EXHIBIT 10.14
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ATLANTIC TELE-NETWORK, INC.
DEFINED BENEFIT PLAN FOR SALARIED EMPLOYEES
AMENDED AND RESTATED
DEFINED BENEFIT PLAN AGREEMENT
PLAN NUMBER 003
DATED EFFECTIVE FEBRUARY 1, 1993
ATLANTIC TELE-NETWORK, INC.
AMENDED AND RESTATED
DEFINED BENEFIT PLAN AGREEMENT
THIS AMENDED AND RESTATED DEFINED BENEFIT PLAN AGREEMENT, dated
for reference purposes only the 1st day of February 1, 1993, is hereby adopted
by ATLANTIC TELE-NETWORK, INC., a corporation organized under the laws of
Delaware (hereinafter referred to as "ATN, Inc." and as "Employer"), for the
benefit of its eligible Employees.
W I T N E S S E T H :
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ATN, Inc. has previously established and does hereby amend and
restate within this Agreement, a Plan for the administration and distribution of
contributions made by the Employer for the purpose of providing retirement
benefits for eligible Employees. The name of this Plan shall be "ATLANTIC
TELE-NETWORK,. INC. DEFINED BENEFIT PLAN FOR SALARIED EMPLOYEES" (hereinafter
referred to as the "Plan"). The provisions of this Plan shall apply solely to an
Employee whose employment with the Employer terminates on or after the Effective
Date of the Employer's Plan. If an Employee's employment with the Employer
terminates prior to the Effective Date, that Employee shall not be entitled to
any benefit under the Plan.
ARTICLE I
DEFINITIONS
1.01 ACCOUNTING DATE. The last day of the Plan Year.
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1.02 ACCRUED BENEFIT. Subject to Article XVIII, a Participant's
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normal retirement pension under Section 5.02. Once an Employee becomes a
Participant in the Plan, pursuant to the provisions of Article II, then Years of
Participation shall include all Years of Service, as defined in Section 2.02,
except that, for purposes of determining a Participant's Accrued Benefit, a
Participant shall not be credited with Years of Participation for any period of
employment prior to the Effective Date of the Plan, as defined in Section 1.12.
Notwithstanding the preceding sentence, ITT/Vitelco Employees, as defined in
Section 1.17, shall be credited with Years of Participation for purposes of
accruing benefits under this Plan for Years of
Service prior to the Effective Date of the Plan to the extent provided in
Section 1.17 of the Plan.
If the Participant is a leased employee described in Section 1.13
of the Plan, the Advisory Committee shall reduce the Participant's Accrued
Benefit by his accrued benefit under a qualified plan maintained by the leasing
organization, to the extent attributable to services the leased employee
performed for the Employer. If the leasing organization's plan is a defined
benefit plan, the Advisory Committee shall make this reduction first by
converting the benefit under the leasing organization's plan to the same normal
form of benefit described in Section 5.03 of the Plan, if that benefit is
expressed in a different form, payable at the Participant's Normal Retirement
Age under this Plan. If the leasing organization's plan is a defined
contribution plan, the Advisory Committee shall make this reduction first by
converting the leased employee's vested account balance in that defined
contribution plan, determined as of the last day of the applicable Plan Year,
into an annual benefit payable at the Participant's Normal Retirement Age under
this Plan, in the normal form of benefit described in Section 5.03 of the Plan.
The Advisory Committee shall make all calculations under this paragraph by using
the actuarial assumptions specified in Section 1.04 of the Plan.
1.03 ACT. The Employee Retirement Income Security Act of 1974,
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as amended.
1.04 ACTUARIAL EQUIVALENT. A benefit of equal value computed by
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using the UP-1984 Mortality Tables set back 1 and 1/2 years for Participants and
Beneficiaries and six percent (6%) interest per annum. When determining the
amount of a Participant's distribution, or when determining the present value of
the Participant's Nonforfeitable Accrued Benefit for purposes of any consent
requirements under the Plan, the Advisory Committee shall not use an interest
rate greater than the applicable PBGC rate in effect at the beginning of the
Plan Year in which the Participant's distribution occurs. The applicable PBGC
rate generally is 100% of the immediate or deferred annuity interest rates,
whichever apply to the Participant. However, if the present value of the
Participant's Nonforfeitable Accrued Benefit exceeds $25,000 by using 100% of
the PBGC interest rates, then the Advisory Committee shall use 120% of the
applicable immediate or deferred annuity interest rates. If the Advisory
Committee determines the interest rate limitation using 120% of the applicable
PBGC rates, that calculation shall not reduce the present value determination
below $25,000. In no event shall this interest rate limitation reduce a
Participant's distribution amount or present value calculation below the amount
determined by using the Plan's interest rate assumption stated in the first
sentence of this Section.
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1.05 ACTUARY. An enrolled actuary selected by the Advisory
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Committee to provide actuarial services for the Plan.
1.06 ADVISORY COMMITTEE. The Advisory Committee as from time
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to time constituted by ATN, Inc.
1.07 AVERAGE ANNUAL COMPENSATION. The Compensation received by an
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Employee during the period of five (5) calendar years during the last ten (10)
Years of Service as defined in Article II which produces the highest Average
Annual Compensation. For an Employee who does not receive Compensation during
five (5) calendar years, "Average Annual Compensation" shall mean the total
Compensation received by the Employee multiplied by 12 and divided by the number
of months during which compensation was received. With the exception of
ITT/Vitelco Employees, Average Annual Compensation shall not include
compensation paid or accrued for services performed before the Effective Date of
the Plan.
1.08 BENEFICIARY. A person designated by a Participant who is or
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may become entitled to a benefit under the Plan. A Beneficiary who becomes
entitled to a benefit under the Plan shall remain a Beneficiary under the Plan
until the Trustee has fully distributed his or her benefit to him or her. A
Beneficiary's right to (and the Plan Administrator's, the Advisory Committee's
or a Trustee's duty to provide to the Beneficiary) information or data
concerning the Plan shall not arise until he or she first becomes entitled to
receive a benefit under the Plan.
1.09 CODE. The Internal Revenue Code of 1986, as amended.
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1.10 COMPENSATION. The total amount of payments made or incurred
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by the Employer to an Employee for services rendered to the Employer, including
overtime pay, but specifically excluding bonuses and commissions. In addition to
bonuses and commissions, compensation shall not include Employee expense
reimbursements, foreign service allowances, fringe benefits, (taxable or
nontaxable), director's fees, contributions made by the Employer under the Plan,
payments made by the Employer for group insurance, hospitalization and like
benefits, nor contributions made by the Employer under any other employee
benefit plan it maintains. For Plan Years beginning after December 31, 1988,
notwithstanding anything herein to the contrary, Compensation shall not include
amounts paid by the Employer in excess of the greater of $200,000 or the maximum
amount prescribed pursuant to Code Section 401(a)(17).
1.11 COVERED COMPENSATION. Table 1 defined in the covered
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compensation tables published by the Internal Revenue
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Service for the year in which the Employee's termination occurs.
1.12 EFFECTIVE DATE. The effective date of this Plan is
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June 24, 1987.
1.13 EMPLOYEE. An Employee of the Employer, an Employee of any
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subsidiary of the Employer incorporated in the United States, Puerto Rico or the
United States Virgin Islands, except whether said subsidiary existed on the
Effective Date or is incorporated subsequent thereto, and a Leased Employee as
defined by Internal Revenue Code Section 414(n)(2).
1.14 EMPLOYMENT COMMENCEMENT DATE. The date on which an
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Employee first performs an Hour of Service for the Employer.
1.15 EMPLOYER. ATN, Inc., all of the subsidiaries of ATN, Inc.
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incorporated in the United States, Puerto Rico or the United States Virgin
Islands, whether said subsidiaries existed on the Effective Date or are
incorporated subsequent thereto, and any other employer who with the written
consent of ATN adopts this Plan.
1.16 HOUR OF SERVICE. Unless otherwise provided, the term
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"Hour of Service" shall mean:
(a) Each Hour of Service for which the Employer, either directly or
indirectly, pays an Employee, or for which the Employee is
entitled to payment, for the performance of duties during the
Plan Year. The Advisory Committee shall credit Hours of Service
under this paragraph (a) to the Employee for the Plan Year in
which the Employee performs the duties, irrespective of when
paid;
(b) Each Hour of Service for back pay, irrespective of mitigation of
damages, to which the Employer has agreed or for which the
Employee has received an award. The Advisory Committee shall
credit Hours of Service under this paragraph (b) to the Employee
for the Plan Year(s) to which the award or the agreement pertains
rather than for the Plan Year in which the award, agreement or
payment is made; and
(c) Each Hour of Service for which the Employer, either directly or
indirectly, pays an Employee, or for which the Employee is
entitled to payment (irrespective of whether the employment
relationship is terminated), for reasons other than for the
performance of duties during a Plan Year, such as leave
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of absence, vacation, holiday, sick leave, illness, incapacity
(including disability), layoff, jury duty or military duty. The
Advisory Committee shall not credit more than five hundred one (501)
Hours of Service under this paragraph (c) to an Employee on account of
any single continuous period during which the Employee does not perform
any duties (whether or not such period occurs during a single Plan
Year). The Advisory Committee shall credit Hours of Service under this
paragraph (c) in accordance with the rules of paragraphs (b) and (c) of
Labor Reg. Section 2530.200b-2, which the Plan, by this reference,
specifically incorporates in full within this paragraph (c).
The Advisory Committee shall not credit an Hour of Service under
more than one (1) of the above paragraphs. Furthermore, if the Advisory
Committee is to credit Hours of Service to an Employee for the twelve (12) month
period beginning with the Employee's Employment Commencement Date, or with an
anniversary of such date, then the twelve (12) month period shall be substituted
for the term "Plan Year" wherever the latter term appears in this Section. The
Advisory Committee shall resolve any ambiguity with respect to the crediting of
an Hour of Service in favor of the Employee.
The Advisory Committee shall credit every Employee with Hours of
Service on the basis of the "actual" method. For purposes of the Plan, "actual"
method means the determination of Hours of Service from records of hours worked
and hours for which the Employer makes payment or for which payment is due from
the Employer.
Solely for purposes of determining whether the Employee incurs a
Break in Service under any provision of this Plan, the Advisory Committee shall
credit Hours of Service during an Employee's unpaid absence period due to
maternity or paternity leave. The Advisory Committee shall consider an Employee
on maternity or paternity leave if the Employee's absence is due to the
Employee's pregnancy, the birth of the Employee's child, the placement with the
Employee of an adopted child, or the care of the Employee's child immediately
following the child's birth or placement. The Advisory Committee shall credit
Hours of Service under this paragraph on the basis of the number of Hours of
Service the Employee would receive if he or she were paid during the absence
period or, if the Advisory Committee cannot determine the number of Hours of
Service the Employee would receive, on the basis of eight (8) hours per day
during the absence period. The Advisory Committee only shall credit the number
of Hours of Service (up to 501 Hours of Service) necessary to prevent an
Employee's Break in Service.
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The Advisory Committee shall credit all Hours of Service described in this
paragraph to the computation period in which the absence period begins or, if
the Employee does not need these Hours of Service to prevent a Break in Service
in the computation period in which his or her absence period begins, the
Advisory committee shall credit these Hours of Service to the immediately
following computation period.
1.17 ITT/VITELCO EMPLOYEES. Prior to June 24, 1987, all of the
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issued and outstanding stock of Vitelco was owned by ITT Communications
Services, Inc. which was indirectly fully owned and controlled by ITT
Corporation or a wholly owned subsidiary of ITT Corporation. The employees of
Vitelco who are eligible to become Participants under the Plan, provided service
requirements are satisfied, generally were Members (as defined therein) in the
Retirement Plan for Salaried Employees of ITT Corporation (hereinafter referred
to as "ITT Plan"). With respect to Members of the ITT Plan employed by Vitelco
as of June 23, 1987 who are employed by Vitelco on June 24, 1987,
notwithstanding anything in the Plan to the contrary, for the purposes of
determining service under the Plan for vesting, for determining benefits and for
determining benefit amounts, the Service of Members of the ITT Plan shall be
credited as Service under this Plan even though rendered before the Effective
Date of the Plan, to the extent (only to such extent) it was recognized by the
ITT Plan. Hereinafter, such employees (governed by the preceding sentence), are
referred to as "ITT/Vitelco Employees".
1.18 NONFORFEITABLE. A Participant's or Beneficiary's
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unconditional claim, legally enforceable against the Plan, to the Participant's
Accrued Benefit.
1.19 NONTRANSFERABLE ANNUITY. An annuity which by its terms
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provides that it may not be sold, assigned, discounted, pledged as collateral
for a loan or security for the performance of an obligation or for any purpose
to any person other than the insurance company.
1.20 PARTICIPANT. An Employee who is eligible to be and becomes a
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Participant in accordance with the provisions of Article II. An Employee who
becomes a Participant shall remain a Participant under the Plan until the
Trustee has fully distributed his or her Nonforfeitable Accrued Benefit to him
or her.
1.21 PLAN. The retirement Plan established by the Employer in the
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form of this Agreement, designated as the ATLANTIC TELE-NETWORK, INC. DEFINED
BENEFIT PLAN FOR SALARIED EMPLOYEES (formerly known as the Atlantic Tele-Network
Co. Defined Benefit Plan).
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1.22 PLAN ADMINISTRATOR. The Plan Administrator shall be the
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Chairman of the Advisory Committee unless the Employer designates another person
or entity to hold the position of Plan Administrator. In addition to his or her
other duties, the Plan Administrator shall have full responsibility for
compliance with the reporting and disclosure rules under the Act as respects
this Agreement.
1.23 PLAN ENTRY DATE. The Effective Date and every January 1
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and July 1 after the Effective Date.
1.24 PLAN YEAR. The fiscal year of the Plan, a twelve (12)
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consecutive month period ending every December 31, except the first Plan Year
shall be the short period of June 24, 1987 through December 31, 1987.
1.25 SERVICE. Any period of time the Employee is in the employ of
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the Employer, including any period the Employee is on unpaid leave of absence
authorized by the Employer under a uniform, non-discriminatory policy applicable
to all Employees.
1.26 SERVICE FOR CONTROLLED BUSINESSES. If the Employer is a
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member of a related group, the Plan shall treat all employees of the members of
such related group as if employed by a single employer. A related group is,
except as provided in Article III, a controlled group of corporations (as
defined in Code Section 414(b), trades or businesses (whether or not
incorporated) which are under common control (as defined in Code Section 414(c)
or an affiliated service group (as defined in Code Section 414(m) or Code
Section 414(0)).
1.27 THEORETICAL CONTRIBUTION/THEORETICAL RESERVE. The
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Theoretical Contribution for any Plan Year is the contribution which the
Advisory Committee would compute using the individual level premium funding
method from the age at which a Participant commenced participation in the Plan
to Normal Retirement Age to fund the Participant's entire anticipated normal
retirement pension, including any minimum benefit guaranteed under Article
XVIII, without regard to preretirement ancillary benefits. The Theoretical
Reserve is the amount the Advisory Committee would have available in a reserve
fund if for each Year of Participation until the Participant's death the
Employer made the Theoretical Contribution to the reserve fund. The Advisory
Committee shall base its calculations under this Section on the actuarial
assumptions specified in Section 1.04.
1.28 TRUST. The Trust created pursuant to the Trust Agreement
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executed concurrent with the execution hereof and incorporated herein as if set
forth in its entirety.
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1.29 TRUSTEE. The Trustee of the Trust shall be WACHOVIA BANK OF
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GEORGIA, N.A. or any successor who in writing accepts the position of Trustee.
The Trustee may resign at any time as Trustee of the Plan by giving sixty (60)
days written notice in advance to the Employer and to the Pension Committee. The
Employer, by giving thirty (30) days written notice in advance to the Trustee,
may remove the Trustee without cause. In the event of the resignation or removal
of the Trustee, the Employer may at any time, subject to the requirements of any
applicable statute or regulation, appoint a successor trustee or trustees, other
than as heretofore provided, and any such successor trustee or trustees may be
either an individual or individuals, or a corporation authorized by law to
administer trusts.
1.30 TRUST FUND. All property of every kind held or acquired by
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the Trustee under the Trust, as of any date, including without limitation
annuity contracts.
ARTICLE II
EMPLOYEE PARTICIPANTS
2.01 ELIGIBILITY. Each Employee who is not a member of a
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collective bargaining unit shall become a Participant in the Plan on the Plan
Entry Date (if employed on that date) coincident with or immediately following
the later of the date on which he completes one (1) Year of Service or attains
age twenty-one (21).
If a Participant does not terminate employment but is or becomes
a member of a collective bargaining unit, then, unless the applicable collective
bargaining agreement provides otherwise, during any full Plan Year that such a
Participant is a member of a collective bargaining unit, the Participant shall
not accrue any benefit under the Plan nor shall he receive credit for Years of
Participation under Section 5.05.
