fraction, the numerator of which is the
number of full calendar months in the period and the
denominator of which is twelve (12). If "compensation" for a
prior Limitation Year is taken into account for any
Limitation Year, such compensation shall be subject to the
annual compensation limit in effect for such prior Limitation
Year.
7.6 CERTAIN CONTRIBUTIONS TREATED AS ANNUAL
ADDITIONS. For purposes of this Article:
(a) Excess Contributions and Excess Elective
Contributions shall be treated as Annual Additions;
(b) amounts derived from contributions which
are paid or accrued in taxable years ending after December
31, 1985, and which are attributable to post-retirement
medical benefits allocated to the separate account of a Key
Employee (as defined in Section 419A(d) of the Code) under a
welfare benefit fund (as defined in Section 419(e) of the
Code) maintained by an Employer, shall be treated as annual
additions to a defined contribution plan; and
(c) contributions allocated after March 31,
1984, to an individual medical benefit account (as defined in
Section 415(l)(2) of the Code) which is part of a defined
benefit plan maintained by an Employer shall be treated as
annual additions to a defined contribution plan.
ARTICLE VIII
ACCOUNTS AND VALUATION
8.1 PARTICIPANTS' ACCOUNTS. The Benefits Committee
shall direct the Trustee to establish and maintain a separate
Account for each Participant which shall separately reflect:
(a) the Participant's Elective Contributions
and the income, expenses, gains and losses of the Trust Fund
attributable thereto and his or her Qualified Nonelective
Contributions pursuant to Section 3.7(i) or Section 5.4, if
any, and the income, expenses, gains and losses of the Trust
Fund attributable thereto (such portion of a Participant's
Account shall be referred to as his or her "Elective
Contributions Account");
(b) the Participant's Matching Contributions,
if any, and the income, expenses, gains and losses of the
Trust Fund attributable thereto (such portion of a
Participant's Account shall be referred to as his or her
"Matching Contributions Account");
(c) the Participant's share of Discretionary
Contributions, if any, and the income, expenses, gains and
losses of the Trust Fund attributable thereto (such portion
of a Participant's Account shall be referred to as his or her
"Discretionary Contributions Account");
(d) the Participant's Rollover Contributions
and the income, expenses, gains and losses of the Trust Fund
attributable thereto (such portion of a Participant's Account
shall be referred to as his or her "Rollover Contributions
Account");
(e) the assets transferred from another
qualified plan on behalf of the Participant in accordance
with Section 4.1 or Article XVI and the income, expenses,
gains and losses of the Trust Fund attributable thereto (such
portion of a Participant's Account shall be referred to as
his or her "Transfer Account"); and
(f) for Plan Years prior to January 1, 1989,
the Participant's after-tax contributions and Employer
matching contributions made thereon, if any, and the income,
expenses, gains and losses of the Trust Fund attributable
thereto (such portion of a Participant's Account shall be
referred to as his or her "After-Tax Contributions Account").
8.2 ADJUSTMENTS. Effective July 1, 1996, as of each
Valuation Date, the Participants' Accounts shall be adjusted
as follows:
(a) First, determine the fair market value of
each Investment Fund and Participant-Directed Brokerage
Account as of the close of business on such date.
(b) Second, allocate the income, expenses,
gains and losses of each Investment Fund and Participant-
Directed Brokerage Account among the Accounts in proportion
to the Account balances (to the extent invested therein).
(c) Third, reduce the separate Account of each
Participant to reflect all distributions, withdrawals and
loans made from such Account, since the last preceding
Valuation Date.
(d) Fourth, credit to the separate Account of
each Participant the Elective Contributions, Matching
Contributions, Qualified Nonelective Contributions,
Discretionary Contributions, Rollover Contributions, and the
assets transferred from another qualified plan in accordance
with Section 4.1 or Article XVI made on his or her behalf and
the Participant's loan repayments since the preceding
Valuation Date.
(e) Fifth, adjust each Participant's Account to
reflect transfers among the Investment Funds and between the
Investment Funds and such Participant's Participant-Directed
Brokerage Account, if any.
In the event no adjustment to any separate Account is
required under subsection (c) above as of any Valuation Date
(other than the last Valuation Date of a Plan Year), no
adjustments of the separate Accounts of the Participants
shall be required except as of the last Valuation Date of the
Plan Year.
Notwithstanding the foregoing provisions of this Section
to the contrary, the Benefits Committee may direct the
Trustee to debit the Account of any Participant or Former
Participant as of any Valuation Date in the amount of any
reasonable expense attributable to such Participant's or
Former Participant's exercise of control over his or her
Account since the preceding Valuation Date. The Benefits
Committee shall establish, in writing, reasonable procedures
to inform Participants and Former Participants that such
expenses may be charged to their Account pursuant to this
paragraph, to inform each Participant or Former Participant
at least annually of the actual expenses incurred with
respect to his or her Account, and to otherwise carry out
this paragraph. The Benefits Committee shall follow a
uniform and nondiscriminatory policy in charging reasonable
expenses to the Account of a Participant or Former
Participant pursuant to this paragraph. For purposes of this
paragraph, a Participant's or Former Participant's "exercise
of control over his or her Account" shall include but not be
limited to the following:
(f) a request for a loan pursuant to Section
9.6;
(g) a request for a withdrawal pursuant to
Section 9.5 or 9.9; and
(h) any election with respect to the investment
of contributions made on his or her behalf (or an election
with respect to the reinvestment of his or her Account)
pursuant to Section 13.7 or 13.8.
8.3 ALLOCATION OF DISCRETIONARY CONTRIBUTIONS. As
of the last Valuation Date of each Plan Year, the Trustee
shall allocate and credit the Discretionary Contribution, if
any, for such Plan Year to the separate Accounts of the
Eligible Employees entitled to share therein in proportion to
their respective amounts of compensation for such Plan Year.
For purposes of this Section, "compensation" shall have the
meaning given such term in Section 1.10, except that it shall
include compensation paid for services rendered while an
Eligible Employee.
8.4 ELIGIBLE EMPLOYEES ENTITLED TO SHARE IN
DISCRETIONARY CONTRIBUTIONS. An Eligible Employee shall be
entitled to share in the Discretionary Contributions made by
or with respect to his or her Employer for a Plan Year if he
or she is credited with at least one thousand (1,000) Hours
of Service during such Plan Year, and remains in the employ
of such Employer on the last business day of such Plan Year,
or if he or she dies, retires after having attained Normal
Retirement Age or becomes Disabled during such Plan Year
while in the employ of such Employer. For purposes of this
Section, "Hours of Service" shall mean only Hours of Service
credited with the Employer who is making the Discretionary
Contribution.
In the event application of the preceding sentence would
cause the Plan to fail to satisfy the requirements of Section
410(b) of the Code for any Plan Year, the following
provisions shall apply:
(a) An Eligible Employee shall be entitled to
share in the Discretionary Contributions made by or with
respect to his or her Employer for a Plan Year if he or she
is credited with more than five hundred (500) Hours of
Service during such Plan Year and remains in the employ of
such Employer on the last business day of such Plan Year, or
if he or she dies, retires after having attained Normal
Retirement Age or becomes Disabled during such Plan Year
while in the employ of such Employer.
(b) If after applying subsection (a) above the
Plan would fail to satisfy the requirements of Section
410(b) of the Code, an Eligible Employee shall be entitled to
share in the Discretionary Contributions made by or with
respect to his or her Employer for a Plan Year if he or she
remains in the employ of such Employer on the last business
day of such Plan Year, without regard to the number of Hours
of Service credited during such year, or if he or she dies,
retires after having attained normal Retirement Age or
becomes Disabled during such Plan Year while in the employ of
such Employer.
(c) If after applying subsections (a) and (b)
of this Section the Plan would fail to satisfy the
requirements of Section 410(b) of the Code, an Eligible
Employee shall be entitled to share in the Discretionary
Contributions made by or with respect to his or her Employer
for a Plan Year if he or she is credited with more than five
hundred (500) Hours of Service during such Plan Year,
regardless of whether he or she remains in the employ of such
Employer on the last business day of such year, or if he or
she dies, retires after having attained Normal Retirement Age
or becomes Disabled during such Plan Year while in the employ
of such Employer.
If after applying subsections (a), (b) and (c) of this
Section the Plan would fail to satisfy the requirements of
Section 410(b) of the Code, the Board shall amend the Plan in
accordance with, and within the time period prescribed by,
Treasury Regulation Section 1.401(a)(4)-11(g) to the extent
necessary to comply with Section 410(b) of the Code.
8.5 ALLOCATION OF ELECTIVE CONTRIBUTIONS AND
MATCHING CONTRIBUTIONS. Any Elective Contributions and
Matching Contributions made on behalf of a Participant shall
be allocated to his or her Account as of the Valuation Date
coinciding with or next following the date on which such
contributions are received by the Trustee.
8.6 PARTICIPANTS ENTITLED TO SHARE IN MATCHING
CONTRIBUTIONS. A Participant shall be entitled to share in
the Matching Contribution, if any, for a Plan Year, if
Elective Contributions are made on his or her behalf for such
year.
8.7 ALLOCATION OF QUALIFIED NONELECTIVE
CONTRIBUTIONS. As of the last Valuation Date of the Plan
Year, the Trustee shall allocate and credit the Qualified
Nonelective Contributions, if any, for such Plan Year to the
separate Accounts of the Eligible Employees entitled to share
therein, as determined in accordance with Sections 3.7(i) and
5.4.
8.8 ALLOCATION OF ROLLOVER CONTRIBUTIONS. Any
Rollover Contribution by an Employee shall be allocated to
his or her Account as of the Valuation Date coinciding with
or next following the date on which such contribution is
received by the Trustee.
8.9 ALLOCATION OF ASSET TRANSFERS. Any direct
transfer of plan assets made on behalf of an Employee in
accordance with Section 4.1 or Article XVI shall be allocated
to his or her Account as of the Valuation Date coinciding
with or next following the date on which such transfer is
made to the Trustee.
8.10 REPORTS TO PARTICIPANTS. The Trustee shall, at
least annually, determine each Participant's share of the
Trust Fund and furnish each Participant with a statement
summarizing his or her Account.
ARTICLE IX
DISTRIBUTIONS AND LOANS
9.1 RETIREMENT. When a Participant attains Normal
Retirement Age, he or she shall have a fully vested and
nonforfeitable right to his or her Account. Following
retirement, such Participant shall receive distribution of
his or her Account in such manner and at such time as
hereinafter provided.
9.2 DISABILITY. If a Participant becomes Disabled,
such Participant shall have a fully vested and nonforfeitable
right to his or her Account. Such Participant shall receive
distribution of his or her Account in such manner and at such
time as hereinafter provided.
9.3 DEATH. If a Participant dies before the
complete distribution of his or her Account, the balance of
such Account shall be distributed, in such manner and at such
time as hereinafter provided, to his or her surviving spouse,
or if the Participant is not survived by a spouse or the
Participant's spouse consents, to his or her designated
Beneficiary. To be effective, the consent of the
Participant's surviving spouse must be in writing, must
acknowledge the effect thereof and must be witnessed by a
notary public.
Subject to the preceding provisions of this Section,
each Participant from time to time may designate any person
or persons (who may be designated concurrently, contingently
or successively) to receive any benefits payable upon his or
her death. Each beneficiary designation shall revoke all
prior designations by the Participant and shall be effective
only when filed with the Benefits Committee or its designated
representative during the Participant's lifetime by such
written, telephonic or electronic means as shall be
prescribed by the Benefits Committee. If a Participant fails
to designate a Beneficiary, distribution shall be made to his
or her surviving spouse, but if the Participant is not
survived by a spouse, to such of the Participant's issue who
survive him or her, such issue to take equal shares of such
distribution, but if the Participant is not survived by a
spouse or any issue, then to the Participant's estate.
9.4 TERMINATION OF EMPLOYMENT. If a Participant
ceases to be employed by an Employer or an Affiliated
Employer and is no longer employed by any of them prior to
attaining Normal Retirement Age for any reason other than
Disability or death, such Participant shall nevertheless have
a fully vested and nonforfeitable right to his or her
Account. Following termination of employment, such
Participant shall receive distribution of his or her Account
in such manner and at such time as hereinafter provided.
9.5 IN-SERVICE DISTRIBUTIONS. Subject to the
provisions of Section 16.2, once every twelve (12) months, an
Employee may elect to receive all or a portion of his or her
After-Tax Contributions Account or Rollover Contributions
Account (reduced by the outstanding balance of any loans made
to the Participant from such Account) in a lump sum. The
Employee's After-Tax Contributions Account or Rollover
Contributions Account shall be valued as of the first
Valuation Date which is administratively practicable
following receipt of such election by the Benefits Committee
or its designated representative, and distribution shall be
made as soon as practicable thereafter.
Effective January 1, 1989, and subject to the provisions
of Section 16.2, once every twelve (12) months, a
Participant who has attained age fifty-nine and one-half
(59.5) may elect to receive all or a portion of his or her
Elective Contributions Account (reduced by the outstanding
balance of any loans made to the Participant from such
Account) in a lump sum. The Participant's Elective
Contributions Account shall be valued as of the first
Valuation Date which is administratively practicable
following receipt of such election by the Benefits Committee
or its designated representative, and distribution shall be
made as soon as practicable thereafter.
Any election pursuant to this Section 9.5 shall be made
by such written, telephonic or electronic means as the
Benefits Committee may prescribe. The Benefits Committee may
from time to time establish rules governing distributions
pursuant to this Section 9.5. Such rules shall be applied on
a uniform and nondiscriminatory basis.
9.6 PARTICIPANT LOANS. The Benefits Committee may,
upon the request of a Participant or Beneficiary who is a
"party in interest" as defined in Section 3(14) of ERISA,
direct the Trustee to make a loan or loans to such
Participant or Beneficiary from the Participant's Elective
Contributions Account and, effective December 4, 1995,
Rollover Contributions Account, subject to the following:
(a) The amount of each loan shall be determined
with reference to the fair market value of the Participant's
Account as of the most recent Valuation Date for which
valuation data has been received by the Benefits Committee.
(b) Any loan made on or after January 1, 1987,
when added to the balance of all other outstanding loans with
respect to a Participant's Account from the Plan, shall not
exceed the lesser of:
(i) Fifty Thousand Dollars ($50,000.00),
reduced by the excess, if any, of:
(aa) the Participant's highest
outstanding loan balance under the Plan for the one (1) year
period ending on the day before such loan is made, over
(bb) the Participant's loan balance
under the Plan on the day such loan is made, or
(ii) Fifty percent (50%) of the sum of the
Participant's Elective Contributions Account, Matching
Contributions Account and, effective December 4, 1995,
Rollover Contributions Account.
The total unpaid balance of all loans (including accrued
but unpaid interest) made with respect to a Participant's
Account under the Plan and all other qualified plans
maintained by his or her Employer shall not exceed the
maximum amount permitted under Section 72(p) of the Code.
(c) Effective December 1, 1989, no loan shall
be made in an amount less than One Thousand Dollars
($1,000.00).
(d) Each loan shall be evidenced by a
promissory note bearing a reasonable rate of interest as
determined by the Benefits Committee taking into
consideration interest rates currently being charged by
commercial lenders for loans made under similar circumstances
and shall be adequately secured in such manner as the
Benefits Committee may determine. Subject to the provisions
of Section 16.2, collateral for a loan may consist of an
assignment of not more than fifty percent (50%) of a
Participant's vested interest in his or her Account, provided
such collateral adequately secures repayment of the loan. In
the event of a default on a loan, the Benefits Committee
shall, after giving the Participant or Beneficiary written
notice of the default and an opportunity to cure the default,
in accordance with the terms and conditions of such loan,
foreclose upon the collateral to the extent necessary to
satisfy the Participant's obligation. If the collateral for
such loan is the Participant's interest in his or her
Account, such foreclosure may not occur prior to the
Participant's termination of employment.
(e) Each loan shall be made for such term and,
subject to (d) above, upon such terms and conditions as the
Benefits Committee shall determine; provided that
substantially level amortization, with payments not less
frequently than quarterly, shall be required over the term of
any loan, and further provided that the term shall not exceed
five (5) years.
(f) Each loan to a Participant or Beneficiary
shall be treated and accounted for as an investment of such
Participant's Account, and loans shall be charged against the
Investment Funds in which the Participant's Account is
invested in proportion to the amounts invested in such funds
as of the date such loan is made. Effective October 1, 1995,
amounts of principal and interest paid on any loan shall be
transferred to the Investment Funds in accordance with the
Participant's investment direction in effect at the time of
payment.
(g) No loan shall be made to any owner-employee
or shareholder-employee. For purposes of this subsection
(g), an "owner-employee" means a self-employed individual who
is a sole proprietor or who is a partner in an Employer who
owns more than ten percent (10%) of either the capital or
profits interest in such Employer, and a "shareholder-
employee" means an employee or officer of an electing small
business corporation (S corporation) who owns (or is
considered as owning within the meaning of Section 318(a)(1)
of the Code), on any day during the taxable year of such
corporation, more than five percent (5%) of the outstanding
stock of the corporation.
(h) No distribution (other than a deemed
distribution under Section 72(p) of the Code) shall be made
to any Participant or Former Participant or to a Beneficiary
of any Participant until all unpaid loans with respect to the
Participant's Account, including accrued interest thereon,
have been paid in full. Notwithstanding the preceding
sentence to the contrary, in the event a Participant or
Beneficiary receives distribution of his or her Account
pursuant to Section 9.7 or 9.9 of the Plan, and at the time
of such distribution there remains outstanding any unpaid
loans with respect to his or her Account, then
(i) such unpaid loan shall be treated as
due and payable immediately as of the date distribution is
made or commences;
(ii) the Account of the Participant or
Beneficiary shall be reduced prior to any such distribution
by the amount of the principal and accrued interest
outstanding on such loan;
(iii) the loan shall be deemed to be paid in
full as of the date the distribution is made or commences;
and
(iv) such Participant or Beneficiary shall be
treated as receiving or commencing to receive a distribution
of his or her entire Account.
(i) The Benefits Committee shall suspend the
obligation to repay any loan made to a Participant pursuant
to this Section 9.6 for any period during which such
Participant is performing service in the uniformed services
(as defined in USERRA), whether or not such service is
"qualified military service" within the meaning of Section
3.9, and such suspension shall not be taken into account for
purposes of Sections 72(p), 401(a), or 4975(d)(1) of the
Code.
(j) The Benefits Committee shall follow a
uniform and nondiscriminatory policy in making loans to
assure that loans are available to all Participants and
Beneficiaries who are "parties in interest" on a reasonably
equivalent basis as required under 29 C.F.R. Section
2550.408b-1 and to further assure that the Plan meets the
requirements of Section 401(a)(4) of the Code.
(k) A request for a loan shall be made by such
written, telephonic or electronic means as may be prescribed
by the Benefits Committee.
(l) The Benefits Committee shall establish, in
writing, administrative procedures to carry out the
provisions of this Section 9.6.
9.7 DISTRIBUTIONS TO PARTICIPANTS. Effective
January 1, 1997, and subject to the provisions of Section
16.2 and Exhibit A hereto, each Participant's Account shall
be distributed in a lump sum. Subject to the provisions of
subsections (a), (b) and (c) below, a Participant may elect
to receive distribution of his or her Account as of any
Valuation Date which occurs after the date he or she becomes
Disabled or ceases to be employed by an Employer or an
Affiliated Employer and is no longer employed by any of them.
