As filed with the Securities and Exchange Commission on April 24, 2015
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
FRONTIER
COMMUNICATIONS CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
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Delaware |
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06-0619596 |
(State or Other Jurisdiction of
Incorporation or Organization) |
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(I.R.S. Employer
Identification Number) |
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3 High Ridge Park
Stamford, Connecticut |
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06905 |
(Address of Principal Executive Offices) |
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(Zip Code) |
Frontier Communications 401(k) Savings Plan
Frontier Communications Corporate Services Inc. Savings and Security Plan for Mid-Atlantic Associates
(Full Title of Plans)
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John M. Jureller
Executive Vice President and Chief Financial Officer
Frontier Communications Corporation
3 High Ridge Park
Stamford, Connecticut 06905 |
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Copies to:
J. Eric Maki, Esq. Jones
Day 222 East 41st Street
New York, New York 10017
(212) 326-3939 |
(Name and Address of Agent for Service) |
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(203) 614-5600 |
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(Telephone Number, Including Area Code, of Agent for Service) |
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):
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Large accelerated filer |
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x |
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Accelerated filer |
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¨ |
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Non-accelerated filer |
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¨ |
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(Do not check if a smaller reporting company) |
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Smaller reporting company |
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¨ |
CALCULATION OF REGISTRATION FEE
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Title of Securities
to be Registered (1) |
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Amount
to be Registered
(2) |
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Proposed
Maximum Offering
Price Per Share (3) |
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Proposed
Maximum Aggregate
Offering Price (3) |
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Amount of Registration Fee (3) |
Common Stock, par value $0.25 per share |
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10,000,000 |
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$7.045 |
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$70,450,000 |
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$8,186.29 |
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(1) |
In addition, pursuant to Rule 416(c) under the Securities Act of 1933, as amended (the Securities Act), this registration statement shall also be deemed to cover an indeterminate amount of employee
benefit plan interests to be offered or sold pursuant to each plan described herein. |
(2) |
Pursuant to Rule 416(b), the number of shares of Common Stock being registered shall be adjusted to include any additional securities that may become issuable in connection with, or as a result of, stock splits,
stock dividends or similar transactions. |
(3) |
Determined on the basis of the average of the high and low prices of the Common Stock reported by the NASDAQ Global Select Market on April 20, 2015 in accordance with Rule 457(c) under the Securities Act, solely
for the purpose of calculating the registration fee pursuant to Rule 457(h) under the Securities Act. |
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The document(s) containing the information specified in this Part I will be sent or given to participants in (1) the Frontier
Communications 401(k) Savings Plan and (2) the Frontier Communications Corporate Services Inc. Savings and Security Plan for Mid-Atlantic Associates (together, the Plans) as specified by Rule 428(b)(1) under the
Securities Act of 1933, as amended (the Securities Act). These and the documents incorporated by reference into this registration statement pursuant to Item 3 of Part II of this registration statement, taken
together, constitute a prospectus that meets the requirements of Section 10(a) of the Securities Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. |
INCORPORATION OF DOCUMENTS BY REFERENCE |
The following documents filed or to be filed by
Frontier Communications Corporation (the Company or the Registrant) with the Securities and Exchange Commission (the SEC) are hereby incorporated by reference into this
registration statement as of their respective dates:
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The Companys Annual Report on Form 10-K for the fiscal year ended December 31, 2014; |
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The Companys Current Reports on Form 8-K filed on January 7, February 5 (except as to Item 7.01), February 19 (two reports, except as to Items 2.02 and 7.01), February 26,
March 3, March 5, March 10, March 27, March 31, and April 8, 2015; and |
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The descriptions of the Companys Common Stock, par value $0.25 per share, contained in Item 1 (Description of Registrants Securities to be Registered) of the Companys Registration Statement on
Form 8-A filed on December 14, 2011. |
The information incorporated by reference in this registration statement,
and information that the Company and the Plans subsequently file with the SEC under Sections 13(a), 13(c), 14 or 15(d) under the Securities Exchange Act of 1934, as amended (the Exchange Act), after the date of this
registration statement and prior to the filing of a post-effective amendment to this registration statement that indicates that all securities registered hereunder have been sold or that deregisters all such securities then remaining unsold, is
considered to be a part of this registration statement and will automatically update and supersede any earlier information.
Any statement
contained in a document incorporated by reference in this registration statement shall be deemed to be modified or superseded for purposes of this registration statement to the extent that a statement contained herein or in any other subsequently
filed document incorporated by reference in this registration statement modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this
registration statement.
ITEM 4. |
DESCRIPTION OF SECURITIES |
Not applicable.
ITEM 5. |
INTERESTS OF NAMED EXPERTS AND COUNSEL |
Not applicable.
ITEM 6. |
INDEMNIFICATION OF DIRECTORS AND OFFICERS |
Section 145 of the Delaware General
Corporation Law (the Delaware Law) permits a corporation, under specified circumstances, to indemnify its directors, officers, employees and agents against expenses (including attorneys fees) and other liabilities actually and
reasonably incurred by them as a result of any suit (other than a suit brought by or in the right of the corporation) brought against them in their capacity as such, if they acted in good faith and in a manner they reasonably believed to be in or
not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, if they had no
reasonable cause to believe their conduct was unlawful. Section 145 of the Delaware Law also provides that directors, officers, employees and agents may also be indemnified against expenses
(including attorneys fees) incurred by them in connection with a suit brought by or in the right of the corporation if they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the
corporation, except that no indemnification may be made, unless otherwise determined by the court, if such person was adjudged liable to the corporation.
The Delaware Law also provides that the indemnification described above will not be deemed exclusive of other indemnification that may be
granted by a corporation pursuant to its By-laws, disinterested directors vote, stockholders vote, agreement or otherwise.
The Delaware Law also provides corporations with the power to purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation in a similar capacity for another corporation, partnership, joint venture, trust or other enterprise, against any liability asserted
against him or her in any such capacity, or arising out of his or her status, whether or not the corporation would have the power to indemnify him or her against such liability as described above.
As permitted by sections 102 and 145 of the Delaware Law, the Registrants Restated Certificate of Incorporation eliminates the liability
of a director to the Registrant and its stockholders for monetary damages for breach of a directors fiduciary duty except for liability under section 174 of the Delaware Law, for any breach of the directors duty of loyalty to the
Registrant or its stockholders, for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law or for any transaction from which the director derived an improper personal benefit.
The Registrants By-laws provide that to the fullest extent permitted by applicable law as then in effect, the Registrant shall indemnify
any person (the Indemnitee) who was or is involved in any manner (including, without limitation, as a party or witness) or was or is threatened to be made so involved in any threatened, pending or completed investigation,
claim, action, suit or proceeding, whether civil, criminal, administrative, or investigative (including, without limitation, any action or proceeding by or in the right of the Registrant to procure a judgment in its favor) (a
Proceeding), by reason of the fact that he is or was a director or officer of the Registrant, or is or was serving at the request of the Registrant as a director or officer of another corporation, or of a partnership, joint
venture, trust or other enterprise (including, without limitation, service with respect to any employee benefit plan), whether the basis of any such Proceeding is alleged action in an official capacity as director or officer or in any other capacity
while serving as a director or officer, against all expenses, liability and loss (including, without limitation, attorneys fees, judgments, fines, ERISA excise taxes or penalties, and amounts paid or to be paid in settlement) actually and
reasonably incurred by him in connection with such Proceeding. Such indemnification shall continue as to a person who has ceased to be a director or officer and shall inure to the benefit of his heirs, executors, administrators and legal
representatives. The right to indemnification conferred in the Registrants By-laws includes the right to receive payment of any expenses incurred by the Indemnitee in connection with such Proceeding in advance of the final disposition of the
Proceeding, consistent with applicable law as then in effect.
The above discussion of the Delaware Law and the Registrants Restated
Certificate of Incorporation and By-laws is not intended to be exhaustive and is qualified in its entirety by such statutes, the Restated Certificate of Incorporation and the By-laws.
The Registrant maintains liability insurance for the benefit of its directors and officers.
ITEM 7. |
EXEMPTION FROM REGISTRATION CLAIMED |
Not applicable.
The following instruments and documents are included as exhibits to this
registration statement.
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Exhibit No. |
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Description |
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5.1 |
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Opinion of Jones Day. |
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5.2 |
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Pursuant to Item 8(b) of Form S-8, in lieu of an Internal Revenue Service (IRS) determination letter that the Plans are qualified under Section 401 of the Internal Revenue Code, the Company hereby
undertakes that it will submit or has submitted the Plans and any amendments thereto to the IRS in a timely manner and has made or will make all changes required by the IRS in order to qualify the Plans. |
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23.1 |
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Consent of Jones Day (included in Exhibit 5.1). |
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23.2 |
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Consent of KPMG LLP. |
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24 |
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Powers of Attorney (included in signature page of the Registration Statement). |
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99.1 |
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Frontier Communications 401(k) Savings Plan. |
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99.2 |
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Frontier Communications Corporate Services Inc. Savings and Security Plan for Mid-Atlantic Associates. |
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the Securities Act;
(ii) to reflect in the prospectus any facts or events arising after the effective date of this registration statement (or the
most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this registration statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with
the SEC pursuant to Rule 424(b) (§230.424(b) of this chapter) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the Calculation of Registration
Fee table in the effective registration statement.; and
(iii) to include any material information with respect to
the plan of distribution not previously disclosed in this registration statement or any material change to such information in this registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) of this section do not apply if the registration statement is on Form
S-8, and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the SEC by the registrant pursuant to Section 13 or Section 15(d) of the Exchange Act
that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold
at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of determining any liability
under the Securities Act, each filing of the Registrants annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plans annual report pursuant to
Section 15(d) of the Exchange Act) that is incorporated by reference in
this registration statement shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act may be permitted
to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-8, and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Stamford, State of Connecticut, on the 24th day of April, 2015.
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FRONTIER COMMUNICATIONS CORPORATION |
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By: |
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/s/ John M. Jureller |
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John M. Jureller |
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Executive Vice President and Chief Financial Officer |
POWER OF ATTORNEY
We, the undersigned directors and officers of the Company, hereby severally constitute and appoint John M. Jureller and Mark D. Nielsen, and
each of them singly, our true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, to sign for us in our name in the capacities indicated below, any and all amendments to this registration statement on Form
S-8 filed by the Company with the SEC, and generally to do all such things in our name and behalf in such capacities to enable the Company to comply with the provisions of the Securities Act, and all requirements of the SEC, and we hereby ratify and
confirm our signatures as they may be signed by our said attorneys, or any of them, to any and all such amendments.
Pursuant to the
requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities indicated on April 24, 2015.
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SIGNATURE |
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TITLE |
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/s/ Daniel J. McCarthy |
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Daniel J. McCarthy |
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President and Chief Executive Officer |
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(Principal Executive Officer) |
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/s/ John M. Jureller |
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John M. Jureller |
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Executive Vice President and Chief Financial Officer |
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(Principal Financial Officer) |
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/s/ Donald Daniels |
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Donald Daniels |
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Senior Vice President & Controller |
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(Principal Accounting Officer) |
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/s/ Mary Agnes Wilderotter |
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Mary Agnes Wilderotter |
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Executive Chairman |
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/s/ Leroy T. Barnes, Jr. |
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Leroy T. Barnes, Jr. |
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Director |
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/s/ Peter C. B. Bynoe |
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Peter C. B. Bynoe |
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Director |
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/s/ Diana S. Ferguson |
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Diana S. Ferguson |
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Director |
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/s/ Edward Fraioli |
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Edward Fraioli |
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Director |
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/s/ Pamela D.A. Reeve |
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Pamela D.A. Reeve |
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Director |
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/s/ Virginia P. Reusterholz |
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Virginia P. Reusterholz |
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Director |
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/s/ Howard L. Schrott |
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Howard L. Schrott |
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Director |
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/s/ Larraine D. Segil |
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Larraine D. Segil |
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Director |
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/s/ Mark Shapiro |
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Mark Shapiro |
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Director |
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/s/ Myron A. Wick III |
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Myron A. Wick III |
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Director |
We, the undersigned trustees (or other persons who signed on behalf of the Plans), hereby
severally constitute and appoint John M. Jureller and Mark D. Nielsen, and each of them singly, our true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, to sign for us in our name in the capacities
indicated below, any and all amendments to this registration statement on Form S-8 filed by the Company with the SEC, and generally to do all such things in our name and behalf in such capacities to enable the Company to comply with the provisions
of the Securities Act, and all requirements of the SEC, and we hereby ratify and confirm our signatures as they may be signed by our said attorneys, or any of them, to any and all such amendments.
Pursuant to the requirements of the Securities Act, the trustees (or other persons who administer the employee benefits plans) have duly
caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Stamford, State of Connecticut, on the 24th day of April, 2015.
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FRONTIER COMMUNICATIONS 401(K) SAVINGS PLAN |
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By: |
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FRONTIER COMMUNICATIONS CORPORATION, |
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as Plan Administrator |
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By: |
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/s/ John M. Jureller |
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John M. Jureller |
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Executive Vice President and Chief Financial Officer |
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FRONTIER COMMUNICATIONS CORPORATE SERVICES INC. SAVINGS AND SECURITY PLAN FOR MID-ATLANTIC ASSOCIATES |
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By: |
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FRONTIER COMMUNICATIONS CORPORATION, |
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as Plan Administrator |
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By: |
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/s/ John M. Jureller |
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John M. Jureller |
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Executive Vice President and Chief Financial Officer |
INDEX TO EXHIBITS
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Exhibit No. |
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Description |
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5.1 |
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Opinion of Jones Day. |
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5.2 |
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Pursuant to Item 8(b) of Form S-8, in lieu of an Internal Revenue Service (IRS) determination letter that the Plans are qualified under Section 401 of the Internal Revenue Code, the Company hereby
undertakes that it will submit or has submitted the Plans and any amendments thereto to the IRS in a timely manner and has made or will make all changes required by the IRS in order to qualify the Plans. |
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23.1 |
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Consent of Jones Day (included in Exhibit 5.1). |
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23.2 |
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Consent of KPMG LLP. |
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24 |
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Powers of Attorney (included in signature page of the Registration Statement). |
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99.1 |
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Frontier Communications 401(k) Savings Plan. |
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99.2 |
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Frontier Communications Corporate Services Inc. Savings and Security Plan for Mid-Atlantic Associates. |
Exhibit 5.1
[JONES DAY LETTERHEAD]
April 24, 2015
Frontier Communications
Corporation
3 High Ridge Park
Stamford, Connecticut 06905
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Re: |
Registration Statement on Form S-8 of Frontier Communications Corporation |
Ladies and Gentlemen:
We have acted as counsel to Frontier Communications Corporation, a Delaware corporation (the Company), in connection
with the preparation of a Registration Statement on Form S-8 (the Registration Statement) to be filed with the Securities and Exchange Commission (the Commission) relating to an aggregate of
10,000,000 shares (the Shares) of the Companys Common Stock, par value $0.25 per share, issuable by the Company in accordance with (1) the Frontier Communications 401(k) Savings Plan and (2) the Frontier
Communications Corporate Services Inc. Savings and Security Plan for Mid-Atlantic Associates (collectively, the Plans).
In connection with the opinion expressed herein, we have examined such documents, records and matters of law as we have deemed relevant or
necessary for purposes of this opinion. Based on the foregoing, and subject to the further limitations, qualifications and assumptions set forth herein, we are of the opinion that the Shares have been authorized by all necessary corporate action of
the Company and upon issuance in accordance with the Plans will be validly issued, fully paid and nonassessable.
The opinion expressed
herein is limited to the laws of the State of Delaware, as currently in effect, and we express no opinion as to the effect of the laws of any other jurisdiction.
We consent to the filing of this opinion as an exhibit to the Registration Statement. In giving such consent, we do not thereby admit that we
are within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the rules and regulations of the Commission thereunder.
Yours truly,
/s/ Jones Day
Exhibit 23.2
Consent of Independent Registered Public Accounting Firm
Board of Directors
Frontier Communications Corporation:
We consent to the use of our reports dated February 24, 2015, with respect to the consolidated balance sheets of Frontier Communications Corporation as
of December 31, 2014 and 2013, and the related consolidated statements of operations, equity, comprehensive income and cash flows for each of the years in the three-year period ended December 31, 2014, and the effectiveness of internal
control over financial reporting as of December 31, 2014, incorporated by reference herein.
/s/ KPMG LLP
Stamford, Connecticut
April 24, 2015
Exhibit 99.1
FRONTIER COMMUNICATIONS 401(k) SAVINGS PLAN
(AS AMENDED AND RESTATED AS OF JANUARY 1, 2012)
[Subject to Approval by the Internal Revenue Service]
ARTICLE I
ESTABLISHMENT OF PLAN
1.01. |
Establishment and History of Plan. |
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(a) |
Effective January 1, 1997, the Citizens Utilities 401(k) Savings Plan and CUC 401(k) Employee Benefit Plan, which previously were maintained as separate plans, were restated into a single document.