If an Employee who is not a Participant ceases to be a member of
a collective bargaining unit, he shall participate in the Plan immediately if he
has satisfied the service and age conditions of this Section and would have been
a Participant had he not been a member of a-collective bargaining unit during
his period of service with the Employer. Furthermore, an Employee shall receive
vesting credit under Article VIII for each included Year of Service during his
period of Service with the Employer without regard to whether the Employee is a
member of a collective bargaining unit.
For purposes of this Section, an Employee is a member of a
collective bargaining unit if he is included in a unit of
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employees covered by an agreement which the Secretary of Labor finds to be a
collective bargaining agreement between employee representatives and one (1) or
more employers if there is evidence that retirement benefits were the subject of
good faith bargaining between such employee representatives and such employer or
employers. The term "employee representatives" does not include an organization
more than one-half (1/2) the members of which are owners, officers or executives
of the Employer.
Each Employee of Vitelco as of June 23, 1987, who was then
satisfying the Eligibility Service requirements (as defined in the ITT Plan) to
become a Member of the ITT Plan, shall receive credit for such service before
June 24, 1987, as long as such service is consecutive, for purposes of
determining when such party shall become a Participant in this Plan.
2.02 YEAR OF SERVICE - PARTICIPATION. For purposes of
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participation under Section 2.01 the Plan shall take into account all of an
Employee's Years of Service with the Employer. Year of Service shall mean a
twelve (12) consecutive month period during which the Employee completes not
less than one thousand (1,000) Hours of Service, or is credited with one
thousand (1,000) Hours of Service pursuant to Article VII, measuring the
beginning of the first twelve (12) month period from the Employment Commencement
Date. If the Employee does not complete one thousand (1,000) Hours of Service
during the twelve (12) month period commencing with the Employment Commencement
Date, the Plan shall measure the twelve (12) month period from the first day of
the Plan Year which includes the first anniversary of the Employment
Commencement Date. The Plan shall measure any subsequent twelve (12) month
period necessary for a determination of Year of Service for participation by
reference to succeeding Plan-Years. "Employment Commencement Date" means the
date on which the Employee first performs an Hour of Service for the Employer.
Except as provided in Section 2.01, an Employee shall not be credited with Years
of Service for any period such Employee was a member of a collective bargaining
unit. For instance, an Employee who was a member of a collective bargaining
unit, shall not be credited with Years of Participation or Years of Service for
purposes of determining the Employee is normal retirement benefit or accrued
benefit for the period of service during which such Employee was a member of
such collective bargaining unit.
2.03 BREAK IN SERVICE - PARTICIPATION. For purposes of
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participation in the Plan, the Plan shall not apply any Break in Service rule.
2.04 PARTICIPATION UPON RE-EMPLOYMENT. A Participant whose
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employment terminates shall re-enter the Plan as a
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Participant on the date of his re-employment. An Employee who has satisfied the
eligibility conditions of Section 2.01 but who terminates employment prior to
becoming a Participant shall become a Participant in the Plan on the date of his
re-employment. Any other Employee whose employment terminates and who is
subsequently re-employed shall become a Participant in accordance with the
provisions of Section 2.01 and Section 2.02.
2.05 ITT/Vitelco EMPLOYEES. ITT/Vitelco Employees shall become
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Participants in the Plan as of the first Plan Entry Date, June 24, 1987, as
provided in Section 1.17 hereof notwithstanding anything herein to the contrary.
Further, as provided in Section 1.17, years of Benefit Service (as defined in
the ITT Plan) credited pursuant to the ITT Plan shall be credited as Years of
Service pursuant to Section 2.02 and as Years of Participation pursuant to
Section 1.02.
ARTICLE III
EMPLOYER CONTRIBUTIONS AND FORFEITURES
3.01 AMOUNT. The Employer alone shall make the contributions
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required to fund the cost of the benefits provided by this Plan. The Employer
intends to make such contributions as are necessary to fund the Plan in
accordance with the minimum funding standards of the Code; provided however, the
Trustee, upon written request from the Employer, shall return to the Employer
the amount of the Employer's contribution made by the Employer by mistake of
fact or the amount of the Employer's contribution disallowed as a deduction
under Code Section 404.
The Trustee shall not return any portion of the Employer's
contribution under the provisions of the first paragraph of this Section more
than one (1) year after:
(a) The Employer made the contribution by mistake of fact; or
(b) The disallowance of the contribution as a deduction, and then,
only to the extent of the disallowance.
Furthermore, the Trustee shall not increase the amount of the
Employer contribution returnable under this Section for any earnings
attributable to the contribution, but the Trustee shall decrease the Employer
contribution returnable for any losses attributable to it. The Trustee may
require the Employer to furnish it whatever evidence the Trustee deems necessary
to enable the Trustee to confirm the amount the Employer has requested be
returned is properly returnable under the Act.
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Notwithstanding any provision contained herein to the contrary,
the Employer shall be entitled to the return of all contributions made by the
Employer to this Plan should the Internal Revenue Service initially determine
that this Plan is not qualified.
3.02 DETERMINATION OF CONTRIBUTION. The Employer, from its
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records and the reports of the Actuary, shall determine the amount of any
contribution to be made by it to the Trust Fund under the terms of the Plan. In
this regard, the Employer may place full reliance upon all reports, opinions,
tables, valuations, certificates and computations the Actuary furnishes the
Employer.
3.03 TIME OF PAYMENT OF CONTRIBUTION. The Employer may pay its
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contribution for each Plan Year in one (1) or more installments. The Employer
must make its contribution to the Trust within the time prescribed (including
extensions) by Code Section 404(a)(6) for filing its tax return for the taxable
year for which it claims a deduction for its contribution.
3.04 NONVESTED ACCRUED BENEFIT. The Trustee shall retain in the
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Trust all amounts representing the nonvested Accrued Benefit of Participants who
have terminated employment. The Employer shall not use these amounts to increase
benefits under the Plan but instead shall use the amounts to reduce its
contribution for future Plan Year(s).
3.05 LIMITATION ON ANNUAL BENEFIT. Notwithstanding any other
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provision of this Plan, in no event shall a Participant's Annual Benefit payable
at his Social Security retirement age, at any time within a Limitation Year,
exceed the lesser of $90,000 (or, beginning January 1, 1988, such larger dollar
amount as the Commissioner of Internal Revenue may prescribe) or one hundred
percent (100%) of the Participant's average Compensation for his highest three
(3) consecutive Years of Service. A Participant shall satisfy the limitation of
this Section if his Annual Benefit under this Plan is $10,000 or less, and the
Participant has not participated at any time in a defined contribution plan the
Employer has maintained.
If a Participant's Annual Benefit commences prior to his
attaining Social Security Retirement Age, but not earlier than his attaining age
sixty-two (62), the Advisory Committee shall adjust the $90,000 (or the larger
adjusted dollar amount) limitation of this Section by 5/9 of 1% for each of the
first thirty-six (36) months the benefit commencement date precedes the
Participant's Social Security retirement age, and by 5/12 of 1% for each
additional month (not exceeding twenty-four (24) months) the benefit
commencement date precedes the Participant's Social Security retirement age. If
a Participant's An-
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nual Benefit commences prior to his attaining age sixty-two (62), the Advisory
Committee shall adjust the dollar amount limitation of this Section to the
Actuarial Equivalent of an Annual Benefit equal to the dollar limitation
applicable to an Annual Benefit commencing to that Participant at age sixty-two
(62). To determine the Actuarial Equivalent under this paragraph, the Advisory
Committee shall use an interest rate assumption equal to the greater of five
percent (5%) per annum or the rate specified in Section 1.04.
In the event a Participant's Annual Benefit commences after his
Social Security retirement age, the Advisory Committee shall adjust the $90,000
(or larger adjusted dollar amount) limitation of this Section to the Actuarial
Equivalent of an Annual Benefit equal to such dollar limitation commencing at
Social Security retirement age. To determine the Actuarial Equivalent under this
paragraph, the Advisory Committee shall use an interest rate assumption equal to
the lesser of five percent (5%) per annum or the rate specified in Section 1.04.
The maximum Annual Benefit described in this Section applies to a
Participant who has completed at least ten (10) Years of Service with the
Employer, for purposes of the 100% average Compensation limitation and the
$10,000 special limitation, and has completed at least ten (10) Years of
Participation in the Plan, for purposes of the dollar limitation. If a
Participant has less than ten (10) Years of Service with the Employer at the
time benefits commence, the Advisory Committee shall multiply his 100% average
compensation limitation and the $10,000 special limitation by a fraction, the
numerator of which is the number of Years of Service (including fractional
years) with the Employer and the denominator of which is ten (10). If a
Participant has less than ten (10) Years of Participation in the Plan at the
time his benefits commence, the Advisory Committee shall multiply his dollar
limitation by a fraction, numerator of which is the number of years of
Participation (including fractional years) in the Plan and the denominator of
which is ten (10). In no event will the reductions described in this paragraph
reduce a Participant's maximum Annual Benefit to less than one-tenth (1/10) of
the maximum Annual Benefit determined without regard to the reductions. To the
extent required by Treasury regulations, the Advisory Committee shall apply the
reductions of this paragraph separately to each change in the benefit structure
of the Plan.
If the Trustee pays the Participant's benefit in a form other
than an Annual Benefit, the benefit paid may not exceed the Actuarial Equivalent
of the maximum Annual Benefit payable as a straight life annuity. To determine
the Actuarial Equivalent under this paragraph, the Advisory Committee shall
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use an interest rate assumption equal to the greater of five percent (5%) per
annum or the rate specified in Section 1.04.
Any adjustment to the dollar limitation of this Section shall not
take effect until the first day of the calendar year for which the Commissioner
of Internal Revenue publishes the adjustment. The new limitation shall apply to
the Limitation Year ending with or within the calendar year for which the
Commissioner of Internal Revenue makes the adjustment.
A Participant's Accrued Benefit shall not exceed the limitations
of this Section or of Section 3.07.
3.06 DEFINITIONS - ARTICLE III. For purposes of Article III, the
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following definitions and rules of interpretation shall apply:
(a) "Annual Benefit" -- The Participant's retirement benefit
(including any portion of the Participant's retirement benefit
payable to an alternate payee under a qualified domestic
relations order satisfying the requirements of Code Section
414(p)) attributable to Employer contributions payable in the
form of a straight life annuity or a qualified joint and survivor
annuity, with no ancillary benefits (other than the survivor
annuity).
(b) "Compensation" -- Amounts received for personal services actually
rendered in the course of employment with the Employer
maintaining the plan (including, but not limited to, commissions
paid salesmen, compensation for services on the basis of a
percentage of profits, Commissions on insurance premiums, tips
and bonuses). The term "Compensation" shall not include:
(1) Employer contributions to a plan of deferred compensation
to the extent the contributions are not included in the
gross income of the Employee for the taxable year in which
contributed, on behalf of an Employee to A Simplified
Employee Pension Plan to the extent such contributions are
excludable from the Employee's gross income, and any
distributions from a plan of deferred compensation,
regardless of whether such amounts are includable in the
gross income of the Employee when distributed.
(2) Amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property) held
by an Employee either becomes
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freely transferable or is no longer subject to a
substantial risk of forfeiture.
(3) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock
option.
(4) Other amounts which receive special tax benefits, such as
premiums for group term life insurance (but only to the
extent that the premiums are not includable in the gross
income of the Employee), or contributions made by an
Employer (whether or not under a salary reduction
agreement) towards the purchase of an annuity contract
described in Code Section 403 (b) (whether or not the
contributions are excludable from the gross income of the
Employee).
The provisions of this subparagraph (b) shall apply solely to
this Article III. For purposes of applying the limitations of
this Article III, amounts included as Compensation are those
amounts actually paid to a Participant (or accrued for a
Participant if the Employer included Compensation accrued under
Section 1. 10) or includable in his gross income within the
Limitation Year.
(c) "Limitation Year" -- The Plan Year.
(d) "Projected Annual Benefit"-- A Participant's Annual Benefit under
this Plan provided by Employer contributions on the assumptions
that the Participant will continue employment until his Normal
Retirement Age (or current age, if later), that his Compensation
will continue at the same rate as in effect for the Limitation
Year under consideration until his Normal Retirement Age (or
current age, if later) and that all relevant factors used to
determine benefits under the Plan will remain constant as of the
current Limitation Year for all future Limitation Years.
(e) "Annual Addition"-- The sum of the following amounts allocated on
behalf of a Participant for a Limitation Year, of (i) all
Employer contributions; (ii) all forfeitures; and (iii) all
Employee contributions. Annual Additions include excess
contributions described in Code Section 401(k), excess aggregate
contributions described in Code Section 401(m) and excess
deferrals described in Code Section 402(g) , irrespective of
whether the plan distributes or forfeits such excess amounts.
Annual Additions also in-
-14-
clude amounts allocated after March 31, 1984, to an individual
medical account (as defined in Code Section 415(l)(2)) included
as part of a defined benefit plan maintained by the Employer.
Furthermore, Annual Additions include contributions paid or
accrued after December 31, 1985, for taxable years ending after
December 31, 1985, attributable to post-retirement medical
benefits allocated to the separate account of a key employee (as
defined in Code Section 419A(d)(3) under a welfare benefit fund
(Code Section 419(e)) maintained by the Employer, but only for
purposes of the dollar limitation applicable to the Maximum
Permissible Amount.
(f) "Year of Service" -- A Plan Year during which a Participant
completes at least one thousand (1,000) Hours of Service.
(g) "Year of Participation" -- A Year of Participation, as determined
under Section 1.02 of the Plan. A Year of Participation also
shall mean years of participation credited under any predecessor
or successor plan maintained by the Employer, to the extent
permitted under Treasury regulations.
(h) "Social Security Retirement Age" -- The Advisory Committee shall
determine a Participant's Social Security Retirement Age in
accordance with the following table:
Social Security
Calendar Year of Birth Retirement Age
---------------------- --------------
Prior to 1938 65
1938 through 1954 66
After 1954 67
(i) "Employer"-- In the case of a group of employers which
constitutes a controlled group of corporations (as defined in
Code Section 414(b) as modified by Code Section 415(h)), which
constitutes trades or businesses (whether or not incorporated)
which are under common control (as defined in Code Section 414
(c) as modified by Code Section 415(h)) or which constitutes an
affiliated service group within the meaning of Code Section 414
(m) , all such employers shall be considered a single employer
for purposes of applying the limitations of Section 3.05.
(j) "Defined benefit plan" -- A retirement plan which does not
provide for individual accounts for Employer con-
-15-
tributions. The Advisory Committee shall treat all defined
benefit plans (whether or not terminated) maintained by the
Employer as a single plan.
(k) "Defined contribution plan"-- A retirement plan which provides
for an individual account for each participant and for benefits
based solely on the amount contributed to the participant's
account, and any income, expenses, gains and losses, and any
forfeitures of accounts of other participants which the Advisory
Committee may allocate to such Participant's account. The
Advisory Committee shall treat all defined contribution plans
(whether or not terminated) maintained by the Employer as a
single plan. For purposes of the limitations of this Article III
only (except for the $10,000 special limitation in Section 3.05),
the Advisory Committee shall treat employee contributions made to
a defined benefit plan maintained by the Employer as a separate
defined contribution plan. The Advisory Committee shall treat as
a defined contribution plan an individual medical account (as
defined in Code Section 415(l)(2) included as part of a defined
benefit plan maintained by the Employer and, for taxable years
ending after December 31, 1985, a welfare benefit fund under Code
Section 419(e) maintained by the Employer to the extent there are
post-retirement medical benefits allocated to the separate
account of a key employee (as defined in Code Section
419A(d)(3)).