The Participant's Account shall be valued as of the first
Valuation Date which is administratively practicable
following receipt of such election by the Benefits Committee
or its designated representative or the Valuation Date
specified in said election, if later, and distribution shall
be made in a lump sum as soon as practicable thereafter.
(a) Notwithstanding the foregoing provisions of
this Section to the contrary (other than the provisions of
Section 16.2 and Exhibit A hereto), if the value of a
Participant's Account does not exceed Three Thousand Five
Hundred Dollars ($3,500.00) as of the Valuation Date
following the date that he or she ceases to be employed by an
Employer or an Affiliated Employer and is no longer employed
by any of them (and did not exceed Three Thousand Five
Hundred Dollars ($3,500.00) as of the date of any prior
distribution), his or her Account shall be distributed in a
lump sum as soon as practicable thereafter.
(b) Notwithstanding the foregoing provisions of
this Section to the contrary, unless a Participant otherwise
elects, distribution shall be made (or commence, with respect
to the portion of a Participant's Account which is subject to
the provisions of Section 16.2 or Exhibit A and not
distributed in a lump sum) not later than the sixtieth (60th)
day after the later of the close of the Plan Year in which
the Participant attains the Normal Retirement Age or in which
the Participant ceases to be employed by an Employer or an
Affiliated Employer and is no longer employed by any of them.
(c) Notwithstanding the foregoing provisions of
this Section to the contrary, effective January 1, 1997:
(i) distribution of the Account of a
Participant who is not a Five Percent Owner shall be made in
a lump sum (or commence, with respect to the portion of the
Participant's Account which is subject to the provisions of
Section 16.2 or Exhibit A and not distributed in a lump sum)
not later than April 1 of the calendar year following the
later of the calendar year in which the Participant attains
age seventy and one-half (70.5) or the calendar year in which
the Participant retires; and
(ii) distribution of the Account of a
Participant who is a Five Percent Owner shall be made (or
commence with respect to the portion of the Participant's
Account which is subject to the provisions of Section 16.2 or
Exhibit A and not distributed in a lump sum) not later than
April 1 of the calendar year following the calendar year in
which the Participant attains age seventy and one-half (70.5).
For purposes of this subsection (c), a Five Percent
Owner shall mean a Participant who is a Five Percent Owner
with respect to the Plan Year ending with or within the
calendar year in which such Participant attains age seventy
and one-half (70.5).
Any election pursuant to this Section 9.7 shall be made
by such written, telephonic or electronic means as may be
prescribed by the Benefits Committee.
9.8 DISTRIBUTIONS TO SPOUSE OR BENEFICIARY. Subject
to the provisions of Section 16.2 and Exhibit A hereto, upon
the death of a Participant, the balance of the Participant's
Account shall be distributed to his or her surviving spouse
or, if the Participant is not survived by a spouse or the
Participant's surviving spouse consents in the manner
provided in Section 9.3, to the Participant's designated
Beneficiary. Distribution shall be made in a lump sum by
December 31 of the calendar year which contains the fifth
(5th) anniversary of the date of the Participant's death.
If a Participant fails to designate a Beneficiary and is
not survived by a spouse, distribution of the Participant's
Account shall be made in the a lump sum to the distributee
determined under Section 9.3, provided such distribution must
be made by December 31 of the calendar year which contains
the fifth (5th) anniversary of the date of the Participant's
death.
9.9 HARDSHIP WITHDRAWALS. Effective January 1,
1989, and subject to the provisions of Section 16.2, the
Benefits Committee may direct the Trustee to make a hardship
withdrawal distribution to a Participant from his or her
Elective Contributions Account and Matching Contributions
Account subject to the following:
(a) Each request for a hardship withdrawal
shall be made by such written, telephonic or electronic means
as may be prescribed by the Benefits Committee. The request
shall specify the reason for such withdrawal and shall
include such other information and documentation as the
Benefits Committee may request.
(b) A hardship withdrawal may be made only in
cash and may not exceed the sum of the Elective Contributions
(and income allocable thereto as of December 31, 1988) and
Matching Contributions (and income allocable thereto)
allocated to the Participant's Account.
(c) A hardship withdrawal shall be permitted
only if the distribution is on account of an immediate and
heavy financial need of the Participant and is necessary to
satisfy such financial need.
(i) A financial need may qualify as
immediate and heavy without regard to whether such need was
foreseeable or voluntarily incurred by the Participant. The
following shall be deemed immediate and heavy financial
needs:
(aa) Payment of medical expenses
described in Section 213(d) of the Code previously incurred
by the Participant, his or her spouse or dependent (within
the meaning of Section 152 of the Code) or payment necessary
for such persons to obtain medical care as described in
Section 213(d) of the Code;
(bb) Costs directly related to the
purchase (excluding mortgage payments) of a principal
residence of the Participant;
(cc) Payment of tuition, related
educational fees and room and board expenses for the next
twelve (12) months of post-secondary education for the
Participant, his or her spouse or dependent (within the
meaning of Section 152 of the Code); and
(dd) Payment to prevent eviction of
the Participant from his or her principal residence or
foreclosure on the mortgage of the Participant's principal
residence.
The above list of deemed immediate and heavy financial
needs shall not be exclusive, and other needs may qualify as
immediate and heavy financial needs.
(ii) A distribution shall be treated as
necessary to satisfy an immediate and heavy financial need of
the Participant only to the extent the amount of such
distribution is not reasonably available to the Participant
from other resources. The Benefits Committee may reasonably
rely on the Participant's representations that the need
cannot be relieved by insurance, by reasonable liquidation of
the Participant's assets, by termination of the Participant's
Deferral Election or by other distributions or loans from the
Plan or from commercial lenders. A Participant's resources
shall be deemed to include those assets of his or her spouse
and minor children that are reasonably available to the
Participant. A distribution shall be deemed necessary to
satisfy an immediate and heavy financial need provided each
of the following requirements is satisfied:
(aa) The distribution is not in excess
of the amount of the immediate and heavy financial need of
the Participant;
(bb) The Participant has obtained all
distributions, other than a distribution pursuant to this
Section 9.10, and all loans available under this Plan and all
other plans maintained by the Employer;
(cc) Elective Contributions made on
behalf of a Participant under this Plan and all other plans
maintained by the Employer are suspended for a period of
twelve (12) months beginning on the date such Participant
receives a hardship distribution; and
(dd) The Participant may not make a
Deferral Election for his or her taxable year immediately
following the taxable year of the hardship withdrawal under
this Plan and all other plans maintained by the Employer in
excess of the applicable limit under Section 402(g) of the
Code for such next taxable year less the amount of the
Elective Contributions made on his or her behalf for the
taxable year of the hardship withdrawal.
A Participant shall not cease to be treated as an
Eligible Employee because his or her Elective Contributions
are suspended in accordance with subsection (c)(ii)(cc)
above.
(iii) The amount of an immediate and heavy
financial need may include any amounts necessary to pay any
federal, state or local income taxes or penalties reasonably
anticipated to result from the distribution.
(d) Withdrawals shall be charged against the
Investment Funds in which the withdrawing Participant's
Account is invested in proportion to the amounts invested in
such funds as of the date such withdrawal is made.
(e) A request for a hardship distribution shall
be treated as a claim for benefits under Article XII. A
hardship withdrawal shall be made as soon as practicable
following approval of the request by the Benefits Committee.
(f) The Benefits Committee may from time to
time establish rules governing withdrawals. Such rules shall
be applied on a uniform and nondiscriminatory basis.
9.10 DISTRIBUTION TO ALTERNATE PAYEE. In the event
that all or a portion of a Participant's Account is
immediately distributable to an alternate payee pursuant to a
qualified domestic relations order, the Benefits Committee
shall distribute the amount payable to such alternate payee
in a lump sum as soon as practicable after determining that
such order is qualified in accordance with Article XV.
Except as otherwise provided in the domestic relations order,
such distribution shall be made as of the Valuation Date
coinciding with or next following the date that it is
determined that the order is qualified. If the amount to be
distributed under this Section exceeds Three Thousand Five
Hundred Dollars ($3,500.00), distribution shall not be made
without the written consent of the alternate payee.
In the event that all or a portion of a Participant's
Account is payable to an alternate payee pursuant to a
qualified domestic relations order, but is not immediately
distributable under such order, the Benefits Committee shall
direct the Trustee to establish a separate account within the
meaning of Section 15.5(b) on behalf of the alternate payee
as soon as practicable after determining that such order is
qualified in accordance with Article XV. The Benefits
Committee shall distribute the amount payable from such
account to such alternate payee in such form and at such time
as is provided by the terms of such order. Distribution of a
separate account pursuant to this Section 9.10 may be made
prior to the Participant's "earliest retirement age" as
defined in Section 15.7.
9.11 DISTRIBUTIONS TO MINORS AND INCOMPETENT
PERSONS. If any person to whom benefits shall be distributed
under the Plan shall be a minor, or if the Benefits Committee
shall determine that such person is incompetent by reason of
mental or physical disability, the Benefits Committee may
direct the Trustee to distribute such benefits in one or more
of the following ways to be determined by the Benefits
Committee:
(a) directly to such minor or incompetent
person; or
(b) to a legal or natural guardian or other
relative of such minor, or to the legal guardian or
conservator of such incompetent person or to any adult person
with whom such incompetent person temporarily or permanently
resides.
The receipt by such minor, incompetent person, guardian,
conservator, relative or other person shall be a complete
discharge of the Trustee, the Benefits Committee and the
Trust Fund, and the Trustee and Benefits Committee shall be
without any responsibility to see to the application of any
such distributions.
9.12 DISTRIBUTION RULES FOR TSA PARTICIPANTS. The
provisions of this Section shall be effective October 1,
1996.
(a) For purposes of this Section 9.12, the
following terms shall have the following meanings unless the
context clearly indicates otherwise:
(i) "Closing Date" shall mean October 1,
1996.
(ii) "Lincoln" shall mean The Lincoln
National Life Insurance Company, any other corporation, trade
or business organization that, at the time of reference,
controls, is controlled by, or is under common control with
The Lincoln National Life Insurance Company, and any
successor to The Lincoln National Life Insurance Company or
to such other corporation, trade or business organization
that assumes the obligations of The Lincoln National Life
Insurance Company under Asset Transfer and Acquisition
Agreement By and Between UNUM Life Insurance Company of
America and The Lincoln National Life Insurance Company Dated
as of January 24, 1996.
(iii) "Transition Period" shall mean, with
respect to a TSA Participant, the period beginning on the
Closing Date and ending on the earlier of (i) the date on
which the TSA Participant terminates employment with Lincoln
and is not thereupon reemployed by an Employer and (ii) the
date that is twenty (20) months after the Closing Date.
(iv) "TSA Participant" shall mean a
Participant in the Plan who (i) is an Eligible Employee
immediately before the Closing Date; (ii) becomes employed by
Lincoln as of the Closing Date or, in the case of a
Participant who on the Closing Date is receiving benefits
under an Employer's short-term disability plan or is absent
from service with an Employer on account of an approved leave
of absence, becomes employed by Lincoln immediately after the
period of disability or approved leave of absence; and (iii)
is employed by Lincoln as an employee at will and not as a
contract employee.
(b) Notwithstanding Sections 9.6(h)(i) and 9.14
to the contrary, in the event that a TSA Participant elects
to receive distribution of his or her Account in the form of
a direct rollover (as described in Section 9.13) to the
Lincoln National Corporation Employees' Savings and Profit
Sharing Plan (the "Lincoln 401(k) Plan") and at the time of
such distribution there remain outstanding any unpaid loans
with respect to his or her Account that are not in default,
such unpaid loans shall not be treated as due and payable
immediately as of the date such distribution is made and
instead shall be transferred to the Lincoln 401(k) Plan.
The promissory note evidencing such loan(s) shall be assigned
to the Lincoln 401(k) Plan, and the TSA Participant's
obligation to this Plan shall be deemed to be paid in full as
of the date the distribution is made. Such TSA Participant
shall be treated as receiving a distribution of his or her
entire Account.
(c) During his or her Transition Period,
Section 9.7(a) shall not apply with respect to a TSA
Participant, and, subject to Section 9.7(b) and (c), the TSA
Participant shall be permitted to maintain his or her Account
under the Plan, or to elect to receive distribution of his or
her Account as of any Valuation Date that occurs after the
Closing Date, without regard to the value of his or her
Account as of the Valuation Date following the Closing Date
or any subsequent Valuation Date that falls within such
Transition Period. Beginning with the first Valuation Date
following the end of his or her Transition Period, Section
9.7(a) shall once again apply to a TSA Participant.
9.13 DIRECT ROLLOVERS.
(a) Effective January 1, 1993, a Participant
who is entitled to receive an eligible rollover distribution
may elect to have such distribution (or a portion thereof not
less than Five Hundred Dollars ($500.00)) made directly to an
eligible retirement plan ("direct rollover election").
An alternate payee who is entitled to receive an
eligible rollover distribution pursuant to a qualified
domestic relations order under Article XV and who is the
spouse or a former spouse of a Participant may make a direct
rollover election as if such alternate payee were the
Participant.
A surviving spouse who is entitled to receive an
eligible rollover distribution by reason of the Participant's
death may make a direct rollover election; provided that such
election is restricted to an eligible retirement plan that is
an individual retirement account described in Section 408(a)
of the Code or an individual retirement annuity described in
Section 408(b) of the Code.
(b) No earlier than ninety (90) days and no
later than thirty (30) days before an eligible rollover
distribution is to be made, the Benefits Committee shall
provide the Participant, alternate payee, or surviving
spouse, as the case may be, with a written explanation of:
(i) the rules under which he or she may make
a direct rollover election;
(ii) the legal requirement that federal
income tax be withheld from the distribution if he or she
does not elect a direct rollover;
(iii) the rules under which the amount that
he or she actually receives will not be subject to federal
income tax if such amount is transferred ("rolled over")
within sixty (60) days after being received pursuant to
Section 402(c) of the Code;
(iv) the rules, if applicable, for
receiving special income tax averaging, or capital gain
treatment, under Section 402(d) of the Code; and
(v) the Plan provisions under which a
direct rollover election with respect to one payment in a
series of periodic payments will apply to all subsequent
payments until such election is changed.
Notwithstanding the foregoing to the contrary, if
an eligible rollover distribution is one of a series of
periodic payments, the explanation required by this
subsection shall be provided annually as long as such
payments continue.
(c) A direct rollover election shall be made in
such manner and at such time as the Benefits Committee shall
prescribe, and shall include:
(i) the name of the eligible retirement
plan;
(ii) a statement that such plan is an
eligible retirement plan; and
(iii) any other information necessary to
permit a direct rollover by the means selected by the
Benefits Committee.
An election to make a direct rollover with respect
to one payment in a series of periodic payments shall apply
to all subsequent payments in the series until such election
is changed; such change with respect to subsequent payments
may be made at any time.
(d) Notwithstanding subsection (b) to the
contrary, if an individual, after receiving the written
explanation required by subsection (b), affirmatively elects
to make or not make a direct rollover, an eligible rollover
distribution may be made less than thirty (30) days after the
date such written explanation was given, provided the
Benefits Committee has informed such individual, in writing,
of his or her right to a period of at least thirty (30) days
to make such election.
(e) As used in this Section, the following
terms shall have the following meanings:
(i) "Eligible retirement plan" shall mean
(A) an individual retirement account,
described in Section 408(a) of the Code;
(B) an individual retirement annuity
described in Section 408(b) of the Code (other than an
endowment contract);
(C) a trust described in Section
401(a) of the Code which is exempt from tax under Section
501(a) of the Code and which is part of a defined
contribution plan described in Section 414(i) of the Code
that permits rollover contributions; or
(D) an annuity plan described in
Section 403(a) of the Code.
(ii) "Eligible rollover distribution"
shall mean a distribution from the Plan of Two Hundred
Dollars ($200.00) or more, excluding the following:
(A) a distribution that is one of a
series of periodic payments (not less frequently than
annually) made for a specified period of ten (10) years or
longer, for the distributee's life expectancy (or the joint
life expectancy of the distributee and his or her designated
Beneficiary), or for the distributee's life (or the joint
lives of the distributee and his or her designated
Beneficiary);
(B) a required distribution pursuant
to Section 9.7;
(C) a return of Elective
Contributions pursuant to Section 7.4;
(D) a corrective distribution
pursuant to Section 3.7, 5.4 or 6.2; and
(E) a distribution of after-tax
contributions.
9.14 FORM OF DISTRIBUTION. Distribution of a
Participant's Account shall be made in cash; provided,
however, a Participant may elect that distribution of the
portion of his or her Account which is invested in the UNUM
Stock Fund be made, in whole or in part, in whole shares of
common stock of UNUM Corporation. Such election shall be
made by such written, telephonic or electronic means, and at
such time, as shall be prescribed by the Benefits Committee.
In the event of the death of a Participant, his or her
surviving spouse or Beneficiary may make the same election as
permitted with respect to a Participant pursuant to this
Section.
ARTICLE X
TOP HEAVY PROVISIONS
10.1 TOP HEAVY REQUIREMENTS. Notwithstanding any
provision of this Plan to the contrary, if the Plan is or
becomes Top Heavy in any Plan Year beginning after December
31, 1983, then the provisions of this Article shall become
applicable and supersede any conflicting provisions of this
Plan.
10.2 MINIMUM VESTING REQUIREMENTS. Each Participant
shall continue to have a fully vested and nonforfeitable
interest in his or her Account.
10.3 MINIMUM CONTRIBUTION REQUIREMENT. Except as
hereinafter provided, for each Plan Year in which the Plan is
Top Heavy, each Employer shall contribute, on behalf of each
Eligible Employee who is a Non-Key Employee and who has not
separated from its employ by the end of such Plan Year, an
amount, which when added to the Discretionary Contributions
allocated to such Eligible Employee's Account, shall be equal
to the lesser of:
(a) three percent (3%) of such Eligible
Employee's compensation (as defined in Section 7.5); or
(b) the percentage of such Eligible Employee's
compensation (as so defined) which is equal to the largest
percentage determined by dividing the Employer Contributions
allocated to the Account of each Key Employee by such Key
Employee's compensation (as so defined).
The preceding sentence shall be applied by substituting four
percent (4%) for three percent (3%) for each Plan Year in
which:
(i) the Plan is included in a Required
Aggregation Group or a Permissive Aggregation Group which
includes a qualified defined benefit plan and the Top Heavy
Ratio does not exceed ninety percent (90%); and
(ii) the limitation set forth in Section 7.2
would be exceeded if 1.0 is substituted for 1.25 wherever
1.25 appears in said limitation.
The minimum contribution shall be made on behalf of each
Eligible Employee who is a Non-Key Employee and who remains
in the service of the Employer on the last day of the Plan
Year, regardless of the number of Hours of Service such
Eligible Employee is credited with during such Plan Year.