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(b) |
Effective January 1, 1998, the Citizens Utilities 401(k) Savings Plan was merged into the CUC 401(k) Employee Benefit Plan, with the resulting plan being renamed the Citizens 401(k) Savings Plan (the
Plan). |
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(c) |
Effective October 1, 1999, the Gasco Bargaining 401(k) Plan was merged into the Plan. |
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(d) |
Citizens Communications Company (formerly Citizens Utilities Company) amended and restated the Plan, effective January 1, 1997, to reflect the various plan mergers, and to incorporate certain administrative and
required legal changes into the Plan. |
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(e) |
Effective January 1, 2002, the Company adopted good faith EGTRRA amendments to the Plan and to the Frontier Union 401(k) Savings Plan. Effective December 31, 2002, the Frontier Union 401(k) Savings
Plan was merged into the Plan. |
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(f) |
Citizens further amended and restated the Plan, effective January 1, 2003, to reflect such merger and to reflect various other changes, including the introduction of Supplemental Profit-Sharing Matches. Prior to
January 1, 2003, the rights under the Plan of Frontier Union Participants shall be determined by the provisions of the Frontier Union 401(k) Savings Plan as in effect immediately prior to such merger. |
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(g) |
Citizens Communications became known as Frontier Communications on July 31, 2008, and the Plan was renamed the Frontier Communications 401(k) Savings Plan, effective as of January 1, 2009. |
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(h) |
Effective immediately after the markets close on December 30, 2011, the Frontier Communications Corporate Services Inc. Management 401(k) Plan and the Frontier Communications Corporate Services Inc. Savings
and Security Plan for West Region Hourly Employees were merged in their entirety into this Plan. |
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(i) |
Except as otherwise provided herein, the provisions of the Plan as amended and restated herein shall apply to all persons who are eligible Employees on and after January 1, 2012. |
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1.02. |
Purpose of Plan. The purpose of the Plan is to provide eligible Employees with an opportunity and incentive to save for their retirement and to encourage such Employees to be productive and to make and continue
careers with the Company by providing matching contributions. |
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(a) |
ESOP Portion. Except to the extent allocated to the Accounts of current or former Mohave Employees, the portion of the Plan consisting of the Company Stock Fund (the ESOP or ESOP Portion)
is intended to be an employee stock ownership plan satisfying the requirements of Sections 401(a) and 4975(e)(7) of the Code and is intended to enable eligible employees to acquire stock ownership interests in the Company by investing in Company
Stock. The ESOP is specifically permitted and designed to invest primarily in qualifying employer securities as defined in Section 4975(e)(8) of the Code. |
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(b) |
Non-ESOP Portion. The remaining portion of the Plan (the Non-ESOP Portion) is intended to qualify as a defined contribution profit sharing plan with a cash or deferred arrangement meeting the
requirements of Sections 401(a) and related provisions of the Code. |
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(c) |
Cash or Deferred Arrangement. The Plans cash or deferred arrangement and related matching contribution features are intended to satisfy the requirements of Sections 401(k) and 401(m) and related provisions
of the Code. |
ARTICLE II
ELIGIBILITY FOR PARTICIPATION
2.01. |
Eligible and Ineligible Classes of Employees. All salaried and hourly Employees, except those in the ineligible classes of Employees designated below, shall be eligible to participate in the Plan upon completing
the eligibility requirements of Section 2.02 or 2.03, as applicable. The following classes of Employees shall be ineligible to participate in the Plan: |
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(a) |
Non-Participating Collectively Bargained Employees: Employees included in a unit of Employees covered by a collective bargaining agreement which does not provide for their participation in the Plan, where such
benefits were the subject of good faith bargaining; |
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(b) |
Employees of Non-Participating Employers: Individuals who are employed by Related Employers of the Company other than Participating Employers; |
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(c) |
Leased Employees: Individuals who are classified by the Company as leased employees (whether or not they are considered a Leased Employee under Code Section 414(n)), even if such individuals
relationship to the Employer is subsequently determined by an agency or court to have been that of a common law employee; |
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(d) |
Individuals Not on the Payroll: Individuals not on an Employers payroll (including any individual classified at the time by an Employer as an independent contractor, even if such individuals
relationship to the Employer is subsequently determined by an agency or court to have been that of a common law employee); |
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(e) |
Per Diem or Casual Workers: Individuals who are classified by the Company as per diem or casual and who work only on an as needed basis; |
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(f) |
Temporary Employees: Individuals who are classified by the Company as employed on a temporary basis and paid through Company payroll, provided that their employment does not continue beyond one (1) year;
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(g) |
Scholarship Students: Individuals who are scholarship recipients performing services for the Company as part of the Citizens Scholarship Program; |
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(h) |
Contract Workers: Contract workers whose agreements preclude participation in the Plan. |
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(i) |
Nonresident Aliens: Nonresident aliens who do not receive income from the Company or a Related Employer that constitutes earned income from United States sources. |
For purposes of this Section, it is expressly intended that individuals whom an Employer classifies as independent contractors and any other
individual otherwise not classified as an eligible Employee under this Section may not become Participants until the Plan Administrator affirmatively changes their classification. Therefore, an independent contractor or any other individual who is
reclassified by a court, administrative agency, governmental unit, tribunal or other party as an Employee or eligible Employee will nevertheless not be considered an eligible Employee hereunder for periods before the Plan Administrator implements
the reclassification decision, even if the decision applies retroactively. During any period when an Employee is included in an ineligible class of Employees, he shall be ineligible to become a Participant in the Plan, or if otherwise a Participant,
shall be ineligible to contribute to the Plan or share in any Employer contributions.
2.02. |
Participation On the Effective Date. Each Participant employed by the Company as of January 1, 2012, the Effective Date of this restated Plan document, shall continue to participate. |
2.03. |
General Participation Rule. |
|
(a) |
Except as otherwise provided in this Section 2.03, each eligible Employee not otherwise participating under Section 2.02 shall become a Participant as of the first day of the month (the Entry Date)
immediately following |
|
(1) |
Effective for Plan Years beginning on or after January 1, 2013, the Employees completion of 90 days of service; |
4
|
(2) |
Effective for Plan Years beginning on or after January 1, 2006 and prior to January 1, 2013, the Employees completion of 30 days of service; and |
|
(3) |
For Plan Years beginning prior to January 1, 2006, the Employees attainment of age 21 (this requirement is not applicable on or after August 1, 2003) and completion of three months of continuous service,
|
provided, however, that in each case the Employee is employed by a Participating Employer in an eligible class of
Employees.
|
(b) |
In the case of an Employee who is subject to a collective bargaining agreement, to the extent provided under the terms of such collective bargaining agreement 30 days (or such other number as is provided for
in such collective bargaining agreement) shall be substituted for three months for purposes of applying Section 2.03(a). |
|
(c) |
With respect to any Employee who made Elective Deferral Contributions to the Plan in 2002 prior to the attainment of age 21, Section 2.03(a) shall be applied without regard to the minimum age requirement set forth
therein. This Section 2.03(c) shall be effective with respect to Plan Years beginning on or after January 1, 2002. |
2.04. |
Transfer In or Out of Eligible Class of Employees. In the event a Participant becomes ineligible to be an active Participant in the Plan because he is no longer a member of an eligible class of Employees, such
Employee shall cease active participation, and shall resume his status as an active Participant under the Plan immediately upon his return to an eligible class of Employees. In the event an Employee who is not a member of the eligible class of
Employees becomes a member of the eligible class, if such Employee has otherwise satisfied the participation requirements of Section 2.03, such Employee shall commence participation in the Plan immediately upon becoming a member of the eligible
class. If such Employee has not satisfied the Plans participation requirements, participation shall commence in accordance with the provisions of Section 2.03. |
2.05. |
Rehired Employees. If a rehired Employee meets the participation requirements of Section 2.03 and is in an eligible class of Employees at the time of his rehire, he shall become a Participant or resume his
status as an active Participant under the Plan immediately upon his rehire. If the Employee had not met participation and eligibility requirements as specified in this Article prior to severance from employment, such Employee shall be eligible to
participate in the Plan as of the first day of the month after completing the then applicable eligibility requirements. |
2.06. |
Absence From Employment. |
|
(a) |
Absence from employment on account of a leave of absence authorized by the Employer will be handled in accordance with the Employers policies regarding the particular type of leave. The Employers leave
policy shall be applied in a uniform and nondiscriminatory manner to all Participants under similar circumstances. |
5
|
(b) |
Absence from employment on account of active duty with the Armed Forces of the United States will be counted as employment with the Employer, provided that the Employee returns to service with the Employer within the
period during which his employment rights are protected by law following his severance from such government service. If the Employee does not return to active employment with the Employer, his Service will be deemed to have ceased on the date the
Plan Administrator receives notice that such Employee will not return to the active Service of the Employer. |
|
(c) |
A Participant who dies or becomes Permanently Disabled after December 31, 2006 while performing qualified military service with respect to the Employer shall be treated as if the Participant had resumed employment
in accordance with the individuals reemployment rights on the day preceding death or Permanent Disability and terminated employment on the actual date of death or Permanent Disability. |
|
(d) |
Effective January 1, 2009, a Participant receiving differential wage payments, as defined in Section 3401(h) of the Code, from the Employer shall be treated as an Employee of the Employer. |
|
(e) |
Effective January 1, 2009, and notwithstanding Section 2.06(d), for purposes of Section 401(k)(2)(B)(i)(I) of the Code, a Participant shall be treated as having severed from employment during any period
the Participant is performing service in the uniformed services while on active duty for a period of more than 30 days. If the Participant elects to receive a distribution by reason of such deemed severance from employment, he or she may not make an
Elective Deferral Contribution or Voluntary After-Tax Contribution during the six-month period beginning on the date of the distribution |
|
(f) |
For purposes of this Section 2.06(f), a Qualified Reservist Distribution means a distribution from the Plan to a Participant if (i) the Participant was, by reason of being a member of a reserve
component (as defined for purposes of Section 72(t)(2)(G)(iii)(II) of the Code), ordered or called to active duty after December 31, 2007 for a period in excess of 179 days or for an indefinite period, (ii) the distribution is made
during the beginning of the date of such order and ending at the close of the active duty period and (iii) the distribution is made from any Account permitted under applicable statutory and regulatory guidance. Notwithstanding any provision of
the Plan to the contrary, a Participant described in clause (i) of the preceding sentence may elect to receive a Qualified Reservist Distribution within the period described in clause (ii) of the preceding sentence. |
|
(g) |
Notwithstanding any provision of the Plan to the contrary, contributions, benefits and service credit with respect to qualified military service will be provided in accordance with Section 414(u) of the Code,
effective for reemployment initiated on or after December 12, 1994. |
6
|
(h) |
With respect to unpaid family and medical leave, contributions, benefits and service credit will be provided in accordance with Section 825.215 of Title 29 of the Code of Federal Regulations. |
ARTICLE III
CONTRIBUTIONS AND
FUNDING
3.01. |
Funding Policy. The Company shall establish a funding policy and method consistent with the objectives, terms and conditions of the Plan and as appropriate communicate the same to the Plan Administrator. The Plan
Administrator shall arrange for the establishment and maintenance of such funding accounts as may be required by ERISA or appropriate in connection with the administration of the Plan. |
3.02. |
Company Contributions Generally. Each Participating Employer shall make contributions to the Plan without regard to whether the Company has current or accumulated income for the period during which such amounts
are being contributed and without regard to the age of the Participant. |
3.03. |
Pre-Tax and Roth Elective Deferral Contributions. |
|
(a) |
Any Participant may elect to have the Participating Employer make Elective Deferral Contributions to the Plan with respect to payroll periods ending on and after the effective date of such election in whole percentages
of Compensation otherwise payable during such respective payroll periods in an amount of no less than 1% and no more than 75% of the Participants Compensation during the payroll period. Notwithstanding the foregoing, in lieu of
75%, the maximum percentage of Compensation that may be deferred in periods before September 16, 2002 is 16%, and for periods between September 16, 2003 and December 31, 2003 such maximum is 50%. A
Participant may submit a deferral election to the Plan at any time, specifying the amount and type of Elective Deferral Contributions (either Roth Elective Deferral Contributions, Pre-Tax Elective Deferral Contributions, or a specific combination)
to be withheld from each paycheck. Such election will be effective as soon as administratively practicable. The Participant can elect to terminate the election or modify the amount and/or type of the election of the election at any time.
|
|
(b) |
With respect to periods during which Elective Deferral Contribution elections are in force for Participants, the Participating Employer shall contribute to the Plan an amount equal to the Elective Deferral Contribution
for each electing Participant by reducing the amount otherwise payable in his or her paychecks. Elective Deferral Contribution elections shall be subject to nondiscriminatory rules and procedures approved by the Plan Administrator in its discretion
from time to time. Elective Deferral Contribution elections are effective as soon as administratively practicable following receipt of the election request by the Plan Administrator, and may be prospectively revoked or modified effective as soon as
administratively practicable following receipt of such revocation or modification by the Plan Administrator. |
7
|
(c) |
Notwithstanding subsections (a) and (b), a Frontier Union Participant covered by an applicable collective bargaining agreement may make an advance election to have the Participating Employer make an Elective
Deferral Contribution on his or her behalf of an amount equal to such Participants Flex Credit Refund, if any. Such election shall be made in accordance with the provisions of the applicable cafeteria plan and may be revoked only to the extent
provided in such plan. Elective Deferral Contributions made pursuant to this subsection (c) are ineligible for Matching Contributions. For purposes of this Section 3.03(c), an applicable collective bargaining agreement means
any of the following: CWA 521, Iowa and Minnesota; RTWA; CWA 1170; IBEW 503, Monroe; IBEW 320, Sylvan Lake; and IBEW 1106, Michigan. |
|
(d) |
Notwithstanding subsections (a) and (b), to the extent permitted under the terms of his or her collective bargaining agreement a union Participant who, upon retirement, is scheduled to become eligible for coverage
under the Companys retiree medical plan may make an advance irrevocable election (i) to forego such retiree medical coverage in consideration of the Companys payment of the fixed payment amount provided under the terms of such
collective bargaining agreement (the Retiree Medical Opt-Out Payment), and (ii) to have the Retiree Medical Opt-Out Payment be contributed to his or her Account as an Elective Deferral Contribution in lieu of being paid to
the Participant in cash. A Participants Retiree Medical Opt-Out Payment is eligible for an elective deferral election only to the extent provided in this subsection (d). Elective Deferral Contributions made pursuant to this subsection
(d) on behalf of Employees covered by the IBEW Local 57 collective bargaining agreement are ineligible for Matching Contributions. |
|
(e) |
Notwithstanding subsections (a) and (b), for the 2006 Plan Year an Eligible CWA Local 7471 Participant may make an advance irrevocable election to have his or her Special One-Time Payment be contributed to his or
her Account as an Elective Deferral Contribution in lieu of being paid to the Participant in cash. For purposes hereof, a Special One-Time Payment means a payment made pursuant to the terms
of the CWA Local 7471 collective bargaining agreement to an Employee satisfying such minimum age and service eligibility criteria as are specified in such collective bargaining agreement for purposes of mitigating the discontinuance of the retiree
medical coverage to which such Employee might otherwise have been entitled upon his or her retirement. Elective Deferral Contributions made pursuant to this subsection are ineligible for Matching Contributions. |
|
(f) |
Maximum Contribution Under Code Section 402(g). The total amount of a Participants Elective Deferral Contributions during a Plan Year shall in no event exceed the amount specified in
Section 402(g) of the Code, as adjusted by the Secretary of the Treasury from time to time. |
8
|
(g) |
Roth Elective Deferral Contribution Feature. Effective January 1, 2012, the Plan includes a Roth Elective Deferral Contribution feature. The provisions applicable to those contributions are set forth in this
Section 3.03(g). |
|
(1) |
Effective January 1, 2012, Participants are entitled to designate some or all of their Elective Deferral Contributions as Roth Elective Deferral Contributions (pursuant to Section 402A of the Code), by
following the procedure for electing to make Elective Deferral Contributions described in Sections 3.03(a) and 3.03(b) of the Plan. |
|
(2) |
A Participants Roth Elective Deferral Contributions will be deposited in the Participants Roth Elective Deferral Account in the Plan. No contributions other than Roth Elective Deferral Contributions and
properly attributable earnings will be credited to each Participants Roth Elective Deferral Account, and gains, losses and other credits or charges will be allocated on a reasonable and consistent basis to such account. The Plan will maintain
a record of the amount of Roth Elective Deferral Contributions in each Participants Roth Elective Deferral Account. |
|
(3) |
Elective Deferrals contributed to the Plan as one type, either Roth Elective Deferral Contributions or Pre-tax Elective Deferral Contributions, may not later be reclassified as the other type. |
|
(4) |
If a Participant makes both Elective Deferrals and Roth Elective Deferral Contributions for a year, distribution of Excess Elective Deferrals will consist of a combination of both, to the extent such type of Elective
Deferrals was made for the year. |
|
(5) |
Except as specifically provided otherwise, Roth Elective Contributions will be treated as Elective Contributions and Roth catch-up contributions will be treated as catch-up contributions for all purposes under the Plan.
|
3.04. |
Catch-Up Contributions. All Employees who are eligible to make Elective Deferral Contributions under this Plan and who have attained or will attain age 50 before the close of the Plan Year shall be eligible to
make catch-up contributions in accordance with, and subject to the limitations of, Section 414(v) of the Code, any portion of which the Participant can designate as Pre-Tax or Roth. Such catch-up contributions shall not be taken into account
for purposes of the provisions of the Plan implementing the required limitations of Sections 402(g) and 415 of the Code. The Plan shall not be treated as failing to satisfy the provisions of the Plan implementing the requirements of
Section 401(k)(3), 401(k)(11), 401(k)(12), 410(b), or 416 of the Code, as applicable, by reason of the making of such catch-up contributions. |
3.05. |
Matching Contributions. |
|
(a) |
In General. Except as otherwise provided in Subsection (b), each Participant making Elective Deferral Contributions in a payroll period ending
during a Plan Year shall be entitled to have contributed to his or her Account a Matching |
9
|
Contribution in an amount equal to the applicable Match Rate multiplied by the Participants Elective Deferral Contributions in such payroll period; provided, however, that the
Participants Elective Deferral Contributions qualifying for such Matching Contribution shall be limited to the Match-Eligible Percentage of such Participants Compensation during such payroll period; and provided further that no Matching
Contributions shall be made once a Participants Elective Deferral Contributions have attained the limitation of Section 402(g) of the Code. Notwithstanding the foregoing, Matching Contributions shall be made with respect to a union
Participant only to the extent provided by the applicable collective bargaining agreement. |
|
(b) |
For Frontier Union Employees. Each Frontier Union Participant making Elective Deferral Contributions and/or Voluntary After-Tax Contributions in a payroll period ending during a Plan Year shall be entitled to
have contributed to his or her Account a Matching Contribution in an amount equal to the applicable Match Rate multiplied by the Participants combined Elective Deferral Contributions and Voluntary After-Tax Contributions in such payroll
period, provided, however, that the combined amount of Elective Deferral Contributions and Voluntary After-Tax Contributions qualifying for such Matching Contribution shall be limited to the Match-Eligible Percentage of such Participants
Compensation during such payroll period. |
|
(c) |
Allocation of Matching Contributions. Matching Contributions shall be allocated to Participants Matching Contribution Accounts as provided in Section 4.02. Matching Contributions are subject to the
limitations of Article VII and may be limited, adjusted, recharacterized or returned in accordance with the provisions of Article VIII. |
|
(d) |
Definitions. For purposes of this Section 3.05 the following terms have the meanings set forth below: |
|
(1) |
Match Rate shall mean: |
|
(i) |
With respect to Participants not described in clauses (ii) or (iii) below: 50%; |
|
(ii) |
With respect to GTE 2000 Nonunion Participants for Plan Years ending prior to January 1, 2006: 75%; and |
|
(iii) |
With respect to Participants who are covered by a collective bargaining agreement, the matching percentage (if any) provided under such collective bargaining agreement. |
|
(2) |
Match-Eligible Percentage shall mean: |
|
(i) |
With respect to Participants not described in clauses (ii) or (iii) below: 8% (6% for payroll periods ending before January 1, 2011); |
10
|
(ii) |
With respect to Frontier Union Participants: the ceiling (expressed as a maximum percentage of Compensation) on combined Elective Deferral Contributions and Voluntary After-Tax Contributions that are eligible for a
Matching Contribution, as determined under the applicable collective bargaining agreement; |
|
(iii) |
With respect to Participants (other than Frontier Union Participants) who are covered by a collective bargaining agreement, the ceiling (expressed as a maximum percentage of Compensation) on Elective Deferral
Contributions that are eligible for a Matching Contribution, as determined under the applicable collective bargaining agreement. |
Notwithstanding the foregoing, the Retirement Committee, on behalf of the Company or any Participating Employer, may elect prior to the
beginning of any Plan Year a different Match Rate (which may be 0%) or a different Match-Eligible Percentage for any particular group of Participants (other than Participants covered under a collective bargaining agreement) for such Plan Year.