3.07 OVERALL LIMITATIONS. This Section applies to any Participant
-------------------
who also participates, or ever participated, in a defined contribution plan
maintained by the Employer. The Employer shall reduce its contributions under
the defined contribution plan to the extent necessary to prevent the sum of the
following fractions, computed as of the close of the Limitation Year, from
exceeding 1.0:
Projected Annual Benefit of the Participant
under the defined benefit plan
--------------------------------------------------------------------------------
The lesser of (i) 125% of the Participant's dollar limitation in
effect under Code Section 415(b)(1)(A) for the Limitation
Year, or (ii) 1.4 times the Participant's average Compensation
limitation under Section 3.05
plus
the sum of the Annual Additions to the Participant's Account under the defined
contribution plan(s) as of the close of the Limitation Year
--------------------------------------------------------------------------------
-16-
the sum of the lesser of the following amounts determined for the Limitation
Year and for each prior Year of Service with the Employer: (i) 125% of the
dollar limitation in effect under Code Section 415(c)(1)(A) for the Limitation
Year (determined without regard to the special dollar limitations for employee
stock ownership plans), or (ii) 35% of the Participant's Compensation for the
Limitation Year
The Advisory Committee shall determine the denominator of the
first fraction by taking into account the years of participation and the years
of service the Advisory Committee reasonably can project the Participant will
have at the time his Projected Annual Benefit is payable. The Advisory Committee
may use on a uniform basis any transitional rules prescribed by law to compute
the Participant's fractions. The denominator of the first fraction shall not be
less than 125% of the Participant's Current Accrued Benefit (as determined under
Section 3.05). For purposes of the second fraction, the Advisory Committee shall
not recompute Annual Additions in Limitation Years beginning prior to January 1,
1987, to treat all Employee contributions as Annual Additions. If the plan
satisfied Code Section 415 for Limitation Years beginning prior to January 1,
1987, the Advisory Committee will redetermine the fractions as of the end of the
last Limitation Year beginning before January 1, 1987, in accordance with this
Section. If the sum of the redetermined fractions exceeds 1.0, the Advisory
Committee will subtract permanently from the numerator of the second fraction an
amount equal to the product of (1) the excess of the sum of the fractions over
1.0, times (2) the denominator of the second fraction. In making the adjustment,
the Advisory Committee shall disregard any Accrued Benefit in excess of the
Current Accrued Benefit.
ARTICLE IV
PARTICIPANT CONTRIBUTIONS
4.01 PARTICIPANT VOLUNTARY CONTRIBUTIONS. This Plan does not
-----------------------------------
permit or require Participant voluntary contributions.
4.02 PARTICIPANT ROLLOVER CONTRIBUTIONS. This Plan does not
----------------------------------
permit Participant rollover contributions.
ARTICLE V
NORMAL RETIREMENT BENEFIT
5.01 NORMAL RETIREMENT AGE. A Participant's Normal Retirement Age
---------------------
is the date he attains sixty-five (65) years of age or the date he completes
five (5) years of Participation within the meaning of Section 1.02 herein. A
Participant who
-17-
retires on or after attaining Normal Retirement Age shall receive a Normal
Retirement Pension as described below.
5.02 AMOUNT OF NORMAL RETIREMENT PENSION. Subject to the Annual
-----------------------------------
Benefit limitations of Article III, and in the case of ITT/Vitelco Employees, as
modified by Section 5.03, a Participant's normal retirement pension shall equal:
(a) For Plan Years beginning before January 1, 1989:
(1) Two percent (2%) of the Participant's Average Annual
Compensation for each Year of Participation (as defined by
Section 1.02 which includes Years of Service prior to the
Effective Date of the Plan for ITT/Vitelco Employees) up
to twenty-five (25) years, plus
(2) One and one-half percent (1.5%) of the Participant's
Average Annual Compensation for each Year of Participation
(as defined by Section 1. 02 which includes Years of
Service prior to the Effective Date of the Plan for
ITT/Vitelco Employees) for the next fifteen (15) years,
offset by
(3) one and one-quarter percent (1.25%) of the Participant's
Primary Insurance Amount for each Year of Participation
(as defined by Section 1.02 which should equal the sum of
years credited under (a) and (b) immediately above) up to
and not to exceed forty (40) years.
(b) For Plan Years beginning after December 31, 1988:
1.4% of the Participant's Average Annual Compensation up to
Covered Compensation, plus 1.8% of the Participant's Average
Annual Compensation in excess of Covered Compensation, for each
Year of Participation (as defined in Section 1.02 herein, which
includes Years of Service prior to the Effective Date of the Plan
for ITT/Vitelco Employees) up to thirty-five (35) years.
Notwithstanding the foregoing to the contrary, in no event shall the benefit
determined under this Section be less than the benefit accrued as of September
1, 1991.
A Participant's Primary Insurance Amount is his old-age insurance
benefit under the Social Security Act as in effect at the time the offset first
applies. If a Participant
-18-
terminates service prior to attaining Normal Retirement Age, the Advisory
Committee shall compute the Participant's Primary Insurance Amount as if the
Participant will receive wages for purposes of the Social Security Act after his
termination of service, assuming the Participant's annual rate of Compensation
(at the time he terminates service) continues until Normal Retirement Age.
In calculating a Participant's Primary Insurance Amount, the
Advisory Committee shall use the Participant's Estimated Compensation for all
years prior to the Participant's termination of service (by retirement or
otherwise). The Advisory Committee shall determine the Participant's Estimated
Compensation by applying a salary scale projected backwards, to the
Participant's Compensation at termination of service. The salary scale shall be
six percent (6%) per annum. The Plan Administrator shall provide each
Participant, at the time the Participant receives a summary plan description and
at the time he terminates service, written notice of (1) his right to provide
the Advisory Committee actual salary history; (2) the financial effect of
failing to supply actual salary history; and (3) the Participant's right to
obtain actual salary history from the Social Security Administration. If the
Participant provides the Advisory Committee actual salary history within six (6)
months (or such longer period of time the Advisory Committee determines is
administratively reasonable) following the later of the date the Participant
terminates service or the date the Advisory Committee notifies him of the amount
of his benefit, the Advisory Committee shall adjust the Participant's benefit to
reflect an offset based on the actual salary history.
5.03 ITT/Vitelco EMPLOYEES. Pursuant to Sections 1.17 and 2.05
---------------------
hereof, ITT/Vitelco Employees obtain credit for Service before the Effective
Date of this Plan. Further, the contract governing the acquisition of Vitelco
provided that ITT Corporation would cause such employees to be fully vested in
the accrued benefit provided in the ITT Plan as of June 23, 1987. With respect
to ITT/Vitelco Employees, such employees calculation of normal retirement
pension as provided in Section 5.02 shall be modified by subtracting from the
normal retirement pension calculated pursuant to subparagraphs (a), (b) and (c)
of Section 5.02 the normal retirement allowance (Accrued Benefit) such
Participant is entitled to pursuant to the ITT Plan as of June 23, 1987 assuming
such Employees were fully vested as provided in the contract.
5.04 OFFSETS. A Participant's normal retirement pension shall be
-------
offset for the Primary Insurance Amount as provided in Section 5.02,
subparagraph (c), and for the normal retirement allowance (Accrued Benefit) from
the ITT Plan as
-19-
provided in Section 5.03 even though the Participant does not receive such
benefits (Social Security benefits or retirement benefits from the ITT Plan)
regardless of the reason therefor, such as, for example only, the failure to
apply for benefits or excess earnings decreasing or eliminating the benefit.
5.05 COMPUTATION OF NORMAL RETIREMENT PENSION. The Advisory
----------------------------------------
Committee shall compute a Participant's normal retirement pension and, in the
case of ITT/Vitelco Employees, the normal retirement allowance under the ITT
Plan in the form of a straight life annuity commencing at Normal Retirement Age.
The Trustee shall pay the Participant's normal retirement pension in accordance
with Article X.
5.06 LATE RETIREMENT. A Participant who continues his employment
---------------
after attaining Normal Retirement Age may retire on a Late Retirement Date. In
such event, the Participant's pension will commence on his Late Retirement Date,
which will be the first day of the month coincident with or next following the
date he ceases to be an active Participant. A Participant who retires on his
Late Retirement Date will receive a pension commencing on such date equal to his
Accrued Benefit as of his Late Retirement Date, taking into account his years of
Participation and Compensation to his Late Retirement Date. In the event that a
Participant elects a form of payment other than the straight life annuity form,
the pension will be the Actuarial Equivalent of the pension otherwise payable at
his Late Retirement Date based on the form of payment selected.
After a Participant attains Normal Retirement Age, the
Participant, until he retires, has a continuing election, subject to the joint
and survivor annuity requirements of Article X, to receive all, or any portion,
of his Accrued Benefit in a single sum payment, or to make a direct transfer of
his Accrued Benefit to another qualified plan in which he is a participant. A
Participant shall make his election on a form prescribed by the Advisory
Committee at any time during the two (2) month period ending on the Accounting
Date of the Plan Year for which his election is to be effective. If a
Participant fails to file a written election with the Plan Administrator, before
the close of business on an Accounting Date, the Participant's right to elect to
receive a distribution of his Accrued Benefit or to direct a transfer of his
Accrued Benefit shall lapse until the next Plan Year. The Trustee shall make a
distribution to a Participant in accordance with his election under this Section
within sixty (60) days after the close of the Plan Year in which the Participant
files his written election with the Plan Administrator.
-20-
ARTICLE VI
EARLY RETIREMENT PENSION
6.01 ELIGIBILITY FOR EARLY RETIREMENT PENSION. A Participant who
----------------------------------------
has received credit for at least ten (10) Years of Participation and has
attained age fifty-five (55) may retire at any time prior to Normal Retirement
Age. A Participant eligible for an early retirement pension who elects to retire
prior to Normal Retirement Age shall receive an early retirement pension as of
his early retirement date. A Participant's early retirement pension shall equal
his Accrued Benefit, multiplied by the appropriate percentage from the following
table. Such percentage is based upon the number of years by which the
Participant's Early Retirement Date precedes his Normal Retirement Date. If such
is not an exact number of years, a straight-line interpolation shall be made.
Number of Years Percentage
--------------- ----------
\
0 100.00%
1 93.33
2 86.67
3 80.00
4 73.33
5 66.67
6 63.33
7 60.00
8 56.67
9 53.33
10 50.00
In the event that a Participant elects a form of payment other than the straight
life annuity form, the pension will be the Actuarial Equivalent of the early
retirement pension otherwise payable at his Early Retirement Date based on the
form of payment selected.
6.02 PAYMENT OF EARLY RETIREMENT PENSION. The Trustee shall pay
-----------------------------------
the Participant his early retirement pension in accordance with Article X. In
this regard, the Trustee shall commence payment of the early retirement pension
on the first day of the month designated by the Participant as the annuity
starting date. If a Participant fails to designate an annuity starting date,
then the Trustee shall commence payment in accordance with Article X after the
Participant attains Normal Retirement Age.
6.03 ELIGIBILITY FOR SPECIAL EARLY RETIREMENT PENSION. A
------------------------------------------------
Participant whose Years of Participation, as defined in Section 1.02 and further
modified by Section 2.05, when combined with his age equals eighty (80) shall be
eligible
-21-
for a special early retirement pension provided the employee has at least
fifteen (15) Years of Participation. A Participant eligible for a special early
retirement pension who elects to retire before Normal Retirement Age shall
receive a special early retirement pension as of the later of his early
retirement date or age fifty-five (55). Such special early retirement pension
shall equal his Accrued Benefit, multiplied by the appropriate percentage from
the following table. Such percentage is based upon the number of years by which
the Participant's special Early Retirement Date precedes his Normal Retirement
Date. If such is not an exact number of years, a straight-line interpolation
shall be made.
Number of Years Percentage
--------------- ----------
0 100.00%
1 100.00
2 100.00
3 100.00
4 100.00
5 100.00
6 93.33
7 86.67
8 80.00
9 73.33
10 66.67
6.04 PAYMENT OF SPECIAL EARLY RETIREMENT PENSION. The Trustee
-------------------------------------------
shall pay the Participant his special early retirement pension in accordance
with Article X. In this regard, the Trustee shall commence payment of the
special early retirement pension on the first day of the month designated by the
Participant as the annuity starting date provided the Participant is fifty-five
(55) or older on such annuity starting date. If a Participant fails to designate
an annuity starting date, then the Trustee shall commence payment in accordance
with Article X after the Participant attains Normal Retirement Age. Subject to
the limitations of Article III, the Advisory Committee shall not make an
actuarial equivalence reduction to the special early retirement pension to the
extent the annuity starting date is on or after the Participant's sixtieth
(60th) birthday. However, the Advisory Committee shall make an actuarial
equivalence to the portion of the Participant's Accrued Benefit based on the
"thirty-three percent (33%)" component of his normal retirement pension.
ARTICLE VII
DISABILITY
-22-
7.01 EFFECT OF DISABILITY. Subject to Section 7.02, a Participant
--------------------
who becomes totally disabled while employed by the Employer shall be credited
with One Thousand (1,000) Hours of Service, notwithstanding Section 1.16, and a
Year of Participation, within the meaning of Section 1.02, for each Plan Year
the Participant is considered totally disabled. The Plan shall consider a
Participant "totally disabled" on the date the Advisory Committee determines the
Participant is not able to engage in any substantial gainful activity by reason
of any medically determinable physical or mental impairment which the Advisory
Committee expects to last for a continuous period of not less than twelve (12)
months. Furthermore, the disabling condition must exist for a period of at least
three (3) months before the Advisory Committee makes a determination of total
disability, and the Participant must be eligible for and he must actually
receive disability benefits under the Social Security Act. The Advisory
Committee shall apply the provisions of this Section in a nondiscriminatory,
consistent and uniform manner. If a Participant becomes totally disabled after
attaining Normal Retirement Age while employed by the Employer, the provisions
of Article V shall apply. This Article VII shall not apply if the Participant is
receiving an early retirement pension or a special early retirement pension
under Article VI at the time he becomes totally disabled.
7.02 CONTINUING EVIDENCE OF TOTAL DISABILITY. The Advisory
---------------------------------------
Committee may require a Participant to submit evidence of his continued
eligibility for disability income benefits at any time he is receiving a
disability pension. The Advisory Committee may not require furnishing of such
evidence more frequently than semi-annually. If the Participant engages in
gainful employment (except for employment the Advisory Committee approves for
purposes of rehabilitation), the Participant shall not be eligible for any
further credit for Years of Participation and Hours of Service as provided in
Section 7.01. In the event that a disabled Participant refuses or fails to
submit evidence of his continued disability when requested by the Advisory
Committee, the Trustee, upon written notice from the Advisory Committee, shall
discontinue the benefit accrued, as of that date, pursuant to Section 7.01.
7.03 RECOVERY FROM TOTAL DISABILITY. If a Participant recovers
------------------------------
from total disability and re-enters employment covered under the Plan, the
Participant then shall accrue benefits under the Plan based upon his Years of
Participation before his total disability, the Years of Participation credit
pursuant to Section 7.01 while he is totally disabled, and Years of
Participation after his re-employment. Notwithstanding anything herein to the
contrary, the Participant shall not be credited with more than one Year of
Participation for each
-23-
Plan Year the employee was either employed or absent due to being totally
disabled.
7.04 PAYMENT OF BENEFITS. Payment of a Participant's benefit
-------------------
shall commence when the Participant is eligible to receive normal retirement
pension, early retirement pension or special early retirement pension pursuant
to the other provisions of this Plan giving credit for Years of Participation
during which the Participant is totally disabled as provided in this Article
VII. For purposes of determining a totally disabled Participant's Average Annual
Compensation the Advisory Committee shall compute the Average Annual
Compensation as if the Participant separated from service on the date the
Participant became totally disabled under the rules provided in the third
paragraph of Section 1.02. The amount of such pension shall be determined
pursuant to Article V or Article VI, whichever is applicable, giving effect to
the provisions of this Article VII.
ARTICLE VIII
DEFERRED VESTED PENSION - DEATH BENEFIT
8.01 DEFERRED VESTED PENSION. A partially or fully vested
-----------------------
Participant who terminates employment for any reason other than death,
disability subject to Article VII, eligibility for an early retirement pension,
eligibility for a special early retirement pension, or after attaining Normal
Retirement Age shall receive a deferred vested pension. A terminated
Participant's deferred vested pension shall become payable upon the
Participant's attaining Normal Retirement Age.
8.02 AMOUNT OF DEFERRED VESTED PENSION. The Participant's
---------------------------------
deferred vested pension shall equal his Nonforfeitable Accrued Benefit as of the
close of the Plan Year in which his termination of employment occurs.
8.03 PAYMENT OF DEFERRED VESTED PENSION. The Trustee shall pay a
----------------------------------
Participant his deferred vested pension in accordance with Article X. However, a
terminated Participant may elect on a form prescribed by and filed with the Plan
Administrator to have the Trustee commence payment of his deferred vested
pension at any time after he attains age fifty-five (55). The Advisory Committee
shall direct the Trustee to pay the Participant his deferred vested pension,
determined as of the date the deferred vested pension commences by using the
factors in Section 6.01.
Notwithstanding the first paragraph of this Section, the Advisory
Committee, shall direct the Trustee to distribute to the Participant, on or
before the Participant's annuity
-24-
starting date (as defined in Section 10.02 of the Plan), in single sum ("cash
out"), the present value of the Participant's deferred vested pension. If, at
the time the Trustee is to make the cash-out payment, the present value of the
Participant's deferred vested pension is greater than $3,500, the Participant
(and, if the Participant is married, the Participant's spouse) must consent in
writing to the Advisory Committee's direction to the Trustee to distribute. To
determine whether the present value of the Participant's deferred vested pension
is greater than $3,500, the Advisory Committee shall use the interest rate
described in Section 1.04 of the Plan, subject to the interest limitation
described in that Section. If the Advisory Committee directs the Trustee to
distribute a Participant's deferred vested pension under this paragraph, it
shall provide the Participant a true copy of its written notice of direction and
with the appropriate form to enable him to make his (and, if applicable, his
spouse's) consent. The single sum payment shall be the commuted Actuarial
Equivalent of the deferred vested pension.