Notwithstanding any provision of this Section to the
contrary, for each Plan Year in which the Plan is Top Heavy,
an Eligible Employee who is a Non-Key Employee and who is
also covered by a qualified defined benefit plan maintained
by the Employer, shall accrue a minimum benefit (as required
by Section 416(c)(1) of the Code and the regulations
thereunder) under such plan (unless such plan is terminated),
and a minimum contribution shall not be made on behalf of
such Eligible Employee under this Plan. The preceding
sentence shall be applied by substituting "three percent
(3%)" for "two percent (2%)" in Section 416(c)(1)(B)(i) of
the Code and by increasing (but not by more than ten
percentage points) the percentage provided in Section
416(c)(1)(B)(ii) of the Code for each Plan Year in which:
(i) the Plan is included in a Required
Aggregation Group or a Permissive Aggregation Group which
includes a qualified defined benefit plan and the Top Heavy
Ratio does not exceed ninety percent (90%); and
(ii) the limitation set forth in Section
7.2 would be exceeded if 1.0 is substituted for 1.25 wherever
1.25 appears in said limitation.
For purposes of satisfying the minimum contribution
requirement of this Section, Elective Contributions and
Matching Contributions shall not be taken into account.
10.4 MODIFIED LIMITATION ON ALLOCATIONS. The
limitation of Section 7.2 shall be applied by substituting
1.0 for 1.25 wherever 1.25 appears in said limitation for
each Plan Year in which the Plan is included in a Required
Aggregation Group or a Permissive Aggregation Group which
includes a qualified defined benefit plan and the Top Heavy
Ratio exceeds ninety percent (90%).
10.5 PRESENT VALUE FACTORS. For purposes of
determining the Top Heavy Ratio, the present value of accrued
benefits under all defined benefit plans included in a
Required Aggregation Group or a Permissive Aggregation Group
shall be based on the following factors:
Interest: six and one-half percent (6.5%)
Mortality: 1971 Group Annuity Mortality Table, using
male rates for all individuals.
10.6 BENEFIT ACCRUAL. For purposes of determining
the Top Heavy Ratio, the accrued benefit of any Non-Key
Employee under all defined benefit plans included in a
Required Aggregation Group or a Permissive Aggregation Group
shall be determined under the method used for accrual
purposes for all such plans of an Employer or, if no method
is prescribed, as if such benefit accrued no more rapidly
than the slowest rate permitted under Section 411(b)(1)(C) of
the Code.
ARTICLE XI
PLAN ADMINISTRATION
11.1 APPOINTMENT OF BENEFITS COMMITTEE. The Board
(or any person or persons to whom the Board delegates its
authority) shall appoint at least three (3) persons to
administer the Plan, and they shall be known as the Benefits
Committee. The Benefits Committee shall act by a majority of
its members either by a meeting or in a writing without a
meeting. Any member may participate in a meeting by means of
a conference telephone or similar communications equipment by
means of which all persons participating in the meeting can
hear each other. Any person appointed to serve as a member
of the Benefits Committee shall signify his or her acceptance
in writing to the Board (or to such person or persons
specified by the Board).
11.2 RESIGNATION AND REMOVAL. Any member of the
Benefits Committee may resign at any time by delivering to
the Board (or to such person or persons specified by the
Board) a written notice of resignation, to take effect at a
date specified therein, which shall not be less than thirty
(30) days after the delivery thereof, unless such notice
shall, in writing, be waived by the Board (or such
person(s)). Each member of the Benefits Committee shall
serve at the pleasure of the Board (or such person or persons
to whom the Board delegates its authority) and may be removed
by delivery of written notice of removal, to take effect at a
date specified therein.
The Board (or such person or persons to whom the Board
delegates its authority) as soon as practicable following
receipt of a written notice of resignation or delivery of a
written notice of removal of the Benefits Committee, shall
consider the appointment of a successor. In the event the
Board (or such person(s)) fails to appoint a successor to
serve as a member of the Benefits Committee, the remaining
members of the Benefits Committee shall constitute the
Benefits Committee.
11.3 POWERS AND DUTIES. The Benefits Committee
shall be a Named Fiduciary for purposes of Section 402(a)(1)
of ERISA with the following powers and complete discretionary
authority to control and manage the operation and
administration of the Plan:
(a) To determine all questions concerning the
eligibility of Employees to participate in and receive
benefits under the Plan.
(b) To compute the amount of benefits payable
to any Participant or Beneficiary.
(c) To authorize and direct the Trustee with
respect to payment of benefits.
(d) To furnish the Trustee with such
information, statements and reports as will enable the
Trustee to comply with the reporting and disclosure
requirements under ERISA and the Code.
(e) To interpret the provisions of the Plan and
to make rules and regulations for the administration of the
Plan.
(f) To maintain all the necessary records for
the administration of the Plan.
(g) To employ or retain counsel, accountants,
actuaries or such other consultants as may be required to
assist in administering the Plan.
(h) To act as agent for service of legal
process.
(i) To give written notice to all interested
parties (as defined in the regulations prescribed under
Section 7476(b)(1) of the Code), in the form and manner, and
at such time as prescribed by such regulations, of an
application for an advance determination with respect to the
initial qualification of the Plan or to the effect of an
amendment or termination of the Plan.
The Benefits Committee shall have no power or authority
over the investment of the assets of the Trust and nothing in
this Section 11.3 shall be construed as granting such power
and authority.
11.4 REPORTING AND DISCLOSURE. The Benefits
Committee shall furnish to each Participant and to each
Beneficiary who is receiving benefits under the Plan, and
shall file with the Secretary of Labor and the Secretary of
Treasury all reports, disclosures and notifications as are
required under the Code and ERISA.
11.5 DELEGATION OF MINISTERIAL DUTIES. The Benefits
Committee may delegate to any other person or persons,
severally or jointly, the authority to perform any
ministerial act in connection with the administration of the
Plan.
11.6 PAYMENT OF PLAN EXPENSES. Notwithstanding any
provision of the Plan or Trust to the contrary, payment of
any reasonable expenses of administering the Plan, as
determined by the Benefits Committee, shall be made from the
Trust Fund, unless paid by the Employers. If such expenses
are incurred as a result of services provided to the Plan or
Trust by a party in interest (as defined in Section 3(14) of
ERISA), no payment shall be made from the Trust Fund unless
the payment (a) satisfies the applicable requirements of
Section 408 of ERISA and the regulations thereunder; or (b)
is otherwise exempt from the applicable prohibited
transaction rules of the Code and ERISA.
11.7 COMPENSATION AND REIMBURSEMENT OF EXPENSES.
The Benefits Committee shall be entitled to reasonable
compensation for services rendered and to reimbursement of
expenses properly and actually incurred in the performance of
its duties on behalf of the Plan, but no person so serving
who already receives compensation from an Employer or any
Affiliated Employer for services rendered as an Employee
shall receive compensation from the Plan, except
reimbursement of expenses properly and actually incurred and
not otherwise reimbursed.
11.8 UNIFORMITY OF RULES AND REGULATIONS. In the
administration of the Plan and the interpretation and
application of its provisions, the Benefits Committee shall
exercise its powers and authority in a nondiscriminatory
manner, and shall apply uniform administrative rules and
regulations in order to assure substantially the same
treatment to Participants in similar circumstances.
11.9 RELIANCE ON REPORTS. The Benefits Committee
shall be entitled to rely upon all certificates and reports
made by any counsel, accountant, actuary or other consultant
employed or retained to assist in administering the Plan.
11.10 MULTIPLE SIGNATURES. A majority of the
members of the Benefits Committee or any one member
authorized by the Benefits Committee shall have authority to
execute all documents, reports or other memoranda necessary
or appropriate to carry out the actions and decisions of the
Benefits Committee. The Trustee or any other interested
party may rely upon any document, report or other memorandum
so executed as evidence of the Benefits Committee action or
decision indicated thereby.
ARTICLE XII
CLAIMS PROCEDURE
12.1 FILING A CLAIM FOR BENEFITS. A Plan
Participant or other person entitled to benefits under the
Plan may make a claim for Plan benefits by filing a written
request with the Benefits Committee.
12.2 DENIAL OF CLAIM. If a claim is wholly or
partially denied, the Benefits Committee shall furnish the
claimant with written notice setting forth in a manner
calculated to be understood by the claimant:
(a) the specific reason or reasons for the
denial;
(b) specific reference to pertinent Plan
provisions on which the denial is based;
(c) a description of any additional material or
information necessary for the claimant to perfect his or her
claim and an explanation why such material or information is
necessary; and
(d) appropriate information as to the steps to
be taken if the claimant wishes to submit his or her claim
for review.
Such notice shall be furnished to the claimant within ninety
(90) days after receipt of his or her claim, unless special
circumstances require an extension of time for processing
such claim. If an extension of time for processing is
required, the Benefits Committee shall, prior to the
termination of the initial ninety (90) day period, furnish
the claimant with written notice indicating the special
circumstances requiring an extension and the date by which
the Benefits Committee expects to render its decision. In no
event shall an extension exceed a period of ninety (90) days
from the end of the initial ninety (90) day period.
12.3 APPEAL OF DENIED CLAIM. A claimant may request
the Appellate Committee to review a denied claim. Such
request shall be in writing and must be delivered to the
Appellate Committee within sixty (60) days after receipt by
the claimant of written notification of denial of claim. A
claimant or his or her duly authorized representative may:
(a) review pertinent documents, and
(b) submit issues and comments in writing.
For purposes of this Section and Section 12.4,
"Appellate Committee" shall mean a committee of no less than
five (5) and no more than seven (7) persons appointed by the
Board (or any person or persons to whom the Board delegates
its authority) to review any denied claims. The Appellate
Committee shall be a named fiduciary for the purpose of
reviewing denied claims and shall have the powers identified
in subsections 11.3(a)-(g) and complete discretionary
authority in reviewing denied claims.
The Appellate Committee shall act by a majority of its
members either by a meeting or in a writing without a
meeting. Any member may participate in a meeting by means of
a conference telephone or similar communications equipment by
means of which all persons participating in the meeting can
hear each other. Any person appointed to serve as a member
of the Appellate Committee shall signify his or her
acceptance in writing to the Board (or such person or persons
specified by the Board).
Any member of the Appellate Committee may resign at any
time by delivering to the Board (or such person or persons
specified by the Board) a written notice of resignation, to
take effect at a date specified therein, which shall not be
less than thirty (30) days after the delivery thereof, unless
such notice shall, in writing, be waived by the Board (or
such person or persons specified by the Board). Each member
of the Appellate Committee shall serve at the pleasure of the
Board (or such person or persons specified by the Board) and
may be removed by delivery of written notice of removal, to
take effect at a date specified therein.
The Board (or such person or persons specified by the
Board), as soon as practical following receipt of a written
notice of resignation or delivery of a written notice of
removal of any member of the Appellate Committee, shall
consider the appointment of a successor. In the event the
Board (or such person or persons specified by the Board)
fails to appoint a successor to serve as a member of the
Appellate Committee, the remaining members of the Appellate
Committee shall constitute the Appellate Committee.
12.4 DECISION ON APPEAL. The Appellate Committee
shall notify the claimant of its decision on review not later
than sixty (60) days after receipt of a request for review,
unless special circumstances require an extension of time for
processing, in which case a decision shall be rendered as
soon as possible, but not later than one hundred twenty (120)
days after receipt of a request for review. If an extension
of time for review is required because of special
circumstances, written notice of the extension must be
furnished to the claimant prior to the commencement of the
extension. The Appellate Committee's decision on review
shall be in writing and shall include specific reasons for
the decision, as well as specific references to the pertinent
Plan provisions on which the decision is based.
ARTICLE XIII
TRUST FUND INVESTMENTS
13.1 EFFECTIVE DATE. Except as hereinafter
provided, the provisions of this Article shall be effective
October 1, 1995.
13.2 DUTIES OF TRUSTEE. The Trustee shall receive
and hold all contributions made by an Employer together with
such other assets as may be transferred to it in accordance
with the provisions of the Plan. In addition, the Trustee
shall make distributions as directed by the Benefits
Committee in accordance with the provisions of Article IX.
13.3 INVESTMENT FUNDS. The Trustee shall establish
a UNUM Stock Fund, a Fixed Income Fund, one or more other
Investment Funds and, effective July 1, 1996, Participant-
Directed Brokerage Accounts as the Individual Trustees (as
defined in Section 1.11 of the Trust) may from time to time
direct. The Individual Trustees shall direct that each
Investment Fund, other than the UNUM Stock Fund and any
Participant-Directed Brokerage Account, shall be invested:
(a) at the discretion of the Trustee in
accordance with such investment guidelines and objectives as
it may establish; or
(b) at the discretion of a duly appointed
Investment Manager in accordance with such investment
guidelines and objectives as may be established by the
Trustee.
The Individual Trustees may from time to time change
their direction with respect to any Investment Fund and may,
at any time, eliminate any Investment Fund. Whenever an
Investment Fund is eliminated, the Trustee shall promptly
liquidate the assets of such Investment Fund and reinvest the
proceeds thereof in such other Investment Fund as the
Benefits Committee may direct, unless a Participant or Former
Participant, pursuant to Section 13.7 or 13.8, elects to
reinvest all or a portion of the balance of his or her
Account which had been invested in the eliminated Investment
Fund in one or more of the other available Investment Funds
or through a Participant-Directed Brokerage Account.
The Trustee shall transfer to each Investment Fund or
Participant-Directed Brokerage Account such portion of the
assets of the Trust as the Benefits Committee may from time
to time direct in accordance with the terms of the Plan. All
interest, dividends and other income received with respect
to, and any proceeds realized from the sale or other
disposition of, assets held in any Investment Fund shall be
credited to and reinvested in such Investment Fund, and all
expenses properly attributable to any Investment Fund shall
be paid therefrom unless paid by the Employers.
13.4 UNUM STOCK FUND. Effective December 1, 1989,
the Trustee shall establish a UNUM Stock Fund which shall be
invested solely in shares of common stock of UNUM Corporation
and any other qualifying employer security within the meaning
of Section 407(d)(5) of ERISA ("Employer Stock"). The
Trustee shall, as soon as practicable, apply amounts
allocated to the UNUM Stock Fund to purchase Employer Stock
on the open market or in private transactions, from UNUM
Corporation or otherwise, at current market value. Any
purchase of Employer Stock directly from the UNUM Corporation
shall be made without commission. Pending investment in
Employer Stock, the Trustee shall invest amounts allocated to
and dividends or other amounts received by the UNUM Stock
Fund in cash or short-term cash equivalents including, but
not limited to, short-term debt obligations issued or
guaranteed by the United States government, money market
funds and savings accounts. Notwithstanding the provisions
of this Section 13.4 to the contrary, the Trustee shall have
no authority to invest any assets of the Trust in shares of
Employer Stock unless (i) such shares constitute "qualifying
employer securities" within the meaning of Section 407 of
ERISA and (ii) such investment is not prohibited by Section
404, 406 or 407 of ERISA.
Upon the purchase of any Employer Stock by the Trustee,
the purchase price chargeable to the Account of each
Participant shall be its proportionate share (based upon the
number of shares purchased and the number of shares allocable
to such Account) of the entire amount paid by the Trustee
taking into account all brokerage fees, transfer taxes, the
additional cost incurred on purchase of odd lots and other
expenses incurred in connection with the purchase and
transfer of such stock.
Employer Stock acquired by the Plan shall be accounted
for as provided under Treasury Regulation Section 1.402(a)-
1(b)(2)(ii), and the Benefits Committee shall maintain
adequate records of the cost basis of all shares of the
Employer Stock allocated to each Participant's Account.
Cash dividends received by the Trustee upon Employer
Stock allocated to a Participant's Account shall be allocated
and credited to such Account as of the payment date and
applied to the purchase of additional Employer Stock. Stock
dividends received by the Trustee upon Employer Stock
allocated to a Participant's Account shall be allocated and
credited to such Account as of the payment date. If Employer
Stock held in the UNUM Stock Fund is split, the new or
additional shares shall be credited as of the record date to
the Accounts of Participants in proportion to the number of
shares credited to their respective Account, as compared to
the total number of shares in the UNUM Stock Fund,
immediately prior to such date.
13.5 FIXED INCOME FUND. The Trustee shall establish
a Fixed Income Fund which shall, in accordance with Section
13.3, be invested primarily in securities expected to produce
a fixed income, including, but not limited to debt
obligations issued or guaranteed by the United States
government or its agencies, debt obligations of corporations,
bank certificates of deposit, money market funds, savings
accounts and other cash equivalents, or a deposit
administration, investment or group annuity contract issued
by a legal reserve life insurance company.
13.6 INVESTMENT OF MATCHING CONTRIBUTIONS.
Effective for Plan Years beginning on or after January 1,
1997, the first one percent (1%) of any Matching
Contributions made on behalf of a Participant for such year
shall be invested in the UNUM Stock Fund; provided, however,
a Participant who has attained age fifty-five (55) shall have
the right to direct that all or a portion of his or her
Matching Contributions Account that is invested in the UNUM
Stock Fund pursuant to this Section be reinvested in any one
or more of the other Investment Funds pursuant to Section
13.7 or reinvested in his or her Participant-Directed
Brokerage Account pursuant to Section 13.8. Matching
Contributions for any Plan Year in excess of the first one
percent (1%) of a Participant's Compensation for such year
shall be invested in accordance with the provisions of
Sections 13.7 and 13.8.
13.7 INVESTMENT FUNDS-PARTICIPANT DIRECTIONS.
(a) INVESTMENT OF CONTRIBUTIONS. Except as
provided in Section 13.6, each Participant may direct that
contributions made on his or her behalf shall be invested in
any one or more of the Investment Funds. Effective December
4, 1995, the percentage of contributions to be invested in
any Investment Fund shall be five percent (5%), or a multiple
thereof. An investment direction shall be made by such
written, telephonic or electronic means as shall be
prescribed by the Benefits Committee.
A Participant's investment direction, if received
by the Benefits Committee prior to the date he or she
commences participation, shall be effective as of said date.
If a Participant does not make an investment direction or an
investment direction is not received by the Benefits
Committee before the Participant commences participation, the
contributions on behalf of such Participant shall be invested
in the fund which presents the least risk of loss as
determined by the Trustee. An investment direction received
by the Benefits Committee after the date a Participant
commences participation shall be effective as of the later of
the first payroll period following receipt by the Benefits
Committee (or by the person or persons specified by the
Benefits Committee) or the date specified by the Participant
in the investment direction. A deemed investment direction
pursuant to Section 16.2 shall be effective January 1, 1997.
A Participant may modify at any time an investment
direction to have future contributions on his or her behalf
(other than the first one percent (1%) of any Matching
Contributions made for any Plan Year beginning on or after
January 1, 1997) invested in the Investment Funds in
proportions other than those previously elected. An election
modifying a previous investment direction shall be made in
multiples of five percent (5%) of such contributions and
shall be made by such written, telephonic or electronic means
as shall be prescribed by the Benefits Committee. A
modification shall be effective as soon as practicable after
receipt by the Benefits Committee (or by the person or
persons specified by the Benefits Committee). The provisions
of this paragraph shall be effective December 4, 1995.