3.06. |
Supplemental Profit-Sharing Match. |
|
(a) |
In General. The Company shall contribute a Supplemental Profit-Sharing Match with respect to any Plan Year to the extent provided in this Section 3.06. A Supplemental Profit-Sharing Match is a supplemental
matching contribution made by the Company that is contingent upon the Companys exceeding its financial targets. |
|
(1) |
In General. In the event that a Supplemental Profit-Sharing Match is made with respect to a Plan Year, subject to the provisions of Section 3.06(b)(2) a Participant shall be eligible to share in such
Supplemental Profit-Sharing Match if he or she satisfies each of the following requirements: |
|
(i) |
the Participant is not covered by a collective bargaining agreement (other than one that specifically provides for participating in the Supplemental Profit-Sharing Match feature of the Plan); |
|
(ii) |
the Participant made Elective Deferral Contributions for such Plan Year in a total amount of not less than 1% of such Participants Compensation for such Plan Year; and |
|
(iii) |
one of the following requirements is satisfied: |
|
(A) |
such Participant has active-employee status on the last day of such Plan Year; |
11
|
(B) |
such Participant is on Permanent Disability on the last day of the Plan Year; |
|
(C) |
such Participant is on a military leave of absence on the last day of the Plan Year; or |
|
(D) |
Such Participant is an Employee of a business in the Companys Public Service Division that is divested (whether by sale, merger, or otherwise) by the Company during a Plan Year and is an Employee on the day
immediately preceding the closing date of such divestiture. |
|
(2) |
GTE 2000 Nonunion Participants, Before 2006. GTE 2000 Nonunion Participants shall be ineligible to participate in the Supplemental Profit-Sharing Match feature of the Plan until the Plan Year beginning
January 1, 2006. |
|
(c) |
Amount of Contribution. The Supplemental Profit-Sharing Match (if any) for a Plan Year allocable to the Account of a Participant who is eligible for such contribution under Subsection (b) shall be equal to
the Supplemental Match Rate for such Plan Year multiplied by the Participants Compensation for the Plan Year. |
|
(d) |
Supplemental Match Rate. The Supplemental Match Rate for a Plan Year shall be a function of the amount, if any, by which Corporate EBITDA for the Companys fiscal year coinciding with the Plan Year exceeds
the Corporate EBITDA target established by the Board of Directors for such fiscal year, as determined (except as otherwise provided by the applicable collective bargaining agreement) by the following schedule: |
|
|
|
If Actual Corporate EBITDA exceeds
Target Corporate EBITDA by . . . |
|
The Supplemental Match Rate is . . . |
Less than 1% |
|
0% |
At least 1% but less than 2% |
|
0.5% |
At least 2% but less than 3% |
|
1.0% |
At least 3% but less than 4% |
|
1.5% |
At least 4% but less than 5% |
|
2.0% |
At least 5% but less than 6% |
|
2.5% |
6% or more |
|
3.0% |
With respect to Participants described in 3.06(b)(1)(iii)(D) who are employed by a Public Service unit that
is sold or otherwise divested by
12
the Company before the end of a Plan Year, the Retirement Committee may determine that the Supplemental Match Rate will be based on year-to-date Corporate EBITDA as of the last day of the month
coinciding with or next following the date of the sale, in which case it may prorate or otherwise adjust the Corporate EBITDA targets in such manner as it deems appropriate in its sole discretion.
3.07. |
Fixed Contributions (for Certain Union Participants). With respect to any Plan Year, the Company shall, to the extent provided by the applicable collective bargaining agreement, contribute Employer Fixed
Contributions with respect to union Participants. Except as otherwise provided by the applicable collective bargaining agreement, Fixed Contributions (i) shall be determined as a fixed percentage of a Participants Compensation during the
Plan Year, and (ii) shall be available only with respect to a Participant who is an Employee on the last day of such Plan Year or terminates employment during such Plan Year by reason of retirement or Permanent Disability. Alternatively, if so
provided in the collective bargaining agreement, Fixed Contributions shall be contributed on a payroll period by payroll period basis in an amount equal to a fixed percentage of a Participants Compensation during such payroll period. Fixed
Contributions may be made without regard to whether or not the Participating Employer has net profits. |
3.08. |
Discretionary Contributions. With respect to any Plan Year, the Company may elect to make a Discretionary Contribution on behalf of one or more collectively bargained or non-collectively bargained groups of
employees. Except as otherwise provided by the collective bargaining agreement, Discretionary Contributions shall be determined as a percentage of a Participants Compensation during the Plan Year. Such contributions may be made without regard
to whether or not the Participating Employer has net profits. |
3.09. |
Special Transition-Year Contributions. |
|
(a) |
In General. To the extent provided in the applicable collective bargaining agreement, the Company shall with respect to the Transition Year make a one-time Special Transition-Year Contribution to the Account of
an eligible Participant. The purpose of such Special Transition-Year Contributions is to mitigate the effect of a change in the terms of such collective bargaining agreement that results in the cessation of Matching Contributions to the Accounts of
Participants who are subject to such collective bargaining agreements. |
13
|
(b) |
Eligibility. Special Transition-Year Contributions shall be subject to the following eligibility rules except as otherwise set forth in the applicable collective bargaining agreement. |
|
(1) |
Unreduced Contribution. A Participant shall be eligible to have a Special Transition-Year Contribution credited to his Account for the Transition Year if he satisfies the following eligibility requirements:
|
|
(i) |
The Participant is subject to a collective bargaining agreement that provides for Special Transition-Year Contributions for the Transition Year; |
|
(ii) |
The Participant had an Elective Deferral Contribution election in effect on the Active Participation Testing Date; and |
|
(iii) |
The Participant is an Employee (and, if required by the applicable collective bargaining agreement, had an Elective Deferral Contribution election in effect) on the first day of the Transition Year (or on such other day
during the Transition Year as may be specified in the applicable collective bargaining agreement). |
|
(2) |
Reduced Contribution. To the extent provided under the applicable collective bargaining agreement, a Participant who would qualify for a Special Transition-Year Contribution pursuant to Section 3.09(b)(1)
but for the fact that he was not actively participating in the Plan on the Active Participation Testing Date, but who on the Active Participation Testing Date has an Account Balance attributable to previous active participation in the Plan, shall be
eligible for a Special Transition-Year Contribution in such reduced amount as the collective bargaining agreement may specify. |
|
(c) |
Amount of Contribution. The amount of a Special Transition-Year Contribution shall be such flat dollar amount as may be determined under the terms of the applicable collective bargaining agreement.
|
|
(1) |
Active Participation Testing Date shall mean the date specified in the applicable collective bargaining agreement as of which a Participant must be actively participating in the Plan in order to
qualify for an unreduced Special Transition-Year Contribution. |
14
|
(2) |
Transition Year shall mean the first Plan Year for which the applicable collective bargaining agreement ceases to provide for Matching Contributions. |
3.10. |
Deductibility Limit. The sum of the contributions made pursuant to Sections 3.05, 3.06, 3.07, 3.08, and 3.09 generally shall not exceed the amount deductible for federal income tax purposes, currently 25% of the
total Compensation of Participants for the fiscal year of the Company with respect to which such contributions are made. |
3.11. |
Timing of Contributions. |
|
(a) |
Elective Deferral Contributions shall be paid to the Trustee as soon as they can be reasonably segregated, but in no event later than the 15th business day following the end of the month in which the reduced amounts
would have been paid to Participants if no Elective Deferral Contribution election had been in force. |
|
(b) |
Matching Contributions shall be paid to the Trustee coincident with or as soon as administratively practicable following the Elective Deferral Contributions to which they relate. |
|
(c) |
Supplemental Profit-Sharing Matches shall be paid to the Trustee as soon as administratively practicable following the publication of final Corporate year-end financial results (or, in the case of Participants affected
by a divestiture described in Section 3.06(b)(1)(iii)(D) (relating to divestitures of business units in the Companys Public Service sector), as soon as administratively practicable following the determination of the Supplemental Match
Rate applicable to such Participants. |
|
(d) |
Fixed Contributions shall be paid to the Trustee on a payroll-period by payroll-period basis except as otherwise provided under the terms of any applicable collective bargaining agreement. |
|
(e) |
Discretionary Contributions shall be paid to the Trustee on a payroll-period by payroll-period basis except as otherwise provided under the terms of any applicable collective bargaining agreement. |
|
(f) |
Company contributions with respect to a Plan Year shall in no event be paid to the Trustee later than the due date (including extensions) of the Companys federal tax return for the fiscal year of the Company
coinciding with the Plan Year, or within which the Plan Year ended. |
3.12. |
Voluntary After-Tax Contributions. |
|
(a) |
No Participant contributions shall be required under the Plan. |
15
|
(b) |
Voluntary After-Tax Contributions shall be permitted under the Plan (i) for any Participant, effective January 1, 2012, and (ii) prior to January 1, 2012, only in the case of Pre-2012 VATC-Eligible
Participants in accordance with Subsection (c). Further, to the extent that after-tax contribution account balances have been or will be transferred to the Plan, whether as a result of a plan merger or a trust-to-trust transfer from another
qualified defined contribution plan, the Plan shall maintain a Voluntary After-Tax Contribution Account on behalf of those Participants credited with such balances as of the merger or transfer in question. |
|
(c) |
A Participant who is eligible to make Voluntary After-Tax Contributions pursuant to Subsection (b) above may elect to make such contributions in whole percentages of Compensation payable in payroll periods ending
on and after the effective date of such election. The Plan Administrator may specify a minimum election (such as 1% of such Participants Compensation) and a maximum election (such as 25%, and has the option of establishing a lower maximum
election for Highly Compensated Employees). For periods before January 1, 2012, the maximum election was and no more than (i) 50% (16% prior to September 16, 2002) of the Participants Compensation in such payroll periods,
reduced by (ii) the percentage of the Participants Compensation with respect to which an Elective Deferral Election is in effect with respect to such payroll periods. All Voluntary After-Tax Contributions shall be made through withholding
from the Participants paychecks. |
|
(d) |
Any after-tax contribution elections previously made by Frontier Nonunion Participants under the predecessor Frontier savings plan from which such Participants account balances were transferred to this Plan were
given effect as if such elections had been under this Plan, and such transferred elections remained in effect from July 1, 2001 through April 15, 2003. Solely for purposes of the Matching Contribution provisions of Section 3.05(a),
Voluntary After-Tax Contributions made pursuant to such elections shall be treated as if they were Elective Deferral Contributions. The Frontier Nonunion Participants with respect to whom such elections were effective are deemed to be Pre-2012
VATC-Eligible Participants during the periods of effectiveness of such elections (July 1, 2001 through April 15, 2003). Except as otherwise provided in this subsection (d), no Voluntary After-Tax Contributions may be made by Frontier Nonunion
Participants. The provisions of this Section 3.12(d) shall be effective July 1, 2001. |
16
3.13. |
Investment of Contributions. |
|
(a) |
Generally. All contributions under the Plan shall be added to the Fund held by the Trustee under the Trust Agreement, to be managed, invested, reinvested and distributed in accordance with the Plan, the Trust
Agreement and any agreement with an insurance company or other financial institution constituting a part of the Plan and Fund. The management and control of the assets of the Plan shall be vested in the Trustee designated by the Company, provided
that the Company may appoint one or more investment managers to manage, acquire or dispose of any assets of the Plan. Notwithstanding any other provision in the Plan, the Trustee shall not permit any investment of Global Stock, other than such stock
already held by Participants in their Global Stock Accounts. |
|
(b) |
Participant Directed Investments. The Plan Administrator is authorized and directed to maintain a program, to be administered in a uniform and
non-discriminatory manner, whereby a Participant, an alternate payee or, in the event of a Participants death, a Beneficiary, may direct the investment of the Participants Account into the ESOP Portion and/or investment funds within the
Non-ESOP Portion of the Plan, including transfers between such respective portions of the Plan as well as transfers among the investment funds within the Non-ESOP Portion. Contributions (other than contributions which, pursuant to the terms of the
Plan, are invested in Company Stock) for which no Participant investment direction has been received shall be invested in the age-appropriate T. Rowe Price Retirement Ready Fund, each of which funds is intended to qualify as a qualified
default investment alternative (QDIA) within the meaning of final regulations promulgated by the Department of Labor under Section 404(c) of ERISA. By virtue of such Participant-directed investments and QDIAs, the Plan is
intended to constitute a plan described in Section 404(c) of ERISA and the final regulations issued thereunder. As such, the fiduciaries of the Plan may be relieved of liability for any losses that are the direct and necessary result of the
exercise of investment control by the Participant or Beneficiary. However, the Participant or Beneficiary shall not be deemed to be a plan fiduciary by reason of the exercise of control over the investment of his Account. Participant investment
directions shall be subject to such rules and regulations as to the timing and frequency of investment changes, limitations, allocations of expenses, transaction and brokerage fees, and other aspects of Plan administration as the Investment
Committee may from time to time establish in writing. The Company may change the types of investments offered from time to time, and may add or delete any particular investment option by resolution of the Board of Directors or the Investment
Committee if so authorized by the Board. All expenses directly or indirectly caused or incurred as a result of individual |
17
|
investment direction shall be paid from and constitute a charge against the respective account of a Participant requesting such individual investment direction. |
|
(c) |
ESOP and Company Stock Fund Provisions. |
|
(1) |
Company Stock Fund. The Trustee shall maintain a Company Stock Fund which is specifically designed and intended to invest primarily in Company Stock. Except to the extent allocated to the Accounts of Mohave
Employees, the portion of the Plan consisting of the Company Stock Fund is intended to be an employee stock ownership plan satisfying the requirements of Sections 401(a) and 4975(e)(7) of the Code and is intended to enable eligible employees to
acquire stock ownership interests in the Company by investing in Company Stock. The portion of the Company Stock Fund allocated to the Accounts of Participants who are current or former Mohave Employees shall be part of the Non-ESOP Portion of the
Plan. |
|
(2) |
Acquisition of Company Stock. Stock for the Company Stock Fund shall be purchased by the Trustee regularly on the open market, unless otherwise directed by the Retirement Committee. If so directed by the
Retirement Committee, the Trustee shall acquire treasury stock, newly issued shares of Company stock previously authorized but unissued, or stock from private purchase. |
|
(i) |
Election. Each Participant or Beneficiary shall be given an election, in accordance with such rules as the Administrator shall adopt and with the provisions of Section 404(k)(2)(A)(iii) of the Code, to have
cash dividends that are paid on shares of Company Stock in the ESOP portion of such Participants or Beneficiarys Account be either (x) reinvested in the Company Stock Fund, or (y) distributed in cash to the Participant no later
than 90 days after the end of the year in which the dividend is paid to the Plan. Any such election shall remain in effect until changed by the Participant or Beneficiary. A Participant or Beneficiary who fails to make an affirmative initial
election by the deadline established by the Administrator for such an election shall be deemed to have made an initial election to have such dividends reinvested in the Company Stock Fund. |
18
|
(ii) |
Vested Status of Reinvested Dividends. Notwithstanding any provision herein to the contrary, the portion of a Participants Account attributable to the reinvestment of cash dividends on Company Stock
pursuant to an election under Section 3.13(c)(3)(i) shall be accounted for separately and 100% vested at all times. |
|
(iii) |
Other Distributions. All dividends, distributions, gain or income attributable to Company Stock (x) in the ESOP and not described in Section 3.13(c)(3)(i) or (y) in the Non-ESOP Portion of the Plan
shall be reinvested in the Company Stock Fund. |
|
(d) |
Investment and Diversification of TRASOP Account. |
|
(1) |
In General. The TRASOP Account of each Participant shall be invested in Company Stock. Except as otherwise provided in Section 3.13(d)(2), however, within 90 days after the close of the first calendar year
in which a Participant has both reached age 55 and completed at least 10 years of participation in the TRASOP, and within 90 days of the close of each of the five succeeding calendar years (the Qualified Election Period), the Participant
may elect to redirect the investment of 25% (50% in the case of the last calendar year in the Qualified Election Period) of that portion of his TRASOP Account, determined as of the end of the prior calendar year, which is attributable to Company
Stock allocated to his TRASOP Account after 1986 (Post-1986 Shares), reduced by the amount of the TRASOP Account previously diversified; provided, however, that such diversification right shall apply only while the Participant is an
Employee. |
|
(2) |
De Minimis Exception. A diversification election is not available under Section 3.13(d)(1) in a calendar year if, as of the respective Valuation Dates immediately preceding the first day of such year and of
each prior year in the Participants Qualified Election Period, the market value of the Post-1986 Shares allocated to a Participants TRASOP Account does not exceed $500. |
|
(e) |
Investment and Diversification of LGS Account. Participants with account balances derived from the LGS Employees Savings and Investment Plan which are invested in Company Stock may elect to transfer amounts
from their LGS Accounts to any of the other permitted Participant directed investments under the Plan, in accordance with uniform and nondiscriminatory rules established by the Plan Administrator. |
19
|
(f) |
Pre-1992 Investment in Life Insurance. Prior to January 1, 1992, a Participant was permitted to elect to invest a portion of his Elective Deferral Contribution in certain life insurance investments made
available under the Plan. On and after January 1, 1992, any Participant who had not elected to invest in life insurance was no longer permitted to choose that investment; however, Participants who already had made such an investment election
were permitted to continue to service the policies in the Plan. |
|
(1) |
Limitations on Insurance Investment. Any Participant electing to invest in life insurance prior to January 1, 1992 may elect to invest a portion of his Elective Deferral Account in individual or group
insurance policies covering the Participant, his spouse or his children, and in individual group annuity contracts issued by one or more insurance companies. Such investment shall be deemed a separate investment of the Participants Elective
Deferral Account and premiums on such polices shall be charged to such Account. No more than 49.99% of the aggregate amount of a Participants Elective Deferral Contributions may be invested in universal life insurance contracts on the life of
the Participant or his spouse or children. No more than 24.99% of the aggregate amount of a Participants Elective Deferral Contributions may be invested in term life insurance contracts on the life of the Participant, his spouse or children.