8.04 VESTING SCHEDULE. A Participant's Accrued Benefit shall be
----------------
one hundred percent (100%) Nonforfeitable upon and after his attaining Normal
Retirement Age (if employed by the Employer on or after that date), or if his
employment terminates as a result of death. If a Participant's employment
terminates prior to Normal Retirement Age for any reason other than death or
disability, the Participant's Accrued Benefit shall be Nonforfeitable after he
has completed five (5) Years of Service.
8.05 YEAR OF SERVICE - VESTING. For purposes of vesting under
-------------------------
Section 8.04, Year of Service shall mean any Plan Year during which an Employee
completes not less than one thousand (1,000) Hours of service with the Employer
and for ITT/ Vitelco Employees, as defined in Section 1.17, Years of Service
shall include Plan Years prior to the Effective Date of the Plan to the same
extent (but only to such extent) such service was recognized by the ITT Plan for
such purposes.
8.06 BREAK IN SERVICE - VESTING. For purposes of this Article
--------------------------
VIII, a Participant shall incur a "Break in Service" if during any Plan Year he
does not complete more than five hundred (500) Hours of Service with the
Employer.
8.07 INCLUDED YEARS OF SERVICE - VESTING. For purposes of
-----------------------------------
determining "Years of Service" under Section 8.05, the Plan shall take into
account all Years of Service an Employee completes with the Employer.
8.08 SERVICE AFTER BREAK IN SERVICE. If a Participant incurs a
------------------------------
Break in Service, the Advisory Committee shall
-25-
not take into account Years of Service before the Break in Service until the
Employee completes a Year of Service after the Break in Service. Furthermore, if
a Participant with a zero percent (0%) Nonforfeitable Accrued Benefit incurs a
Break in Service, the Advisory Committee shall disregard the Years of Service
before the Break in Service if the number of the Employee's consecutive Breaks
in Service equals or exceeds the greater of five (5) or the number of the
Employee's aggregate Years of Service (without regard to Years of Service the
Advisory Committee previously disregarded under this sentence). If the Advisory
Committee disregards the Participant's Years of Service described in the
immediately preceding sentence, the Advisory Committee shall forfeit the
Participants pre-Break in Service Accrued Benefit. The Plan does not permit
forfeiture for cause.
8.09 DISREGARD OF ACCRUED BENEFIT. If the Participant receives a
----------------------------
cash-out payment of his deferred vested pension, the Advisory Committee shall
disregard the Participant's Accrued Benefit determined as of the close of the
Plan Year in which his termination of employment occurs. A Participant who is
re-employed after receiving a cash-out payment of his deferred vested pension
shall have the right to repay the Trustee the Employer derived portion of the
cash-out distribution he received, provided the repayment includes interest at
the rate of five percent (5%) per annum from the date of the prior distribution
and his right to make repayment has not expired. A Participant's right to make
repayment shall expire on the earlier of: (a) the date five (5) years after the
Participant's re-employment date following the cash-out distribution; or (b) the
last day of the first Break in Service Period ending after the cash-out
distribution. A Break in Service Period is a period of five (5) consecutive Plan
Years in which the Participant incurs a Break in Service. A re-employed
Participant shall not have a right to repay if he was one hundred percent (100%)
vested at the time he received the cash-out payment of his deferred vested
pension.
If a re-employed Participant makes repayment in accordance with
the terms of the first paragraph of this Section, the Advisory Committee shall
restore the Participant's Accrued Benefit disregarded under this Section.
However, the Advisory Committee shall not restore the Participant's Accrued
Benefit unless the re-employed Participant makes the repayment prior to the
expiration of the repayment period described in the first paragraph of this
Section.
ARTICLE IX
PRERETIREMENT SURVIVOR ANNUITY
-26-
9.01 PRERETIREMENT SURVIVOR ANNUITY -- ELIGIBILITY. If a married
---------------------------------------------
Participant dies prior to his annuity starting date (as defined in Section
10.02), the Advisory Committee shall direct the Trustee to distribute to the
Participant's surviving spouse a preretirement survivor annuity, unless the
Participant and his spouse were not married throughout the one (1) year period
ending on the date of his death.
For a Participant dying after the earliest retirement age under
the Plan, the preretirement survivor annuity shall equal the survivor annuity
portion of the qualified joint and 50% survivor annuity the Trustee would have
paid under Section 10.02 if the Participant had commenced receiving the
qualified joint and survivor annuity the day before his death. For a Participant
dying on or before the earliest retirement age under the Plan, the preretirement
survivor annuity shall equal the survivor annuity portion of the qualified joint
and 50% survivor annuity the Trustee would have paid under Section 10.02 if the
Participant had separated from service on the date of his death (or, if earlier,
his actual date of separation from service), had commenced receiving the
qualified joint and survivor annuity at the earliest retirement age under the
Plan, and had died the day after attaining the earliest retirement age under the
Plan. The "earliest retirement age under the Plan" is the earliest date on which
the Plan permits the Participant to elect to receive retirement benefits.
Notwithstanding the immediately preceding provisions of this paragraph, the
Advisory Committee shall direct the Trustee to pay the Participant's surviving
spouse the Actuarial Equivalent of the preretirement survivor annuity in a lump
sum, in lieu of providing a preretirement survivor annuity, if the Actuarial
Equivalent of the preretirement survivor annuity is not greater than $3,500.00.
The Advisory Committee shall determine the Actuarial Equivalent of the
preretirement survivor annuity by using the interest rate described in Section
1.04 of the Plan, subject to the interest limitation described in that Section.
If the present value of the preretirement survivor annuity
exceeds $3,500, the Advisory Committee shall not direct the Trustee to commence
payment of the preretirement survivor annuity prior to the date the Participant
would have attained the later of Normal Retirement Age or age 62, without the
written consent of the Participant's surviving spouse. The Participant's
surviving spouse may elect to have the Trustee commence payment of the
preretirement survivor annuity on or after the earliest retirement age under the
Plan. The Advisory Committee may permit the Participant's surviving spouse to
elect any form of payment permitted under Article X in lieu of the preretirement
survivor annuity. For purposes of applying this Article IX, the Advisory
Committee shall treat a former spouse as the Participant's surviving spouse, and
shall not treat the
-27-
current spouse as the surviving spouse, to the extent provided under a qualified
domestic relations order (as defined in Code Section 414(p)).
9.02 REDUCTION OF PENSION BENEFITS. The Trustee shall not reduce
-----------------------------
a Participant's pension benefits as a result of the preretirement survivor
annuity coverage required under Section 9.01. The Employer alone shall bear the
cost of providing the preretirement survivor annuity or the survivor's annuity.
ARTICLE X
PAYMENT OF ACCRUED BENEFIT -- OPTIONAL FORMS OF PAYMENT
10.01 FORM OF BENEFIT. Subject to the requirements of Section
---------------
10.02, the Advisory Committee shall direct the Trustee to pay a Participant his
Nonforfeitable Accrued Benefit in a form permitted under Section 10.05. Subject
to the limitations of Article III, the Participant shall receive the Actuarial
Equivalent of his Nonforfeitable Accrued Benefit payable at Normal Retirement
Age, determined as of the time the Trustee commences payment. Annuity payments
shall continue until the last scheduled payment coincident with or immediately
preceding the date of the Participant's death or, if applicable, the date of his
survivor's death.
10.02 QUALIFIED JOINT AND SURVIVOR ANNUITY. A Participant,
------------------------------------
whether married or unmarried, shall receive his Nonforfeitable Accrued Benefit
in the form of a qualified joint and survivor annuity unless the Participant
makes a valid waiver election (described in Section 10.04) within the ninety
(90) day period ending on the annuity starting date. For purposes of this Plan,
Nonforfeitable Accrued Benefit is payable as an annuity. If the Participant's
Nonforfeitable Accrued Benefit is payable in a form other than an annuity, his
annuity starting date is the first day on which all events have occurred
entitling the Participant to that form of distribution. The qualified joint and
survivor annuity is an annuity payable for the life of the Participant and, if
the Participant is married on the annuity starting date, a survivor annuity
payable for the remaining . life of the Participant's surviving spouse which is
fifty percent (50%) of the amount of the annuity payable during the life of the
Participant. The qualified joint and survivor annuity shall be the Actuarial
Equivalent of the Participant's Nonforfeitable Accrued Benefit and shall provide
payments no less frequently than annually. The Participant and his spouse may
elect to receive a joint and survivor annuity, which is the Actuarial Equivalent
of the qualified joint and survivor annuity, under which the Participant and his
spouse receive a reduced annuity during their joint lives with a sur-
-28-
vivor annuity providing more than fifty percent (50%), but no more than one
hundred percent (100%) of the amount of the joint life annuity. For purposes of
the qualified joint and survivor annuity, a Participant's Nonforfeitable Accrued
Benefit includes his Accrued Benefit attributable to his Participant
contributions. The Advisory Committee shall take into account any security
interest (including any offset rights authorized by Section 16.03(e)) held by
the Plan by reason of a Participant loan to determine the value of the
Participant's Nonforfeitable Accrued Benefit distributable in the form of a
qualified joint and survivor annuity, provided any loan satisfied the spousal
consent requirement described in Section 16.03(e) of the Plan.
On or before the annuity starting date, the Advisory Committee,
in its sole discretion, may direct the Trustee to pay the Participant's
Nonforfeitable Accrued Benefit in a lump sum, in lieu of a qualified joint and
survivor annuity, if the Actuarial Equivalent of the Participant's
Nonforfeitable Accrued Benefit is not greater than $3,500. The Advisory
Committee shall determine the Actuarial Equivalent of the Participant's
Nonforfeitable Accrued Benefit by using the interest rate described in Section
1.04 of the Plan, subject to the interest limitation described in that Section.
For purposes of applying this Article X, the Advisory Committee shall treat a
former spouse as the Participant's spouse or surviving spouse, and shall not
treat the current spouse as the spouse or surviving spouse, to be provided under
a qualified domestic relations Order (as defined in Code Section 414(p)).
10.03 COMMENCEMENT OF BENEFITS. Subject to Section 10.06, the
------------------------
Advisory Committee shall direct the Trustee to commence payment of the
Participant's normal retirement pension not later than sixty (60) days after the
close of the Plan Year in which the Participant retires. Subject to Section
10.06, the Advisory Committee shall direct the Trustee to commence payment to
the Participant of his early retirement pension or of his deferred vested
pension not later than sixty (60) days after the close of the Plan Year in which
the Participant attains Normal Retirement Age unless the Participant elects
otherwise. The Trustee may not commence distribution under this Section, without
the consent of the Participant and the consent of the Participant's spouse, if
any, if the present value of the Participant's Nonforfeitable Accrued Benefit
exceeds $3,500 and the distribution will commence prior to the later of the
Participant's Normal Retirement Age or age 62. The Advisory Committee shall
determine the present value of the Participant's Nonforfeitable Accrued Benefit
by using the interest rate described in Section 1.04 of the Plan, subject to the
interest limitation described in that Section.
-29-
10.04 WAIVER ELECTION - QUALIFIED JOINT AND SURVIVOR ANNUITY.
------------------------------------------------------
Within a reasonable period of time (consistent with regulations prescribed by
the Secretary of Treasury) before the Participant's annuity starting date, the
Plan Administrator shall provide the Participant a written explanation of the
terms and conditions of the qualified joint and survivor-annuity, the
Participant's right to make, and the effect of, an election to waive the joint
and survivor form of benefit, the rights of the Participant's spouse regarding
the waiver election and the Participant's right to make, and effect of, a
revocation of a waiver election. The Plan does not limit the number of times the
Participant may revoke a waiver of the qualified joint and survivor annuity or
make a new waiver during the election period.
A Participant's waiver election is not valid unless:
(a) the Participant's spouse (to whom the survivor annuity is payable
under the qualified joint and survivor annuity) has consented in
writing to the waiver election, the spouse's consent acknowledges
the effect of the election and a notary public or the Plan
Administrator (or his representative) witnesses the spouse's
consent;
(b) the spouse consents to the alternate form of payment designated
by the Participant or to any change in that designated form of
payment; and
(c) unless the spouse is the Participant's sole primary Beneficiary,
the spouse consents to the Participant's Beneficiary designation
or to any change in the Participant's Beneficiary designation.
The spouse's consent to a waiver of the qualified joint and
survivor annuity shall be irrevocable unless the Participant
revokes the waiver election.
The spouse may execute a blanket consent to any form of payment
designation or to any Beneficiary designation made by the Participant, if the
spouse acknowledges the right to limit that consent to a specific designation
but, in writing, waives that right.
The Plan Administrator may accept as valid a waiver election
which does not satisfy the spousal consent requirements if the Plan
Administrator establishes the Participant does not have a spouse, the Plan
Administrator is not able to locate the Participant's spouse, or other
circumstances exist under which the Secretary of the Treasury will excuse the
consent requirement.
-30-
10.05 OPTIONAL FORMS OF DISTRIBUTION. The Advisory Committee
------------------------------
shall direct the Trustee to pay the Participant's Nonforfeitable Accrued Benefit
under one of the optional forms of distribution permitted under this Section,
subject to the requirements, of Section 10.02. The optional forms of
distribution are:
(a) Payment in a lump sum, subject to the provisions of Section 8.03.
(b) A straight life annuity, payable no less frequently than
annually, with payment of the Participant's Accrued Benefit
ending on the Participant's death.
(c) A life annuity, payable no less frequently than annually, with a
term of ten (10) years certain guaranteed.
(d) Any other form of payment of the Participant's Nonforfeitable
Accrued Benefit which the Advisory Committee may approve.
However, such form. of payment cannot extend beyond the
Participant's life, the life of the Participant and his
designated Beneficiary, the Participant's life expectancy or the
joint life and last survivor expectancy of the Participant and
his designated Beneficiary.
Any form of payment under this Section must satisfy the mandatory
distribution requirements of Section 10.06. Subject to Section 10.02, the
Participant (or the Beneficiary) may elect, on a form prescribed by the Advisory
Committee and subject to the approval of the Advisory Committee, to receive
payment of his Nonforfeitable Accrued Benefit under one (1) of the options
described in this Section and, subject to Section 10.06, to defer the date at
which the Trustee otherwise would commence payment of the Participant's
Nonforfeitable Accrued Benefit. If the Participant's spouse is not his sole
designated Beneficiary, the Advisory Committee shall not direct (by Participant
election or otherwise) the Trustee to distribute to a Participant a form of
payment which provides more than incidental benefits to the Beneficiary.
Benefits to the Beneficiary are incidental if the Actuarial Equivalent of the
retirement benefits payable solely to the Participant is greater than fifty
percent (50%) of the Actuarial Equivalent of the total benefits payable to the
Participant and his Beneficiaries. The Advisory Committee shall determine the
Actuarial Equivalent as of the date the Trustee is to commence payment to the
Participant of his Accrued Benefit.
10.06 MANDATORY DISTRIBUTIONS. The Advisory Committee shall not
-----------------------
direct the Trustee to commence nor shall the Par-
-31-
ticipant elect to have distribution commence, later than the Required Beginning
Date. For purposes of this Article X, the Required Beginning Date is the April 1
immediately following the calendar year in which the Participant attains age
seventy and one-half (70 1/2).
The Advisory Committee shall not direct the Trustee to distribute
the Participant's Nonforfeitable Accrued Benefit, nor shall the Participant
elect to have the Trustee distribute his Nonforfeitable Accrued Benefit, under a
method of payment which, as of the Required Beginning Date, does not satisfy the
minimum distribution requirements established by this Section and which is not
consistent with Treasury regulations. The minimum distribution for a calendar
year equals the Participant's Nonforfeitable Accrued Benefit at the beginning of
the year divided by the Participant's life expectancy or, if applicable, the
joint and last survivor expectancy of the Participant and his designated
Beneficiary. In computing a minimum distribution, the Advisory Committee shall
use the unisex life expectancy multiples under Treas. Reg. Section 1.72-9. The
Advisory Committee may compute, upon the Participant's written request, the
minimum distribution for a calendar year subsequent to the first calendar year
for which the Plan requires a minimum distribution by redetermining the
applicable life expectancy. However, the Advisory Committee may not redetermine
the joint life and last survivor expectancy of the Participant and a nonspouse
designated Beneficiary in a manner which takes into account any adjustment of
life expectancy other than the Participant's life expectancy. A distribution to
the Participant in the form of a life annuity, joint and survivor annuity or an
annuity over a fixed period will satisfy the minimum distribution requirements
of this Section if the method of distribution provides substantially
non-increasing payments and otherwise satisfies Treasury regulations.