(b) REINVESTMENT OF ACCOUNT. Except as
provided in Section 13.6, a Participant may elect at any
time to reinvest all or a portion of the balance of his or
her Account in any one or more of the Investment Funds. A
Former Participant may elect at any time to reinvest all or a
portion of the balance of his or her Account, including all
or a portion of his or her Matching Contributions Account
that is invested in the UNUM Stock Fund pursuant to Section
13.6, in any one or more of the Investment Funds. An
election to reinvest an Account balance shall be made in five
percent (5%) multiples of such balance and shall be made by
such written, telephonic or electronic means as shall be
prescribed by the Benefits Committee. An election to
reinvest shall be effective as soon as practicable after
receipt by the Benefits Committee (or by the person or
persons specified by the Benefits Committee). The provisions
of this subsection (b) shall be effective December 4, 1995.
13.8 PARTICIPANT-DIRECTED BROKERAGE ACCOUNTS.
Effective July 1, 1996, and except as provided in Section
13.6, each Participant shall have the right to direct that
his or her Account, or such portion thereof as the
Participant shall designate, shall be reinvested through a
Participant-Directed Brokerage Account in such investments as
the Participant shall choose, subject to such restrictions,
applied in a uniform and nondiscriminatory manner, as the
Benefits Committee may determine; provided that (a) no
portion of a Participant's Account may be invested in
collectibles (as defined in Section 408(m)(2) of the Code);
and (b) no portion of a Participant's Account may be invested
in any investment which does not have a fair market value
that is readily determinable on an established market.
A reinvestment direction under this Section 13.8 shall
be made by such written, telephonic or electronic means as
shall be prescribed by the Benefits Committee and shall be
effective as soon as practicable after receipt by the
Benefits Committee (or the person or persons designated by
the Benefits Committee).
Expenses attributable to a Participant's investment
direction under his or her Participant-Directed Brokerage
Account, including any applicable fees, commissions, load
amounts or service charges, shall be charged to such
Participant's Account.
For purposes of this Section, the term "Participant"
shall include a Former Participant with respect to the
Participant's right to direct that his or her Account, or
such portion thereof as he or she shall designate, shall be
reinvested through a Participant-Directed Brokerage Account
in such investments as the Participant shall choose;
provided, a Former Participant shall also have the right to
direct that all or a portion of his or her Matching
Contributions Account that is invested in the UNUM Stock Fund
pursuant to Section 13.6 shall be reinvested through a
Participant-Directed Brokerage Account in such investments as
the Former Participant shall choose.
13.9 NO FIDUCIARY STATUS. A Participant or Former
Participant who directs the investment of his or her Account
shall not by reason thereof be deemed a fiduciary with
respect to the Plan, and the Employer, Trustee, Benefits
Committee, and other fiduciaries, and any custodian acting as
an agent thereof, shall not be liable for any losses
resulting from the purchase, sale or retention of any assets
which are purchased, sold or retained at the direction of a
Participant or Former Participant. Once a Participant or
Former Participant assumes responsibility for direction of
the investment of his or her Account or any portion thereof,
the fiduciaries shall not thereafter be responsible for the
investment thereof except to the extent otherwise required by
applicable law.
13.10 CUSTODIAN. The Board may from time to time
appoint one or more banks, insurance companies, third party
plan administrators or brokers to serve as custodian of all
or any portion of the Trust Fund.
13.11 INVESTMENT MANAGER. The Board may from time
to time appoint one or more Investment Managers to direct the
investment and reinvestment of the Trust Fund or such portion
thereof as may be designated by the Board. Such appointment
shall be in writing and shall be effective upon receipt by
the Board of the Investment Manager's written acceptance and
acknowledgment that he or she is a fiduciary with respect to
the Plan and Trust. The Board shall give prompt written
notice of such appointment to the Trustee. The Board may
revoke the appointment of any Investment Manager by
furnishing such Investment Manager and the Trustee with
written notice setting forth the effective date of such
revocation. The Trustee shall be fully protected in relying
upon the effectiveness of such appointment until such time as
it receives written notice from the Board to the contrary.
For purposes of this Section 13.11, "Board" shall mean
the Board of Directors of UNUM Corporation or any person or
persons to whom the Board delegates all or a part of its
authority under this Section.
13.12 RECORDKEEPER. The Board may from time to time
appoint one or more persons, corporations or business
organizations to perform recordkeeping and other
administrative services with respect to the Plan and the
Accounts established under the Plan.
13.13 VOTING RIGHTS. Stock held in the UNUM Stock
Fund shall be voted by the Trustee.
ARTICLE XIV
AMENDMENT AND TERMINATION
14.1 AMENDMENT. The Board reserves the right to
amend the Plan from time to time, provided that no amendment
shall, except as otherwise provided in the Plan or authorized
by law, permit any part of the Trust Fund to revert to an
Employer, or permit any part of the Trust Fund to be used or
diverted to purposes other than the exclusive benefit of
Employees, their surviving spouses or Beneficiaries.
If the vesting schedule in effect under the Plan is
amended, each Participant who has completed at least three
(3) years of vesting service, may elect to have the vested
percentage of such portion of his or her Account determined
without regard to such amendment. The Benefits Committee
shall promptly give each such Participant written notice of
the adoption of any such amendment and the availability of
the election to have the vested percentage of such portion of
his or her Account determined without regard to such
amendment. An election by a Participant shall be in writing
and shall be effective if filed with the Benefits Committee
at any time during the period beginning with the date such
amendment is adopted and ending on the later of (i) the date
which is sixty (60) days after the day such amendment is
adopted, (ii) the date which is sixty (60) days after the day
such amendment becomes effective, or (iii) the date which is
sixty (60) days after the day the Participant receives
written notice of such amendment. An election once made
shall be irrevocable. For purposes of this Section, a "year
of vesting service" shall mean a Plan Year in which the
Participant is credited with one thousand (1,000) or more
Hours of Service. Further, a Participant shall be considered
to have completed three (3) years of vesting service if the
Participant has completed three (3) years of vesting service
prior to the expiration of the period in which an election
could be made.
14.2 ACCOUNTS NOT TO BE DECREASED BY AMENDMENT. No
amendment shall, except to the extent permitted under Section
412(c)(8) of the Code, decrease a Participant's Account
balance or, except to the extent permitted by regulations,
eliminate an optional form of benefit. In addition, no
amendment shall have the effect of decreasing a Participant's
vested interest determined without regard to such amendment
as of the later of the date such amendment is adopted or the
date it becomes effective.
14.3 TERMINATION. The Board may terminate the Plan
at any time in its entirety or with respect to any Employer
and shall deliver written notice thereof to the Trustee. The
Plan shall terminate with respect to any Employer on the
earliest of the following dates:
(a) The date the Employer is judicially declared
bankrupt or insolvent;
(b) The date the Employer permanently discontinues
contributions under the Plan;
(c) The date the Employer is merged or
consolidated with another corporation and the Employer is not
the surviving corporation or substantially all its assets are
sold, unless the surviving or purchasing corporation
continues the Plan with the consent of the Board; or
(d) The date the Employer withdraws from the Plan.
If an Employer permanently discontinues contributions or
the Plan is otherwise completely or partially terminated for
any other reason, each affected Participant shall have a
fully vested and nonforfeitable interest in his or her
Account and the Trustee shall make distributions in such
manner and at such time as directed by the Benefits Committee
in accordance with the terms of the Plan. Notwithstanding
any provision of the Plan to the contrary, distribution of a
Participant's Account shall be made without the Participant's
or Former Participant's consent following termination of the
Plan, unless applicable regulations require that the Account
of a Participant who does not consent to a distribution be
transferred to another qualified plan maintained by his or
her Employer.
14.4 NOTICE OF AMENDMENT OR TERMINATION. In the
case of an application for an advance determination as to
whether a Plan amendment or termination affects the
continuing qualification of the Plan, the Benefits Committee
shall furnish each interested party (as defined by the
regulations prescribed under Section 7476(b)(1) of the Code)
with written notice, in the form and manner, and at such time
as prescribed by such regulations, of the adoption of any
amendment or Plan termination.
ARTICLE XV
NONALIENABILITY OF BENEFITS; QUALIFIED DOMESTIC RELATIONS
ORDERS
15.1 NONALIENABILITY OF BENEFITS. Except as
expressly provided below, the benefits provided under the
Plan shall not be subject to alienation, assignment,
garnishment, attachment, execution (other than the collection
by the United States on a judgment resulting from an unpaid
tax assessment) or levy of any kind (other than a federal tax
levy made pursuant to Section 6331 of the Code), and any
attempt to cause such benefits to be so subjected will not be
recognized.
15.2 QUALIFIED DOMESTIC RELATIONS ORDERS. The
provisions of the immediately preceding Section shall apply
to the creation, assignment or recognition of a right to any
benefit payable with respect to a Participant pursuant to a
domestic relations order, except that said immediately
preceding Section shall not apply if the order is determined
to be a qualified domestic relations order.
15.3 NOTICE. Upon the receipt of any domestic
relations order by the Plan, the Benefits Committee shall
promptly notify, in writing, the Participant and any
alternate payee named in the domestic relations order (at the
address included in the domestic relations order) of the
receipt of such order and the Plan's procedures for
determining the qualified status of such domestic relations
order.
15.4 REPRESENTATIVE. Any alternate payee named in a
domestic relations order received by the Plan shall have the
right to designate, by notice in writing to the Benefits
Committee, a representative for the receipt of copies of
notices that are sent to the alternate payee with respect to
such domestic relations order.
15.5 SEPARATE ACCOUNT.
(a) During any period in which the issue of
whether a domestic relations order is a qualified domestic
relations order is being determined (by the Benefits
Committee, by a court of competent jurisdiction, or
otherwise), the Benefits Committee shall direct the Trustee
to separately account for the amounts, if any, which would
have been payable to any alternate payee during such period
if the order had been determined to be a qualified domestic
relations order.
(b) In the event an alternate payee does not
receive an immediate distribution pursuant to a domestic
relations order which is determined by the Benefits Committee
or by a court of competent jurisdiction to be a qualified
domestic relations order, the Benefits Committee shall direct
the Trustee to establish a separate account in the Plan in
the name of the alternate payee as soon as practicable
following such determination. An alternate payee shall have
the same rights and protections as a Participant with respect
to such account and shall be entitled to receive distribution
of such account in accordance with Section 9.10.
15.6 DETERMINATION BY BENEFITS COMMITTEE.
(a) Within ninety (90) days after receipt of a
domestic relations order, the Benefits Committee shall
determine whether such order is a qualified domestic
relations order and shall notify, in writing, the Participant
and each alternate payee named in such order of such
determination.
(b) If the Benefits Committee shall determine
that the domestic relations order is a qualified domestic
relations order and such order provides that the benefits
required to be paid thereunder are immediately distributable,
the Benefits Committee shall direct the Trustee to pay to
each alternate payee named in such order, the benefits
required to be paid thereunder, including any amounts
segregated in accordance with Section 15.5(a) (plus any
interest thereon). If the Benefits Committee shall determine
that the domestic relations order is a qualified domestic
relations order and such order does not provide that the
benefits required to be paid thereunder are immediately
distributable, the Benefits Committee shall direct the
Trustee to establish a separate account in accordance with
Section 15.5(b).
(c) If the Benefits Committee shall determine
that the domestic relations order is not a qualified domestic
relations order, the notice required by the first paragraph
of this Section shall include a statement of the specific
reason or reasons for the Benefits Committee's determination
and the Benefits Committee shall direct the Trustee to
continue to segregate, in accordance with Section 15.5(a),
during the eighteen (18) month period beginning with the date
on which the first payment would be required to be made under
such domestic relations order, any amounts which would have
been payable to any alternate payee during such eighteen (18)
month period if the order had been determined to be a
qualified domestic relations order, unless such order shall
sooner be determined, by the Benefits Committee or a court of
competent jurisdiction, to be a qualified domestic relations
order, in which event the Benefits Committee shall direct the
Trustee to make payment of any such segregated amount (plus
any interest thereon) to each alternate payee named in the
order in accordance with subsection (b) above. If neither
the Benefits Committee nor a court of competent jurisdiction
shall determine within said period of eighteen (18) months
that such domestic relations order is a qualified domestic
relations order; then, upon expiration of said period, the
Benefits Committee shall direct the Trustee to pay any such
segregated amount (plus any interest thereon) to the person
or persons who would have been entitled to such amounts if
there had been no order.
15.7 DEFINITIONS. As used in this Article, the
following terms shall have the meanings hereinafter set
forth:
(a) "Alternate payee" shall mean any spouse,
former spouse, child or other dependent of a Participant who
is recognized by a domestic relations order as having a right
to receive all, or a portion of, the benefits payable under
the Plan with respect to such Participant.
(b) "Domestic relations order" shall mean any
judgment, decree or order (including approval of property
settlement agreement) which relates to the provisions of
child support, alimony payments or marital property rights to
a spouse, former spouse, child or other dependent of a
Participant, and is made pursuant to a state domestic
relations law (including a community property law).
(c) "Earliest retirement age" shall mean the
earlier of:
(i) the date on which the Participant is
entitled to a distribution under the Plan, or
(ii) the later of the date the Participant
attains age fifty (50), or the earliest date on which the
Participant could begin receiving payments under the Plan if
he or she separated from service.
(d) "Qualified domestic relations order" shall
mean a domestic relations order which:
(i) creates or recognizes the existence of
an alternate payee's right to, or assigns to an alternate
payee the right to, receive all or a portion of the benefits
payable with respect to a Participant under the Plan; and
(ii) clearly specifies:
(aa) the name and the last known
mailing address (if any) of the Participant and the name and
mailing address of each alternate payee covered by the order;
(bb) the amount or percentage of the
Participant's benefits to be paid by the Plan to each such
alternate payee, or the manner in which such amount or
percentage is to be determined;
(cc) the number of payments or period
to which such order applies; and
(dd) each plan to which such order
applies; and
(iii) does not require the Plan to:
(aa) provide any type or form of
benefits, or any option, not otherwise provided under the
Plan;
(bb) provide increased benefits
(determined on the basis of actuarial value); or
(cc) pay benefits to an alternate
payee which are to be paid to another alternate payee under
another order previously determined to be a qualified
domestic relations order.
In the case of any payment to an alternate payee before
a Participant has separated from service, a domestic
relations order shall not be treated as failing to meet the
requirements of clause (aa) of subparagraph (iii) solely
because such order requires that payment of benefits be made
to an alternate payee:
(iv) on or after the date on which the
Participant attains (or would have attained) the earliest
retirement age;
(v) as if the Participant has retired on
the date on which such payment is to begin under such order;
and
(vi) in any form in which such benefits
may be paid under the Plan to the Participant (other than in
the form of a joint and survivor annuity with respect to the
alternate payee and his or her subsequent spouse).
ARTICLE XVI
MERGERS
16.1 MERGER OR CONSOLIDATION OF PLAN. In case of
any merger or consolidation of the Plan with, or transfer of
assets and liabilities of the Plan to, any other plan
qualified under Section 401(a) and Section 501(a) of the
Code, provision must be made so that each Participant would,
if the Plan then terminated, receive a benefit immediately
after the merger, consolidation or transfer which is equal to
or greater than the benefit he would have been entitled to
receive immediately before the merger, consolidation or
transfer if the Plan had then terminated.
16.2 MERGER WITH DUNCANSON & HOLT, INC. EMPLOYEE
PROFIT PARTICIPATION AND SAVINGS PLAN. Effective January 1,
1997, the Plan shall be merged with the Duncanson & Holt,
Inc. Employee Profit Participation and Savings Plan (the
"Duncanson & Holt, Inc. Plan"). The provisions of this
Section shall be applicable to such merger and shall
supersede any conflicting provisions of this Plan.
(a) The assets of the Duncanson & Holt, Inc.
Plan shall be directly transferred to the Plan as of January
1, 1997. Upon receipt, the Benefits Committee shall direct
the Trustee to establish and maintain an account on behalf of
each participant and former participant under the Duncanson &
Holt, Inc. Plan and shall direct the Trustee to credit such
account with the portion of the transferred assets standing
to the credit of such participant or former participant under
the Duncanson & Holt, Inc. Plan immediately prior to such
transfer, provided such amount shall be separately accounted
for in accordance with Section 8.1. With respect to a
participant in the Duncanson & Holt, Inc. Plan who has an
outstanding loan balance under such plan at the time of the
transfer, the promissory note evidencing such loan shall be
transferred to this Plan and the outstanding loan balance
shall be treated in accordance with the provisions of Section
9.6 as an outstanding loan balance under this Plan.
(b) Each elective, matching or other type of
contribution comprising the transfer account created pursuant
to subsection (a) above shall be administered, invested and
distributed in accordance with the provisions of this Plan
applicable to such type of contribution. Each type of
contribution comprising the transfer account of an individual
who is a participant in the Duncanson & Holt, Inc. Plan as of
December 31, 1996, and which is not fully vested under such
plan as of December 31, 1996, shall become fully vested under
this Plan as of January 1, 1997. Each type of contribution
comprising the transfer account of an individual who is a
former participant in the Duncanson & Holt, Inc. Plan as of
December 31, 1996, and which is not fully vested under such
plan as of December 31, 1996, shall remain subject to the
vesting schedule set forth in Section 9.4 of the Duncanson &
Holt, Inc. Plan, which is reproduced below:
VESTED PERCENTAGE OF
NUMBER OF PARTICIPANT'S MATCHING CONTRIBUTIONS ACCOUNT
AND
YEARS OF VESTING SERVICE DISCRETIONARY CONTRIBUTIONS
ACCOUNT
Less than 1 20%
1 but less than 2 40%
2 but less than 3 60%
3 but less than 4 80%
4 or more 100%
The portion of such former participant's transfer
account which is not vested in accordance with the preceding
sentence as of December 31, 1996, shall be forfeited as of
the date he or she receives distribution of the vested
portion, provided if such former participant receives less
than the entire vested portion of his or her transfer
account, the forfeiture shall be limited to the nonvested
portion of such account at the time of distribution
multiplied by a fraction, the numerator of which is the
amount distributed to such former participant from such
account and the denominator of which is the value of the
vested portion of such account at the time of distribution.
In the event that such former participant is
reemployed prior to incurring five (5) consecutive Breaks in
Service, the amount forfeited shall be restored to his or her
transfer account if he or she repays the full amount of the
vested portion of his or her transfer account distributed to
him or her before the earlier of (a) five (5) years from the
date he or she is again employed by an Employer, or (b) the
close of the first period of five (5) consecutive Breaks in
Service commencing after the date of distribution.
In the event that an individual who was a
participant in the Duncanson & Holt, Inc. Plan and who was
not vested in any portion of his or her matching
contributions account and discretionary contributions account
under that plan at the time he or she ceased to be employed
is reemployed prior to incurring five (5) consecutive Breaks
in Service, the balance of his or her matching contributions
account and discretionary contributions account as of the
Valuation Date coinciding with or next following the date he
or she ceased to be employed shall be restored, and the
Benefits Committee shall direct the Trustee to establish and
maintain an account on behalf of such individual and shall
direct the Trustee to credit such account with such balance.
Restoration shall be made by the end of the Plan
Year following the Plan Year in which such individual is
reemployed by an Employer or, if restoration is conditioned
upon repayment by a former participant, the end of the Plan
Year following the Plan Year in which repayment is made.
Restoration shall first be made out of forfeitures and to the
extent forfeitures are insufficient, then out of Employer
Contributions.