If both universal and term life insurance contracts are purchased, the sum of the annual term life insurance premium, plus one-half of the universal life insurance premium may not exceed 24.99% of the Participants Elective Deferral
Contributions for the Plan Year in question. |
|
(2) |
Treatment of Policy Dividends. Any dividends that become payable on any contracts shall be used to provide additional benefits for the Participant. |
|
(3) |
Borrowing. A Participant may not borrow amounts from insurers issuing such policies or use such policies as security for a loan; however, the trustee, with the consent of the Plan Administrator, may borrow
against the policies to fund loans under Section 6.01. |
|
(4) |
Distribution. Upon distribution of a Participants Elective Deferral Account Balance, the Participant may elect (A) to direct the Trustee to convert into cash the entire value of any individual policies
or contracts purchased, and to credit such amount to the Participants Elective Deferral Account or, alternatively, (B) to receive a distribution of the policies or contracts intact. |
20
|
(5) |
Beneficiary of Policy on Participant. The Trustee shall be the named beneficiary of any insurance policy on the Participants life held under the Plan. In the event of the death of the Participant prior to
the distribution or cashing out of the policy, the proceeds from such policy shall be added to the Participants vested Account Balance and distributed to the Participants Beneficiary as determined in accordance with Section 6.04.
|
|
(6) |
Beneficiary of Policy on Spouse or Child. To the extent that a Participants Elective Deferral Account is invested in a life insurance policy on the life of the Participants Spouse or children, the
beneficiary under such a Policy shall be the Participant. |
|
(7) |
Sunset Provision. Notwithstanding anything to the contrary in this Section 3.13, no portion of a Participants Account may be invested in a life insurance policy on or after December 1, 2003. The
Plan Administrator shall provide Participants whose Account investments include one or more life insurance policies the opportunity in advance of such date to elect to purchase such policies from the Plan in a transaction complying with Prohibited
Transaction Class Exemption 92-6. Any life insurance policies with respect to which a Participant does not make such a purchase election shall be surrendered by the Plan, and the cash proceeds thereof shall be invested in accordance with the
Participants election then in effect for the investment of new contributions. |
3.14. |
Reversion of Contributions to the Company. No contributions shall revert to the Company, except that: |
|
(a) |
in the case of a contribution or portion thereof which is made by a Participating Employer by mistake of fact, the amount contributed by mistake may be returned to the Participating Employer making the contribution upon
its request within one year after the payment thereof; |
|
(b) |
the Companys contributions under Section 3.02 hereby are conditioned on qualification of the Plan under Section 401 of the Code, and if the Plan does not initially qualify, such contributions shall be
returned to the Participating Employer making the contributions upon its request within one year after the date of denial of qualification of the Plan; |
|
(c) |
the Companys contributions under Section 3.02 hereof hereby are conditioned on their deductibility under Section 404 of the Code and, to the extent not so deductible, such contributions shall be returned
to the Participating Employer making the contribution upon its request within one year after the disallowance of the deduction; and |
21
|
(d) |
in the event the Plan terminates at a time where there are unallocated funds in a suspense account provided for in the Plan in order to comply with the limitations under Section 415 of the Code, any and all such
funds shall be returned to the Company upon its request. |
Notwithstanding the foregoing, no refund shall be made from the
Fund of any property or funds otherwise subject to refund hereunder which have been distributed to Participants or Beneficiaries. In the case that such distributions become refundable, the Company shall have a claim directly against the distributees
to the extent of the refund to which it is entitled. No interest shall be paid to the Company with respect to any refundable contribution. In determining the amount to be refunded pursuant to Sections 3.14(a) or (c), the refund shall be reduced by
any net loss attributable to the contribution to be refunded, but shall not be increased by any net gain so attributable.
3.15. |
Expenses of Plan Amendment and Administration. |
|
(a) |
In General. The expenses of amending, restating and administering the Plan and Fund shall be paid by the Fund, to the extent not paid directly or reimbursed by the Company. The Company may advance funds to the
Plan for the payment of Plan ordinary operating and administrative expenses, and shall be entitled to be reimbursed therefor from the Plan without interest. Administrative expenses include fees and expenses of the Fiduciaries of the Plan for the
performance of their duties under the Plan, reasonable fees and expenses of any legal counsel, accountant, actuary or agent for authorized services rendered in respect of the Plan and all other proper charges and disbursements in respect of the Plan
(including settlements of claims or legal actions approved by legal counsel to the Plan). The members of the Retirement Committee and any other committee permitted under the Plan may receive reasonable compensation for their services, and shall be
reimbursed by the Company for all necessary expenses incurred in the discharge of their duties; expressly provided, however, that no member of any such committee who is receiving compensation as an employee of the Company may receive compensation
for his or her services as a member of a fiduciary committee. |
|
(b) |
Expenses Specifically Allocable to a Participants Account. |
|
(1) |
Individual Investment Direction. All expenses directly or indirectly caused or incurred as a result of individual investment direction shall be paid from and constitute a charge against the respective account of
a Participant requesting such individual investment direction. |
22
|
(2) |
Loan Origination and Maintenance Fees. The Plans loan procedures may provide that a Participants accounts will be charged with a loan origination fee and or periodic maintenance fees with respect to
any loan to such Participant. |
3.16. |
Fund is Sole Source of Benefits. The Fund shall be the sole source of benefits under the Plan. No Participating Employer nor any other Fiduciary of the Plan guarantees the Fund in any manner against investment
loss or depreciation in asset value or assumes any liability or responsibility for payment out of its or his own assets of any benefits promised under the Plan. Each Participant, Beneficiary or other person who shall claim the right to any payment
under or in respect of the Plan shall bear all risk in connection with any decrease in the value of the assets of the Fund or in their Account. Any Participant, Beneficiary or other person claiming any benefit under or in respect of the Plan shall
be entitled to look only to the Fund for such payment and, unless otherwise required by applicable law, shall not have any right, claim or demand therefor against any Participating Employer or any other Fiduciary of the Plan. |
3.17. |
Rollover Contributions. The Plan may receive, on behalf of a Participant, Rollover Contributions (including direct rollovers) representing all or part of the entire amount of any distribution from the following
types of plans: |
|
(a) |
a qualified plan described in Section 401(a) or 403(a) of the Code, excluding after-tax employee contributions; |
|
(b) |
an annuity contract described in Section 403(b) of the Code, excluding after-tax employee contributions; or |
|
(c) |
an eligible plan under Section 457(b) of the Code which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state;
|
provided that no distribution may be rolled over to the Plan to the extent that it consists of amounts distributed on
account of hardship, is a distribution made to comply with the minimum required distribution rules of Code Section 401(a)(9) of the Code, or is one of a series of substantially equal periodic payments made over the life (or life expectancy) of
the Participant or the joint lives (or joint life expectancies) of the Participant and his designated Beneficiary, or for a specified period of ten years or more.
The Plan will accept a Participant rollover contribution of the portion of a distribution from an individual retirement account or annuity
described in Section 408(a) or 408(b) of the Code that is eligible to be rolled over and would otherwise be includible in gross income.
The Plan will accept a direct rollover from another Roth elective contributions account under an applicable retirement plan described in Code
section 402A(e)(1) and only to the extent the rollover is permitted under the rules of Code section 402(c).
23
With respect to a determination that the distributing plan meets the requirements of
Section 401(a) of the Code, evidence that the distributing plan has received a favorable determination letter from the Internal Revenue Service shall not be necessary for the Plan Administrator to reach the conclusion, in good faith, that such
Rollover Contributions appear to be valid.
Rollover Contributions may be invested in any manner authorized under the provisions of the
Plan.
3.18. |
Trust-to-Trust Transfers. The Plan may receive trust-to-trust transfers representing a Participants interest in a qualified retirement plan. In its sole discretion, the Plan Administrator may refuse to
permit transfers from any plan subject to Sections 401(a)(11) or 417 of the Code. Transfers may be invested in any manner authorized under the provisions of the Plan or may be segregated and invested separately according to the provisions of the
transferor plan. |
3.19. |
Suspension of Elective Deferral Contributions and Voluntary After-Tax Contributions. The following provisions shall apply with respect to suspension of Elective Deferral Contributions and Voluntary After-Tax
Contributions. |
|
(a) |
Elective Suspension. An Active Participant may elect to suspend his Elective Deferral Contributions and Voluntary After-Tax Contributions effective as soon as administratively practicable following receipt by the
Plan Administrator of the notice of suspension. |
|
(b) |
Suspension for Military Leave. A Participant who is absent from employment on account of an authorized leave of absence or military leave shall have his Elective Deferral Contributions and Voluntary After-Tax
Contributions suspended during such leave. Such suspension of Contributions shall be effective on the date payment of Compensation by the Company to him ceases, and shall remain in effect until payment of Compensation is resumed. At the expiration
of the suspension period described above, the Participants Elective Deferral Contribution and Voluntary After-Tax Contribution election shall automatically become effective again and such applicable contributions shall be resumed on behalf of
the Participant, subject to applicable requirements for making up Elective Deferral Contributions and Voluntary After-Tax Contributions in accordance with the requirements of Section 414(u) of the Code and regulations issued thereunder.
|
24
3.20. |
Collective Bargaining Agreement. The provisions of an applicable collective bargaining agreement may supersede the provisions of this Article with respect to a Participant covered under such agreement (for
example, by changing the amount a Participant may defer or the matching contribution formula). |
ARTICLE IV
ALLOCATIONS AND ACCOUNTS
4.01. |
Separate Accounts. The Plan Administrator shall maintain, or cause to be maintained, separate accounts including, as applicable, a Participants Elective Deferral Accounts, Roth Elective Deferral Account,
Matching Contribution Accounts, Supplemental Profit-Sharing Match Accounts, Discretionary Contribution Accounts, Fixed Contribution Accounts, Rollover Accounts, Transferred Accounts, TRASOP Accounts, LGS Accounts, Global Stock Accounts, and
Voluntary After-Tax Contribution Accounts, and such other accounts as the Plan Administrator may determine to be appropriate from time to time. Except as may be required in Section 3.17 or Section 3.18, the establishment and use of such
accounts shall not require a segregation of fund assets, all of which may be administered as a single trust, nor vest in any Participant any right, title or interest in any specific assets of the fund. |
4.02. |
Valuation and Allocation of the Fund. With respect to Participant directed investment accounts, the Plan Administrator shall revalue each Account separately. All income earned, expenses incurred and profits and
losses realized and unrealized with respect to each Participant directed investment during the period since the last valuation shall be determined in accordance with acceptable accounting methods reasonably and consistently applied and shall be
added to, or deducted from, the Account of each Participant, based on the amount in each Participant directed investment as of the preceding valuation date. So long as mutual funds are offered for investment of Participants Accounts, such
Accounts shall be credited daily with the income paid by the particular investment vehicle in which such Account, or portion thereof, is invested. The unrealized appreciation or depreciation of the particular investment shall be reflected in the
daily closing balance of each such Account. The Plan Administrator shall provide each Participant with a statement as soon as administratively practicable following the end of each calendar quarter showing the value of each Participants
Account (including sub-Accounts) as of the close of the last business day of the calendar quarter just ended. Life insurance policies held under the Plan shall be treated as segregated assets the value of which shall be added to the Accounts of the
Participants whose benefits are to be paid in whole or part through such contracts or policies. |
4.03. |
Account Balance Subject to Change Until Distributed. A Participants Account Balance shall remain subject to revaluation and other change in accordance with the provisions of the Plan until actually
distributed from the Fund to the Participant or his Beneficiaries. |
25
ARTICLE V
BENEFITS AND VESTING
5.01. |
Benefits Based on Account Balances. The Plan is a defined contribution profit sharing plan with a cash or deferred arrangement pursuant to Section 401(k) of the Code under which a Participants benefits
consist solely of distributions of such Participants Account Balance. No particular level of benefits is guaranteed or assured under the Plan. All distributions shall be based upon the Current Market Value of assets in the Participants
Account as of the Valuation Date on which the distribution is processed. |
5.02. |
Fully Vested Accounts. A Participant shall at all times be fully vested in such Participants Elective Deferral, Roth, Transferred Frontier Savings Plan, TRASOP, LGS, Voluntary After-Tax, and Rollover
Accounts, if any, under the Plan. |
5.03. |
Vesting in Matching Contribution, Discretionary Contribution, Fixed Contribution, Supplemental Profit-Sharing Match, and Special Transition-Year Contribution Accounts. |
|
(a) |
A Participants Matching Contribution Account, Supplemental Profit-Sharing Match Account, Discretionary Contribution Account, and Special Transition-Year Contribution Account shall be fully vested if the
Participant is employed by the Company or Related Employers on his Normal Retirement Date or the date of his death, or when he becomes Permanently Disabled. |
|
(b) |
Except as otherwise provided in Subsection (c) or (d) or in a Supplement hereto, if a Participant ceases to be employed by the Company or Related Employers prior to reaching his Normal Retirement Age for
reasons other than death or Permanent Disability, the Participants Matching Contribution Account, Supplemental Profit-Sharing Match Account, Discretionary Contribution Account, and Special Transition-Year Contribution Account, shall be vested
as of the date of such Participants severance from employment according to the following schedule: |
|
|
|
|
|
Years of Vesting Service |
|
Vested Percentage |
|
Less than 2 |
|
|
0 |
% |
2 |
|
|
40 |
% |
3 |
|
|
60 |
% |
4 |
|
|
80 |
% |
5 or more |
|
|
100 |
% |
26
|
(c) |
The Matching Contribution Accounts, Supplemental Profit-Sharing Match Accounts, Fixed Contribution Accounts, Special Transition-Year Contribution Accounts, Retiree Medical Opt-Out Contribution Accounts, and
Discretionary Contribution Accounts of all Frontier Union Participants, and, to the extent provided by the applicable collective bargaining agreement, GTE 2000 Union Participants shall be fully vested at all times. |
|
(d) |
If and to the extent that the Board of Directors of the Company or the Retirement Committee so determines by rules uniformly applicable to all Employees similarly situated with respect to such divestiture, an Employee
who, as of the closing date of a divestiture by the Company or a Related Employer (by sale, merger, consolidation or otherwise) of any business, was employed by such business and whose employment is transferred to the buyer shall be fully vested as
of such date with respect to his or her entire Account. |
|
(a) |
The unvested portion of a Participants Account shall be forfeited upon the earlier of (a) the distribution of the vested portion of the Participants Account or (b) the last day of the Plan Year in
which the Participant incurs five consecutive Breaks in Service. Forfeited amounts shall be applied first to the payment of Plan administrative expenses, to the extent not previously paid by the Company, with any excess being applied to reduce
future contributions of the Company and other Participating Employers. |
|
(b) |
Amounts from misclassification or mistake of fact which are not otherwise returnable to the Company shall be applied in the same manner as forfeitures in accordance with Subsection (a). |
|
(c) |
If a Participant who has incurred a Break in Service has received a distribution of the vested portion of the Account (Cash Out) as a result of ceasing to be an Employee, and was less than 100% vested in his
Account at such time, then the Participant shall have the right to repay to the Plan the amount of the Cash Out distribution. Such repayment must be made prior to the earlier of (i) five years from the individual rehire date, or (ii) the
completion of five consecutive one-year Breaks in Service following the date of the Cash Out distribution. If the Participant makes such repayment within the time specified, then any unvested portion of the Account that was forfeited will be
restored either out of forfeitures in such Plan Year or, if forfeitures are insufficient, by additional Company contributions. |
5.05. |
Changes in Vesting Provisions. The vested Account Balance of a Participant shall be nonforfeitable and shall not be reduced by any amendment to
the Plan |
27
|
unless such amendment is required or permitted by the Code or other law. In the event that the vesting provisions of the Plan are amended or the Plan is amended in any way that directly or
indirectly affects the computation of the Participants Account Balance vested percentage, or if the Plan is deemed amended by the application of the Top-Heavy provisions of Article IX, a Participant with at least three Years of Vesting Service
as of the later of the date such amendment is adopted or becomes effective may elect to have such Participants vested Account as of such date computed under the Plan without regard to such amendment. |
5.06. |
Protected Benefits. Any benefits provided under the Plan which are protected benefits under Section 411(d)(6) of the Code and regulations thereunder shall be available to Participants (and their
Beneficiaries) without regard to Employer consent or discretion. |
ARTICLE VI
LOANS AND IN-SERVICE WITHDRAWALS
6.01. |
Loans to Participants and Beneficiaries. The Plan Administrator is authorized in its sole discretion to establish and maintain a loan program in accordance with Section 408(b)(1) of ERISA and consistent with
the provisions of this Section 6.01. Only a Participant who is a Party in Interest as defined in Section 3(14) of ERISA (hereinafter collectively referred to as Eligible Borrowers) shall be eligible to participate in the loan
program. |
|
(a) |
General Rules. Any Eligible Borrower with a vested interest in an Account under the Plan may apply for a loan. Loan applications shall be approved or denied by the Plan Administrator within a reasonable period of
time after receipt. Loans shall be made available to all Eligible Borrowers on a uniform and reasonably equivalent basis, without regard to an individuals race, color, religion, sex, age or national origin. In reviewing a loan application, the
Plan Administrator shall consider only those factors that would be considered in a normal commercial setting by an entity in the business of making similar types of loans. Such factors may include the Eligible Borrowers creditworthiness and
financial need. If approved, the Plan Administrator shall direct the Trustee to make a loan to the Eligible Borrower. Any loan made to an Eligible Borrower shall be treated as a segregated investment of a portion of the Eligible Borrowers
Account. Loans shall be processed and made in accordance with rules and procedures from time to time adopted by the Plan Administrator in its discretion. Such rules and procedures shall be in a written document and are hereby incorporated herein by
reference. |
28
|
(b) |
Amount. Loans shall be made in amounts approved by the Plan Administrator in its discretion. Not more than two loans may be outstanding at a time. No loan shall be less than $500. No loan to the Eligible Borrower
shall exceed the lesser of: |
|
(1) |
$50,000, reduced by the highest outstanding balance of loans from the Plan to the Eligible Borrower during the one-year period ending on the day before the date the loan is made, or |
|
(2) |
one-half of the Eligible Borrowers vested Account Balance (exclusive of his or her TRASOP Account), minus (ii) the balance of all other loans from the Plan immediately preceding the date of the loan.