Upon the death of the Participant, the Advisory Committee shall
direct the Trustee to pay the Participant's Nonforfeitable Accrued Benefit in
accordance with this paragraph. If the Participant's death occurs after the
Trustee has commenced payment of the Participant's Nonforfeitable Accrued
Benefit, the Advisory Committee shall direct the Trustee to complete payment
over a period which does not exceed the payment period which had commenced. If
the Participant's death occurs prior to the time the Trustee commences payment
of the Participant's Nonforfeitable Accrued Benefit, the Advisory Committee
shall direct the Trustee to make payment over a period not exceeding (i) five
(5) years after the date of the Participant's death, or (ii) if the Beneficiary
is a designated Beneficiary, over the designated Beneficiary's life or life
expectancy. The Advisory Committee shall not direct payment of the Participant's
Nonforfeitable Accrued Benefit over a period de-
-32-
scribed in (ii) unless the Trustee will commence payment to the designated
Beneficiary no later than one (1) year after the date of the Participant's death
or, if later, and the designated Beneficiary is the Participant's surviving
spouse, the date the Participant would have attained age seventy and one-half
(70 1/2). The Advisory Committee shall use the unisex life expectancy multiples
under Treas. Reg. Section 1.72-9 for purposes of applying this paragraph. The
Advisory Committee may recalculate, upon the written request of the Participant
or of the Participant's surviving spouse, the life expectancy of the
Participant's surviving spouse not more frequently than annually, but may not
recalculate the life expectancy of a nonspouse designated Beneficiary after the
Trustee commences payment to the designated Beneficiary. The Advisory Committee
shall apply this paragraph by treating any amount paid to the Participant's
child, which becomes payable to the Participant's surviving spouse upon the
child's attaining the age of majority, as paid to the Participant's surviving
spouse. Upon the Beneficiary's written request, the Advisory Committee, in its
sole discretion, may accelerate the payment of all, or any portion, of the
Participant's unpaid Accrued Benefit.
10.07 DISTRIBUTIONS UNDER DOMESTIC RELATIONS ORDERS. Nothing
---------------------------------------------
contained in this Plan shall prevent the Trustee, in accordance with the
direction of the Advisory Committee, from complying with the provisions of a
qualified domestic relations order (as defined in Code Section 414(p)).
This Plan specifically permits distribution to an alternate payee
under a qualified domestic relations order at any time, irrespective of whether
the Participant has attained his earliest retirement age (as defined under Code
Section 414(p)) under the Plan. A distribution to an alternate payee prior to
the Participant's attainment of earliest retirement age is available only if:
(1) the order specifies distribution at that time or permits
an agreement between the Plan and the alternate payee to
authorize an earlier distribution; and
(2) if the present value of the alternate payee's benefits
under the Plan exceeds $3,500, the alternate payee
consents to any distribution occurring prior to the
Participant's attainment of earliest retirement age.
The Advisory Committee shall determine the present value of the
alternate payee's benefits under the Plan by using the interest rate described
in Section 1.04 of the Plan, subject to the interest limitation described in
that Section.
-33-
Nothing in this Section shall permit a Participant a right to receive
distribution at a time otherwise not permitted under the Plan nor shall it
permit the alternate payee to receive a form of payment not permitted under the
Plan.
The Plan Administrator shall establish reasonable procedures to
determine the qualified status of a domestic relations order. Upon receiving a
domestic relations order, the Plan Administrator promptly shall notify the
Participant and any alternate payee named in the order, in writing, of the
receipt of the order and Plan's procedures for determining the qualified status
of the order. Within a reasonable period of time after receiving the domestic
relations order, the Plan Administrator shall determine the qualified status of
the order and shall notify the Participant and each alternate payee, in writing,
of its determination. The Plan Administrator shall provide notice under this
paragraph by mailing to the individual's address specified in the domestic
relations order, or in a manner consistent with Department of Labor regulations.
The Plan Administrator may treat as qualified any domestic relations order
entered prior to January 1, 1985, irrespective of whether it satisfies all the
requirements described in Code Section 414(p)).
If any portion of the Participant's Nonforfeitable Accrued
Benefit is payable during the period the Plan Administrator is making its
determination of the qualified status of the domestic relations order, the
Advisory Committee shall direct the Trustee to make a separate accounting of the
amounts payable. If the Plan Administrator determines the order is a qualified
domestic relations order within eighteen (18) months of the date amounts first
are payable following receipt of the order, the Advisory Committee shall direct
the Trustee to distribute the payable amounts in accordance with the order. If
the Plan Administrator does not make its determination of the qualified status
of the order within the eighteen (18) month determination period, the Advisory
Committee shall direct the Trustee to distribute the payable amounts in the
manner the Plan would distribute if the order did not exist and shall apply the
order prospectively if the Plan Administrator later determines the order is a
qualified domestic relations order.
The Trustee shall make any payments or distributions required
under this Section by separate benefit checks or other separate distribution to
the alternate payee(s).
ARTICLE XI
MISCELLANEOUS PROVISIONS AFFECTING THE PAYMENT OF BENEFITS
-34-
11.01 GENERAL. In general, the Trustee shall make payment of any
-------
pension directly to the Participant entitled to the payment. However, the
Advisory Committee, in lieu of instructing the Trustee to pay the pension which
a Participant is to receive directly from the Trust Fund, may instruct the
Trustee to purchase from an insurance company selected by the Advisory Committee
a Nontransferable Annuity contract. The Nontransferable Annuity contract must
provide pension and other benefits in an amount not less than the pension and
other benefits a Participant would receive under this Plan, and must satisfy all
consent and distribution requirements prescribed by the Plan. In the event the
Trustee purchases a Nontransferable Annuity contract for the benefit of a
Participant, the Trustee may either assign the contract to the Participant or
hold the contract for the benefit of the Participant pursuant to the
instructions of the Advisory Committee. The Trustee also may purchase a
Nontransferable Annuity contract, satisfying the requirements of this Section,
for the benefit of a designated Beneficiary, surviving spouse or alternate payee
under a qualified domestic relations order (as defined in Code Section 414(p))
entitled to distribution of all or a portion of the Participant's Nonforfeitable
Accrued Benefit.
11.02 NONDUPLICATION OF BENEFITS. In the event the Trustee
--------------------------
distributes any part or all of a Participant's Accrued Benefit to him and the
Participant later resumes active employment with the Employer, the Advisory
Committee shall compute the Participant's Accrued Benefit by taking into account
all of the Participant's Accrued Benefit so computed by the Participant's
Accrued Benefit attributable to any distribution the Trustee has made to the
Participant (other than a distribution described in the second paragraph of
Section 8.03). If the distribution was a single sum payment of the present value
of the Participant's deferred vested pension, as described in Section 8.03, the
Advisory Committee shall offset the Participant's Accrued Benefit by the Accrued
Benefit disregarded under Section 8.08.
ITT/Vitelco Employees, as defined in Section 1.17, are the only
Participants receiving benefits under the Plan for Years of Service prior to the
Effective Date of the Plan. This exception was made pursuant to a contractual
agreement with ITT Corporation and premised upon ITT Corporation's agreement
that it would fully vest such Employees in their accrued benefit as of June 23,
1987 in the ITT Plan. Regardless of the form or reason for the payment of a
benefit to an ITT/Vitelco Employee or a Beneficiary of an ITT/Vitelco Employee,
such benefit shall be decreased by or take fully into account the accrued
benefit that should have vested under the ITT Plan. Further, no ITT/Vitelco
Employee shall receive an Accrued Benefit for a Year of Service prior to the
Effective Date of the Plan unless
-35-
such party received an accrual benefit for such Year of Service under the ITT
Plan.
11.03 SUSPENSION OF BENEFITS. The Plan does not apply the
----------------------
suspension of benefits rules of Act Section 203(a)(3)(B).
11.04 NO DISREGARD OF SERVICE. For purposes of computing Years
-----------------------
of-Service under Article XIII, the Plan shall not disregard Service with respect
to which a Participant has received a distribution of his Accrued Benefit.
11.05 MERGER. The Trustee shall not consent to, or be a party to,
------
any merger or consolidation with another plan, or to a transfer of assets or
liabilities to another plan, unless immediately after the merger, consolidation
or transfer, the surviving Plan provides each Participant a benefit equal to or
greater than the benefit each Participant would have received had the Plan
terminated immediately before the merger or consolidation or transfer.
ARTICLE XII
OTHER PROVISIONS AFFECTING BENEFITS
12.01 ASSIGNMENT OR ALIENATION. Subject to Code Section 414(p)
------------------------
relating to qualified domestic relations orders, neither a Participant nor a
Beneficiary shall anticipate, assign or alienate (either at law or in equity)
any benefit provided under the Plan, and the Trustee shall not recognize any
such anticipation, assignment or alienation. Furthermore, a benefit under the
Plan is not subject to attachment, garnishment, levy, execution or other legal
or equitable process.
12.02 NO DECREASE IN BENEFITS BY CHANGE IN SOCIAL SECURITY. In
----------------------------------------------------
the case of a Participant or Beneficiary who is receiving benefits under this
Plan or a Participant who has terminated employment with the Employer and has a
vested Accrued Benefit under this Plan, any increase in the taxable wage base or
the benefit level payable under Title II of the Social Security Act shall not
affect in any way the benefits payable under this Plan to such Participant or
Beneficiary. The Plan does not permit the recalculation of any benefits accrued
before the termination of employment of a Participant on the basis of changes in
Social Security benefit levels or the taxable wage base in effect during Years
of Service after re-employment with the Employer.
12.03 SPECIAL RESTRICTION ON BENEFIT. The restrictions,
------------------------------
hereinafter set forth, of this Section apply only if:
-36-
(i) The Employer terminates the Plan within ten (10) years
of the Effective Date; or
(ii) Such Participant's retirement benefit becomes payable
within ten (10) years of the Effective Date.
If the restrictions of this Section apply to a Participant because of paragraph
(ii) above, the Advisory Committee shall apply the restrictions until ten (10)
years after the Effective Date.
RESTRICTIONS:
(a) In event of early termination of the Plan within the meaning of
Code Section 411(d)(2), and notwithstanding any other provision
of this Plan to the contrary, the Employer contributions which
the Trustee may use to provide benefits for Participants who are
among the twenty-five (25) highest paid Employees (the "original
25 Employees") as of the Effective Date (including any Employees
who are not Participants on the Effective Date but who later may
become Participants) and whose annual retirement benefit will
exceed $1,500.00 shall not exceed the greatest of:
(1) $20,000.00;
(2) An amount equal to twenty percent (20%) of the first
$50,000.00 of a Participant's Average Annual Compensation
salary multiplied by the number of years elapsed between
the Effective Date and the date the Plan terminates, the
date a Participant's retirement benefit becomes payable,
or the date the Employer fails to meet the full current
costs of the Plan, whichever first occurs; or
(3) If the Employee is a substantial owner (as defined in Act
Section 4022(b)(5)), the present value of his guaranteed
benefit under Act Section 4022, or the present value of
the benefit he would be guaranteed under Act Section 4022
if the Plan terminated on the date benefits commence
(determined in accordance with Pension Benefit Guaranty
Corporation regulations). If the Employee is not a
substantial owner, the present value of his maximum
benefit under Act Section 4022(b)(3)(B) on the earlier of
the date the Plan terminated or the date his benefits
commence (determined in accordance with Pension
-37-
Benefit Guaranty Corporation regulations) regardless of
any other limitations in Act Section 4022.
(b) If the Employer changes the Plan so as to increase substantially
the extent of possible discrimination as to contributions and as
to benefits actually payable in the event of the subsequent
termination of the Plan or the subsequent discontinuance of
contributions under the Plan, then the Employer shall apply the
provisions of this Section to the 25 highest paid Employees (the
"new 25 Employees") as of the date of the change (including any
Employees who are not Participants on the date of the change but
who later may become Participants) and whose annual retirement
benefit will exceed $1,500.00. The Advisory Committee shall
continue the restrictions described in Section 12.03(a) to the
original 25 Employees for the period the restrictions apply to
such Employees. The Advisory Committee shall apply Section 12.03
(a) to the new 25 Employees as if the Effective Date is the date
of the change. Furthermore, the Advisory Committee shall apply
Section 12.03(a) by substituting for paragraph (2) the greater of
the following:
(1) The Employer contributions (or the funds attributable to
Employer contributions) the Trustee would have applied to
provide the Participant's retirement benefit if the
Employer had not changed the Plan; and
(2) The sum of:
(i) the Employer contributions (or the finds
attributable to Employer contributions,) -the
Trustee would have applied to provide the
Participant's retirement benefit if the Employer
had terminated the Plan the day before the date of
the change, and
(ii) the product of the number of years the Employer
satisfies the full current costs of the Plan after
the date of the change multiplied by the smaller of
$10,000 or 20% of the Participant's annual
Compensation.
(c) The conditions of this Section shall not restrict the full
payment of any insurance, death or survivor's benefits on behalf
of a Participant who dies while the Plan is in full effect and
the Employer has met the full current costs.
-38-
(d) The conditions of this Section 12.03 shall not restrict the
current payment of full retirement benefits called for by the
Plan for any retired Participant while the Plan is in full effect
and the Employer has met full current costs.
(e) If a Participant to whom the limitations of this Section apply
terminates employment while the limitations are in effect, the
Participant may nevertheless receive a lump sum payment of
benefits in excess of such limitations, provided the Participant
enters into an agreement with the Trustee requiring the
Participant to repay to the Trustee all amounts he has received
in excess of such limitations. The Participant's requirement to
repay shall apply in the event the Plan terminates within the
restricted ten (10) year period or if within such period the
Employer has not met the Plan's full current costs. The Trustee
shall not pay any benefit to the Participant under this
subparagraph unless the Participant provides adequate security
for his contingent repayment obligation.
(f) For purposes of this Section, the term "Effective Date" means the
first day of the Plan Year in which the Employer initially
established the Plan.
12.04 DISTRIBUTION UPON TERMINATION OF TRUST. If the Employer
--------------------------------------
terminates the Plan, the Trustee shall liquidate all assets of the Plan and
shall determine the value of the Trust Fund as of the business day next
following the date of such termination. Subject to the provisions of Section
12.03, the Trustee shall allocate assets to the Plan among the Participants and
Beneficiaries according to the following priorities:
(a) The Participant's benefits payable from his employee
contributions, if any.
(b) Benefits payable as an annuity:
(1) In the case of the benefit of a Participant or Beneficiary
which was in pay status as of the beginning of the three
(3) year period ending on the termination date of the
Plan, each such benefit, based on the provisions of the
Plan (as in effect during the five (5) year period ending
on such date) under which such benefit would be the least;
or
-39-
(2) In the case of a Participant's or Beneficiary's benefit
(other than a benefit described in subparagraph (1)) which
would have been in pay status as of the beginning of such
three (3) year period if the Participant had retired prior
to the beginning of the three (3) year period and if his
benefits had commenced (in the normal form of annuity
under the Plan) as of the beginning of such period, each
such benefit based on the provisions of the Plan (as in
effect during the five (5) year period ending on such
date) under which such benefit would be the least.
For purposes of subparagraph (1), the lowest benefit in pay status
during a three (3) year period is the benefit in pay status for such
period.
(c) All other Plan benefits insured by the Pension Benefit Guaranty
Corporation;
(d) All other Nonforfeitable benefits under the Plan; and
(e) Any other benefits under the Plan.
If assets are insufficient to provide all benefits under the
Plan, the Trustee shall allocate such assets to satisfy obligations within each
category by order of priority. If assets are insufficient to provide all
benefits under a priority category, the Trustee shall allocate assets to
Participants within that category in the ratio which each Participant's total
benefit bears to the total benefits of all Participant's within that category.
The Trustee shall reallocate assets it is not required to allocate under Act
Section 4044(a)(1), (2), (3) and (4)(A) in a manner which will reduce to the
extent possible discrimination as described in Code Section 401(a)(4).
12.05 OVERFUNDING. If the Employer has overfunded the Plan at the
-----------
time it terminates the Plan, the Trustee may return the amount by which the
Employer has overfunded the Plan to the Employer. The Employer shall state by
written request to the Trustee the amount of the overfunding it wishes the
Trustee to return to it upon termination of the Plan.
ARTICLE XIII
EMPLOYER ADMINISTRATIVE PROVISIONS
13.01 INFORMATION TO COMMITTEE. The Employer shall supply current
------------------------
information to the Advisory Committee as to the name, date of birth, date of
employment, annual Compensation, leaves of absence, Years of Service and date of
termination of
-40-
employment of each Employee who is, or who will be eligible to become, a
Participant under the Plan, together with any other information which the
Advisory Committee considers necessary. The Employer's records as to the current
information the Employer furnishes to the Advisory Committee shall be conclusive
as to all persons.