The amounts forfeited by such former participants
in any Plan Year shall be used to make restoration in
accordance with this subsection and, to the extent
forfeitures exceed the amounts required to make restoration,
to reduce Employer Contributions. The amount, if any, by
which forfeitures occurring during a Plan Year exceed the sum
of the amounts required to make restoration and the amount
required to be contributed by the Employer for such Plan Year
shall be credited to an excess forfeiture account, which
shall be adjusted for the income, expenses, gains and losses
attributable thereto in the same manner provided for
adjustment of Accounts. On the Valuation Date coinciding
with the last day of the next succeeding Plan Year, the
excess forfeiture account shall be closed and treated as a
forfeiture occurring in such Plan Year. This procedure shall
be repeated for each Plan Year in which forfeitures occurring
during such year exceed the sum of the amount required to
make restoration and the amount required to be contributed by
such Employer for such year, subject, however, to such
modification as may be required by the Section governing
termination of the Plan.
(c) The deferral election and investment
direction of a participant (and former participant, in the
case of an investment direction) in effect under the
Duncanson & Holt, Inc. Plan as of December 31, 1996, shall be
deemed a Deferral Election under Section 5.1 and an
investment direction under Section 13.7 or 13.8, as the case
may be, of this Plan.
(d) Notwithstanding the foregoing provisions of
this Plan to the contrary, a participant or former
participant in the Duncanson & Holt, Inc. Plan may elect to
have the vested portion of the balance of the transfer
account created pursuant to Section 16.2(a) of this Plan as
of January 1, 1997, distributed in such form as set forth in
Article I of Exhibit B to this Plan.
(e) Notwithstanding any provision of this Plan
to the contrary, any participant or former participant in the
Duncanson & Holt, Inc. Plan who is subject to the provisions
of Article XVI of said plan shall remain subject to such
provisions, which are set forth in Article II of Exhibit B to
this Plan.
(f) Notwithstanding any provision of this Plan
to the contrary, if a participant or former participant in
the Duncanson & Holt, Inc. Plan has made a designation
pursuant to Section 242(b) of the Tax Equity and Fiscal
Responsibility Act of 1982, distribution of his or her
Account shall be made in accordance with such designation.
16.3 MERGER WITH COLONIAL COMPANIES, INC. SECURITY
SAVER PLAN. Effective January 1, 1997, the Plan shall be
merged with the Colonial Companies, Inc. Security Saver Plan
(the "Colonial Plan"). The provisions of this Section shall
be applicable to such merger and shall supersede any
conflicting provisions of this Plan.
(a) The assets of the Colonial Plan shall be
directly transferred to the Plan as of January 1, 1997. Upon
receipt, the Benefits Committee shall direct the Trustee to
establish and maintain an account on behalf of each
participant and former participant under the Colonial Plan
and shall direct the Trustee to credit such account with the
portion of the transferred assets standing to the credit of
such participant or former participant under the Colonial
Plan immediately prior to such transfer, provided such amount
shall be separately accounted for in accordance with Section
8.1. With respect to a participant in the Colonial Plan who
has an outstanding loan balance under such plan at the time
of the transfer, the promissory note evidencing such loan
shall be transferred to this Plan and the outstanding loan
balance shall be treated in accordance with the provisions of
Section 9.6 as an outstanding loan balance under this Plan.
(b) Except as hereinafter provided, each
elective, matching or other type of contribution comprising
the transfer account created pursuant to subsection (a) above
shall be administered, invested and distributed in accordance
with the provisions of this Plan applicable to such type of
contribution. Each type of contribution comprising the
transfer account of an individual who is a participant in the
Colonial Plan as of December 31, 1996, and which is not fully
vested under such plan as of December 31, 1996, shall become
fully vested under this Plan as of January 1, 1997. Each
type of contribution comprising the transfer account of an
individual who is a former participant in the Colonial Plan
as of December 31, 1996, and which is not fully vested under
such plan as of December 31, 1996, shall remain subject to
the vesting schedule set forth in Section 7.3 of the Colonial
Plan, which is reproduced below:
NUMBER OF PARTICIPANT'S VESTED PERCENTAGE OF
YEARS OF VESTING SERVICE MATCHING CONTRIBUTIONS
ACCOUNT
Less than 1 0%
1 but less than 20%
2 but less than 40%
3 but less than 4 60%
4 but less than 5 80%
5 or more 100%
The portion of such former participant's transfer
account which is not vested in accordance with the preceding
sentence as of December 31, 1996, shall be forfeited as of
the date he or she receives distribution of the vested
portion, provided if such former participant receives less
than the entire vested portion of his or her transfer
account, the forfeiture shall be limited to the nonvested
portion of such account at the time of distribution
multiplied by a fraction, the numerator of which is the
amount distributed to such former participant from such
account and the denominator of which is the value of the
vested portion of such account at the time of distribution.
In the event that such former participant is
reemployed prior to incurring five (5) consecutive Breaks in
Service, the amount forfeited shall be restored to his or her
transfer account if he or she repays the full amount of the
vested portion of his or her transfer account distributed to
him or her before the earlier of (a) five (5) years from the
date he or she is again employed by an Employer, or (b) the
close of the first period of five (5) consecutive Breaks in
Service commencing after the date of distribution.
In the event that an individual who was a
participant in the Colonial Plan and who was not vested in
any portion of his or her matching contributions account
under that plan at the time he or she ceased to be employed
is reemployed prior to incurring five (5) consecutive Breaks
in Service, the balance of his or her matching contributions
account as of the Valuation Date coinciding with or next
following the date he or she ceased to be employed shall be
restored, and the Benefits Committee shall direct the Trustee
to establish and maintain an account on behalf of such former
participant and shall direct the Trustee to credit such
account with such balance.
Restoration shall be made by the end of the Plan
Year following the Plan Year in which such individual is
reemployed by an Employer or, if restoration is conditioned
upon repayment by a former participant, the end of the Plan
Year following the Plan Year in which repayment is made.
Restoration shall first be made out of forfeitures and to the
extent forfeitures are insufficient, then out of Employer
Contributions.
The amounts forfeited by such former participants
in any Plan Year shall be used to make restoration in
accordance with this subsection and, to the extent
forfeitures exceed the amounts required to make restoration,
to reduce Employer Contributions. The amount, if any, by
which forfeitures occurring during a Plan Year exceed the sum
of the amounts required to make restoration and the amount
required to be contributed by the Employer for such Plan Year
shall be credited to an excess forfeiture account, which
shall be adjusted for the income, expenses, gains and losses
attributable thereto in the same manner provided for
adjustment of Accounts. On the Valuation Date coinciding
with the last day of the next succeeding Plan Year, the
excess forfeiture account shall be closed and treated as a
forfeiture occurring in such Plan Year. This procedure shall
be repeated for each Plan Year in which forfeitures occurring
during such year exceed the sum of the amount required to
make restoration and the amount required to be contributed by
such Employer for such year, subject, however, to such
modification as may be required by the Section governing
termination of the Plan.
(c) The deferral election of a participant in
effect under the Colonial Plan as of December 31, 1996, shall
be deemed a Deferral Election under Section 5.1 of this Plan.
During the period beginning January 1, 1997, and ending on
the later of February 1, 1997, or the date participant
records under the Colonial Plan are reconciled and updated by
State Street Bank and Trust Company, the balance of each
transfer account created pursuant to subsection (a) above,
and, except as provided in Section 13.6 of this Plan, any
contributions made on behalf of a Participant who was a
participant in the Colonial Plan as of December 31, 1996,
shall be invested in such Investment Fund(s) as the plan
fiduciary of the Colonial Plan who is responsible for
investment decisions shall determine. Effective as of the
first day immediately following the end of the period
described in the preceding sentence, each participant and
former participant in the Colonial Plan as of December 31,
1996, shall be permitted to make investment directions as
provided in Section 13.7 or Section 13.8 of this Plan. If a
participant or former participant in the Colonial Plan does
not make an investment direction, in accordance with the
preceding sentence, the balance of his or her transfer
account (and any contributions made on his or her behalf
under this Plan, in the case of a participant) shall continue
to be invested in accordance with investment instructions in
effect for the period described in the second sentence of
this subsection (c). Any investment direction pursuant to
this subsection (c) shall be made by such written, telephonic
or electronic means as shall be prescribed by the Benefits
Committee.
ARTICLE XVII
MISCELLANEOUS
17.1 FIDUCIARY DUTIES. All fiduciaries with respect
to the Plan and Trust shall discharge their respective duties
under the Plan and Trust solely in the interest of the
Participants, their surviving spouses and their Beneficiaries
and:
(a) for the exclusive purpose of providing
benefits to Participants, their surviving spouses and their
Beneficiaries, and defraying reasonable expenses of
administering the Plan;
(b) with the care, skill, prudence, and
diligence under the circumstances then prevailing that a
prudent person acting in like capacity and familiar with such
matters would use in the conduct of an enterprise of a like
character and with like aims; and
(c) by diversifying the investments of the Plan
so as to minimize the risk of large losses, unless under the
circumstances it is clearly prudent not to do so.
17.2 PROHIBITED TRANSACTIONS. Neither the Trustee,
nor any Investment Manager, nor any Participant (or Former
Participant) who directs the investment of his or her Account
shall engage in a transaction which the Trustee, Investment
Manager or Participant (or Former Participant) knows or
should know is prohibited by Section 406 or 407(a) of ERISA
or by Section 4975 of the Code, unless an appropriate
exemption or exemptions have been granted by the Department
of Labor under Section 408 of ERISA and the Department of the
Treasury under Section 4975(c)(2) of the Code.
17.3 DELEGATION OF AUTHORITY BY ADOPTING EMPLOYERS.
Each employer that adopts the Plan with the consent of the
Board hereby irrevocably grants to the Board, the Benefits
Committee, the Appellate Committee, and the Trustee exclusive
authority to exercise all the powers conferred on them by the
terms of the Plan, including the power vested in the Board to
amend or terminate the Plan and Trust, and each adopting
employer irrevocably appoints the Board, the Benefits
Committee, the Appellate Committee and the Trustee as its
agents for such purposes. In addition, each employer that
adopts the Plan shall automatically become a party to the
Trust without further action on its part.
17.4 TRANSFERS OF EMPLOYMENT. If any Employee
transfers employment from one Employer to another Employer,
his or her employment shall not be considered interrupted or
terminated. Upon such transfer, the Employee's new Employer
shall assume the obligations of this Plan with respect to
such Employee. A Participant's transfer from one Employer to
another Employer shall not affect his or her rights under the
Plan, and all amounts allocated and credited to his or her
Account as well as all of his or her Years of Participation
Service with the transferor Employer as of the date of such
transfer shall continue to his or her credit.
17.5 ADDITIONAL CONTRIBUTIONS. An Employer shall
contribute such amounts as may be necessary to implement a
decision of the Benefits Committee or Appellate Committee
regarding the failure of a Former Participant or Beneficiary
to receive distribution of his or her Account in accordance
with the provisions of Article IX within a reasonable period
of time due to inadvertent administrative error or such other
circumstances as the Benefits Committee or Appellate
Committee may designate.
17.6 INITIAL PLAN QUALIFICATION. All contributions
to the Plan are conditioned on initial qualification of the
Plan under Section 401(a) of the Code. If the Plan does not
initially qualify, the Trustee shall, upon request of the
Employer, return the contributions and any earnings thereon.
17.7 EXCLUSIVE BENEFIT. Except as otherwise
provided in the Plan or authorized by the Code, in no event
shall any part of the Trust Fund be used for, or diverted to,
purposes other than for the exclusive benefit of the
Employees and their Beneficiaries.
17.8 SERVICE WITH PREDECESSOR EMPLOYER. Service
with a predecessor employer shall, to the extent required by
law, be treated as service with an Employer.
17.9 EMPLOYMENT. Participation in the Plan shall
not give any Participant the right to be retained in the
employ of the Employer or any other right not specified
herein.
17.10 GENDER. When necessary to the meaning hereof,
and except when otherwise indicated by the context, either
the masculine or the neuter pronoun shall be deemed to
include the masculine, the feminine, and the neuter.
17.11 GOVERNING LAW. This Plan shall be governed
and construed by the laws of the United States of America.
To the extent that the laws of the United States of America
shall not be held to have preempted local law, the Plan shall
be administered under the laws of the State of Maine.
17.12 ARTICLE AND SECTION HEADINGS AND TABLE OF
CONTENTS. The Article and Section headings and Table of
Contents are inserted for convenience of reference and shall
not be considered in the construction of the Plan.
IN WITNESS WHEREOF, UNUM Corporation has caused this
instrument to be executed by its duly authorized officer this
day of , 1996.
WITNESS: UNUM CORPORATION
____________________________ By:___________________________
Its
<PAGE>
EXHIBIT A
UNUM EMPLOYEES RETIREMENT SAVINGS PLAN
The terms used in this Exhibit shall have the meanings
set forth in the Plan unless the context indicates
otherwise. The provisions of this Exhibit A shall apply to the portion
of a Participant's or Former Participant's Account balance
which was allocated to his or her Account under the Plan as
of December 31, 1996.
1.1 OPTIONAL FORMS OF DISTRIBUTION.
Notwithstanding the provisions of Article IX of the Plan to the contrary, a
Participant or Former Participant may elect to have the
portion of his or her Account balance which was allocated to
his or her Account under the Plan as of December 31, 1996,
distributed in one of the following methods:
(a) an annuity providing monthly payments over
a period not to exceed the life (or life expectancy) of the
Participant or the joint life (or joint life and last
survivor expectancy) of the Participant and his or her
Beneficiary, provided such distribution shall be made in
accordance with the requirements of Section 401(a)(9) of the
Code and the regulations thereunder; or
(b) effective January 1, 1995, with respect to
a Participant who has attained age fifty-five (55) and
completed at least five (5) Years of Participation Service
as of the date he or she ceases to be employed by his or her
Employer, periodic payments over a period not to exceed five
(5) years, provided such distribution shall be made in
accordance with the requirements of Section 401(a)(9) of the
Code and the regulations thereunder; or
provided, however, this Section 1.1 shall not apply if such
portion does not exceed Three Thousand Five Hundred Dollars
($3,500.00) (and did not exceed Three Thousand Five Hundred
Dollars ($3,500.00) as of the date of any prior
distribution). For purposes of this Section 1.1, the term
"Participant" shall include an Employee who has made a
Rollover Contribution to the Plan. Distribution shall
commence as soon as practicable following receipt by the
Benefits Committee or its designated representative of an
election pursuant to this Section 1.1.
1.2 SPECIAL RULES FOR ANNUITY OPTION. In the event
a Participant or Former Participant elects to have the
portion of his or her Account balance which was allocated to
his or her Account under the Plan as of December 31, 1996,
distributed in the form of an annuity pursuant to Section
1.1(a) of this Exhibit A, the following provisions shall
apply.
(a) Except as hereinafter provided in
subsection (b), the Participant or Former Participant may
elect the life annuity option described in subparagraph (i)
below; the years certain and life annuity option described
in subparagraph (ii) below; the years certain annuity option
described in subparagraph (iii) below; the full cash refund
annuity described in subparagraph (iv) below; or the
contingent annuitant option described in subparagraph (v)
below. Such election shall be effective upon delivery to
the Benefits Committee within the ninety (90) day period ending
on the date distribution of the Participant's Account is to
be made or commence. If an electing Participant or Former
Participant dies prior to his or her annuity starting date,
such election shall be void, and any death benefit payable
with respect to such Participant shall be determined in
accordance with the provisions of Section 9.3 of the Plan.
The term "annuity starting date" shall mean the date benefit
payments commence.
(i) LIFE ANNUITY OPTION. A Participant who
elects a life annuity option shall receive a benefit which
shall be payable monthly for life, ending with the last
payment due immediately preceding the Participant's date of
death.
(ii) YEARS CERTAIN AND LIFE ANNUITY OPTION.
A Participant who elects a years certain and life annuity
option shall receive monthly payments during his or her
life, and such payments shall be made to the Participant and/or
the Participant's designated Beneficiary for not less than the
five (5) or ten (10) year period elected by the Participant.
If a Participant elects to have his or her Account balance
paid in accordance with this subparagraph (ii) and dies
before the period elected has expired, the balance of the
payments shall be paid to the Participant's designated
Beneficiary. The first such payment shall be made as of the
first day of the month immediately following the
Participant's death.
In the event the Beneficiary designated by the
Participant is not living at the time of the Participant's
death, the balance of the payments which would otherwise have
become payable to the Participant's Beneficiary shall be
commuted to a single sum and shall be paid to the
Participant's estate. If the Beneficiary of the deceased
Participant should die prior to receiving the balance of the
payments which would otherwise have become payable to such
Beneficiary, the balance of the monthly payments shall be
commuted to a single sum and shall be paid to the
Beneficiary's estate.
(iii) YEARS CERTAIN ANNUITY OPTION. A
Participant who elects a years certain annuity option shall
receive monthly payments during the period elected by the
Participant, with payments ceasing at the end of such period.
Under this option, if a Participant survives beyond the
period elected, he or she shall receive no further payments.
In the event of the death of the Participant or the death of
the Participant and the designated Beneficiary before the
period elected has expired, payments shall be made in
accordance with the provisions of subparagraph (ii) above
governing such events.
(iv) FULL CASH REFUND ANNUITY OPTION. A
Participant who elects a full cash refund annuity option
shall receive monthly payments during his or her life, and
in the event the Participant dies before receiving monthly
payments equaling, in the aggregate, the amount paid to
purchase the annuity, the excess of said amount over the
total of all payments received shall be paid in a single sum
to the Beneficiary designated by the Participant. If the
Beneficiary is not living at the time of the Participant's
death, the excess shall be paid in a single sum to the
Participant's estate. No death benefit shall be payable
under this option if the Participant dies after receiving
monthly payments that equal, in the aggregate, the amount
paid to purchase the annuity.
(v) CONTINGENT ANNUITANT OPTION. A
Participant who elects a contingent annuitant option shall
receive monthly payments during his or her life, and
following the Participant's death, monthly payments in the
same amount (or 50% or 66 2/3% of said amount, as elected by
the Participant) shall continue to the person designated by
the Participant ("Contingent Annuitant") at the time of
making the election for the life of the Contingent Annuitant.
If an electing Participant dies after the commencement of
benefit payments, the Contingent Annuitant designated by the
electing Participant shall receive during his or her life the
monthly benefit payable to the Contingent Annuitant under
this option. Monthly payments to the Contingent Annuitant
shall commence on the first day of the month immediately
following the Participant's death, if the Contingent
Annuitant is then living, and shall cease with the monthly
payment coinciding with or immediately preceding the date of
the Contingent Annuitant's death. If the Contingent
Annuitant dies before the commencement of payments to the
Participant, the Participant's election under this
subparagraph shall be void and the Participant shall be
entitled to make another election with respect to the method
of distribution of the portion of his or her Account balance
which was allocated to his or her Account under the Plan as
of December 31, 1996. If the Contingent Annuitant dies after
the commencement of payments to the Participant, such
payments shall cease upon the Participant's death.