|
|
(c) |
Rate of Interest. All loans shall be considered a segregated investment of the Trust Fund and shall bear a reasonable rate of interest to be determined by the Plan Administrator taking into consideration the
interest rates being charged by regional and local banks, the prevailing prime rate and general economic conditions. The interest rate shall not exceed the maximum rate allowed by state or federal law, provided, however, that the Plan Administrator
shall have no obligation to make loans during any period in which the maximum rate allowed by state or federal law would not permit the loan to bear a reasonable rate of interest in light of the prevailing economic circumstances. |
|
(d) |
Term of Loan. All loans shall be for a maximum of five years or for such shorter term as the Plan Administrator may determine, provided, however, that loans made for the acquisition of a principal residence (or
to acquire a dwelling unit which within a reasonable time shall be used as the principal residence of the Eligible Borrower) may be for up to 15 years. |
|
(e) |
Security. All loans shall be secured by the pledge of the Eligible Borrowers vested Account Balance under the Plan. No more than 50% of an Eligible Borrowers Vested Account Balance (exclusive of his
or her TRASOP Account) determined as of the valuation date coincident with or immediately preceding the date of the loan may be used to secure a loan. |
|
(f) |
Repayment. All loans shall provide for substantially level amortization over the term of the loan, with payments of principal and interest made
not less frequently than quarterly, provided, however, that the Eligible Borrower may prepay the loan at any time without penalty. If an Eligible Borrower withdraws a portion or all of such individuals vested Account Balance or becomes
entitled to payment of benefits under the Plan, such payments or withdrawals shall first be applied toward any outstanding loan balance (including accrued interest), with |
29
|
the excess, if any, being paid directly to the individual. To the extent permitted by law, repayments will be suspended during an unpaid leave of absence or layoff for up to one year, although
interest will continue to accrue during these periods of suspension. Upon the Eligible Borrowers return to employment, the accrued interest will be added to his outstanding loan balance, and the individuals repayment amount will be
adjusted so that the loan is repaid by the latest permissible term for the loan, as determined under Section 6.01(d). If a leave of absence or layoff exceeds one year, the outstanding loan balance will become immediately due and payable as of
the end of the one-year period. If the Eligible Borrower is on leave of absence because of qualified military leave, loan repayments will be suspended under the Plan as permitted under Section 414(u)(4) of the Code. |
|
(g) |
Outstanding Loan Balance at Severance From Employment. Any distribution from the Plan following the Participants severance from employment shall be reduced by any outstanding loan balance (including accrued
interest) remaining unpaid at the time of such distribution. The portion of the loan paid in this manner shall be taxable as a distribution. |
|
(h) |
Loan Defaults. If a Participant fails to make an installment payment on an outstanding loan when due and such failure is not cured within 90 days after the payment first became due, the loan will be in default.
In the event of a default, the Plan is authorized to offset the entire outstanding amount of the loan (including accrued interest) against the Participants Account at the time the Participant becomes eligible for a distribution from the Plan.
The portion of the loan paid in this manner shall be taxable as a distribution. In the event the Participant is not eligible for a distribution from the Plan when the default occurs, the amount of principal and interest on the loan remaining unpaid
as of the date the loan defaults will be considered to be a deemed distribution and will be taxable to the Participant. However the loan will still be required to be repaid and interest will continue to accrue. |
6.02. |
In-Service Withdrawals. Except as otherwise provided in this Section, no benefits under the Plan shall be distributed to a Participant who remains employed by the Company (unless such Participant is Permanently
Disabled). Withdrawals under this Section shall be subject to uniform and nondiscriminatory rules and procedures (which, among other things, may limit the number of withdrawals per year, set maximum or minimum withdrawal amounts, and specify
required information to be provided) approved by the Plan Administrator in its discretion from time to time. |
|
(a) |
Age 59 1⁄2 Withdrawal. If the Participant is age 59 1⁄2 or older all or any portion of his entire vested Account may be withdrawn; provided, however, that Company common stock allocated to a Participants
|
30
|
TRASOP account may not be withdrawn earlier than the end of the 84th month following the month in which such stock was allocated to the
Participants Account. |
|
(b) |
Hardship Withdrawals. Upon application in the form and manner prescribed by the Plan Administrator, Hardship Withdrawals shall be available, on a reasonably equivalent basis and subject to the requirements set
forth in this Section 6.02(b) and such objective, uniform, and nondiscriminatory rules as my be prescribed by the Plan Administrator. |
|
(1) |
Hardship Substantiation. The Participant must provide written certification that a Hardship exists and that a Hardship Withdrawal is needed in order to alleviate the Hardship. Such certification shall further
represent that the Hardship cannot reasonably be relieved (i) through reimbursement or compensation by insurance or otherwise, (ii) by liquidation of the Participants assets, (iii) by cessation of Elective Deferral Contributions
or (if applicable) Voluntary After-Tax Contributions, or (iv) by other distributions or loans from plans maintained by Employer or any other employer, or (v) by borrowing from commercial sources on reasonable commercial terms. A
Participants certification shall be accompanied by documentary proof of the Hardship. Before obtaining a Hardship Withdrawal, a Participant, if eligible, shall be required to request a loan from the Plan and any distribution otherwise
available under the Plan. |
|
(2) |
Amount Available. The maximum amount a Participant may receive as a Hardship Withdrawal is the smaller of the following amounts: |
|
(i) |
The sum of the balances in his or her Elective Deferral Account and Roth Elective Deferral Account (exclusive of earnings credited thereon after December 31, 1988), and Rollover Account. |
|
(ii) |
The amount which the Participant certifies is necessary to satisfy his or her financial need (including any amounts necessary to pay any Federal, state, or local income taxes or penalties reasonably anticipated to
result from the Hardship Withdrawal). |
For purposes of clause (i) above, the portion of a Participants Elective
Deferral Account or Roth Elective Deferral Account invested in a Plan loan shall not be taken into account.
31
|
(3) |
Six-Month Suspension. The Participants elective contributions and employee contributions this and under all other plans maintained by Employer or a Related Employer shall be suspended for a period of six
months after the Hardship Withdrawal is made. Such suspension shall apply to all plans of deferred compensation, including stock purchase, stock option, and similar plans, but shall not apply to health or welfare plans. |
|
(4) |
Source of Withdrawal. A Hardship Withdrawal shall be made on a pro-rata basis, from a Participants Elective Deferral Contributions and Roth Elective Deferral Contributions (exclusive of earnings credited
thereon after December 31, 1988), and Rollover Account. Hardship Withdrawals may not be repaid. |
|
(c) |
Voluntary After-Tax Contribution Withdrawals. |
|
(1) |
In General. If a Participant has a Voluntary After-Tax Contribution Account Balance, he may request a withdrawal of some portion or all of thereof. Notwithstanding the foregoing, that portion of a
Participants TRASOP Account attributable to after-tax Participant contributions shall not be available for withdrawal prior to the Participant reaching
59 1⁄2, terminating service, or satisfying the provisions of Subparagraph (d) below. A Participant may withdraw all or any part of the fair market value
of his or her traceable pre-1987 Voluntary After-Tax Contributions without withdrawing the earnings attributable thereto. Post-1986 Voluntary After-Tax Contributions may be withdrawn only with a portion of the earnings thereon, determined by using
the following formula: DA [1 (V divided by V + E)], where DA is the distribution amount, V is the amount of voluntary contributions, and V + E is the amount of voluntary contributions plus the earnings attributable thereto. |
|
(2) |
Suspension of Contributions for Pre-2012 VATC-Eligible Participants. Any withdrawal from the portion of the Voluntary After-Tax Contribution Account that relates to post-2011 contributions or from a Pre-2012
VATC-Eligible Participants Voluntary After-Tax Contribution Account will result in an automatic suspension of the Participants right to make future Elective Deferral Contributions and Voluntary After-Tax Contributions for a period of six
months from the date of the withdrawal. During the period of suspension, Matching Contributions will also be suspended. Finally, after the Participant resumes making contributions to the Plan, no make-up contributions will be permitted for the
period of the suspension. |
32
|
(3) |
TRASOP In-Service Withdrawals. Any Participant who is actively employed and who has a TRASOP Account Balance may request a withdrawal from such TRASOP Account in Company Stock or cash with a value not exceeding
the amount of the Participants contributions to such TRASOP Account. No withdrawal may be made before the end of the 84th month following the last day of the month in which such contribution was allocated to his TRASOP Account.
|
ARTICLE VII
PAYMENT OF BENEFITS
7.01. |
Form and Timing of Distributions |
|
(1) |
Lump-Sum Distributions. Except as otherwise provided in this Article VII, a Participant who has had a severance from employment or who has become Permanently Disabled may at any time thereafter elect to receive
his or her vested Account Balance in a single sum. |
|
(2) |
Partial Distributions Permitted. In lieu of receiving his or her vested Account Balance in a single sum, a Participant described in Section 7.01(a)(1) may from time to time prior to his or her Required
Beginning Date elect to receive one or more partial distributions from such Participants remaining vested Account Balance. |
|
(3) |
Other Forms of Distribution. Effective January 1, 2003, no annuity or installment payment options are available under the Plan (including with respect to Participants whose severance from employment occurred
prior to that date and who had not commenced receiving annuity or installment distributions prior to that date), except as otherwise permitted in a Supplement. |
|
(b) |
Small-Sum Distributions. Notwithstanding Section 7.01(a), in the event that upon severance from employment the value of the
Participants vested Account Balance does not exceed $1,000, such vested Account Balance shall be paid in a single sum on such date as the Plan Administrator shall determine, which shall be no later than 12 months from the date of such
severance. If a Participant would have received a distribution pursuant to the preceding sentence but for the fact that his or her vested Account Balance exceeded $1,000 when the |
33
|
Participant terminated service, and if at a later time the Plan Administrator determines that such vested Account Balance is not greater than $1,000, the Participant will receive a distribution
of such Account Balance as soon as practicable thereafter. For purposes of this Section 7.01(b), if the value of a Participants vested Account Balance upon severance from employment is zero, the Participant shall be deemed to have
received a distribution of such vested Account Balance. |
|
(c) |
Section 401(a)(14) Compliance. Notwithstanding any provision herein to the contrary, a Participants vested Account Balance shall be distributed in compliance with Section 401(a)(14) of the Code.
|
|
(d) |
Required Begin Date. Notwithstanding any provision herein to the contrary, distribution of a Participants vested Account Balance shall begin no later than the Required Beginning Date.
|
|
(e) |
Benefit Claims. Unless and until the Plan Administrator establishes a procedure for paperless claims administration, distributions of benefits shall not be made until a written claim for benefits containing all
information reasonably necessary for the payment of benefits, together with such supporting evidence as the Plan Administrator may require, has been filed with the Plan Administrator. |
7.02. |
Section 401(a)(9) Compliance. The following required minimum distribution rules shall supersede any provision herein to the contrary. |
|
(1) |
Requirements of Treasury Regulations Incorporated. All distributions made pursuant to this Section 7.02 will be determined and made in accordance with the Treasury regulations under Section 401(a)(9) of
the Code. |
|
(2) |
TEFRA Section 242(b)(2) Elections. Notwithstanding the other provisions of this Section 7.02, distributions may be made under a designation made before January 1, 1984, in accordance with
Section 242(b)(2) of the Tax Equity and Fiscal Responsibility Act (TEFRA) and the provisions of the Plan that relate to Section 242(b)(2) of TEFRA. |
|
(b) |
Required Minimum Distributions During Participants Lifetime. |
|
(1) |
Amount of Required Minimum Distribution for Each Distribution Calendar Year. During the Participants lifetime, the minimum amount that will be distributed for each distribution calendar year is the lesser
of: |
34
|
(i) |
the quotient obtained by dividing the Participants account balance by the distribution period in the Uniform Lifetime Table set forth in Section 1.401(a)(9)-9 of the Treasury regulations, using the
Participants age as of the Participants birthday in the distribution calendar year; or |
|
(ii) |
if the Participants sole designated beneficiary for the distribution calendar year is the Participants spouse, the quotient obtained by dividing the Participants account balance by the number in the
Joint and Last Survivor Table set forth in Section 1.401(a)(9)-9 of the Treasury regulations, using the Participants and spouses attained ages as of the Participants and spouses birthdays in the distribution calendar
year. |
|
(2) |
Lifetime Required Minimum Distributions Continue Through Year of Participants Death. Required minimum distributions will be determined under this Section 7.02(b) for each calendar year and up to and
including the distribution calendar year that includes the Participants date of death. |
|
(c) |
Required Minimum Distributions After Participants Death. |
|
(1) |
Death On or After Date Distributions Begin. |
|
(i) |
Participant Survived by Designated Beneficiary. If the Participant dies on or after the date distributions begin and there is a designated beneficiary, the minimum amount that will be distributed for each
distribution calendar year after the year of the Participants death is the quotient obtained by dividing the Participants account balance by the longer of the remaining life expectancy of the Participant or the remaining life expectancy
of the Participants designated beneficiary, determined as follows: |
|
(A) |
The Participants remaining life expectancy is calculated using the age of the Participant in the year of death, reduced by one for each subsequent year. |
|
(B) |
If the Participants surviving spouse is the Participants sole designated beneficiary, the remaining life expectancy of the surviving
spouse is calculated for each distribution calendar year after the year of the Participants |
35
|
death using the surviving spouses age as of the spouses birthday in that year. For distribution calendar years after the year of the surviving spouses death, the remaining life
expectancy of the surviving spouse is calculated using the age of the surviving spouse as of the spouses birthday in the calendar year of the spouses death, reduced by one for each subsequent calendar year. |
|
(C) |
If the Participants surviving spouse is not the Participants sole designated beneficiary, the designated beneficiarys remaining life expectancy is calculated using the age of the beneficiary in the
year following the year of the Participants death, reduced by one for each subsequent year. |
|
(ii) |
No Designated Beneficiary. If the Participant dies on or after the date distributions begin and there is no designated beneficiary as of September 30 of the year after the year of the Participants
death, the minimum amount that will be distributed for each distribution calendar year after the year of the Participants death is the quotient obtained by dividing the Participants account balance by the Participants remaining
life expectancy calculated using the age of the Participant in the year of death, reduced by one for each subsequent year. |
|
(2) |
Death Before Date Distributions Begin. |
|
(i) |
Participant Survived by Designated Beneficiary. If the Participant dies before the date distributions begin and there is a designated beneficiary, the minimum amount that will be distributed for each distribution
calendar year after the year of the Participants death is the quotient obtained by dividing the Participants account balance by the remaining life expectancy of the Participants designated beneficiary, determined as provided in
Section 7.02(c)(1) . |
|
(ii) |
No Designated Beneficiary. If the Participant dies before the date distributions begin and there is no designated beneficiary as of September 30 of the year following the year of the Participants
death, distribution of the Participants entire interest will be completed by December 31 of the calendar year containing the fifth anniversary of the Participants death. |
36
|
(iii) |
Death of Surviving Spouse Before Distributions to Surviving Spouse Are Required to Begin. If the Participant dies before the date distributions begin, the Participants surviving spouse is the
Participants sole designated beneficiary, and the surviving spouse dies before distributions are required to begin to the surviving spouse, this Section 7.02(c) will apply as if the surviving spouse were the Participant.