13.02 NO LIABILITY. The Employer assumes no obligation or
------------
responsibility to any of its Employees, Participants or Beneficiaries for any
act of, or failure to act on the part of, its Advisory Committee, the Trustee or
the Plan Administrator.
13.03 INDEMNITY OF PLAN ADMINISTRATOR OR COMMITTEE. The Employer
--------------------------------------------
indemnifies and saves harmless the Plan Administrator and the members of the
Advisory Committee, and each of them, from and against any and all loss
resulting from liability to which the Plan Administrator and the Advisory
Committee, or the members of the Advisory Committee, may be subjected by reason
of any act or conduct (except willful misconduct or gross negligence) in their
official capacities in the administration of this Plan, the Trust or both,
including all expenses reasonably incurred in their defense, in case the
Employer fails to provide such defense. The indemnification provisions of this
Section shall not relieve the Plan Administrator or any Advisory Committee
member from any liability he or she may have under the Act for breach of a
fiduciary duty. Furthermore, the Plan Administrator and the Advisory Committee
members and the Employer may execute a letter agreement further delineating the
indemnification agreement of this Section, provided the letter agreement must be
consistent with and shall not violate the Act. The indemnification provisions of
this Section shall extend to the Trustee solely to the extent provided by a
letter agreement executed by the Trustee and the Employer.
13.04 EMPLOYER DIRECTION OF INVESTMENT. The Employer shall have
--------------------------------
the right to direct the Trustee with respect to the investment and re-investment
of assets comprising the Trust Fund.
13.05 AMENDMENT TO VESTING SCHEDULE. Though the Employer reserves
-----------------------------
the right to amend the vesting schedule at any time, the Advisory Committee
shall apply the amended vesting schedule to reduce the Nonforfeitable percentage
of any Participant's Accrued Benefit derived from Employer contributions
(determined as of the later of the date the Employer adopts the amendment, or
the date the amendment becomes effective) to a percentage less than the
Nonforfeitable percentage computed under the Plan without regard to the
amendment.
-41-
If the Employer makes a permissible amendment to the vesting
schedule, each Participant having at least five (5) Years of Service with the
Employer may elect to have the percentage of his or her Nonforfeitable Accrued
Benefit computed under the Plan without regard to the amendment. The Participant
must file his or her election with the Plan Administrator within sixty (60) days
of the latest of (a) the Employer's adoption of the amendment; (b) the effective
date of the amendment; or (c) his or her receipt of a copy of the amendment. The
Plan Administrator, as soon as practicable, shall forward a true copy of any
amendment to the vesting schedule to each affected Participant, together with an
explanation of the effect of the amendment, the appropriate form upon which the
Participant may make an election to remain under the vesting schedule provided
under the Plan prior to the amendment and notice of the time within which the
Participant must make an election to remain under the prior vesting schedule.
For purposes of this Section, an amendment to the vesting schedule includes any
Plan amendment which directly or indirectly affects the computation of the
Nonforfeitable percentage of an Employee's rights to his or her Employer derived
Accrued Benefit.
ARTICLE XIV
PARTICIPANT ADMINISTRATIVE PROVISIONS
14.01 BENEFICIARY DESIGNATION. Subject to Articles IX and X, any
-----------------------
Participant may from time to time designate, in writing, any person or persons,
contingently or successively, to whom the Trustee shall pay his Accrued Benefit
on event of his death. The Advisory Committee shall prescribe the form for the
written designation of Beneficiary and, upon the Participant's filing the form
with the Advisory Committee, it effectively shall revoke all designations filed
prior to that date by the same Participant.
14.02 NO BENEFICIARY DESIGNATION. Subject to Articles IX and X,
--------------------------
if a Participant fails to name a Beneficiary in accordance with Section 14.01,
or if the Beneficiary named by a Participant predeceases him or her or dies
before complete distribution of the Participant's Accrued Benefit, then the
Trustee shall pay the Participant's Accrued Benefit in accordance with Article X
in the following order of priority to:
(a) The Participant's surviving spouse;
(b) The Participant's surviving children, including adopted children,
in equal shares;
(c) The Participant's surviving parents, in equal shares; or
-42-
(d) The legal representative of the estate of the last to die of the
Participant and his or her Beneficiary.
The Advisory Committee shall direct the Trustee as to the method
and to whom the Trustee shall make payment under this Section.
14.03 PERSONAL DATA TO COMMITTEE. Each Participant and each
--------------------------
Beneficiary of a deceased Participant must furnish to the Advisory Committee
such evidence, data or information as the Advisory Committee considers necessary
or desirable for the purpose of administering the Plan. The provisions of this
Plan are effective for the benefit of each Participant upon the condition
precedent that each Participant will furnish promptly full, true and complete
evidence, data and information when requested by the Advisory Committee,
provided the Advisory Committee shall advise each Participant of the effect of
his or her failure to comply with its request.
14.04 ADDRESS FOR NOTIFICATION. Each Participant and each
------------------------
Beneficiary of a deceased Participant shall file with the Advisory Committee
from time to time, in writing, his or her post office address and any change of
post office address. Any communication, statement or notice addressed to a
Participant, or Beneficiary, at his or her last post office address filed with
the Advisory Committee, or as shown on the records of the Employer, shall bind
the Participant, or Beneficiary, for all purposes of this Plan.
14.05 NOTICE OF CHANGE IN TERMS. The Plan Administrator, within
-------------------------
the time prescribed by the Act and the applicable regulations, shall furnish all
Participants and Beneficiaries a summary description of any material amendment
to the Plan or notice of discontinuance of the Plan and all other information
required by the Act to be furnished without charge.
14.06 LITIGATION AGAINST THE TRUST. If any legal action filed
----------------------------
against the Trustee, the Plan Administrator or the Advisory Committee, or
against any member or members of the Advisory Committee, by or on behalf of any
Participant or Beneficiary, results adversely to the Participant or to the
Beneficiary, the Trustee shall reimburse itself, the Plan Administrator or the
Advisory Committee, or any member or members of the Advisory Committee, for all
costs and fees expended by it or them by surcharging all costs and fees against
the sums payable under the Plan to the Participant or to the Beneficiary, but
only to the extent a court of competent jurisdiction specifically authorizes and
directs any such surcharges and then only to the extent Code Section 401(a)(13)
does not prohibit any such surcharges.
-43-
14.07 INFORMATION AVAILABLE. Any Participant in the Plan or any
---------------------
Beneficiary may examine copies of the Plan description, latest annual report,
any bargaining agreement, this Plan, the Trust or any other instrument under
which the Plan and/or Trust was established or is operated. The Plan
Administrator will maintain all of the items listed in this Section in his or
her office, or in such other place or places as he or she may designate from
time to time in order to comply with the regulations issued under the Act, for
examination during reasonable business hours. Upon the written request of a
Participant or Beneficiary the Plan Administrator shall furnish him or her with
a copy of any item listed in this Section. The Plan Administrator may make a
reasonable charge to the requesting person for the copy so furnished.
14.08 APPEAL PROCEDURE FOR DENIAL OF BENEFITS. The Plan
---------------------------------------
Administrator shall provide adequate notice in writing to any Participant or to
any Beneficiary ("Claimant") whose claim for benefits under the Plan the
Advisory Committee has denied. The Plan Administrator's notice to the Claimant
shall set forth:
(a) The specific reason for the denial;
(b) Specific references to pertinent Plan provisions on which the
Advisory Committee based its denial;
(c) A description of any additional material and information needed
for the Claimant to perfect his or her claim and an explanation
of why the material or information is needed; and
(d) That any appeal the Claimant wishes to make of the adverse
determination must be in writing to the Advisory Committee within
seventy-five (75) days after receipt of the Plan Administrator's
notice of denial of benefits. The Plan Administrator's notice
must further advise the Claimant that his or her failure to
appeal the action to the Advisory Committee in writing within the
seventy-five (75) day period will render the Advisory Committee's
determination final, binding and conclusive.
If the Claimant should appeal to the Advisory Committee, he or
she, or his or her duly authorized representative, may submit, in writing,
whatever issues and comments he or she, or his or her duly authorized
representative, feels are pertinent. The Claimant, or his or her duly authorized
representative, may review pertinent Plan documents. The Advisory Committee
shall re-examine all facts related to the appeal and make a final determination
as to whether the denial of benefits
-44-
is justified under the circumstances. The Advisory Committee shall advise the
Claimant of its decision within sixty (60) days of the Claimant's written
request for review, unless special circumstances (such as a hearing) would make
the rendering of a decision within the sixty (60) day limit unfeasible, but in
no event shall the Advisory Committee render a decision respecting a denial for
a claim for benefits later than one hundred twenty (120) days after its receipt
of a request for review.
The Plan Administrator's notice of denial of benefits shall
identify the name of each member of the Advisory Committee and the name and
address of the Advisory Committee member to whom the Claimant may forward his or
her appeal.
ARTICLE XV
ADVISORY COXMITTEE -- DUTIES WITH RESPECT TO
PARTICIPANTS' ACCOUNTS
15.01 MEMBERS' COMPENSATION AND EXPENSES. Employer shall appoint
----------------------------------
an Advisory Committee to administer the Plan, the members of which may or may
not be Participants in the Plan, or which may be the Plan Administrator acting
alone. If the members of the Advisory Committee are in the full-time employment
of the Employer, the members of the Advisory Committee shall serve without
compensation for services as such. Subject to Code Section 4975(d)(10), members
of the Advisory Committee who are not already receiving full-time pay from the
Employer may be paid reasonable compensation for services rendered as a member
of the Advisory Committee or duties performed on behalf of the Advisory
Committee. ATN, Inc. shall pay all expenses of the Advisory Committee, including
the expense for any bond required under the Act.
15.02 TERM. Each member of the Advisory Committee shall serve
----
until his successor is appointed.
15.03 POWERS. In case of a vacancy in the membership of the
------
Advisory Committee, the remaining members of the Advisory Committee may exercise
any and all of the powers, authority, duties and discretion conferred upon the
Advisory Committee pending the filling of the vacancy.
15.04 GENERAL. The Advisory Committee shall have the following
-------
powers and duties:
(a) To select a Secretary, who need not be a member of the Advisory
Committee;
-45-
(b) To determine the rights of eligibility of an Employee to
participate in the Plan, the value of a Participant's Accrued
Benefit and the Nonforfeitable percentage of each Participant's
Accrued Benefit;
(c) To adopt rules of procedure and regulations necessary for the
proper and efficient administration of the Plan, provided the
rules are not inconsistent with the terms of this Agreement;
(d) To enforce the terms of the Plan and the rules and regulations it
adopts;
(e) To direct the Trustee as respects the crediting and distribution
of the Trust;
(f) To review and render decisions respecting a claim for (or denial
of a claim for) a benefit under the Plan;
(g) To furnish the Employer with information which the Employer may
require for tax or other purposes;
(h) To engage the service of agents whom it may deem advisable to
assist it with the performance of its duties;
(i) To engage the services of an Investment Manager or Managers (as
defined in Act Section 3(38)), each of whom shall have full power
and authority to manage, acquire or dispose (or direct the
Trustee with respect to acquisition or disposition) of any Plan
asset under its control; and
(j) To establish and maintain a funding standard account and to make
credits and charges to the account to the extent required by and
in accordance with the provisions of the Code.
15.05 FUNDING POLICY. The Advisory Committee shall review, not
--------------
less often than annually, all pertinent Employee information and Plan data in
order to establish the funding policy of the Plan and to determine the
appropriate methods of carrying out the Plan's objectives. The Advisory
Committee shall communicate periodically, as it deems appropriate, to the
Trustee and to any Plan Investment Manager the Plan's short-term and long-term
financial needs so investment policy can be coordinated with Plan financial
requirements.
15.06 MANNER OF ACTION. The decision of a majority of the
----------------
members appointed and qualified shall control.
-46-
15.07 AUTHORIZED REPRESENTATIVE. The Advisory Committee may
-------------------------
authorize any one (1) of its members, or its Secretary, to sign on its behalf
any notices, directions, applications, certificates, consents, approvals,
waivers, letters or other documents. The Advisory Committee must evidence this
authority by an instrument signed by all members and filed with the Trustee.
15.08 INTERESTED MEMBER. No member of the Advisory Committee may
-----------------
decide or determine any matter concerning the distribution, nature or method of
settlement of his own benefits under the Plan, unless the Plan Administrator is
acting alone in the capacity of the Advisory Committee.
15.09 PARTICIPANT RECORDS. The Advisory Committee shall keep such
-------------------
records and shall prepare such reports concerning Participants' Accounts as the
Act and Code require. Upon a Participant's written request, the Advisory
Committee shall direct the Plan Administrator to furnish the Participant the
information described in Act Section 105(a).
15.10 UNCLAIMED ACCRUED BENEFIT -- PROCEDURE. The Plan does not
--------------------------------------
require either the Trustee or the Advisory Committee to search for, or ascertain
the whereabouts of, any Participant or Beneficiary. The Advisory Committee, by
certified or registered mail addressed to his last known address of record with
the Advisory Committee or the Employer, shall notify any Participant, or
Beneficiary, that he is entitled to a distribution under this Plan, and the
notice shall quote the provisions of this Section. If the Participant, or
Beneficiary, fails to claim his distributive share or make his whereabouts known
in writing to the Advisory Committee within six (6) months from the date of
mailing of the notice, or before this Plan is terminated or discontinued,
whichever should first occur, the Advisory Committee shall treat the
Participant's or Beneficiary's unclaimed payable Accrued Benefit as forfeited.
The Employer shall use the amounts representing the forfeited Accrued Benefit to
reduce its contribution for future Plan Years.
If a Participant or Beneficiary who has incurred a forfeiture of
his Accrued Benefit under the provisions of the first paragraph of this Section
makes a claim, at any time, for his forfeited Accrued Benefit, the Advisory
Committee shall restore the Participant's or Beneficiary's forfeited Accrued
Benefit. The Advisory Committee shall direct the Trustee to distribute the
Participant's or Beneficiary's restored Accrued Benefit in accordance with
Article X as if the Participant's employment terminated in the Plan Year in
which the Advisory Committee restores the forfeited Accrued Benefit.
-47-
ARTICLE XVI
INVESTMENT IN INSURANCE OR ANNUITY CONTRACTS
16.01 PURCHASE OF LIFE INSURANCE AND ANNUITY CONTRACTS. The
------------------------------------------------
Advisory Committee may direct the Trustee to purchase from an insurance company:
(a) ordinary life insurance contracts to the policy anniversary
nearest the Normal Retirement Age of any Participant with
optional cash settlement or conversion to retirement income at
the end of such period;
(b) Retirement income contracts with payment to commence at Normal
Retirement Age;
(c) Annuity contracts with option conversion riders at Normal
Retirement Age; or
(d) Any contracts similar to those listed in subparagraphs (a), (b)
or (c), including term life insurance contracts.
The insurance company shall issue any contract under this Article
XVI on the life of the Participant with the Trustee as the named beneficiary. A
contract issued under this Article XVI may provide a part or all of a
Participant's Accrued Benefit under this Plan.
16.02 LIMITATIONS ON LIFE INSURANCE AND ANNUITY CONTRACTS FOR
-------------------------------------------------------
PARTICIPANT'S BENEFIT. The following limitations shall apply to all investments
---------------------
in life insurance or annuity contracts:
(a) The face amount of all ordinary or term life insurance contracts
purchased on behalf of each Participant shall equal one hundred
(100) times the anticipated monthly retirement benefit payable to
the Participant at his Normal Retirement Age. If on any
anniversary date the Compensation of a Participant shall have
increased in such amount as would produce a change of $20 or more
in such monthly retirement benefit, the Advisory Committee may
instruct the Trustee to take appropriate action to adjust the
amount of life insurance coverage accordingly. If a Participant
is not insurable at standard premium rates as of any date on
which the Trustee otherwise would purchase life insurance
contracts on his behalf, the normal premium payable had such
contract been available at standard rates shall be calculated. If
available, the Trustee may purchase on behalf of the Participant
an ordinary or term life insurance
-48-
contract in such reduced amount as is available by the
application of the same amount of premium as required at standard
rates. In no event shall the premium paid for any Plan Year for
any Participant exceed sixty-six percent (66%) of the Theoretical
Contribution in the case of ordinary life insurance contracts or
thirty-three percent (33%) of the Theoretical Contribution in the
case of term life insurance contracts. In the case of a
combination of contracts, one-half (1/2) the premium paid for any
Plan Year for ordinary life insurance contracts plus the premium
paid for the Plan Year for term insurance contracts shall not
exceed thirty-three percent (33%) of the Theoretical
Contribution. For purposes of this Article XVI, a term life
insurance contract shall mean a term life insurance contract, a
universal life insurance contract and any other life insurance
contract which is not an ordinary life insurance contract.