If distribution to a Participant commences in
the form of a contingent annuitant option for the joint lives
of the Participant and a Contingent Annuitant other than his
or her spouse, the periodic annuity payment payable to the
Contingent Annuitant must not at any time on and after the
Participant's required beginning date (under Section
401(a)(9) of the Code and the regulations thereunder) exceed
the applicable percentage for such period payable to the
Participant using the table set forth in regulation Section
1.401(a)(9)-2 Q&A-6. For purposes of the preceding sentence,
a former spouse to whom all or a portion of a Participant's
Account balance is payable pursuant to a qualified domestic
relations order (as defined in Section 414(p) of the Code)
shall be treated as a spouse of the Participant. If a
Participant's Account balance is divided and a portion is
allocated to an alternate payee pursuant to a qualified
domestic relations order (as defined in Section 414(p) of the
Code), this paragraph shall not apply to the portion so
allocated.
(b) A Participant or Former Participant who is
married when distribution of the portion of his or her
Account balance which was allocated to his or her Account
under the Plan as of December 31, 1996, is to be made or
commence and who elects to be paid in the form of an annuity
described in subsection (a) above, shall be paid in the form
of a qualified joint and survivor annuity, unless such
Participant waives such form of payment as provided in
subsection (c) below.
A qualified joint and survivor annuity shall be an
immediate annuity for the life of the Participant, with a
survivor annuity for the life of the Participant's spouse
equal to fifty percent (50%) of the amount of the annuity
which is payable during the joint lives of the Participant
and the spouse, and which is the actuarial equivalent of the
portion of the Participant's Account balance which was
allocated to his or her Account under the Plan as of December
31, 1996. Monthly payments to the spouse shall commence on
the first day of the month immediately following the
Participant's death, if the spouse is then living, and shall
cease with the monthly payment coinciding with or immediately
preceding the date of the spouse's death.
If the Participant's spouse dies before the
commencement of benefit payments to the Participant, the
Participant's election to receive a qualified joint and
survivor annuity shall be void, and the Participant shall be
entitled to make another election with respect to the method
of distribution of the portion of his or her Account balance
which was allocated to his or her Account under the Plan as
of December 31, 1996. If the Participant's spouse dies after
the commencement of benefit payments in the form of a
qualified joint and survivor annuity to the Participant, such
payments shall cease upon the death of the Participant.
(c) In lieu of receiving the qualified joint
and survivor annuity described in subsection (b) above, a
Participant or Former Participant who is married when
distribution of the portion of his or her Account balance
which was allocated to his or her Account under the Plan as
of December 31, 1996, is to be made or commence may elect one
of the annuity options described in subsection (a)(i)-(v)
above, provided:
(i) The Benefits Committee has provided such
Participant, no less than thirty (30) and no more than ninety
(90) days prior to the date on which distribution of the
Participant's Account is to be made or to commence, a written
explanation of:
(aa) the terms and conditions of the
qualified joint and survivor annuity;
(bb) the Participant's right to elect to
have the portion of his or her Account balance which was
allocated to his or her Account under the Plan as of December
31, 1996, distributed in one of the methods permitted under
subsection (a)(i)-(v) above, in lieu of receiving a qualified
joint and survivor annuity, and the effect of such election;
(cc) the requirement that a
Participant's spouse consents to such election;
(dd) the Participant's right to make,
and the effect of, a revocation of such an election, as
provided below;
(ii) The Participant's election is made
within the ninety (90) day period ending on the date
distribution of his or her Account is to be made or
commence;
(iii) The Participant's spouse consents in
writing to such election within the ninety (90) day period
ending on the date distribution of the Participant's Account
is to be made or commence;
(iv) The Participant's election designates a
specific beneficiary, including any class of beneficiaries
(or a form of benefits), which may not be changed without
further spousal consent unless expressly permitted by the
initial spousal consent; and
(v) The spouse's consent acknowledges the
effect of such election and is witnessed by a notary public.
An election by the Participant to have the portion of
his or her Account balance which was allocated to his or her
Account under the Plan as of December 31, 1996, distributed
in one of the methods permitted under subsection (a)(i)-(v)
above, in lieu of receiving a qualified joint and survivor
annuity, shall be effective upon receipt by the Benefits
Committee, and any consent by a spouse shall be effective
only with respect to such spouse and shall be effective upon
receipt by the Benefits Committee. Any consent which permits
designations by the Participant without any requirement of
further consent by the Participant's spouse must acknowledge
that the spouse has the right to limit his or her consent to
a specific beneficiary (or a form of benefits) and that the
spouse voluntarily elects to relinquish either or both of
such rights.
Any election permitted under this Section 1.2 may be
revoked by a Participant, without the consent of the
Participant's spouse, if applicable, at any time prior to the
date on which distribution of the Participant's Account
balance is to be made or commence. Any such revocation shall
be in writing, shall be signed by the Participant making such
revocation and shall become effective upon receipt by the
Benefits Committee. A Participant may make an unlimited
number of revocations.
1.3 SPECIAL RULES FOR PERIODIC PAYMENTS OPTION. In
the event a Participant who meets the requirements of Section
1.1(b) elects to have the portion of his or her Account
balance which was allocated to his or her Account under the
Plan as of December 31, 1996, distributed in the form of
periodic payments, the following provisions shall apply.
(a) At the time of making such election, the
Participant shall specify the period over which the payments
shall be made and the frequency of such payments.
(b) Periodic payments shall not be made more
frequently than annually and shall be made on the same date
in each of the applicable years (the "scheduled payment
date").
(c) A Participant's election pursuant to
Section 1.1(b), including specification of the period over
which payments shall be made and the frequency of such
payments, shall be irrevocable, except that such Participant
may elect to receive a lump sum distribution of the portion
of his or her Account balance which was allocated to his or
her Account under this Plan as of December 31, 1996, on the
next scheduled payment date, provided he or she notifies the
Benefits Committee or its designated representative of such
election, by such written, telephonic or electronic means as
shall be prescribed by the Benefits Committee, at least
thirty (30) days in advance of the next scheduled payment
date.
(d) At the time of making the election pursuant
to 1.1(b), the Participant shall specify the Investment Fund
or Funds from which the first periodic payment shall be made.
The Participant may specify the Investment Fund or Funds from
which each subsequent periodic payment shall be made by
delivering instructions to the Benefits Committee at least
thirty (30) days in advance of the applicable scheduled
payment date. In the absence of timely instructions, the
instructions in effect with respect to the immediately
preceding scheduled payment shall apply, unless the
Participant's investment in such Fund(s) no longer supports
such instructions, in which case the periodic payment shall
be charged against the Investment Funds and Self-Directed
Brokerage Account, if any, in which the Participant's Account
is invested in proportion to the amounts invested in such
funds and account as of the date such payment is to be made.
Notwithstanding the foregoing to the contrary, a Participant
may specify, within the time periods set forth above, that
all or a portion of any periodic payment shall be made from
his or her Participant-Directed Brokerage Account.
(e) Any election, specification or notification
in accordance with the provisions of this Section 1.3 shall
be made by such written, telephonic or electronic means as
the Benefits Committee may prescribe.
1.4 SPECIAL RULES FOR LUMP SUM DISTRIBUTION.
Notwithstanding the provisions of Article IX of the Plan to
the contrary, a Participant or Former Participant who has
attained age fifty-five (55) and completed at least five (5)
Years of Participation Service as of the date he or she
ceases to be employed by his or her Employer and whose
Account will be distributed in a lump sum may elect, with
respect to the amount which was allocated to his or her
Account under the Plan as of December 31, 1996, to receive a
portion of such amount in a lump sum as soon as practicable
after the Valuation Date determined in accordance with
Section 9.7 of the Plan (the "initial lump sum distribution
of the pre-1997 Account balance"), and the remainder of such
amount in a lump sum as soon as practicable after any
subsequent Valuation Date, as elected by such Participant or
Former Participant. Notwithstanding the foregoing provisions
of this Section 1.4 to the contrary, this Section shall not
apply if the portion of a Participant's or Former
Participant's Account balance which was allocated to his or
her Account under the Plan as of December 31, 1996, does not
exceed Three Thousand Five Hundred Dollars ($3,500.00) and
did not exceed Three Thousand Five Hundred Dollars
($3,500.00) as of the date of any prior distribution.
At the time of making an election pursuant to this
Section 1.4, the Participant or Former Participant shall
specify the amount of the initial lump sum distribution of
the pre-1997 Account balance and the Investment Fund or Funds
from which such initial lump sum distribution and the lump
sum distribution of the portion of his or her Account balance
which was allocated to his or her Account under the Plan
after December 31, 1996, shall be made. Notwithstanding the
foregoing to the contrary, a Participant or Former
Participant may specify that all or a portion of such lump
sum distributions shall be made from his or her Participant-
Directed Brokerage Account. Any election pursuant to this
Section 1.4 shall be made by such written, telephonic or
electronic means as the Benefits Committee may prescribe.
For purposes of this Section 1.4, the term "Participant"
shall include an Employee who has made a Rollover
Contribution to the Plan.
1.5 DISTRIBUTIONS TO SPOUSE OR BENEFICIARY. Upon
the death of a Participant or Former Participant, the portion
of his or her Account balance which was allocated to his or
her Account under the Plan as of December 31, 1996, shall be
distributed to his or her surviving spouse or, if the
Participant or Former Participant is not survived by a spouse
or the Participant's surviving spouse consents in the manner
provided in Section 9.3, to the Participant's designated
Beneficiary. Distribution of such portion shall be made in
the following manner.
(a) In the event the Participant or Former
Participant dies before distribution of the portion of his or
her Account balance which was allocated to his or her Account
under the Plan as of December 31, 1996, has commenced:
(i) If distribution is to be made to the
Participant's surviving spouse, distribution of such portion
shall be made in a lump sum by December 31 of the calendar
year which contains the fifth (5th) anniversary of the date
of the Participant's death; provided the Participant's
surviving spouse may elect to receive distribution in an
annuity providing monthly payments over a period not to
exceed his or her life expectancy provided distribution
commences not later than the later of December 31 of the
calendar year immediately following the calendar year in
which the Participant died or December 31 of the calendar
year in which the Participant would have attained age seventy
and one-half (70.5).
(ii) If distribution is to be made to a
designated Beneficiary other than the Participant's spouse:
(aa) distribution of such portion
shall be made in such manner as the Participant may elect or,
in the absence thereof, as the Beneficiary may elect,
provided the balance of such portion of the Participant's
Account shall be distributed on or before December 31 of the
calendar year which contains the fifth (5th) anniversary of
the date of the Participant's death; or
(bb) distribution of such portion
shall be made, at the election of the Participant or, in the
absence thereof, at the election of the Beneficiary, in an
annuity providing monthly payments over a period not to
exceed the life expectancy of the Beneficiary, provided
distribution shall commence on or before December 31 of the
calendar year immediately following the calendar year in
which the Participant died.
If the Participant has not made an election
pursuant to this subsection (a)(ii), his or her designated
Beneficiary must elect the method of distribution no later
than the earlier of December 31 of the calendar year in which
distributions would be required to commence under this
Section or December 31 of the calendar year which contains
the fifth (5th) anniversary of the date of the Participant's
death.
In the event the surviving spouse dies after the
Participant but before distribution of the portion of the
Participant's Account balance which was allocated to his or
her Account under the Plan as of December 31, 1996, to such
spouse begins, the provisions of this subsection (a), with
the exception of subsection (a)(i), shall be applied as if
the surviving spouse were the Participant.
(b) In the event the Participant or Former
Participant dies after distribution of the portion of his or
her Account balance which was allocated to his or her Account
under the Plan as of December 31, 1996, has commenced
pursuant to Section 1.1, distribution of such portion shall
continue at least as rapidly as under the method of
distribution in effect prior to the Participant's death.
(c) Notwithstanding the foregoing provisions of
this Section 1.5 to the contrary, this Section shall not
apply if the portion of the Participant's or Former
Participant's Account balance which was allocated to his or
her Account under the Plan as of December 31, 1996, does not
exceed Three Thousand Five Hundred Dollars ($3,500.00) (and
did not exceed Three Thousand Five Hundred Dollars
($3,500.00) as of the date of any prior distribution.
If a Participant fails to designate a Beneficiary and is
not survived by a spouse, distribution of the Participant's
Account shall be made in the manner elected by the
distributee determined under Section 9.3 of the Plan,
provided such distribution must be made by December 31 of
the calendar year which contains the fifth (5th) anniversary of
the date of the Participant's death.
For purposes of this Section 1.5, the term "Participant"
or "Former Participant" shall include an Employee who has
made a Rollover Contribution to the Plan.
1.6 PURCHASING ANNUITIES. Any annuity required or
permitted to be purchased under Section 1.2 shall be selected
by the Participant, or the Participant's spouse, as the case
may be, for whom such annuity is to be purchased. The terms
of any annuity required or permitted to be purchased and
distributed under this Exhibit A shall comply with the
applicable requirements of the Plan.
1.7 MINIMUM AMOUNTS TO BE DISTRIBUTED TO
PARTICIPANTS. The amount to be distributed each year
pursuant to Section 9.7(c) of the Plan to a Participant to
whom Section 1.1 of this Exhibit A applies, beginning with
the calendar year in which he or she attains age seventy and
one-half (70.5) (or, with respect to a Participant who is not
a Five Percent Owner, the calendar year in which he or she
retires, if later), shall not be less than the quotient
obtained by dividing the Participant's Account balance at the
beginning of such year by the life expectancy of the
Participant (or the joint life and last survivor expectancy
of the Participant and his or her Beneficiary) determined as
of the beginning of such year and reduced by one (1) for each
year thereafter. The required minimum distribution with
respect to the calendar year in which the Participant attains
age seventy and one-half (70.5) (or, with respect to a
Participant who is not a Five Percent Owner, the calendar
year in which he or she retires, if later) shall be made no
later than April 1 of the next succeeding calendar year.
With respect to any other calendar year, the required minimum
distribution shall be made no later than December 31 of such
year.
Notwithstanding the above, if the Participant (or his or
her spouse, in the event the Participant dies before benefits
have commenced) so elects prior to the time distribution must
commence pursuant to Section 9.7 of the Plan or Section 1.5
of this Exhibit A, the life expectancy of the Participant,
the life expectancy of the spouse or the joint life and last
survivor expectancy of the Participant and his or her spouse
shall be recalculated pursuant to the regulations under
Section 401(a)(9) of the Code. Such election shall be
irrevocable and shall be made by such written, telephonic or
electronic means as may be prescribed by the Benefits
Committee. In the absence of such election, life expectancy
shall not be recalculated. The life expectancy of a
nonspouse Beneficiary may not be recalculated.
Distribution shall be made in accordance with the
regulations under Section 401(a)(9) of the Code, including
Regulation Section 1.401(a)(9)-2, which shall override any
distribution options in the Plan or this Exhibit A
inconsistent therewith.
<PAGE>
EXHIBIT B
UNUM EMPLOYEES RETIREMENT SAVINGS PLAN
The terms used in this Exhibit shall have the meanings
set forth in the Plan unless the context indicates otherwise.
The provisions of this Exhibit B shall apply to a Participant
or Former Participant who participated in the Duncanson &
Holt, Inc. Employee Profit Participation and Savings Plan.
ARTICLE I
PRE-1997 OPTIONAL FORMS OF DISTRIBUTION
1.1 ANNUITY OPTION. Notwithstanding the provisions
of Article IX of the Plan to the contrary, and subject to
Article II of this Exhibit B, a Participant or Former
Participant who participated in the Duncanson & Holt, Inc.
Employee Profit Participation and Savings Plan may elect to
have the vested portion of the balance of his or her transfer
account created pursuant to Section 16.2(a) of the Plan as of
January 1, 1997, distributed in an annuity providing monthly
payments over a period not to exceed the life (or life
expectancy) of the Participant or the joint life (or joint
life and last survivor expectancy) of the Participant and his
or her Beneficiary, provided such distribution shall be made
in accordance with the requirements of Section 401(a)(9) of
the Code and the regulations thereunder; provided, however,
this Section 1.1 shall not apply if such vested portion does
not exceed Three Thousand Five Hundred Dollars ($3,500.00)
(and did not exceed Three Thousand Five Hundred Dollars
($3,500.00) as of the date of any prior distribution).
Distribution shall commence as soon as practicable following
receipt by the Benefits Committee or its designated
representative of an election pursuant to this Section 1.1.
1.2 SPECIAL RULES FOR ANNUITY OPTION. In the event
a Participant or Former Participant elects to have the vested
portion of the balance of his or her transfer account created
pursuant to Section 16.2(a) of the Plan as of January 1,
1997, distributed in the form of an annuity pursuant to
Section 1.1 of this Exhibit B, the following provisions shall
apply.
(a) Except as hereinafter provided in
subsection (b), the Participant or Former Participant may
elect the life annuity option described in subparagraph (i)
below; the years certain and life annuity option described in
subparagraph (ii) below; the contingent annuitant option
described in subparagraph (iii) below or the joint lives
annuity described in subparagraph (iv) below. Such election
shall be effective upon delivery to the Benefits Committee
within the ninety (90) day period ending on the date
distribution of the Participant's Account is to be made or
commence. If an electing Participant or Former Participant
dies prior to his or her annuity starting date, such election
shall be void, and any death benefit payable with respect to
such Participant shall be determined in accordance with the
provisions of Section 9.3 of the Plan. The term "annuity
starting date" shall mean the date benefit payments commence.
(i) LIFE ANNUITY OPTION. A Participant who
elects a life annuity option shall receive a benefit which
shall be payable monthly for life, ending with the last
payment due immediately preceding the Participant's date of
death.
(ii) YEARS CERTAIN AND LIFE ANNUITY OPTION.
A Participant who elects a years certain and life annuity
option shall receive monthly payments during his or her life,
and such payments shall be made to the Participant and/or the
Participant's designated Beneficiary for not less than the
five (5) or ten (10) year period elected by the Participant.
If a Participant elects to have his or her Account balance
paid in accordance with this subparagraph (ii) and dies
before the period elected has expired, the balance of the
payments shall be paid to the Participant's designated
Beneficiary. The first such payment shall be made as of the
first day of the month immediately following the
Participant's death.
In the event the Beneficiary designated by the
Participant is not living at the time of the Participant's
death, the balance of the payments which would otherwise have
become payable to the Participant's Beneficiary shall be
commuted to a single sum and shall be paid to the
Participant's estate. If the Beneficiary of the deceased
Participant should die prior to receiving the balance of the
payments which would otherwise have become payable to such
Beneficiary, the balance of the monthly payments shall be
commuted to a single sum and shall be paid to the
Beneficiary's estate.
(iii) CONTINGENT ANNUITANT OPTION. A
Participant who elects a contingent annuitant option shall
receive monthly payments during his or her life, and
following the Participant's death, monthly payments in the
same amount (or 50% or 66 2/3% of said amount, as elected by
the Participant) shall continue to the person designated by
the Participant ("Contingent Annuitant") at the time of
making the election for the life of the Contingent Annuitant.
If an electing Participant dies after the commencement of
benefit payments, the Contingent Annuitant designated by the
electing Participant shall receive during his or her life the
monthly benefit payable to the Contingent Annuitant under
this option. Monthly payments to the Contingent Annuitant
shall commence on the first day of the month immediately
following the Participant's death, if the Contingent
Annuitant is then living, and shall cease with the monthly
payment coinciding with or immediately preceding the date of
the Contingent Annuitant's death. If the Contingent
Annuitant dies before the commencement of payments to the
Participant, the Participant's election under this
subparagraph shall be void and the Participant shall be
entitled to make another election with respect to the method
of distribution of the vested portion of the balance of his
or her transfer account created pursuant to Section 16.2(a)
of the Plan as of January 1, 1997. If the Contingent
Annuitant dies after the commencement of payments to the
Participant, such payments shall cease upon the Participant's
death.