|
|
(1) |
Designated beneficiary. The individual who is designated as the Beneficiary under the Plan and is the designated beneficiary under Section 401(a)(9) of the Code and Section 1.401(a)(9)-1, Q&A-4, of
the Treasury regulations. |
|
(2) |
Distribution calendar year. A calendar year for which a minimum distribution is required. The required minimum distribution for the Participants first distribution calendar year will be made on or before
the Participants Required Beginning Date. The required minimum distribution for other distribution calendar years, including the required minimum distribution for the distribution calendar year in which the Participants Required
Beginning Date occurs, will be made on or before December 31 of that distribution calendar year. |
|
(3) |
Life expectancy. Life expectancy as computed by use of the Single Life Table in Section 1.401(a)(9)-9 of the Treasury regulations. |
|
(4) |
Participants account balance. The account balance as of the last Valuation Date in the calendar year immediately preceding the distribution calendar year (valuation calendar year) increased by the amount of
any contributions made and allocated or forfeitures allocated to the account balance as of dates in the valuation calendar year after the Valuation Date and decreased by distributions made in the valuation calendar year after the Valuation Date. The
account balance for the valuation calendar year includes any amounts rolled over or transferred to the Plan either in the valuation calendar year or in the distribution calendar year if distributed or transferred in the valuation calendar year.
|
|
(e) |
2009 RMDs. Notwithstanding anything to the contrary in this section 7.02: |
37
|
(1) |
A Participant or Beneficiary who would have been required to receive required minimum distributions for 2009 (2009 RMDs) but for the enactment of Section 401(a)(9)(H) of the Code, and who would
have satisfied that requirement by receiving distributions that are ( l) equal to the 2009 RMDs or (2) one or more payments in a series of substantially equal distributions (that include the 2009 RMDs) made at least annually and expected to
last for the life (or life expectancy) of the Participant, the joint lives (or joint life expectancy) of the Participant and the Participants designated Beneficiary, or for a period of at least 10 years, will receive those distributions for
2009 unless the Participant or Beneficiary chooses not to receive such distributions. Participants and Beneficiaries described in the preceding sentence will be given the opportunity to elect to stop receiving the distributions described in the
preceding sentence. |
|
(2) |
For purposes of Section 7.04, a direct rollover will be offered only for distributions that would be eligible rollover distributions without regard to Section 401(a)(9)(H) of the Code. |
7.03. |
Restrictions on Elective Deferral Account Distributions. |
A Participants Elective
Deferral Account subject to restrictions under Section 401(k) of the Code shall not be distributed to the Participant or his Beneficiary earlier than upon
|
(1) |
the Participants death, disability, or severance from employment; |
|
(2) |
termination of the Plan without establishment or maintenance of a successor plan; |
|
(4) |
the attainment of age 59 1⁄2. |
Such Account shall not be distributable merely by reason of the lapse of a fixed number of years or the Participant having completed a stated
period of participation in the Plan.
|
(a) |
In General. A distributee may elect, at the time and in the manner prescribed by the Plan Administrator, to have any portion of an eligible rollover distribution paid directly to an eligible
retirement plan specified by the distributee in a direct rollover. |
38
|
(b) |
Eligible Rollover Distributions. |
|
(1) |
In General. An eligible rollover distribution is any distribution of all or any portion of the account 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 distributees designated beneficiary, or for a specified period of ten (10) 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). |
|
(2) |
Hardship Distributions. Any amount that is distributed on account of hardship shall not be an eligible rollover distribution and the distributee may not elect to have any portion of such a distribution paid
directly to an eligible retirement plan. |
|
(3) |
After-Tax Contributions. A portion of a distribution shall not fail to be an eligible rollover distribution merely because the portion consists of after-tax employee contributions which are not includible in
gross income. However, such portion may be transferred only to an individual retirement account or annuity described in Section 408(a) or (b) of the Code, or to a qualified defined contribution plan described in Section 401(a) or
403(a) of the Code that agrees to separately account for amounts so transferred, including separately accounting for the portion of such distribution which is includible in gross income and the portion of such distribution which is not so
includible. |
|
(4) |
Nonspousal Rollover. If a direct trustee to trustee transfer is made to an individual retirement plan established for the purpose of receiving the distribution on behalf of an individual who is a nonspouse
Beneficiary of a deceased Participant, the distribution shall be treated as an eligible rollover distribution. |
|
(5) |
Roth Rollovers. A direct rollover of a distribution from a Roth Elective Deferral Account will only be made to another Roth elective contributions account under an applicable retirement plan described in Code
section 402A(e)(1) or to a Roth IRA described in Code section 408A and only to the extent the rollover is permitted under the rules of Code section 402(c). |
39
(b) An Eligible Employee or Member otherwise eligible to make a Rollover Contribution to the
Plan shall be permitted to make Roth direct rollover contributions to the Plan. Notwithstanding anything to the contrary in Sections 3.10, the Plan will accept a rollover contribution to a Roth Elective Contributions sub-account if it is a direct
rollover from another Roth Elective Contributions account under an applicable retirement plan described in Code section 402A(e)(1) and only to the extent the rollover is permitted under the rules of Code section 402(c).
(c) An Eligible Employee or Member otherwise eligible to make a Rollover Contribution to the Plan shall be permitted to roll over the
otherwise taxable portion of a distribution from a designated Roth account under an applicable retirement plan described in Code section 402A(e)(1) to the extent such rollover is permitted under Code sections 402(c) and 402A.
(d) Eligible rollover distributions from a Members Roth Elective Contributions sub-account are taken into account in determining whether
the total amount of the Members account balances under the Plan exceeds $1,000 for purposes of mandatory distributions from the Plan.
|
(c) |
Eligible Retirement Plans. 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 distributees eligible rollover distribution. For purposes of
this Section 7.04, an eligible retirement plan shall also mean an annuity contract described in Section 403(b) of the Code and an eligible plan under Section 457(b) of the Code which is maintained by a state, political
subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state and which agrees to separately account for amounts transferred into such plan from this Plan. The definition of eligible retirement plan shall
also apply in the case of a distribution to a surviving spouse, or to a spouse or former spouse who is the alternate payee under a qualified domestic relations order as defined in Section 414(p) of the Code. Effective for distributions made
after December 31, 2007, an eligible retirement plan shall include a Roth IRA. |
|
(d) |
Direct Roll overs and Distributees. A direct rollover is a payment by the Plan to the eligible retirement plan specified by the distributee. For purposes of this Section 7.04(d), a distributee
means: |
|
(1) |
an Employee or former Employee; |
|
(2) |
an Employees or former Employees surviving spouse; |
40
|
(3) |
an Employees or former Employees spouse or former spouse who is the alternate payee under a qualified domestic relations order as defined in Section 414(p) of the Code, with regard to the interest of
the spouse or former spouse; or |
|
(4) |
an individual who is a Beneficiary of a deceased Employee or former Employee with regard to the interest of such Beneficiary; provided, however, that for purposes of applying this clause (4) an Eligible
Retirement Plan shall include only a traditional individual retirement plan or Roth IRA established for the purpose of receiving the distribution on behalf of such Beneficiary. |
|
(e) |
Interpretation. The provisions of this Section 7.04 shall be interpreted in accordance with the proposed regulations under Sections 401(a)(31), 402(c), 403(b)(8), 403(b)(10) and 3405(c) of the Code and final
regulations thereunder, all of which are incorporated herein by reference. |
7.05. |
Form of Payment. Except as otherwise provided in this Section 7.05, all distributions of benefits under the Plan shall be made in cash. A Participant may elect to receive benefits distributed from his
Account, to the extent it is invested in Company Stock, either in cash or in whole shares of Company Stock, with the value of any fractional shares being paid in cash. A Participant may elect to receive benefits distributed from his Global Stock
Account in cash or in whole shares of Global Stock, with the value of any fractional shares being paid in cash. All distributions under the Plan are subject to federal, state and local tax withholding as required by applicable law as in effect from
time to time. |
7.06. |
Valuation. All distributions and withdrawals shall be determined based upon the Current Market Value of assets in the Participants Account as of the Valuation Date immediately preceding the date on which
the distribution or withdrawal request is processed. Distributions and withdrawals shall be made from and charged to the Account of the Participant. |
7.07. |
Designation of Beneficiaries. |
|
(a) |
A Participants spouse shall be the Participants designated beneficiary under the Plan unless the Participant designates a different
Beneficiary and, if necessary under Section 7.07(b), the Participants spouse consents to such designation. A Participant or Beneficiary, by means of a signed writing filed with the Plan Administrator, and subject to the spousal consent
rules of Section 7.07(b), may at any time designate a person or persons to be a Beneficiary or Beneficiaries hereunder, or revoke a prior designation, and the last unrevoked designation, if any, shall determine the designated Beneficiaries
hereunder. A designation |
41
|
shall automatically revoke all prior designations made by the same person. A designated Beneficiary must survive the Participant (or prior Beneficiary) to be entitled to any benefits under the
Plan. If there is no effective designation of a Beneficiary upon a Participants or Beneficiarys death, or if a Beneficiary becomes entitled to benefits hereunder and then dies without benefits payments having commenced to said
Beneficiary and without there being any provision made for a successor Beneficiary, then benefits for which there is no designated Beneficiary shall be paid to the Participants spouse, if then living, otherwise equally to the
Participants then surviving issue, or if none, to the Participants estate. If benefit payments have commenced to a Beneficiary who dies without there being any provision made for successor beneficiaries, then benefits for which there is
no designated Beneficiary shall be paid to the estate of the last Beneficiary who had been receiving the payments. Beneficiary designations by a Participants Beneficiary shall only take effect if there are no living Beneficiaries designated by
the Participant to receive the benefits in question. |
|
(b) |
Any designation by a Participant of a Beneficiary other than the Participants spouse shall not be effective unless |
|
(1) |
the spouse of the Participant consents in writing to such designation and the spouses consent acknowledges the effect of such designation and is witnessed by a Plan representative or a notary public, or
|
|
(2) |
it is established to the satisfaction of a Plan Administrator that the consent required under (1), may not be obtained because there is no spouse, because the spouse cannot be located or because of such other
circumstances as may be provided in regulations issued pursuant to the Code. |
Any consent by a spouse or determination that
such a consent may not be obtained shall be effective only with respect to such spouse.
7.08. |
Payments to Minors or Incompetents. If the Plan Administrator determines that any person who is entitled to receive a distribution of benefits
(the Payee) is a minor or is under a legal incapacity, or is by reason of advanced age, illness, or other physical or mental incapacity incapable of handling and disposing of his or her property, or otherwise is in such position or
condition that the Plan Administrator believes that he or she could not utilize the benefit for his or her support or welfare, payments may be made in one or more of the following ways as directed by the Plan Administrator: (a) to the Payee
directly; (b) to the guardian or legal representative of the Payees person or estate; (c) to a relative of the Payee, to be expended for the Payees benefit; or (d) to the custodian of the Payee under any Uniform Transfers
to Minors Act |
42
|
or under any Uniform Gifts to Minors Act. The Plan Administrators determination pursuant to this Section 7.08 shall be conclusive and binding upon the Plan, the Trustee, the
Employer, each Employee, Participant, and Beneficiary, and each other interested party or person. The receipt of the distribution shall constitute a full release and discharge of the Plan, the Trustee, the Plan Administrator, and the Employer.
|
7.09. |
Suspension of Benefits Upon Reemployment. Notwithstanding any other provisions of this Article VII, if a Participant receiving or to receive benefits under the Plan returns to active service as an Employee of the
Company prior to such Participants Normal Retirement Date, payment of benefits under the Plan shall be suspended until the Participant subsequently terminates active service or reaches such Participants Normal Retirement Date, whichever
first occurs, provided, however, that benefits to be paid in accordance with Section 7.01(c) shall not be suspended. The suspension of benefits under this Section 7.09 shall not affect a Participants entitlement to or the timing of
normal retirement benefits under the Plan or to in-service withdrawals under Section 6.02. |
7.10. |
Discharge of Obligation; Receipt and Release. All distributions from the Fund pursuant to the provisions of the Plan shall be made by the Trustee in accordance with the Plan Administrators written
directions. All payments and distributions made hereunder shall to that extent constitute complete discharge of all obligations of the Company, the Plan Administrator and the Trustee, any of whom may require the distributee, as a condition precedent
to any such payment or distribution, to execute a receipt and release therefor in a form satisfactory to the Fiduciaries of the Plan. |
7.11. |
Nonalienation of Benefits. |
|
(a) |
The Plan is intended by the Company to provide a system of deferred compensation for the support of Participants, Beneficiaries and their families related to the loss of earning power upon the happening of certain
events. Except as expressly provided in Section 3.14, in this Section 7.11 or as otherwise permitted under ERISA and the Code, no benefit or interest available under the Plan will be subject to assignment or alienation, either voluntarily
or involuntarily. |
|
(b) |
A Participants benefits under the Plan shall be paid in accordance with the applicable requirements of any qualified domestic relations order (as defined in ERISA and the Code) which applies to the
Participants benefits under the Plan. |
|
(c) |
A Participants benefits may be reduced, as provided under Code Section 401(a)(13)(C), as a result of an order or requirement to pay under |
|
(1) |
a judgment of conviction for a crime against the Plan; |
43
|
(2) |
a civil judgment in connection with a violation (or alleged violation) of Part 4 of Subtitle B of Title I of ERISA; or |
|
(3) |
pursuant to a settlement agreement between the Participant and the Secretary of Labor or the Pension Benefit Guaranty Corporation in connection with a violation (or alleged violation) of Part 4 of such Subtitle by a
Fiduciary or any other person. |
|
(d) |
In the event a Participants benefits are attached by order of any court other than in a qualified domestic relations order (as defined in ERISA and the Code), the Plan Administrator may bring an action
for a declaratory judgment in a court of competent jurisdiction to determine the proper recipient of the benefits to be paid by the Plan. During the pendency of said action, any benefits that become payable may be paid into the court as they become
payable, to be distributed by the court to the recipient it deems proper at the close of said action. |
7.12. |
Benefit Claims Procedures. The Plan Administrator shall establish reasonable procedures pertaining to claims for benefits by Participants and beneficiaries that complies with 29 CFR 2560.503-1. |
7.13. |
Qualified Domestic Relations Order Procedures. The Plan Administrator shall establish reasonable procedures for determining whether a domestic relations order is a qualified domestic relations order and for
administering distributions under a qualified domestic relations order. |
7.14. |
Unclaimed Benefits. If the Plan Administrator has not been able to ascertain the whereabouts of any person to whom a payment is due under the Plan after diligent efforts have been made to locate the person, the
Plan Administrator, if it so elects, may direct that such payment and all remaining benefits under the Plan otherwise due or to become due to such person be cancelled on the records of the Plan and the cancelled benefits be treated as a forfeiture,
to be applied in the manner set forth in Section 5.04(a). Upon such cancellation and reallocation, the Plan shall have no further liability therefor except that, in the event that prior to the time such benefits escheat under applicable state
law such person contacts the Plan Administrator, provides an address and requests the benefits due under the Plan, the cancelled benefits shall be reinstated without any adjustment for interest or earnings, and the Company shall make such additional
contribution as may be necessary to fund the reinstated benefits. |
44
ARTICLE VIII
LIMITATIONS ON CONTRIBUTIONS AND BENEFITS
8.01. |
Limitation on Defined Contribution Plan Annual Additions. As and to the extent necessary to satisfy the limitations of Section 415 of the Code, the limitations of this Section 8.01 shall apply
notwithstanding any other provision of the Plan. Annual Additions with respect to a Participant under this and all other defined contribution plans (whether terminated or not) ever maintained by the Company or a Related Employer consisting of:
|
|
(a) |
all Company contributions and the contributions made pursuant to an Elective Deferral Agreement, and all Employee contributions, if any; |
|
(c) |
the Participants voluntary contributions, if any; |
|
(d) |
amounts allocated after March 31, 1984, to an individual medical account, as defined in Section 415(l)(2) of the Code, which is part of a pension or annuity plan maintained by the Company; and
|
|
(e) |
amounts derived from contributions paid or accrued after December 31, 1985, in taxable years ending after such date, which are attributable to post retirement medical benefits allocated to the separate account of a
Key Employee under a welfare benefit fund, as defined in Section 419(e) of the Code, maintained by the Company; |
with
respect to any Limitation Year, shall not, except to the extent permitted under Section 3.04 and Section 414(v) of the Code, exceed the lesser of:
|
(1) |
$40,000, as adjusted for increases in the cost-of-living under Section 415(d) of the Code, or |
|
(2) |
100 percent of the Participants Code Section 415 Compensation for the Limitation Year. |
The compensation limit referred to in (2) shall not apply to any contribution for medical benefits after separation from service (within
the meaning of Section 401(h) or Section 419A(f)(2) of the Code) which is otherwise treated as an Annual Addition.
8.02. |
Benefit Reductions to Meet Annual Additions Limitation. If as a result of the allocation of forfeitures, a reasonable error in estimating a Participants annual compensation or other reason permitted under
Treas. Reg. 1.415-6(b)(6), a Participants defined contribution plan annual additions exceed the limitation of Section 8.01 hereof, the Excess Amount shall be disposed of as follows: |
45
|
(a) |
Any nondeductible Voluntary Contribution, and unmatched Elective Deferrals shall be returned to the Participant to the extent that they would reduce the Excess Amount. To the extent necessary to reduce the Excess
Amount, Non-Highly Compensated Employees will have Elective Deferrals returned whether or not there is a corresponding match. |
|
(b) |
To the extent an Excess Amount still remains after the application of (a) above, the Excess Amounts in the Participants Account will be used to reduce Employer Contributions (including the allocation of any
forfeitures) for such Participant in the next Limitation Year, and in each succeeding Limitation Year, as necessary, provided that the Participant otherwise satisfies the requirements to receive an allocation of Employer contributions in each such
Limitation Year; |
|
(c) |
To the extent that an Excess Amount exists after the application of (a) above, and the Participant is not covered by the Plan at the end of the Limitation Year, the Excess Amount will be held unallocated in a
suspense account. The suspense account will be applied in the manner set forth in Section 5.04(a). |
To the extent that a
Participant has an Excess Amount attributable to his participation in more than one defined contribution plan, the required reduction in such additions shall be prorated among all affected defined contribution plans, including the Plan, making
provision for such reductions.