(b) The face amount of all annuity contracts purchased on behalf of a
Participant shall not exceed the prospective retirement income
(rounded to the nearest $10) payable to the Participant at his
Normal Retirement Age in the form of a straight life annuity.
(c) The Advisory Committee shall direct the Trustee to convert the
entire value of any life insurance contract when the Participant
terminates service (other than by reason of death) to provide
either cash values or periodic income, or the Advisory Committee
may direct the Trustee to distribute the insurance contract
directly to the Participant at retirement as a portion of his
Accrued Benefit under this Plan. However, the Trustee shall not
transfer any contract under this Section which contains a method
of payment not specifically authorized by Article X or which
fails to comply with the joint and survivor requirements, if
applicable, of Articles IX or X. If a Participant remains
employed with the Employer after his Normal Retirement Age, the
Trustee will surrender any life insurance contract in force on
the Participant's life for its current value for the benefit of
the Participant.
(d) If the Advisory Committee directs the Trustee to invest any
portion of the Trust Fund in an insurance or annuity contract,
the Trustee shall make such investment in a manner that the
operation of the Plan shall be fair and equitable (and
nondiscriminatory) in its application to all Participants.
-49-
(e) If the Trustee purchases a contract for a Participant, then the
annual net premium of the contract shall be the contract premium
less any dividend declared by the insurance company as of the
premium due date. If the amount received from the Employer
together with any amount available in the Trust Fund is
insufficient to pay the net premium due, the Trustee may borrow
to pay the premium, provided that the Trustee shall make any loan
to pay premiums on a nondiscriminatory pro rata basis. If a
Participant has more than one (1) contract on his life, the
Trustee may use the values of any of the contracts to pay the
premium on any other contract on his life. The Trustee shall have
no responsibility to pay any premiums in excess of funds which
are available for that purpose.
16.03 SELECTION OF LIFE INSURANCE COMPANY, APPLICATION AND TITLE.
----------------------------------------------------------
Each life insurance and annuity contract shall be issued by a legal reserve life
insurance company which is satisfactory to and selected by the Advisory
Committee. Contracts will be consistent with the provisions of this Plan. The
Trustee shall be the applicant for each contract and the title to each contract
shall be wholly in the Trustee. As the applicant, the Plan Administrator shall
execute any and all application papers and other documents required by the
issuing insurance company and satisfactory to the Plan Administrator in
connection with the issuance of any contract. Each Participant shall execute any
and all application papers and other documents required by the issuing insurance
company and satisfactory to the Plan Administrator in connection with the
issuance of any contract. The Plan Administrator shall arrange that all
insurance and annuity contracts shall have common premium due dates.
16.04 DIVIDENDS AND REFUNDS. Each contract shall provide that any
---------------------
dividends or refunds payable on it shall be used and applied in reduction of the
next premium due and payable, except that any such dividends or refunds due and
payable upon the event of the death of a Participant on whose life such contract
is issued or based shall form part of the death proceeds of the contract.
16.05 LIMITATION ON PARTICIPANT'S RIGHTS IN INSURANCE OR ANNUITY
----------------------------------------------------------
CONTRACTS. The fact that any contract is issued or based on the life of a
---------
Participant shall not vest any right, title or interest in such contract in the
Participant except at the time and upon the terms and conditions set forth in
this Plan. The Trustee shall be the sole owner of all right, title and interest
in and to each such contract, but the
-50-
Advisory Committee shall direct the Trustee as to the exercise of all rights,
options and privileges in each such contract.
16.06 INSURANCE COMPANY NOT A PARTY TO AGREEMENT. No insurance
------------------------------------------
company is a party to this Agreement nor shall any insurance company be
responsible for its validity.
16.07 INSURANCE COMPANY NOT RESPONSIBLE FOR TRUSTEE'S ACTIONS. No
-------------------------------------------------------
insurance company is required to examine the terms of this Agreement nor be
responsible for any action taken by the Trustee or the Plan Administrator.
16.08 INSURANCE COMPANY RELIANCE ON PLAN ADMINISTRATOR'S
--------------------------------------------------
SIGNATURE. For the purpose of making application to an insurance company and in
---------
the exercise of any right or option contained in any policy, the insurance
company may rely upon the signature of the Plan Administrator and shall be saved
harmless and completely discharged in acting at the direction and authorization
of the Plan Administrator.
16.09 ACQUITTANCE. An insurance company shall be discharged from
-----------
all liability for any amount paid to the Trustee or paid in accordance with the
direction of the Trustee, and it shall not be obliged to see to the distribution
or further application of any moneys it so pays.
16.10 DUTIES OF INSURANCE COMPANY. Each insurance company shall
---------------------------
keep such records, make such identification of contracts, funds and accounts
within funds and supply such information as may be necessary for the proper
administration of the Plan under which it is carrying insurance benefits.
16.11 CONFLICTS. If there is any conflict between the provisions
---------
of this Plan and the terms of an insurance contract purchased by the Trustee,
the provisions of the Plan shall govern.
ARTICLE XVII
TOP HEAVY RULES
17.01 MINIMUM BENEFIT. If this Plan is top heavy in any Plan
---------------
Year, the Plan guarantees a minimum normal retirement pension for each Non-Key
Employee who is a Participant in the Plan. The minimum normal retirement pension
is equal to the applicable percentage of the Non-Key Employee's Average Annual
Compensation. The applicable percentage is two percent (2%) multiplied by the
number of Years of Service (not to exceed 10) earned as a Non-Key Employee
Participant in top heavy Plan Years. The Plan satisfies the minimum benefit for
a Non-Key Employee if the Non-Key Employee's Accrued Benefit at the end
-51-
of the top heavy Plan Year is at least equal to the minimum normal retirement
pension. Solely for the purpose of applying the immediately preceding sentence,
the Advisory Committee shall consider as part of the Non-Key Employee's Accrued
Benefit the benefit equivalent (determined under the assumptions specified in
Section 1.04) of the Non-Key Employee's vested employer-derived account balance
in any defined contribution plan maintained by the Employer. The Advisory
Committee shall determine the Non-Key Employee's vested account balance in a
defined contribution plan as of the last day of the applicable Plan Year,
without regard to contributions made after the last day of such Plan Year.
Furthermore, the Advisory Committee shall include as part of the Non-Key
Employee's vested account balance, distributions made to the Non-Key Employee
from the vested account balance. For purposes of applying this Article XVII, the
Advisory Committee shall express the Participant's Accrued Benefit and minimum
normal retirement pension as a straight life annuity payable annually at Normal
Retirement Age.
17.02 ADDITIONAL ACCRUALS. If, at the end of any top heavy Plan
-------------------
Year, a Non-Key Employee Participant's Accrued Benefit is not at least equal to
his minimum normal retirement pension, the Non-Key Employee Participant shall
earn the additional accrual necessary to increase his Accrued Benefit to the
minimum normal retirement pension. The Non-Key Employee Participant's Accrued
Benefit shall never be less than his minimum normal retirement pension,
regardless of the Plan's top heavy status in Plan Years subsequent to a Plan
Year in which he earned an additional accrual under this Article XVII.
The Employer shall not impute Social Security benefits to
determine whether it has satisfied its obligation to provide the minimum normal
retirement pension, nor shall the Plan offset a Participant's Social Security
benefit from his Accrued Benefit attributable to his minimum normal retirement
pension.
17.03 COMPENSATION LIMITATIONS. In any Plan Year in which the
------------------------
Plan is top heavy, the Advisory Committee shall take into account only the first
$200,000 (or such larger amount as the Commissioner of Internal Revenue may
prescribe) of a Participant's annual Compensation (as defined in Section 1.10)
in determining benefits under this Plan. However, the Advisory Committee shall
not reduce a Participant's Accrued Benefit at the time this limitation becomes
effective under the Plan. For purposes of determining the minimum normal
retirement pension under Section 17.01, the Advisory Committee shall calculate a
Participant's Average Annual Compensation by taking into account the first
$200,000 (or such larger amount as the Commissioner of Internal Revenue may
prescribe) of Compensation as
-52-
defined in Section 3.06(b), by disregarding Plan Years in which the Participant
did not earn a Year of Service, and by taking the highest average over five (5)
consecutive Plan Years (or a lesser number of consecutive Plan Years specified
in Section 1.07).
17.04 ADJUSTMENT TO OVERALL SECTION 415 LIMITATIONS. If, during
---------------------------------------------
any Limitation Year, the Plan is top heavy, the Advisory Committee shall apply
the limitations of Article III to the Participant by substituting 100% for 125%
each place it appears in the fractions described in that Article. This Section
shall not apply if:
(a) The Accrued Benefit, determined as of the last day of the
Limitation Year, of any Non-Key Employee who participates only in
the defined benefit plan(s) would satisfy Section 17.01 if three
percent (3%) were substituted for two percent (2%);
(b) A Non-Key Employee who participates in the top heavy defined
contribution plan(s) receives an extra mini-mum contribution or
benefit which satisfies Code Section 416(h)(2); and
(c) The top heavy ratio does not exceed 90%.
17.05 DETERMINATION OF TOP HEAVY STATUS. If this Plan is the only
---------------------------------
qualified Plan maintained by the Employer, the Plan is top heavy for a Plan Year
if the top heavy ratio as of the determination date exceeds 60%. The top heavy
ratio is a fraction, the numerator of which is the sum of the present value of
Accrued Benefits of all Key Employees as of the Determination Date, determined
as if the Participant terminated service as of such Determination Date, and
distributions made within the five (5) Plan Year period ending on the
Determination Date, and the denominator of which is a similar sum determined for
all Employees. The Advisory Committee shall calculate the top heavy ratio by
disregarding the Accrued Benefit of any Non-Key Employee who was formerly a Key
Employee. For Plan Years beginning after December 31, 1984, the Advisory
Committee shall calculate the top heavy ratio by disregarding the Accrued
Benefit (including distributions, if any, of the Accrued Benefit) of an
individual who has not received credit for at least one (1) Hour of Service with
the Employer during the five (5) Plan Year period ending on the Determination
Date. The Advisory Committee shall calculate the top heavy ratio, including the
extent to which it must take into account distributions, rollovers and
transfers, in accordance with Code Section 416 and the regulations under that
Code section. The Advisory Committee shall determine present value of
Employer-derived Accrued Benefits as of the most recent valuation date for
comput-
-53-
ing minimum funding costs falling within the twelve-month period ending on the
Determination Date, whether or not the Actuary performs a valuation that year,
except as Code Section 416 and the regulations under that Code section require
for the first and second Plan Year of this Plan.
If the Employer maintains other qualified plans (including a
Simplified Employee Pension Plan) this Plan is top heavy only if it is part of
the Required Aggregation Group, and the top heavy ratio for both the Required
Aggregation Group and the Permissive Aggregation Group exceeds 60%. The Advisory
Committee will calculate the top heavy ratio in the same manner as required by
the first paragraph of this Section, taking into account all plans within the
Aggregation Group. To the extent the Advisory Committee must take into account
distributions to a Participant, the Advisory Committee shall include
distributions from a terminated plan which would have been part of the Required
Aggregation Group if it were in existence on the Determination Date. The
Advisory Committee shall calculate the present value of accrued benefits and the
other amounts the Advisory Committee must take into account, under Defined
Contribution Plans or Simplified Employee Pension Plans included within the
Group in accordance with the terms of those Plans, Code Section 416 and the
regulations under that Code section. The Advisory Committee shall value the
accrued benefits in the aggregated plan as of the most recent valuation date
falling within the twelve-month period ending on the Determination Date, except
as Code Section 416 and the regulations under that Code section require for the
first and second plan year of a defined benefit plan. The Advisory Committee
shall calculate the top heavy ratio with reference to the determination dates
that fall within the same calendar year.
To determine present value under this Section, the Advisory
Committee shall use the interest and mortality assumptions stated in Section
1.04. If the Employer maintains a defined benefit plan under which any
participants accrue benefits under an accrual method different from other
participants in that plan or in another defined benefit plan maintained by the
Employer, the Advisory Committee shall determine the Accrued Benefits of any
Non-Key Employees by assuming their benefits accrue under the slowest accrual
rate permitted under the fractional rule accrual method described in Code
Section 411(b)(1)(C).
17.06 DEFINITIONS. For purposes of applying the provisions of
-----------
this Article XVII:
(a) "Key Employee" shall mean as of any Determination Date, any
Employee or former Employee (or Beneficiary of such Employee)
who, at any time during the Plan
-54-
Year (which includes the Determination Date) or during the
preceding four Plan Years, is an officer (having annual
Compensation in excess of 150% of the Code Section 415(c)(1)(A)
limitation in effect for any such Plan Years) of the Employer,
one of the Employees (having annual Compensation in excess of the
Code Section 415(c)(1)(A) limitation in effect for any such Plan
Years) owning the 10 largest interests in the Employer, a more
than 5% owner of the Employer, or a more than 1% owner of the
Employer who has annual compensation of more than $150,000. The
constructive ownership rules of Code Section 318 (or the
principles of that section, in the case of an unincorporated
Employer) will apply to determine ownership in the Employer. The
Advisory Committee will make the determination of who is a Key
Employee in accordance with Code Section 416(i)(1) and the
regulations under that Code Section.
(b) "Non-Key Employee" is an Employee who does not meet the
definition of Key Employee.
(c) "Determination Date" for any Plan Year is the Accounting Date of
the preceding Plan Year or, in the case of the first Plan Year of
the Plan, the Accounting Date of that Plan Year.
(d) "Required Aggregation Group" means each qualified plan of the
Employer in which at least one Key Employee participates at any
time during the five (5) Plan Year period ending on the
Determination Date and any other qualified Plan of the Employer
which enables a Plan described above to meet the requirements of
Code Section 401(a)(4) or Code Section 410.
(e) "Permissive Aggregation Group" is the Required Aggregation Group
plus any other qualified Plan maintained by the Employer, but
only if such Group would satisfy in the aggregate, the
requirements of Code Section 401(a)(4) and Code Section 410. The
Advisory Committee shall determine which Plan to take into
account in determining the Permissive Aggregation Group.
(f) "Employer" shall mean all the members of a controlled group of
corporations (as defined in Code Section 414(b)) of a commonly
controlled group of trades or businesses (whether or not
incorporated) (as defined in Code Section 414(c)), or of an
affiliated service group (as defined in Code Section 414(m)), of
which the Employer is a part. However, the Advisory Committee
shall not aggregate ownership interests in
-55-
more than one member of a related group to determine whether an
individual is a Key Employee because of his ownership interest in
the Employer.
(g) "Year of Service" -- A Plan Year during which an Employee
completes at least one thousand (1,000) Hours of Service, without
regard to whether the Employee is employed by the Employer on the
last day of the Plan Year.
(h) "Accrued Benefit" -- Solely for purposes of applying Section
17.05, the Advisory Committee shall take into account, as part of
a Participant's Accrued Benefit, any benefit derived from
Participant contributions, except as provided in Section 17.05.
ARTICLE XVIII
MISCELLANEOUS
18.01 EVIDENCE. Anyone required to give evidence under the terms
--------
of the Plan may do so by certificate, affidavit, document or other information
which the person to act in reliance may consider pertinent, reliable and
genuine, and to have been signed, made or presented by the proper party or
parties. Both the Advisory Committee and the Trustee shall be fully protected in
acting and relying upon any evidence described under this Section.
18.02 NO RESPONSIBILITY FOR EMPLOYER ACTION. The Trustee, the
-------------------------------------
Advisory Committee and the Plan Administrator shall not have any obligation or
responsibility with respect to any action required by the Plan to be taken by
the Employer, any Participant or eligible Employee, nor for the failure of any
of the above persons to act or make any payment or contribution, or to otherwise
provide any benefit contemplated under this Plan, nor shall the Trustee, the
Advisory Committee or the Plan Administrator be required to collect any
contribution required under the Plan, or determine the correctness of the amount
of any Employer contribution. The Trustee, the Advisory Committee and the Plan
Administrator need inquire into or be responsible for any action or failure to
act on the part of the others. Any action required of a corporate Employer shall
be by its Board of Directors or its designates.
18.03 FIDUCIARIES NOT INSURERS. The Trustee, the Advisory
------------------------
Committee, the Plan Administrator and the Employer in no way guarantee the Trust
Fund from loss or depreciation. The Employer does not guarantee the payment of
any money which may be or becomes due to any person from the Trust Fund. The
liability of the Trustee to make any payment from the Trust Fund
-56-
at any time and all times is limited to the then available assets of the Trust
Fund.
18.04 WAIVER OF NOTICE. Any person entitled to notice under
----------------
the Plan may waive the notice.