If distribution to a Participant commences in
the form of a contingent annuitant option for the joint lives
of the Participant and a Contingent Annuitant other than his
or her spouse, the periodic annuity payment payable to the
Contingent Annuitant must not at any time on and after the
Participant's required beginning date (under Section
401(a)(9) of the Code and the regulations thereunder) exceed
the applicable percentage for such period payable to the
Participant using the table set forth in regulation Section
1.401(a)(9)-2 Q&A-6. For purposes of the preceding sentence,
a former spouse to whom all or a portion of a Participant's
Account balance is payable pursuant to a qualified domestic
relations order (as defined in Section 414(p) of the Code)
shall be treated as a spouse of the Participant. If a
Participant's Account balance is divided and a portion is
allocated to an alternate payee pursuant to a qualified
domestic relations order (as defined in Section 414(p) of the
Code), this paragraph shall not apply to the portion so
allocated.
(iv) JOINT LIVES ANNUITY OPTION. A
Participant who elects a joint lives annuity option shall
receive monthly payments during the joint lives of the
Participant and the person designated by the Participant
("Joint Annuitant") at the time of making the election, and
following the death of the Participant or Joint Annuitant,
monthly payments in the same amount (or 50% or 66 2/3% of
said amount, as elected by the Participant) shall continue to
the survivor of the two. If an electing Participant dies
after the commencement of benefit payments, the Joint
Annuitant designated by the electing Participant shall
receive during his or her life the monthly benefit payable to
the survivor under this option. Monthly payments to the
Joint Annuitant shall commence on the first day of the month
immediately following the Participant's death, if the Joint
Annuitant is then living, and shall cease with the monthly
payment coinciding with or immediately preceding the date of
the Joint Annuitant's death. If the Joint Annuitant dies
after the commencement of benefit payments, the Participant
shall receive during his or her life the monthly benefit
payable to the survivor under this option. Such monthly
payments shall commence on the first day of the month
immediately following the Joint Annuitant's death, if the
Participant is then living and shall cease with the monthly
payment coinciding with or immediately preceding the date of
the Participant's death. If the Joint Annuitant dies before
the commencement of payments to the Participant, the
Participant's election under this subparagraph shall be void
and the Participant shall be entitled to make another
election with respect to the method of distribution of the
vested portion of the balance of his or her transfer account
created pursuant to Section 16.2(a) of the Plan as January 1,
1997.
If the Joint Annuitant is not the
Participant's spouse, the periodic annuity payment payable to
the Joint Annuitant must not at any time on and after the
Participant's required beginning date (under Section
401(a)(9) of the Code and the regulations thereunder) exceed
the applicable percentage for such period payable to the
Participant using the table set forth in regulation Section
1.401(a)(9)-2 Q&A-6. For purposes of the preceding sentence,
a former spouse to whom all or a portion of a Participant's
Account balance is payable pursuant to a qualified domestic
relations order (as defined in Section 414(p) of the Code)
shall be treated as a spouse of the Participant. If a
Participant's Account balance is divided and a portion is
allocated to an alternate payee pursuant to a qualified
domestic relations order (as defined in Section 414(p) of the
Code), this paragraph shall not apply to the portion so
allocated.
(b) A Participant or Former Participant who is
married when distribution of the vested portion of the
balance of his or her transfer account created pursuant to
Section 16.2(a) of the Plan as of January 1, 1997, is to be
made or commence and who elects to be paid in the form of an
annuity described in subsection (a) above, shall be paid in
the form of a qualified joint and survivor annuity, unless
such Participant waives such form of payment as provided in
subsection (c) below.
A qualified joint and survivor annuity shall be an
immediate annuity for the life of the Participant, with a
survivor annuity for the life of the Participant's spouse
equal to fifty percent (50%) of the amount of the annuity
which is payable during the joint lives of the Participant
and the spouse, and which is the actuarial equivalent of the
vested portion of the balance of the Participant's transfer
account created pursuant to Section 16.2(a) of the Plan as of
January 1, 1997. Monthly payments to the spouse shall
commence on the first day of the month immediately following
the Participant's death, if the spouse is then living, and
shall cease with the monthly payment coinciding with or
immediately preceding the date of the spouse's death.
If the Participant's spouse dies before the
commencement of benefit payments to the Participant, the
Participant's election to receive a qualified joint and
survivor annuity shall be void, and the Participant shall be
entitled to make another election with respect to the method
of distribution of the vested portion of the balance of his
or her transfer account created pursuant to Section 16.2(a)
of the Plan as of January 1, 1997. If the Participant's
spouse dies after the commencement of benefit payments in the
form of a qualified joint and survivor annuity to the
Participant, such payments shall cease upon the death of the
Participant.
(c) In lieu of receiving the qualified joint
and survivor annuity described in subsection (b) above, a
Participant or Former Participant who is married when
distribution of the vested portion of the balance of his or
her transfer account created pursuant to Section 16.2(a) of
the Plan as of January 1, 1997, is to be made or commence may
elect one of the annuity options described in subsection
(a)(i)-(iv) above, provided:
(i) The Benefits Committee has provided such
Participant, no less than thirty (30) and no more than ninety
(90) days prior to the date on which distribution of the
Participant's Account is to be made or to commence, a written
explanation of:
(aa) the terms and conditions of the
qualified joint and survivor annuity;
(bb) the Participant's right to elect to
have the vested portion of the balance of his or her transfer
account created pursuant to Section 16.2(a) of the Plan as of
January 1, 1997, distributed in one of the methods permitted
under subsection (a)(i)-(iv) above, in lieu of receiving a
qualified joint and survivor annuity, and the effect of such
election;
(cc) the requirement that a
Participant's spouse consents to such election;
(dd) the Participant's right to make,
and the effect of, a revocation of such an election, as
provided below;
(ii) The Participant's election is made
within the ninety (90) day period ending on the date
distribution of his or her Account is to be made or commence;
(iii) The Participant's spouse consents in
writing to such election within the ninety (90) day period
ending on the date distribution of the Participant's Account
is to be made or commence;
(iv) The Participant's election designates a
specific beneficiary, including any class of beneficiaries
(or a form of benefits), which may not be changed without
further spousal consent unless expressly permitted by the
initial spousal consent; and
(v) The spouse's consent acknowledges the
effect of such election and is witnessed by a notary public.
An election by the Participant to have the vested
portion of the balance of his or her transfer account created
pursuant to Section 16.2(a) of the Plan as of January 1,
1997, distributed in one of the methods permitted under
subsection (a)(i)-(iv) above, in lieu of receiving a
qualified joint and survivor annuity, shall be effective upon
receipt by the Benefits Committee, and any consent by a
spouse shall be effective only with respect to such spouse
and shall be effective upon receipt by the Benefits
Committee. Any consent which permits designations by the
Participant without any requirement of further consent by the
Participant's spouse must acknowledge that the spouse has the
right to limit his or her consent to a specific beneficiary
(or a form of benefits) and that the spouse voluntarily
elects to relinquish either or both of such rights.
Any election permitted under this Section 1.2 may be
revoked by a Participant, without the consent of the
Participant's spouse, if applicable, at any time prior to the
date on which distribution of the Participant's Account
balance is to be made or commence. Any such revocation shall
be in writing, shall be signed by the Participant making such
revocation and shall become effective upon receipt by the
Benefits Committee. A Participant may make an unlimited
number of revocations.
1.3 DISTRIBUTIONS TO SPOUSE OR BENEFICIARY.
Notwithstanding the provisions of Article IX of the Plan to
the contrary, and subject to Article II of this Exhibit B,
upon the death of a Participant or Former Participant, the
vested portion of the balance of his or her transfer account
created pursuant to Section 16.2(a) of the Plan as of January
1, 1997, shall be distributed to his or her surviving spouse
or, if the Participant or Former Participant is not survived
by a spouse or the Participant's surviving spouse consents in
the manner provided in Section 9.3, to the Participant's
designated Beneficiary. Distribution of such portion shall
be made in the following manner.
(a) In the event the Participant or Former
Participant dies before distribution of the vested portion of
the balance of his or her transfer account created pursuant
to Section 16.2(a) of the Plan as of January 1, 1997, has
commenced:
(i) If distribution is to be made to the
Participant's surviving spouse, distribution of such portion
shall be made in a lump sum by December 31 of the calendar
year which contains the fifth (5th) anniversary of the date
of the Participant's death; provided the Participant's
surviving spouse may elect to receive distribution in an
annuity providing monthly payments over a period not to
exceed his or her life expectancy provided distribution
commences not later than the later of December 31 of the
calendar year immediately following the calendar year in
which the Participant died or December 31 of the calendar
year in which the Participant would have attained age seventy
and one-half (70.5).
(ii) If distribution is to be made to a
designated Beneficiary other than the Participant's spouse:
(aa) distribution of such portion
shall be made in such manner as the Participant may elect or,
in the absence thereof, as the Beneficiary may elect,
provided the balance of such portion of the Participant's
Account shall be distributed on or before December 31 of the
calendar year which contains the fifth (5th) anniversary of
the date of the Participant's death; or
(bb) distribution of such portion
shall be made, at the election of the Participant or, in the
absence thereof, at the election of the Beneficiary, in an
annuity providing monthly payments over a period not to
exceed the life expectancy of the Beneficiary, provided
distribution shall commence on or before December 31 of the
calendar year immediately following the calendar year in
which the Participant died.
If the Participant has not made an election
pursuant to this subsection (a)(ii), his or her designated
Beneficiary must elect the method of distribution no later
than the earlier of December 31 of the calendar year in which
distributions would be required to commence under this
Section or December 31 of the calendar year which contains
the fifth (5th) anniversary of the date of the Participant's
death.
In the event the surviving spouse dies after the
Participant but before distribution of the vested portion of
the balance of his or her transfer account created pursuant
to Section 16.2(a) of the Plan as of January 1, 1997, to such
spouse begins, the provisions of this subsection (a), with
the exception of subsection (a)(i), shall be applied as if
the surviving spouse were the Participant.
(b) In the event the Participant or Former
Participant dies after distribution of the vested portion of
the balance of his or her transfer account created pursuant
to Section 16.2(a) of the Plan as of January 1, 1997, has
commenced pursuant to Section 1.1, distribution of such
portion shall continue at least as rapidly as under the
method of distribution in effect prior to the Participant's
death.
(c) Notwithstanding the foregoing provisions of
this Section 1.3 to the contrary, this Section shall not
apply if the vested portion of the balance of the
Participant's or Former Participant's transfer account
created pursuant to Section 16.2(a) of the Plan as of January
1, 1997, does not exceed Three Thousand Five Hundred Dollars
($3,500.00) (and did not exceed Three Thousand Five Hundred
Dollars ($3,500.00) as of the date of any prior distribution.
If a Participant fails to designate a Beneficiary and is
not survived by a spouse, distribution of the Participant's
Account shall be made in the manner elected by the
distributee determined under Section 9.3 of the Plan,
provided such distribution must be made by December 31 of the
calendar year which contains the fifth (5th) anniversary of
the date of the Participant's death.
1.4 FORM OF DISTRIBUTION. Notwithstanding the
provisions of Article IX of the Plan to the contrary,
distribution of the vested portion of the balance of a
Participant's or Former Participant's transfer account
created pursuant to Section 16.2(a) of the Plan as of January
1, 1997, may be made in cash or in kind, or partly in each;
provided, the particular investment vehicle(s) in which such
portion is invested at the time of distribution permit an in
kind distribution.
1.5 PURCHASING ANNUITIES. Any annuity required or
permitted to be purchased under Section 1.2 shall be selected
by the Participant, or the Participant's spouse, as the case
may be, for whom such annuity is to be purchased. The terms
of any annuity required or permitted to be purchased and
distributed under this Exhibit B shall comply with the
applicable requirements of the Plan.
ARTICLE II
MINIMUM SURVIVOR ANNUITY REQUIREMENTS
2.1 APPLICATION AND EFFECT OF ARTICLE. The
provisions of this Article shall apply to a Participant or
Former Participant who participated in the Duncanson and
Holt, Inc. Employee Profit Participation and Savings Plan if,
with respect to such Participant or Former Participant, the
Plan is a direct or indirect transferee of:
(a) a defined benefit plan; or
(b) an individual account plan which is subject
to the funding standards of Section 412 of the Code; or
(c) any other individual account plan unless:
(i) such plan provided that the
Participant's nonforfeitable accrued benefit under such plan
was payable in full, on the death of the Participant, to the
Participant's surviving spouse (or, if there was no surviving
spouse or the surviving spouse consented in the manner provid
ed under Section 417(a)(2)(A) of the Code, to a designated
beneficiary);
(ii) the Participant did not elect, under
such plan, a payment of benefits in the form of a life
annuity; and
(iii) with respect to the Participant,
such plan was not a transferee of a plan which is described
in subsections (a) or (b) above or to which this subsection
(c) applies.
In the event that the provisions of this Article shall be
applicable with respect to the Plan, they shall take
precedence over any conflicting provision of the Plan or of
Article I of this Exhibit B.
2.2 QUALIFIED JOINT AND SURVIVOR ANNUITY.
(a) If a Participant is married when
distribution of his or her Account (as defined in Section
2.10(a) of this Exhibit B) is to be made or to commence, his
or her Account shall, except as provided in subsection (b)
below, be used to purchase a Qualified Joint and Survivor
Annuity which shall be distributed to such Participant.
(b) The requirement of subsection (a) above
shall not apply and, therefore, distribution of a
Participant's Account shall be made in accordance with the
provisions of Article IX of the Plan and Article I of this
Exhibit B if:
(i) the Participant elects, within the
ninety (90) day period ending on the date distribution of the
Participant's Account is to be made or to commence, to have
his or her Account distributed in one of the methods
permitted under Article IX of the Plan or Article I of this
Exhibit B, in lieu of receiving said Qualified Joint and
Survivor Annuity, and the Participant's spouse consents to
such election, within said ninety (90) day period, in the
manner set forth below; or
(ii) the Participant's Account balance
does not exceed Three Thousand Five Hundred Dollars
($3,500.00) (and did not exceed Three Thousand Five Hundred
Dollars ($3,500.00) as of the date of any prior
distribution); or
(iii) it is established to the
satisfaction of the Benefits Committee that there is no
spouse or that the Participant's spouse cannot be located at
the time distribution of the Participant's Account is to be
made or to commence.
2.3 QUALIFIED PRERETIREMENT SURVIVOR ANNUITY.
(a) If a Participant is married at the time of
his or her death, and the Participant's death occurs before
distribution of his or her Account (as defined in Section
2.10(a) of this Exhibit B) is made or commences, his or her
Account shall, except as provided in subsection (b) below, be
used to purchase a Qualified Preretirement Survivor Annuity
for the life of the Participant's surviving spouse which
shall be distributed to such Participant's surviving spouse
within a reasonable time after the Participant's death.
(b) The requirement of subsection (a) above
shall not apply and, therefore, distribution of the
Participant's Account shall be made to such Participant's
Beneficiary in accordance with the provisions of Article IX
of the Plan and Article I of this Exhibit B if:
(i) the Participant elects, at any time
within the period which begins on the first day of the Plan
Year in which the Participant attains age thirty-five (35)
(or, if the Participant shall have ceased to be employed by
an Employer or an Affiliated Employer and is no longer
employed by any of them before attaining age thirty-five
(35), then within the period which begins on the date the
Participant ceased to be so employed) and ends on the date of
the Participant's death, to have his or her Account
distributed to his or her Beneficiary in accordance with the
provisions of the Article IX of the Plan and Article I of
this Exhibit B, in lieu of having said Qualified
Preretirement Survivor Annuity purchased for and distributed
to such Participant's spouse, and the Participant's spouse
consents to such election, within the aforesaid period of
time, in the manner set forth below; or
(ii) the Participant's Account balance
does not exceed Three Thousand Five Hundred Dollars
($3,500.00) (and did not exceed Three Thousand Five Hundred
Dollars ($3,500.00) as of the date of any prior
distribution); or
(iii) the Participant and his or her
spouse have been married for less than one (1) year as of the
date of the Participant's death; or
(iv) it is established to the satisfaction
of the Benefits Committee that there is no spouse or that the
Participant's spouse cannot be located at the time of the
Participant's death.
(c) A spouse of a Participant who is entitled
to receive a Qualified Preretirement Survivor Annuity in
accordance with this Section may, at any time prior to the
date on which such annuity is purchased, elect to receive, in
lieu of said Qualified Preretirement Survivor Annuity, the
Participant's Account balance in a lump sum. Such election
shall be effective if delivered to the Benefits Committee
prior to the purchase of said Qualified Preretirement
Survivor Annuity.
2.4 NOTICE TO PARTICIPANTS.
(a) The Benefits Committee shall provide to
each Participant no less than thirty (30) days and no more
than ninety (90) days prior to the date on which distribution
of the Participant's Account (as defined in Section 2.10(a)
of this Exhibit B) is to be made or to commence, a written
explanation of:
(i) the terms and conditions of the
Qualified Joint and Survivor Annuity;
(ii) the Participant's right to elect to
have his or her Account distributed in one of the methods
permitted under Article IX of the Plan and Article I of this
Exhibit B, in lieu of receiving a Qualified Joint and
Survivor Annuity, and the effect of such election;
(iii) the requirement that a Participant's
spouse consents to such election; and
(iv) the Participant's right to make, and
the effect of, a revocation of such an election, as provided
below.
(b) The Benefits Committee shall also provide
to each Participant, within the applicable period described
below, a written explanation with respect to a Qualified
Preretirement Survivor Annuity comparable to that required
under subsection (a) above. For purposes of this subsection
(b), the applicable period means with respect to a
Participant, whichever of the following periods ends last:
(i) the period beginning with the first
day of the Plan Year in which the Participant attains age
thirty-two (32) and ending with the close of the Plan Year
preceding the Plan Year in which the Participant attains age
thirty-five (35);
(ii) a reasonable period ending after the
individual becomes a Participant;
(iii) a reasonable period ending after
Section 417(a)(5) of the Code, if applicable, ceases to apply
to the Participant;
(iv) a reasonable period ending after the
provisions of this Article first become applicable to the
Participant; and
(v) a reasonable period ending after
separation from service in the case of a Participant who
separates before attaining age thirty-five (35).
A reasonable period ending after the date of an
event enumerated in subsection (b)(ii), (b)(iii) or (b)(iv)
shall be the two (2) year period beginning one (1) year prior
to and ending one (1) year after such date. With respect to
a Participant who separates from service with the Employer
before the Plan Year in which he or she attains age thirty-
five (35), written explanation shall be provided within the
two (2) year period beginning one (1) year prior to such
separation and ending one (1) year after such separation. If
such Participant thereafter returns to employment with the
Employer, the applicable period for such Participant shall be
redetermined.