8.03. |
Handling of Forfeitures Caused by Annual Additions Limitation. Any reduction in Company contributions or forfeitures to be allocated to a Participant under the Plan in order to meet the limitation on defined
contribution plan annual additions, other than a reduction in Elective Deferral Contributions, shall be treated as a forfeiture and shall be applied in the manner described in Section 5.04. Any portion of the reduction which cannot be so
allocated because all Participants have reached their maximum annual addition shall be placed in a suspense account to be reallocated as a forfeiture in the next and subsequent Plan Years as necessary until exhausted. All amounts in a suspense
account created pursuant to this Section 8.03 shall be allocated to Participants Accounts before any further Employer or Employee contributions which would constitute annual additions. The suspense account shall not share in the
revaluation of the Fund under Section 4.04 but shall remain fixed in amount until reallocated to the Accounts of Participants. Any reduction in Elective Deferral Contributions to meet the limitation on defined contribution plan annual additions
shall be returned to the Company for payment to the affected Participant as current compensation. |
46
8.04. |
Elective Deferrals in Excess of Permissible Dollar Limits. |
|
(a) |
Excess Elective Deferrals. During any taxable year no Participant shall be permitted to have Elective Deferral Contributions made under the Plan or any other qualified Plan maintained by the Company in excess of
the dollar limitation contained in Section 402(g) of the Code in effect at the beginning of such taxable year. A Participant may assign to the Plan any Excess Elective Deferral Contributions made during a taxable year to another qualified plan
by notifying the Plan Administrator of the amount of Excess Elective Deferral Contributions to be assigned to the Plan. Deemed notification of the Plan Administrator occurs if Excess Elective Deferral Contributions arise solely from Elective
Deferral Contributions under the Plan or any other Plans of the Company. Notwithstanding any provisions of the Plan to the contrary, Excess Elective Deferral Contributions, plus any income or minus any loss allocable thereto, shall be distributed no
later than April 15 to such Participant to whose account Excess Elective Deferral Contributions are assigned for the preceding year and who claims Excess Elective Deferral Contributions for such taxable year. If a Participant makes both
Elective Deferrals and Roth Elective Deferral Contributions for a year, distribution of Excess Elective Deferrals will consist of a combination of both, to the extent each such type of Elective Deferrals was made for the year. |
|
(b) |
Earnings on Excess Elective Deferrals. Excess Elective Deferral Contributions shall be adjusted for any income or loss up to the end of the taxable year in which the Excess Elective Deferral Contribution was made
(or, if earlier, the date of distribution). |
8.05. |
Limitations on Elective Deferral Contributions. Notwithstanding any other provision of the Plan, the following limitations shall apply to Elective Deferral Contributions: |
|
(a) |
Elective Deferral Contributions Must Satisfy Section 401(k) Test. |
|
(1) |
Elective Deferral Contributions with respect to a Plan Year that are subject to Section 401(k) of the Code restrictions shall satisfy one of the following tests |
|
(A) |
The Actual Deferral Percentage for the Highly Compensated Employee group of Participants for a Plan Year is not more than the Actual Deferral Percentage for the Non-Highly Compensated Employee group of Participants for
the prior Plan Year multiplied by 1.25; or |
47
|
(B) |
The excess of the Actual Deferral Percentage for the Highly Compensated Employee group of Participants for a Plan Year over the Actual Deferral Percentage for the Non-Highly Compensated Employee group of Participants
for the prior Plan Year is not more than two percentage points, and the Actual Deferral Percentage for the Highly Compensated Employee group of Participants for a Plan Year is not more than the Actual Deferral Percentage for the Non-Highly
Compensated Employee group for the prior Plan Year multiplied by two. |
Notwithstanding the foregoing, at the election of the
Company prior to the end of the Plan Year immediately before the Plan Year to which such election will apply, the Actual Deferral Percentage tests in Subsections (A) and (B) above may be applied by using the Actual Deferral Percentage of
the Non-Highly Compensated Employees, eligible to participate in the Plan, for the current Plan Year, instead of the preceding Plan Year, provided that such election, once made, cannot be revoked except as provided in Internal Revenue Service
guidance, including Internal Revenue Service Notice 98-1.
|
(2) |
In the event that the Plan satisfies the requirements of Sections 401(k), 401(a)(4), or 410(b) of the Code only if aggregated with one or more other plans, or if one or more other plans satisfy the requirements of such
sections of the Code only if aggregated with the Plan, then this Section shall be applied by determining the Actual Deferral Percentage of Employees as if all such Plans were a single plan. Any adjustments to the Actual Deferral Percentage of
Non-Highly Compensated Employees eligible to participate in the Plan will be made in accordance with guidance provided by the Internal Revenue Service, including Internal Revenue Service Notice 98-1, unless the Company has elected to use the Current
Year Testing Method. Plans may be aggregated in order to satisfy Section 401(k) of the Code only if they have the same Plan Year and use the same Actual Deferral Percentage testing method. The deferral percentage taken into account for any
Participant who also participates in other Code Section 401(k) arrangements of the Company or a Related Employer shall be the sum of the deferral percentages for such a Participant under each of such arrangements. |
|
(3) |
For purposes of determining the Actual Deferral Percentage test, Elective Deferral Contributions and Qualified Nonelective Contributions and Qualified Matching Contributions must be made before the last day of the 12
month period immediately following the Plan Year to which contributions relate. |
48
|
(4) |
The Company shall maintain records sufficient to demonstrate satisfaction of the Actual Deferral Percentage test and the amount of Elective Deferral Contributions, Qualified Nonelective Contributions, and Qualified
Matching Contributions used in such test. |
|
(b) |
Excess. If the tests in Subsection (a)(1), above, otherwise would not be met, the following adjustment shall be made to the Elective Deferral Contributions for Highly Compensated Employee Participants so that
after adjustment one of the two tests is met. |
|
(1) |
On or before the 15th day of the third month following the close of the Plan Year with respect to which the limits in Subsection (a)(1) are exceeded (i.e., March 15th), but in no event later than the last day of
the following Plan Year, Elective Deferral Contributions in excess of the permissible deferral percentage limits (Excess Contributions) shall be returned to Highly Compensated Employees following the procedure set forth in this
subparagraph (b)(1). Excess Contributions shall be adjusted for any income or loss up to the end of the taxable year in which the Excess Contribution was made (or, if earlier, the date of distribution). If such amounts are distributed more than 2 1⁄2 months after the last day of the Plan Year in which the excess arose, a 10% excise tax will be imposed on the Company. Excess Contributions shall be determined
under the following procedures: |
|
(A) |
Calculate the dollar amount of Excess Contributions for each affected Highly Compensated Employee as follows: |
|
(i) |
Rank all Highly Compensated Employees in descending order based on their Actual Deferral Percentage and then reduce the Actual Deferral Percentage of the Highly Compensated Employee with the highest Actual Deferral
Percentage by the amount required to cause such Highly Compensated Employees Actual Deferral Percentage to equal the Actual Deferral Percentage of the Highly Compensated Employee with the next highest Actual Deferral Percentage (or, if less,
by the reduction necessary to enable the Plan to satisfy the ADP test); |
49
|
(ii) |
Repeat the process in (i) above with respect to all Highly Compensated Employees with the next highest Actual Deferral Percentage, until the Plan satisfies the ADP test and the highest permitted Actual Deferral
Percentage is determined; |
|
(iii) |
The amount of Excess Contributions for each Highly Compensated Employee shall be an amount equal to such Highly Compensated Employees Elective Deferral Contributions, plus any Qualified Nonelective Contributions
or Qualified Matching Contributions taken into account in determining such Highly Compensated Employees Actual Deferral Percentage prior to applying (i) and (ii) above, minus an amount determined by multiplying such Highly
Compensated Employees Actual Deferral Percentage, determined after applying (i) and (ii) above, by the Compensation used in determining such Highly Compensated Employees Actual Deferral Percentage; |
|
(B) |
Determine the total of the dollar amounts (total Excess Contributions) calculated in Step (A); |
|
(C) |
Distribute the total Excess Contributions determined in (B) above as follows: |
|
(i) |
Rank all Highly Compensated Employees in descending order based on the dollar amount of their Elective Deferral Contributions and reduce the Elective Deferral Contributions of the Highly Compensated Employee with the
highest dollar amount of Elective Deferral Contributions by the amount required to cause that Highly Compensated Employees Elective Deferral Contributions to equal the dollar amount of the Elective Deferral Contributions of the Highly
Compensated Employee with the next highest dollar amount of Elective Deferral Contributions. |
|
(ii) |
Distribute the amount determined in (i) above to the Highly Compensated Employee with the highest dollar amount until all Excess Contributions are consumed, or until the Elective Deferral Contributions of this
Participant are reduced to the dollar amount of the Highly Compensated Employee with the next highest dollar amount of Elective Deferral Contributions; |
50
|
(D) |
If the total amount distributed under (C) above is less than the total Excess Contributions, repeat step (C). |
|
(E) |
The distribution of Elective Deferral Contributions that are Excess Contributions shall be made from the Participants Elective Deferral Account before the Participants Roth Elective Deferral account, to the
extent Pre-Tax Elective Deferral Contributions were made for the year, unless the Participant specifies otherwise. Excess Contributions shall be distributed from the Participants qualified nonelective contribution account only to the extent
that the Excess Contributions exceed the amount of Excess Contributions in the Participants Elective Deferral account and Qualified Matching Contribution account. |
|
(2) |
Alternatively, with respect to such Plan Year, the Company may, in its discretion, make qualified nonelective and qualified matching contributions, as defined in Treasury Regulations Section 1.401(k)-1(g)(7) as
necessary in order for the tests in Subsection (a)(1) to be satisfied. Such contributions shall be fully vested and subject to the same restrictions on distribution as Elective Deferral Contributions. If the Plan uses prior year testing, then the
non-discrimination requirements of this Section 8.05 must be met for each Plan Year, regardless that Qualified Nonelective Contributions allocated to Non-Highly Compensated Employees in one Plan Year will count toward the Actual Deferral
Percentage test for the following Year. |
|
(3) |
Notwithstanding the foregoing, the amount of Excess Contributions to be recharacterized or distributed under this Section 8.05(b) with respect to a Highly Compensated Employee for a Plan Year is reduced by any
excess deferrals previously distributed to such Employee for the Employees taxable year ending with or within the Plan Year, and the amount of excess deferrals to be distributed under this Section 8.05(b) with respect to a Highly
Compensated Employee for a Plan Year is reduced by any Excess Contributions previously recharacterized or distributed to such Employee for the Employees taxable year ending with or within the Plan Year. |
51
8.06. |
Average Contribution Percentage Test for Matching Contributions, Supplemental Profit-Sharing Matches, and Voluntary After-Tax Contributions. |
|
(a) |
With respect to each Plan Year, Matching Contributions, Supplemental Profit-Sharing Matches, and Voluntary After-Tax Contributions shall satisfy one of the following tests |
|
(1) |
The Average Contribution Percentage for a Plan Year for Highly Compensated Employees who are Participants shall not exceed the Average Contribution Percentage for the prior Plan Year for Non-Highly Compensated Employees
who are Participants, multiplied by 1.25; or |
|
(2) |
The Average Contribution Percentage for a Plan Year for Highly Compensated Employees who are Participants shall not exceed the Average Contribution Percentage for the prior Plan Year for the Non-Highly Compensated
Employees who are Participants by more than two percentage points, and the Average Contribution Percentage for such Highly Compensated Employee group for a Plan Year shall not be more than the Average Contribution Percentage for the prior Plan Year
for such Non-Highly Compensated Employee group, multiplied by two. |
Notwithstanding the foregoing, at the election of the
Company prior to the end of the Plan Year immediately before the Plan Year to which such election will apply, the Average Contribution Percentage Tests above may be applied by using the Average Contribution Percentage of Non-Highly Compensated
Employees who are Participants for the then current Plan Year, instead of the preceding Plan Year, provided that such election, once made, cannot be revoked except as provided in Internal Revenue Service guidance, including Internal Revenue Service
Notice 98-1.
|
(b) |
In the event that the Plan satisfies the requirements of Sections 401(m), 401(a)(4) or 410(b) of the Code only if aggregated with one or more other plans, or if one or more other plans satisfy the requirements of such
sections of the Code only if aggregated with the Plan, then this Section shall be applied by determining the Average Contribution Percentage of employees as if such plans were a single plan. Plans may be aggregated in order to satisfy
Section 401(m) of the Code only if they have the same Plan Year. Any adjustments to the Non-Highly Compensated Employee Average Contribution Percentage for the prior year will be made in accordance with Internal Revenue Service Notice 98-1,
unless the Company has elected to use the current year testing method. |
52
|
(c) |
For purposes of this Section, the Contribution Percentage for any Participant who is a Highly Compensated Employee and who is eligible to have Contribution Percentage amounts allocated to his Account under two or more
plans described in Section 401(a) of the Code, or arrangements described in Section 401(k) of the Code that are maintained by the Company, shall be determined as if the total of such Contribution Percentage amounts was made under each
plan. If a Highly Compensated Employee participates in two or more cash or deferred arrangements that have different plan years, all cash or deferred arrangements ending with or within the same calendar year shall be treated as a single arrangement.
Notwithstanding the foregoing, certain plans shall be treated as separate if mandatorily disaggregated under regulations under Section 401(m) of the Code. |
|
(d) |
Excess. If the tests in Subsection (a) above otherwise would not be met, the following adjustment shall be made with respect to the excess Voluntary After-Tax Contributions, Matching Contributions, and
Supplemental Profit-Sharing Matches of Highly Compensated Participants so that after adjustment one of the two tests is met |
|
(1) |
On or before the 15th day of the third month following the close of the Plan Year with respect to which the limits in Subsection (a) are exceeded, but in no event later than the close of the following Plan Year,
the Plan Administrator may direct the Trustee to distribute to each Highly Compensated Participant, beginning with the Participant having the greatest excess aggregate contributions, the amount of such excess aggregate contributions (together with
income or loss allocable thereon determined in the same manner as for Excess Salary Reduction Contributions under the Plan) and continuing as necessary, until his aggregate contributions are reduced to the aggregate contributions of the Highly
Compensated Employee with the next highest aggregate contributions and so forth, until Subsection (a) is satisfied. If such excess aggregate contributions are distributed more than 2 1⁄2 months after the last day of the Plan Year in which such excess arose, a 10% excise tax will be imposed on the Company with respect to those amounts. Excess aggregate contributions shall be treated as Annual
Additions under the Plan. Such distributions shall be made to each Highly Compensated Employee on the basis of the respective portions of the excess aggregate contributions attributable to such Highly Compensated Employee as determined under the
following procedures: |
|
(A) |
Calculate the dollar amount of excess aggregate contributions for each affected Highly Compensated Employee as follows: |
53
|
(i) |
reduce the Average Contribution Percentage of the Highly Compensated Employee with the highest Average Contribution Percentage by the amount required to cause the Average Contribution Percentage test to be met or, if
greater, by the amount required to cause such Highly Compensated Employees Average Contribution Percentage to equal the Average Contribution Percentage of the Highly Compensated Employee with the next highest Average Contribution Percentage;
|
|
(ii) |
repeat the process in (i) above, until the Plan satisfies the Average Contribution Percentage test and the highest permitted Average Contribution Percentage is determined; |
|
(iii) |
the amount of excess aggregate contributions for each Highly Compensated Employee shall be an amount equal to such Highly Compensated Employees Voluntary After-Tax Contributions, Matching Contributions, and
Supplemental Profit-Sharing Matches taken into account in determining such Highly Compensated Employees Average Contribution Percentage prior to applying (i) and (ii) above, minus an amount determined by multiplying such Highly
Compensated Employees Average Contribution Percentage, determined after applying (i) and (ii) above, by the Compensation used in determining such Highly Compensated Employees Average Contribution Percentage; |
|
(B) |
Determine the total of the dollar amounts (excess aggregate contributions) calculated in Step (A); |
|
(C) |
Distribute the total excess aggregate contributions determined in (B) above as follows: |
|
(i) |
Reduce (on a pro-rata basis) the Voluntary After-Tax Contributions, Matching Contributions, and Supplemental Profit-Sharing Matches of the Highly
Compensated Employee with the highest total dollar amount of Voluntary After-Tax Contributions, Matching Contributions, and Supplemental Profit-Sharing Matches by the amount required to cause such contributions to
|
54
|
equal the dollar amount of the total Voluntary After-Tax Contributions, Matching Contributions, and Supplemental Profit-Sharing Matches of the Highly Compensated Employee with the next highest
total dollar amount of such contributions. |
|
(ii) |
Distribute the amount determined in (i) above to the Highly Compensated Employee with the highest dollar amount (however, if a lesser reduction, when added to the total dollar amount already distributed under this
step, would equal the total excess aggregate contributions, distribute the lesser reduction amount); |
|
(D) |
If the total amount distributed under (C) above is less than the total excess aggregate contributions, repeat step (C). |
|
(E) |
The distribution of Elective Deferrals that are Excess Aggregate Contributions shall be made from the Participants Pre-tax Elective Deferral account before the Participants Roth Elective Deferral account, to
the extent Pre-tax Elective Deferrals were made for the year, unless the Participant specifies otherwise. |
|
(2) |
If the Company has timely elected that the Average Contribution Percentage Tests in Subsection (a) above will be applied using the Average Contribution Percentages of Non-Highly Compensated Employees for the
current Plan Year, then, with respect to the Plan Year for which the Company has elected to use the current year Average Contribution Percentages of Non-Highly Compensated Employees, the Company may, in its discretion, make such qualified
nonelective contributions, subject to the requirements for full vesting and the 401(k) withdrawal restrictions described in Section 7.03, as may be necessary for the tests in Subsection (a) to be satisfied. |
|
(3) |
In its discretion, Plan Administrator may limit Employee or Matching Contributions in a manner that prevents excess aggregate contributions from being made, provided that any such limit shall be nondiscriminatory,
applied on a uniform basis and permitted by applicable provisions of the Code and regulations thereunder. |
|
(4) |
Alternatively, instead of distributing excess aggregate contributions, the Plan Administrator may forfeit excess Matching Contributions, if forfeitable, and apply such forfeitures in accordance with Section 5.04.