18.05 SUCCESSORS. The Plan shall be binding upon all persons
----------
entitled to benefits under the Plan, their respective heirs and legal
representatives, upon the Employer, its successors and assigns, and upon the
Trustee, the Advisory Committee, the Plan Administrator and their successors.
18.06 WORD USAGE. Words used in the masculine shall apply to the
----------
feminine where applicable, and wherever the context of the Plan dictates, the
plural shall be read as the singular and the singular as the plural.
18.07 STATE LAW. The law of the United States Virgin Islands
---------
shall determine all questions arising with respect to the provisions of this
Agreement except to the extent Federal statute supersedes such law.
18.08 EMPLOYMENT NOT GUARANTEED. Nothing contained in this Plan,
-------------------------
or with respect to the establishment of the Trust, or any modification or
amendment to the Plan or Trust, or in the creation of any Account, or the
payment of any benefit, shall give any Employee, Employee-Participant or any
Beneficiary any right to continue employment, any legal or equitable right
against the Employer, or Employee of the Employer, or against the Trustee, or
its agents or employees, or against the Plan Administrator, except as expressly
provided by the Plan, the Trust, the Act or by a separate agreement.
ARTICLE XIX
EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION
19.01 EXCLUSIVE BENEFIT. Except as provided under Article III and
-----------------
Article XII, the Employer shall have no beneficial interest in any asset of the
Trust Fund and no part of any asset in the Trust Fund shall ever revert to or be
repaid to the Employer, either directly or indirectly; nor prior to the
satisfaction of all liabilities with respect to the Participants and their
Beneficiaries under the Plan, shall any part of the corpus or income of the
Trust Fund, or any asset of the Trust, be (at any time) used for, or diverted
to, purposes other than the exclusive benefit of the Participants or their
Beneficiaries. Notwithstanding the foregoing provision for impossibility of
diversion of Trust assets to the Employer, if the Commissioner of Internal
Revenue, upon the Employer's request for initial approval of this Plan,
determines that the
-57-
Trust is not a qualified trust exempt from Federal income tax, then the Trustee,
upon written notice from the Employer, shall return the Employer's contributions
and increment attributable to the contributions to the Employer. The Trustee
must make the return of the Employer contribution under this Section within one
(1) year of a final disposition of the Employer's request for initial (or
amended) approval of the Plan; provided, however, the Trustee shall not return
the Employer's contribution conditioned on amended approval unless the Employer
requested a determination letter from the Revenue Service within one year after
the date the Employer adopted the amendment. The Plan and the Trust shall
terminate upon the Trustee's return of the Employer's contributions.
19.02 AMENDMENT BY EMPLOYER. The Employer shall have the right
---------------------
at any time and from time to time:
(a) To amend this Agreement in any manner it deems necessary and
advisable in order to comply with ATN, Inc.'s contractual
agreements with ITT Corporation, provided such amendments are
consistent with applicable Internal Revenue Code provisions;
(b) To amend this Agreement in any manner it deems necessary or
advisable in order to qualify this Plan and the Trust under the
appropriate provisions of the Code; and
(c) To amend this Agreement in any other manner. However, no
amendment shall authorize or permit any of the Trust Fund (other
than the part which is required to pay taxes and administration
expenses) to be used for or diverted to purposes other than for
the exclusive benefit of the Participants or their Beneficiaries
or estates. No amendment shall cause or permit any portion of the
Trust Fund to revert to or become a property of the Employer; and
the Employer shall not make any amendment which affects the
rights, duties or responsibilities of the Trustee, the Plan
Administrator or the Advisory Committee without the written
consent of the affected Trustee, the Plan Administrator or the
affected member of the Advisory Committee. Furthermore, no
amendment (including a change in the actuarial assumptions
provided in Section 1.04) shall decrease a Participant's Accrued
Benefit, except to the extent permitted under Code Section
412(c)(8). An amendment adopted after July 30, 1984 (including
the adoption of this Plan as a restatement of an existing plan)
decreases a Participant's Accrued Benefit determined immediately
prior to the adoption date if the amendment has the
-58-
effect of either (1) eliminating or reducing an early retirement
benefit or a retirement-type subsidy (as defined in Treasury
regulations), or (2) except as provided by Treasury regulations,
eliminating an optional form of benefit. The Advisory Committee
shall disregard an amendment described in the immediately
preceding sentence to the extent application of the amendment
would decrease the Participant's Accrued Benefit determined
immediately prior to the adoption date of the amendment.
The Employer shall make all amendments in writing. Each amendment
shall state the date to which it is either retroactively or prospectively
effective.
19.03 DISCONTINUANCE. The Employer shall have the right, at any
--------------
time, to suspend or discontinue its contributions under the Plan, and to
terminate, at any time, the Plan and the Trust. The Plan shall terminate upon
the first to occur of the following:
(a) The date terminated by action of the Employer provided the
Employer gives the Trustee thirty (30) days prior notice of
termination;
(b) The date the Employer shall be judicially declared bankrupt or
insolvent; or
(c) The dissolution, merger, consolidation or reorganization of the
Employer or the sale by the Employer of all or substantially all
of its assets, unless the successor or purchaser makes provision
to continue the Plan, in which event the successor or purchaser
shall substitute itself as the Employer under this Plan.
19.04 FULL VESTING ON TERMINATION. Notwithstanding any other
---------------------------
provision of this Plan to the contrary, upon either full or partial termination
of the Plan, an affected Participant's right to his Accrued Benefit shall be one
hundred percent (100%) Nonforfeitable.
19.05 TERMINATION. Upon termination of the Plan, the distribution
-----------
provisions of the Plan shall remain operative, and the Trust shall continue
until the Trustee in accordance with the direction of the Advisory Committee has
distributed all of the benefits under the Plan. The consent requirements under
this Plan expressly apply to a distribution direction upon termination of the
Plan.
-59-
19.06 EFFECT OF AMENDMENT AND RESTATEMENT. Unless otherwise
-----------------------------------
specifically provided herein, all amendments and modifications contained herein
shall be effective retroactive to the Effective Date of this Plan.
-60-
IN WITNESS WHEREOF, the Employer has caused this Amended and
Restated Plan to be executed, as duly authorized by its Board of Directors, on
this ____ day of January, 1993.
ATLANTIC TELE-NETWORK, INC., Employer
By: /s/
---------------------------------
Title:
-------------------------------
-61-
FIRST AMENDMENT TO THE AMENDED AND RESTATED
ATLANTIC TELE-NETWORK, INC.
DEFINED PENSION PLAN FOR SALARIED EMPLOYEES
Pursuant to Article XIX, Section 19.2 of the AMENDED AND RESTATED
ATLANTIC TELE-NETWORK, INC. DEFINED PENSION PLAN FOR SALARIED EMPLOYEES
(hereinafter referred to as the "Plan"), dated for reference purposes only the
1st day of February, 1993, Atlantic Tele-Network, Inc., by action of its Board
of Directors, hereby revises and amends the Plan in the following respects:
1. The Settlor hereby amends and revises Article I by revising
Section 1.10 of said Article in its entirety to read as follows:
1.10 COMPENSATION. The total amount of payments made or incurred
------------
by the Employer to an Employee for services rendered to the Employer,
including overtime pay, but specifically excluding bonuses and
commissions. In addition to bonuses and commissions, compensation shall
not include Employee expense reimbursements, foreign service allowances,
fringe benefits (taxable or nontaxable), director's fees, contributions
made by the Employer under the Plan, payments made by the Employer for
group insurance, hospitalization and like benefits, nor contributions
made by the Employer under any other Employee benefit plan it maintains.
For plan years beginning after December 31, 1988, notwithstanding
anything herein to the contrary, Compensation shall not include amounts
paid by the Employer in excess of the greater of $200,000 or the maximum
amount prescribed pursuant to Code Section 401(a)(17).
In addition to other applicable limitations set forth in the
Plan, and notwithstanding any other provision of the Plan to the
contrary, for plan years beginning on or after January 1, 1994, the
annual compensation of each Employee taken into account under the Plan
shall not exceed the OBRA 1993 annual compensation limit. The OBRA 1993
annual compensation limit is $150,000.00, as adjusted by the
Commissioner for increases in the cost of living in accordance with
Section 401(a)(17)(B) of the Code. The cost-of-living adjustment in
effect for a calendar year applies to any period, not exceeding 12
months, over which compensation is determined (determination period)
begin-
ning such calendar year. If a determination period consists of
fewer than 12 months, the OBRA 1993 annual compensation limit will be
multiplied by a fraction, the numerator of which is the number of months
in the determination period, and the denominator of which is 12.
For plan years beginning on or after January 1, 1994, any
reference in this Plan to the limitation under Section 401(a)(17) of the
Code shall mean the OBRA 1993 annual compensation limit set forth in
this provision.
If compensation for any prior determination period is taken into
account in determining an Employee's benefits accruing in the current
plan year, the compensation for that prior determination period is
subject to the OBRA 1993 annual compensation limit in effect for that
prior determination period. For this purpose, for determination periods
beginning before the first day of the first plan year beginning on or
after January 1, 1994, the OBRA 1993 annual compensation limit is
$150,000.
Notwithstanding any other provision in the Plan, each Section
401(a)(17) Employee's accrued benefit under this Plan will be the
greater of:
(a) the Employee's accrued benefit as of the last day of the
last plan year beginning before January 1, 1994, frozen in
accordance with Treas. Reg. ss. 1.401(a)(4)-13, or
(b) the Employee's accrued benefit determined with respect to
the benefit formula applicable for the plan year beginning
on or after January 1, 1994, as applied to the Employee's
total years of service taken into account under the Plan
for purposes of benefit accruals.
A Section 401(a)(17) Employee means an Employee whose current
accrued benefit as of a date on or after the first day of the first plan
year beginning on or after January 1, 1994, is based on compensation for
a year beginning prior to the first day of the first plan year beginning
on or after January 1, 1994 that exceeded $150,000.
2. Article XVIII is hereby amended and revised by adding the
following language to the end of said Article:
-2-
18.09 Rollover Distributions. This Section applies to
----------------------
distributions made on or after January 1, 1993. Notwithstanding any
provision of the Plan to the contrary that would otherwise limit a
distributee's election under this Section, a distributee may elect, at
the time and in the manner prescribed by the Advisory Committee, to have
any portion of an eligible rollover distribution paid directly to an
eligible retirement plan specified by the distributee in a direct
rollover. The following definitions shall apply to this Section:
(a) Eligible rollover distribution. An eligible rollover
------------------------------
distribution is any distribution of all or any portion of
the balance to the credit of the distributee, except that
an eligible rollover distribution does not include: any
distribution that is one of a series of substantially
equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the
distributee or the joint lives (or joint life
expectancies) of the distributee and the distributee's
designated beneficiary, or for a specified period of ten
years or more; any distribution to the extent such
distribution is required under Section 401(a)(9) of the
Code; and the portion of any distribution that is not
includable in gross income (determined without regard to
the exclusion for net unrealized appreciation with respect
to employer securities)
(b) Eligible retirement plan. An eligible retirement plan is
------------------------
an individual retirement account described in Section
408(a) of the Code, an individual retirement annuity
described in Section 408(b) of the Code, an annuity plan
described in Section 403(a) of the Code, or a qualified
trust described in Section 401(a) of the Code, that
accepts the distributee's eligible rollover distribution.
However, in the case of an eligible rollover. distribution
to the surviving spouse, an eligible retirement plan is an
individual retirement account or individual retirement
annuity.
(c) Distributee. A distributee includes an Employee or former
-----------
Employee. In addition, the Employee's or former Employee's
surviving spouse and the Employee's or former Employee's
spouse or former
-3-
spouse who is the alternate payee under a qualified
domestic relations order, as defined in Section 414(p) of
the Code, are distributees with regard to the interest of
the spouse or former spouse.
(d) Direct rollover. A direct rollover is a payment by the
---------------
Plan to the eligible retirement plan specified by the
distributee.
3. Subject to the alterations and amendments herein
contained, the Plan is hereby ratified and affirmed in all other respects.
IN WITNESS WHEREOF, this FIRST AMENDMENT TO THE AMENDED AND
RESTATED ATLANTIC TELE-NETWORK, INC. DEFINED PENSION PLAN FOR SALARIED EMPLOYEES
is executed on this 9th day of December, 1994.
ATLANTIC TELE-NETWORK, INC., a
Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
-------------------------------
XXXXX X. XXXXXX, Chief
Operating Officer
-4-
SECOND AMENDMENT TO THE AMENDED AND RESTATED
ATLANTIC TELE-NETWORK, INC.
DEFINED BENEFIT PLAN FOR SALARIED EMPLOYEES
Pursuant to Article XIX, Section 19.2 of the AMENDED AND RESTATED
ATLANTIC TELE-NETWORK, INC. DEFINED BENEFIT PLAN FOR SALARIED EMPLOYEES
(hereinafter referred to as the "Plan"), dated for reference purposes only the
1st day of February, 1993, ATLANTIC TELE-NETWORK, INC., by action of its Board
of Directors, hereby revises and amends the Plan in the following respects:
1. Section 13.05 of Article XIII is hereby amended and revised in
its entirety to read as follows:
13.05 AMENDMENT TO VESTING SCHEDULE. Though the Employer reserves
-----------------------------
the right to amend the vesting schedule at any time, the Advisory
Committee shall apply the amended vesting schedule to reduce the
Nonforfeitable percentage of any Participant's Accrued Benefit derived
from Employer contributions (determined as of the later of the date the
Employer adopts the amendment, or the date the amendment becomes
effective) to a percentage less than the Nonforfeitable percentage
computed under the Plan without regard to the amendment.
If the Employer makes a permissible amendment to the vesting
schedule, each Participant having at least three (3) Years of Service
with the Employer may elect to have the percentage of his or her
Nonforfeitable Accrued Benefit computed under the Plan without regard to
the amendment. The Participant must file his or her election with the
Plan Administrator within sixty (60) days of the latest of (a) the
Employer's adoption of the amendment; (b) the effective date of the
amendment; or (c) his or her receipt of a copy of the amendment. The
Plan Administrator, as soon as practicable, shall forward a true copy of
any amendment to the vesting schedule to each affected Participant,
together with an explanation of the effect of the amendment, the
appropriate form upon which the Participant may make an election to
remain under the vesting schedule provided under the Plan prior to the
amendment and notice of the time within which the Participant must make
an election to remain under the prior vesting schedule. For purposes of
this Section, an amendment to the
vesting schedule includes any Plan amendment which directly or
indirectly affects the computation of the Nonforfeitable percentage of
an Employee's rights to his or her Employer derived Accrued Benefit.
2. Section 17.06(a) of Article XVII is hereby amended and revised
in its entirety to read as follows:
(a) "Key Employee" shall mean as of any Determination Date,
any Employee or former Employee (or Beneficiary of such
Employee) who, at any time during the Plan Year (which
includes the Determination Date) or during the preceding
four Plan Years, is or was (1) an officer (having annual
Compensation in excess of 50% of the dollar limit in
effect under Code Section 415(b)(1)(A) for the calendar
year in which the Plan Year ends) of the Employer, (2) an
owner of (or considered as owning within the meaning of
Code Section 318) both more than a 1/2 percent interest
and one of the 10 largest interests in the Employer and
having annual Compensation in excess of the Code Section
415(c)(1)(A) limitation in effect for the Plan Year, (3) a
5% owner of the Employer, or (4) a 1% owner of the
Employer who has annual compensation of more than
$150,000. The construction ownership rules of Code Section
318 (or the principles of that section, in the case of an
unincorporated Employer), will apply to determine
ownership in the Employer. For purposes of determining
five-percent and one-percent owners, neither the
aggregation rules nor the rules of subsections (b), (c)
and (m) of section 414 apply. The Advisory Committee will
make the determination of who is a Key Employee in
accordance with Code Section 416(i)(1) and the regulations
under that Code Section. Beneficiaries of an Employee
shall acquire the character of the Employee who performed
service for the Employer. Inherited benefits will retain
the character of the benefits of the Employee who
performed services for the Employer.
3. Subject to the alterations and amendments herein contained,
the Plan, as previously amended by the FIRST AMENDMENT TO THE AMENDED AND
RESTATED ATLANTIC TELE-NETWORK, INC. DEFINED BENEFIT PLAN FOR SALARIED
EMPLOYEES, dated Decem-
-2-
ber 9, 1994, is hereby ratify and affirm said Trust Agreement in all other
respects.
IN WITNESS HEREOF, this SECOND AMENDMENT TO THE AMENDED AND
RESTATED ATLANTIC TELE-NETWORK, INC. DEFINED BENEFIT PLAN FOR SALARIED EMPLOYEES
is executed this 13th day of September, 1995.
ATLANTIC TELE-NETWORK, INC., a
Delaware corporation
By: /s/ Xxxxx Knock
--------------------------------
XXXXX KNOCK, Vice-President