2.5 SPOUSAL CONSENT. An election by a Participant:
(a) to have his or her Account distributed in
one of the methods permitted under Article IX of the Plan or
Article I of this Exhibit B, in lieu of receiving a Qualified
Joint and Survivor Annuity; or
(b) to have his or her Account distributed to
his or her Beneficiary in one of the methods permitted under
Article IX of the Plan or Article I of this Exhibit B, in
lieu of having a Qualified Preretirement Survivor Annuity
purchased for and distributed to his or her spouse;
shall not be effective unless
(i) the spouse of the Participant consents
in writing to such election,
(ii) such election designates a specific
beneficiary, including any class of beneficiaries or any
contingent beneficiaries (or a form of benefits), which may
not be changed without further spousal consent unless
expressly permitted by the initial spousal consent, and
(iii) the spouse's consent acknowledges
the effect of such election and is witnessed by a notary
public.
(c) Notwithstanding Sections 9.5 and 9.10 of
the Plan to the contrary, in the event the Participant's
Account balance exceeds Three Thousand Five Hundred Dollars
($3,500.00), no withdrawal pursuant to Sections 9.5 or 9.10
shall be permitted in the case of a married Participant
without obtaining the consent of his or her spouse during the
ninety (90) day period ending on the date the withdrawal is
to be made. To be effective, such consent must be in
writing, must acknowledge the effect thereof and must be
witnessed by a notary public. Such consent shall take effect
upon delivery thereof to the Benefits Committee.
(d) Notwithstanding Section 9.6 of the Plan to
the contrary, no loan shall be permitted in the case of a
married Participant without obtaining the consent of his or
her spouse to the assignment set forth in Section 9.6(d)
within the ninety (90) day period ending on the date that the
loan is to be so secured. To be effective, such consent must
be in writing, must acknowledge the effect thereof, and must
be witnessed by a notary public. Such consent shall take
effect upon delivery thereof to the Benefits Committee. Such
consent shall remain effective with respect to such loan
notwithstanding remarriage by the Participant; provided
however that a new consent shall be executed, in the manner
herein provided, for any future advance made with respect to
such loan, by such Participant's spouse on the date of such
advance, to the extent such advance shall be secured by an
assignment or further assignment of such Participant's
interest in his or her Account.
In the event a valid spousal consent has been
obtained in accordance with this subsection (d), then,
notwithstanding any other provision of the Plan, the portion
of the Participant's Account which is used as collateral for
an outstanding loan shall be taken into account for purposes
of determining the amount of the Participant's Account which
is payable at the time of distribution, but only after such
portion has been reduced as necessary to repay the loan. In
the event less than one hundred percent (100%) of the
Participant's Account (determined without regard to the
preceding sentence) is payable to the surviving spouse, then
the Account balance shall be adjusted by first reducing the
Account by the amount of the collateral used as repayment of
the loan, and then determining the benefit payable to the
surviving spouse.
Any consent by a spouse under this Section shall be
effective only with respect to such spouse.
2.6 ELECTIONS AND CONSENTS.
(a) Any election or consent permitted or
required under this Article shall be in writing and shall be
signed by the party making such election or granting such
consent. Such election or consent shall become effective
upon delivery thereof to the Benefits Committee.
Notwithstanding the foregoing, no consent shall be valid
unless the Participant has received the written explanation
required under Section 2.4 of this Exhibit B.
(b) Any election permitted under this Article
may be revoked by a Participant, without the consent of the
Participant's spouse, at any time prior to the date on which
distribution of the Participant's Account is to be made or to
commence. Any such revocation shall be in writing and shall
be signed by the Participant making such revocation and shall
become effective upon delivery thereof to the Benefits
Committee. A Participant may make an unlimited number of
revocations.
(c) Any consent which permits designations by
the Participant without any requirement of further consent by
the Participant's spouse must acknowledge that the spouse has
the right to limit his or her consent to a specific
beneficiary (or a form of benefits) and that the spouse
voluntarily elects to relinquish either or both of such
rights.
2.7 PURCHASING ANNUITIES. Any annuity required or
permitted to be purchased under this Article shall be
selected by the Participant, or the Participant's spouse, as
the case may be, for whom such annuity is to be purchased.
If the Participant or the Participant's spouse shall fail to
select the annuity or designate the insurance company as
provided hereinabove within a reasonable period of time prior
to the date on which such annuity is required, under this
Article, to be delivered to such Participant or such
Participant's spouse, then the Benefits Committee shall
select such annuity and the insurance company from which such
annuity shall be purchased. The Benefits Committee shall
notify each Participant, or each Participant's spouse, as the
case may be, within a reasonable period of time prior to the
date on which any such annuity is required to be delivered,
of his or her right, under this Section, to select such
annuity and the insurance company from which such annuity is
to be purchased. The terms of any annuity required or
permitted to be purchased and distributed under this Article
shall comply with the requirements of the Plan.
2.8 QUALIFIED DOMESTIC RELATIONS ORDERS. The
provisions of this Article shall be subject to the terms of
any qualified domestic relations order (as defined by Section
414(p) of the Code) which may be in effect with respect to a
Participant at the time distribution of the Participant's
Account balance is to be made or to commence; and, the former
spouse of a Participant shall be treated, under this Article,
as such Participant's spouse or surviving spouse to the
extent required by any qualified domestic relations order,
and any spouse of the Participant shall not be treated as a
spouse of the Participant for such purpose.
2.9 TRANSITION RULES.
(a) Except as hereinafter provided, the
provisions of this Article shall only be applicable with
respect to Participants who are credited with at least one
(1) Hour of Service on or after August 23, 1984.
(b) Any living Participant to whom distribution
of his or her Account was not made or did not commence on or
before August 23, 1984, and with respect to whom the
provisions of this Article would not apply because such
Participant would not have been credited with at least one
(1) Hour of Service on or after August 23, 1984, shall,
nevertheless, have the right to elect, at any time during the
period beginning on August 23, 1984, and ending on the date
on which distribution of such Participant's Account is to be
made or to commence, to have the provisions of this Article
apply with respect to such Participant if such Participant
was credited with at least one (1) Hour of Service under the
Plan or any predecessor plan in a Plan Year beginning on or
after January 1, 1976, and such Participant had at least ten
(10) years of vesting service when he or she ceased to be
employed by the Employer.
(c) Any living Participant to whom distribution
of his or her Account was not made or did not commence on or
before August 23, 1984, and with respect to whom the
provisions of this Article would not apply because such
Participant would not have been credited with at least one
(1) Hour of Service on or after August 23, 1984, shall have
the right to elect, at any time during the period beginning
on August 23, 1984, and ending on the date on which distribu
tion of such Participant's Account is to be made or to
commence, to have the balance of his or her Account
distributed in accordance with the provisions of subsection
(d) below if such Participant was credited with at least one
(1) Hour of Service under the Plan or any predecessor plan on
or after September 2, 1974, and was not credited with any
Hours of Service in any Plan Year beginning on or after
January 1, 1976.
(d) Any married Participant who has made an
election pursuant to subsection (c) above; and, any married
Participant who meets the requirements of subsection (b)
above but who has not made an election pursuant to subsection
(b); and, any married Participant who meets all the
requirements of subsection (b) above except that such
Participant did not have ten (10) years of vesting service at
the time he or she ceased to be employed by the Employer:
(i) shall have the balance of his or her
Account applied to the purchase of a Qualified Joint and
Survivor Annuity which shall be distributed to such
Participant provided that:
(aa) distribution of any such
Participant's Account shall only be made after such
Participant shall have attained the Normal Retirement Age or
upon the Participant's death after having attained the Normal
Retirement Age; and
(bb) if the balance of any such
Participant's Account had not been applied to the purchase of
a Qualified Joint and Survivor Annuity as provided under this
subsection, such balance would have been applied to the
purchase of an annuity for the life of such Participant; and
(cc) any such Participant shall not
have elected, at any time prior to the date on which
distribution of such Participant's Account is to be made or
to commence, to receive distribution of such Account in a
manner otherwise permitted under the Plan in lieu of
receiving said Qualified Joint and Survivor Annuity.
(ii) shall have the right to elect, at any
time prior to the date of the Participant's death (provided
that in each case distribution of each such Participant's
Account under the Plan would have been made in the form of an
annuity for the life of the Participant), to have the balance
of his or her Account applied, in the event that such
Participant's death shall occur before the date on which
distribution of such Participant's Account is to be made or
to commence, to the purchase of a Qualified Preretirement
Survivor Annuity for the life of such Participant's surviving
spouse which shall be distributed to such Participant's
spouse.
2.10 DEFINITIONS. As used in this Article, the
following terms shall have the meanings hereinafter set
forth:
(a) "Account" or "Account balance" shall mean
the vested portion of the balance of the transfer account
created pursuant to Section 16.2(a) of the Plan of an
individual described in Section 2.1 of this Exhibit B.
(b) "Qualified Joint and Survivor Annuity"
shall mean an immediate annuity for the life of the
Participant, with survivor annuity for the life of the
Participant's spouse (which survivor annuity is not less than
fifty percent (50%) of, nor more than one hundred percent
(100%) of, the amount of the annuity which is payable during
the joint lives of the Participant and the spouse) which is
the actuarial equivalent of the Participant's Account balance
at the time distribution of said Account is to be made or
commence.
(c) "Qualified Preretirement Survivor Annuity"
shall mean a survivor annuity for the life of the surviving
spouse of a Participant which is the actuarial equivalent of
the Participant's Account balance at the time, after such
Participant's death, that distribution of said Account is to
be made or commence.
(d) "Spouse" ("surviving spouse") shall mean
the spouse or surviving spouse of the Participant, provided
that a former spouse shall be treated as the spouse or
surviving spouse and a current spouse shall not be treated as
the spouse or surviving spouse to the extent provided under a
qualified domestic relations order as defined in Section
414(p) of the Code.
ARTICLE III
REQUIRED DISTRIBUTIONS
3.1 MINIMUM AMOUNTS TO BE DISTRIBUTED TO
PARTICIPANTS. The amount to be distributed each year
pursuant to Section 9.7(c) of the Plan to a Participant to
whom Article I or Article II of this Exhibit B applies,
beginning with the calendar year in which he or she attains
age seventy and one-half (70.5) (or, with respect to a
Participant who is not a Five Percent Owner, the calendar
year in which he or she retires, if later), shall not be less
than the quotient obtained by dividing the Participant's
Account balance at the beginning of such year by the life
expectancy of the Participant (or the joint life and last
survivor expectancy of the Participant and his or her
Beneficiary) determined as of the beginning of such year and
reduced by one (1) for each year thereafter. The required
minimum distribution with respect to the calendar year in
which the Participant attains age seventy and one-half (70.5)
(or with respect to a Participant who is not a Five Percent
Owner, the calendar year in which he or she retires, if
later) shall be made no later than April 1 of the next
succeeding calendar year. With respect to any other calendar
year, the required minimum distribution shall be made no
later than December 31 of such year.
Notwithstanding the above, if the Participant (or his or
her spouse, in the event the Participant dies before benefits
have commenced) so elects prior to the time distribution must
commence pursuant to Section 9.7 of the Plan or Section 1.3
of this Exhibit B, the life expectancy of the Participant,
the life expectancy of the spouse or the joint life and last
survivor expectancy of the Participant and his or her spouse
shall be recalculated pursuant to the regulations under
Section 401(a)(9) of the Code. Such election shall be
irrevocable and shall be made by such written, telephonic or
electronic means as may be prescribed by the Benefits
Committee. In the absence of such election, life expectancy
shall not be recalculated. The life expectancy of a
nonspouse Beneficiary may not be recalculated.
Distribution shall be made in accordance with the
regulations under Section 401(a)(9) of the Code, including
Regulation Section 1.401(a)(9)-2, which shall override any
distribution options in the Plan or this Exhibit B
inconsistent therewith.
ARTICLE IV
TEFRA Section 242(B) ELECTIONS
4.1 APPLICATION AND EFFECT OF ARTICLE. The
provisions of this Article shall apply to any Participant or
Former Participant who participated in the Duncanson & Holt,
Inc. Employee Profit Participation and Savings Plan, if, with
respect to such Participant or Former Participant, the Plan
is a direct or indirect transferee of such plan.
4.2 TEFRA Section 242(B) ELECTIONS. Notwithstanding
any provision of Article IX of the Plan or this Exhibit B to
the contrary, distribution shall be made in accordance with a
designation made by a Participant or Former Participant
pursuant to Section 242(b) of the Tax Equity and Fiscal
Responsibility Act of 1982, provided:
(a) The distribution would not have
disqualified the Plan under Section 401(a)(9) of the Code as
in effect prior to amendment by the Tax Equity and Fiscal
Responsibility Act of 1982;
(b) The designation was made by a written
instrument which was signed by the Participant before January
1, 1984;
(c) The designation specifies the time at which
distribution will be made or commence and the period over
which distribution will be made;
(d) The Participant had accrued a benefit under
the Plan as of December 31, 1983; and
(e) The designation has not been revoked or
modified in any way other than the substitution or addition
of a beneficiary which does not alter the period over which
distributions are to be made.
<PAGE>
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
We are aware that our reports dated April 24, 1996, July 24,
1996, and October 23, 1996, on our review of interim financial
information of UNUM Corporation and subsidiaries for the three-
month, six-month, and nine-month periods ended March 31, 1996,
June 30, 1996, and September 30, 1996, and included in the
Company's quarterly reports on Forms 10-Q for the quarters then
ended are incorporated by reference in Post-Effective Amendment
No. 2 to Form S-8 No. 33-31270 pertaining to the UNUM Employees
Retirement Savings Plan and Trust and Colonial Companies, Inc.
Security Saver Plan. Pursuant to Rule 436(c) under the
Securities Act of 1933, this report should not be considered a
part of the registration statement prepared or certified by us
within the meaning of Section 7 and 11 of that Act.
/s/ Coopers & Lybrand L.L.P.
December 23, 1996
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Post-
Effective Amendment No. 2 to Form S-8 No. 33-31270 pertaining to
the UNUM Employees Retirement Savings Plan and Trust and Colonial
Companies Inc. Security Saver Plan of our report dated February
6, 1996, on our audits of the consolidated financial statements
and the financial statements schedules of UNUM Corporation and
subsidiaries as of December 31, 1995 and 1994, and for the years
ended December 31, 1995, 1994, and 1993, which report is included
in the Annual Report on Form 10-K, and of our reports dated June
21, 1996 and May 17, 1996, on our audits of the UNUM Employees
Retirement Savings Plan and Trust and Colonial Companies Inc.
Security Saver Plan, respectively, for the years ended December
31, 1995 and 1994, which reports are included in the Annual
report on Form 11-K.
/s/ Coopers & Lybrand L.L.P.
Portland, Maine
December 23, 1996
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Kevin J.
Tierney and John-Paul DeRosa his or her true and lawful
attorneys-in-fact and agents, each acting alone, with full
powers of substitution and resubstitution, for and in the
name, place and stead of the undersigned, in the
undersigned's capacity as a Director of UNUM Corporation,
from time to time, to sign
(i) any and all post-effective amendments to Registration
Statement No. 33-31270 under the Securities Act of 1933,
relating to the UNUM Employees Retirement Savings Plan and
Trust;
(ii) any and all post-effective amendments to Registration
Statement No. 33-60124 under such Act, relating to the
Colonial Companies, Inc. Security Saver Plan; and
(iii) a new Registration Statement to be filed under such Act on
Form S-8 prior to January 1, 1997 to register additional
shares of Common Stock for use in connection with either of
such plans, and any and all pre- and post-effective
amendments to such Registration Statement;
and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and
agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and
about the premises, as fully to all intents and purposes as
the undersigned might or could do in person, and hereby
ratifies and confirms all that said attorneys-in-fact and
agents, each acting alone, or their substitute or
substitutes, may lawfully do or cause to be done by virtue
thereof.
Witness our signatures on the date(s) set forth below:
Signature Title Date
/s/ Gayle O. Averyt Director December 13, 1996
Gayle O. Averyt
/s/ Robert E. Dillon, Jr. Director December 13, 1996
Robert E. Dillon, Jr.
/s/ Gwain H. Gillespie Director December 13, 1996
Gwain H. Gillespie
/s/ Ronald E. Goldsberry Director December 13, 1996
Ronald E. Goldsberry
Director December , 1996
Donald W. Harward
/s/ George J. Mitchell Director December 13, 1996
George J. Mitchell
Director December , 1996
Cynthia A. Montgomery
/s/ James L. Moody, Jr. Director December 13, 1996
James L. Moody, Jr.
/s/ Lawrence R. Pugh Director December 13, 1996
Lawrence R. Pugh
/s/ Lois Dickson Rice Director December 13, 1996
Lois Dickson Rice
/s/ John W. Rowe Director December 13, 1996
John W. Rowe
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
constitutes and appoints Kevin J. Tierney and John-Paul
DeRosa my true and lawful attorneys-in-fact and agents, each
acting alone, with full powers of substitution and
resubstitution, for me and in my name, place and stead, in
any and all capacities, from time to time, to sign
(i) any and all post-effective amendments to Registration
Statement No. 33-31270 under the Securities Act of 1933,
relating to the UNUM Employees Retirement Savings Plan and
Trust; and
(ii) a new Registration Statement to be filed under such Act on
Form S-8 prior to January 1, 1997, to register additional
shares of Common Stock for use in connection with such plan,
and any and all pre- and post-effective amendments to such
Registration Statement;
and to file the same, with all exhibits thereto, and other
documents in connection therewith (including, without
limitation, any annual report of such plan on Form 11-K),
with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents full power and authority to
do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to
all intents and purposes as I might or could do in person,
and hereby ratifies and confirms all that said
attorneys-in-fact and agents, each acting alone, or their
substitute or substitutes, may lawfully do or cause to be
done by virtue thereof.
Witness my signature on the date set forth below:
Date: December 17, 1996 /s/ Eileen C. Farrar
Eileen C. Farrrar
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
constitutes and appoints Kevin J. Tierney and John-Paul
DeRosa my true and lawful attorneys-in-fact and agents, each
acting alone, with full powers of substitution and
resubstitution, for me and in my name, place and stead, in
any and all capacities, from time to time, to sign
(i) any and all post-effective amendments to Registration
Statement No. 33-60124 under the Securities Act of 1933,
regarding securities offered through the Colonial Companies,
Inc. Security Saver Plan (the "Colonial Plan");
(ii) any and all post-effective amendments to Registration
Statement No. 33-31270 under such Act, to include in such
Registration Statement securities offered through the
Colonial Plan and to provide for the merger of the Colonial
Plan with the UNUM Employees Retirement Savings Plan and
Trust (the "UNUM Plan"); and
(iii) a new Registration Statement to be filed under such Act on
Form S-8 prior to January 1, 1997, to register additional
shares of Common Stock for use in connection with either the
Colonial Plan or the UNUM Plan, and any and all pre- and
post-effective amendments to such Registration Statement;
to file the same, with all exhibits thereto, and other
documents in connection therewith (including, without
limitation, a Form 15 notice of suspension of duty to file
reports under the Securities Exchange Act of 1934), with the
Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents full power and authority to do
and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to
all intents and purposes as I might or could do in person,
and hereby ratifies and confirms all that said
attorneys-in-fact and agents, each acting alone, or their
substitute or substitutes, may lawfully do or cause to be
done by virtue thereof.
Witness my signature on the date set forth below:
Date: December 16, 1996 /s/ Paul H. Clifton. Jr
Paul H. Clifton, Jr.