|
55
|
(e) |
For purposes of determining the Contribution Percentage test Voluntary After-Tax Contributions will be considered made for a Plan Year if made during such Plan Year, and Matching Contributions and Supplemental
Profit-Sharing Matches will be considered made for a Plan Year if the contributions (i) are made on account of the Participants Elective Deferral Contributions or Voluntary After-Tax Contributions, and (ii) are made no later than the
end of the 12 month period beginning on the day after the close of the Plan Year. |
|
(f) |
The Company shall maintain records sufficient to demonstrate satisfaction of the Average Contribution Percentage Test and the amount of Voluntary After-Tax Contributions, Matching Contributions, and Supplemental
Profit-Sharing Matches used in such test. |
ARTICLE IX
TOP-HEAVY REQUIREMENTS
9.01. |
When Top-Heavy Provisions Are Operative. The Top-Heavy provisions of this Article IX shall supersede any Plan provisions failing to meet or exceed the requirements for Top-Heavy plans under Section 416 of
the Code. In the event that Congress should provide by statute, or the Treasury Department or the Internal Revenue Service should provide by regulation or ruling, or it should be judicially or otherwise determined that the Top-Heavy provisions
provided for in the Plan, or any part thereof, are not necessary in order for the Plan to meet the requirements for a qualified profit sharing plan under the Code for a Plan Year, such provisions, or part thereof, shall become void and shall not
apply for such Plan Year without the necessity of amendment to the Plan. |
9.02. |
Top-Heavy Limitation on Annual Compensation. The annual compensation of any Employee taken into account under the Plan for a Top-Heavy Plan Year shall not exceed the limit on Compensation contained in
Section 401(a)(17) of the Code ($200,000 for Plan Year 2003 or such larger amount as may from time to time be fixed by the Secretary of the Treasury or his delegate to reflect the statutory cost-of-living adjustment). |
9.03. |
Top-Heavy Minimum Contributions. |
|
(a) |
If the Plan is Top-Heavy for a Plan Year, the Company contribution (including reallocated forfeitures) allocated to each Non-Key Employee Participant
who is employed by the Company at the end of the Plan Year shall not be less than the required Top-Heavy percentage of the Participants compensation (as defined in Section 415 of the
|
56
|
Code) for the Plan Year. The required Top-Heavy percentage is the lesser of (1) 3%, or (2) the percentage at which contributions (including reallocated forfeitures) are made (or
required to be made) under the Plan for the Plan Year for the Key Employee Participant for whom such percentage is the highest for the Plan Year. In determining a Key Employees percentage for purposes of (2), (A) all defined contribution
plans included in a required aggregation group with the Plan shall be treated as one plan, (B) for Plan Years beginning after December 31, 1988, elective contributions and, for Plan Years beginning after December 31, 1984, amounts
contributed pursuant to a salary reduction agreement shall be included in determining the amount contributed on behalf of a Key Employee, and (C) the contributions allocated to the Key Employee shall be divided by so much of the Key
Employees total compensation for the Plan Year as does not exceed the compensation limit contained in Section 401(a)(17) of the Code ($200,000 for 2003). The Top-Heavy minimum allocation shall be determined without regard to any social
security contribution by the Company and without regard to any elective contributions made on behalf of Employees other than Key Employees. |
|
(b) |
Any individual who would otherwise fail to be allocated Company contributions for the Plan Year because such individual has |
|
(1) |
failed to complete 1,000 Hours of Service (or the equivalent), |
|
(2) |
declined to make mandatory contributions to the Plan, |
|
(3) |
declined to elect Elective Deferral Contributions to the Plan, or |
|
(4) |
been excluded from the Plan because such individuals compensation is less than a stated amount (even though the individual must be considered a Participant to satisfy the coverage requirements of
Section 410(b) of the Code in accordance with Section 401(a)(5) of the Code) shall be considered a Participant for purposes of applying the Top-Heavy minimum contribution requirements of this Section 9.03. |
|
(c) |
If for any Plan Year in which the Plan is Top-Heavy, but not Super Top-Heavy, the Company maintains both a defined benefit plan and a defined contribution plan and the adjusted limits under Section 415 of the Code
pursuant to Section 416(h)(1) of the Code would otherwise be exceeded, then, to meet the requirements of Section 416(h)(2) of the Code and to avoid the application of Section 416(h)(1) of the Code, the 3% requirement in
Section 9.03(a)(1), shall be increased to 4% for Participants covered only by a defined contribution plan. |
57
|
(d) |
The foregoing notwithstanding, no Top-Heavy minimum benefit shall be provided under the Plan for any Participant with respect to any Plan Year for which the Participant is covered under another qualified plan or plans
of the Company or a Related Employer and is receiving the Top-Heavy minimum benefits or contributions required by Section 416 of the Code under such other plan if the Company has provided that the minimum allocation or benefit requirement will
be met in the other plan or plans. To the extent that a Top-Heavy minimum benefit is due to a Participant, unless such minimum benefit is provided under another plan or plans, it shall be provided under the Plan, but only to the extent necessary to
satisfy the Top-Heavy minimum allocation without duplication. |
|
(e) |
A Participants Elective Deferral Contributions shall not be considered for the purposes of satisfying the minimum Top-Heavy contribution requirement of this Section. |
|
(f) |
Matching Contributions and Supplemental Profit-Sharing Matches shall be taken into account for purposes of satisfying the minimum contribution requirements of Section 416(c)(2) of the Code and the Plan. Matching
Contributions and Supplemental Profit-Sharing Matches that are used to satisfy the minimum contribution requirements shall be treated as matching contributions for purposes of the actual contribution percentage test and other requirements of
Section 401(m) of the Code. |
9.04. |
Top-Heavy Minimum Vesting. If the Plan is Top-Heavy for a Plan Year, vesting in Accounts under the Plan for such Plan Year shall be determined under the following Vesting Schedule: |
|
|
|
|
|
Years of Vesting Service |
|
Vested Percentage of Accrued Benefits |
|
less than 2 |
|
|
0 |
% |
2 |
|
|
40 |
% |
3 |
|
|
60 |
% |
4 |
|
|
80 |
% |
5 |
|
|
100 |
% |
Any change in vesting schedules under this Section shall be deemed to be a Plan amendment subject to the
limitations on reduction of vested benefits and Participant election rights as set forth in Section 5.05. To the extent required to be nonforfeitable under Section 416(b) of the Code, the minimum Top-Heavy allocation may not be forfeited
under Section 411(a)(3)(B) or Section 411(a)(3)(D) of the Code.
9.05. |
Determination of Top-Heavy Status. Whether the Plan or any other Plan included in a required aggregation group of which the Plan is a part is
|
58
Top-Heavy (within the meaning of Section 416(g) of the Code) shall be determined under
(a) the method, if any, that uniformly applies for accrual purposes under all plans maintained by the Related Employees, or (b) if there is no such method, as if such benefit accrued not more rapidly than the slowest accrual rate permitted
under the fractional accrual rate of Section 411(b)(1)(C) of the Code.
9.06. |
Determination of Present Values of Accrued Benefits and Accounts. This Section 9.06 shall apply for purposes of determining the present values of accrued benefits and the amounts of account balances of
Employees as of the determination date. |
|
(a) |
The present values of accrued benefits and the amounts of account balances of an Employee as of the determination date shall be increased by the distributions made with respect to the Employee under the Plan and any
plan aggregated with the Plan under Section 416(g)(2) of the Code during the 1-year period ending on the determination date. The preceding sentence shall also apply to distributions under a terminated plan which, had it not been terminated,
would have been aggregated with the Plan under Section 416(g)(2)(A)(i) of the Code. In the case of a distribution made for a reason other than severance from employment, death, or disability, this provision shall be applied by substituting
5-year period for 1-year period. |
|
(b) |
The accrued benefits and accounts of any individual who has not performed services for the Employer during the 1-year period ending on the determination date shall not be taken into account. |
ARTICLE X
AMENDMENT, MERGER
OR TERMINATION
10.01. |
Amendment. The Company reserves the right, at any time and from time to time, by action of its Board of Directors, the Retirement Committee, or
the Companys duly authorized officers, to amend or modify the Plan, in part or in whole, for any reason and without the consent of any Fiduciary, Employee, Participant, Beneficiary or other person. Unless required or permitted by the Code or
other law, no such amendment or modification (including those made in connection with establishing or maintaining the qualified status of the Plan) shall authorize or permit any part of the funds held under the Plan to be used for, or diverted to,
purposes other than the payment of taxes, the payment of Plan administrative expenses or for the exclusive benefit of Employees or their Beneficiaries, or shall be effective to the extent that it has the effect of decreasing a Participants
accrued benefit, including any early retirement benefit, retirement-type subsidy or optional form of benefit protected by Code Section 411(d)(6). For |
59
|
purposes of this paragraph, a Plan amendment which has the effect of decreasing a Participants Account Balance or eliminating an optional form of benefit, with respect to benefits
attributable to service before the amendment shall be treated as reducing an accrued benefit. Any amendment or modification of the Plan may be retroactive if (a) it does not impair any rights to any benefit under the Plan which any Participant,
Beneficiary or other person would otherwise have had at the date of such amendment by reason of contributions theretofore made or (b) it is necessary or appropriate to qualify or maintain the Plan as a plan and trust exempt from federal income
taxation under Sections 401(a), 501(a) and related provisions of the Code, the provisions of ERISA, or any other applicable provisions of federal or state law, as now in effect or hereafter amended or adopted, and any regulations issued thereunder,
including without limitation any regulations issued by the United States Treasury Department or the United States Department of Labor. Any amendment to the vesting provisions of the Plan shall be subject to the rights of certain Participants to
elect to have their vested benefits determined under the Plan without regard to such amendment as provided in Section 5.05. |
10.02. |
Merger or Consolidation. The Company reserves the right at any time and from time to time by action of its Board of Directors or its duly authorized officers to merge or consolidate the Plan with, or to transfer
any assets or liabilities to, any other plan, provided, however, that no such merger, consolidation or transfer may be undertaken unless each Participant would be entitled to receive a benefit after such merger, consolidation or transfer if such
other plan then terminated which would be equal to or greater than the benefit each Participant would have been entitled to receive immediately prior to such merger, consolidation or transfer if the Plan had then terminated. Satisfaction of this
provision shall be determined without regard to decreases or increases in Account Balances due to investment performance. |
10.03. |
Termination. Although the Company expects to continue the Plan indefinitely, it reserves the right, at any time and from time to time by action of its Board of Directors or its duly authorized officers, to
suspend or terminate prospectively its obligation to pay the costs of or make contributions to the Plan or to terminate or partially terminate the Plan, subject to requirements of collective bargaining. Complete and permanent discontinuance of
contributions under the Plan shall constitute a termination of the Plan. All affected Participants with respect to whom the Plan has been completely or partially terminated shall be fully vested in their Accounts as of the date of termination.
During the termination process, the named Fiduciaries of the Plan shall remain in existence and the provisions of the Plan which are necessary or appropriate for the execution of the Plan and the distribution or transfer of the assets of the Plan
shall remain in force. |
60
10.04. |
Termination Distributions. Upon termination or partial termination of the Plan, no amount shall thereafter be payable under the Plan to or in respect of a Participant affected by such termination except as
provided in this Section 10.04. In the event of the termination of the Plan, the Account Balance of each affected Participant will be nonforfeitable. To the maximum extent permitted by law, transfers or distributions of Plan assets as provided
in this Section 10.04 shall constitute a complete discharge of all liabilities under the Plan. After provision for all expenses of administration and liquidation, any remaining assets of the Plan which are available to provide benefits shall be
liquidated and the proceeds distributed among, or applied to provide benefits for or in respect of, the Participants affected by such termination. Such distributions or benefits shall be made or paid in such manner as the Plan Administrator shall
determine from among the forms of payment permitted by Section 7.01 or other payment forms as may be approved by the Internal Revenue Service. In the discretion of the Plan Administrator or as may be required by applicable law or regulation,
benefit payments, including regular payments to retirees under the Plan, may be made during the Plan termination process. |
ARTICLE XI
PLAN
FIDUCIARIES AND ADMINISTRATION
11.01. |
The Board. The Board shall appoint the members of the Retirement Committee and the Trustee, and shall be responsible for the establishment of the Fund and the amendment and termination of this Plan and the Trust
Agreement. The Board may also delegate such of its authority to the Retirement Committee or other person as the Board may deem appropriate. |
11.02. |
The Retirement Committee, Plan Administrator and Investment Committee. |
|
(a) |
The Retirement Committee shall have the responsibilities and duties delegated to it in this Plan and any responsibilities and duties under this Plan which are not specifically delegated to anyone else. The Retirement
Committee shall be the Plan Administrator, unless it appoints a separate Plan Administrator. The Retirement Committee shall also function as the Investment Committee for the Plan, unless it appoints a separate Investment Committee (in which event
the provisions of Sections 11.05 through 11.08 shall apply to the Investment Committee as if it were the Retirement Committee). |
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(b) |
Pursuant to this Section and Section 11.08, the Retirement Committee has delegated the duties of Plan administration and
|
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operation (including without limitation, compliance matters, vendor management, recordkeeping and the calculation and payment of benefits) to the Retirement Investment & Administration
Committee, which shall be the Plan Administrator, and has further appointed the Retirement Investment & Administration Committee to function as the Investment Committee. |
11.03. |
The Trustee. The Trustee shall have exclusive authority and discretion to manage and control the Fund except to the extent that (i) the Trust Agreement delegates such authority to the Retirement Committee or
another named Fiduciary or (ii) authority to manage the assets held by the Trustee is delegated by the Retirement Committee to an Investment Manager pursuant to the terms of the Trust Agreement. The Trustee may designate agents or others to
carry out certain of the administrative responsibilities in connection with management of the Fund. |
11.04. |
Decision and Action of the Retirement Committee. The Retirement Committee from time to time may establish rules for the administration of this Plan. The Retirement Committee shall have the sole discretion to make
decisions and take any action with respect to questions arising in connection with the Plan, including, but not limited to, the construction and interpretation of the Plan and the Trust Agreement, the resolution of any ambiguities, the determination
of the conditions subject to which any benefits may be payable, the resolution of all questions concerning the status and rights of a Participant and others under the Plan and whether a claimant is eligible for benefits under the Plan, the
determination of the amount of benefits, if any, a claimant is entitled to receive, and making any other determinations which it believes necessary or advisable for the administration and operation of the Plan. Any such decision or action shall be
final and binding upon all Participants and Beneficiaries, and benefits under the Plan shall be paid only if the Retirement Committee decides in its discretion that the claimant is entitled to them. The Retirement Committees decision or action
in respect of any of the above shall be conclusive and binding upon all Participants and their Beneficiaries, heirs, assigns, administrators, executors and any other person claiming through or under them, subject to such individuals rights to
a review of the denial of any benefit claim under the benefit claims provisions referenced in Section 7.12. |
11.05. |
Membership of the Retirement Committee. The Retirement Committee shall consist of at least three (3) members. Each person appointed a
member of the Retirement Committee shall file his or her acceptance of the appointment with the secretary of the Company. Any member of the Committee may resign by delivering his or her written resignation to the secretary of the Company; the
resignation shall become effective 30 days following receipt by the secretary, or at any other time agreed upon by the |
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member and the Board. The Board may remove any member of the Retirement Committee at any time, with or without cause, upon notice to the member being removed. Notice of the appointment,
resignation or removal of a member of the Retirement Committee shall be given by the Board to the Trustee and to the members of the Retirement Committee. |
11.06. |
Officers and Meetings of the Retirement Committee. The Retirement Committee shall elect a chairperson and a secretary, who need not be a member of the Retirement Committee, and shall hold meetings upon such
notice and at such times and places as it may from time to time determine. Notice of a meeting need not be given to any member of the Retirement Committee who submits a signed waiver of notice before or after the meeting or who attends the meeting.
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11.07. |
Procedures of the Retirement Committee. A majority of the total number of members of the Retirement Committee shall constitute a quorum for the transaction of business. The vote of a majority of the members of
the Retirement Committee present at the time of a vote, if a quorum is present at the time, shall be required for action by the Retirement Committee. Resolutions may be adopted or other action taken without a meeting upon the written consent of all
members of the Retirement Committee. Any person dealing with the Retirement Committee shall be entitled to rely upon a certificate of any member of the Retirement Committee, or its secretary, as to any act or determination of the Retirement
Committee. |
11.08. |
Subcommittees, Advisers and Agents of Retirement Committee. The Retirement Committee may (a) appoint subcommittees with such powers as the Retirement Committee shall determine advisable, (b) authorize
one or more of its members or an agent to execute any instrument, (c) utilize the services of Employees and engage accountants, actuaries, agents, clerks, legal counsel, medical advisers and professional consultants, any of whom may also be
serving an Affiliated Company, to assist in the administration of this Plan or to render advice with regard to any responsibility under the Plan, and (d) delegate to any such agent or to any subcommittee or member authority to perform any act
hereunder, including without limitation those matters involving the exercise of discretion, provided that such delegation shall be subject to revocation at any time in the discretion of the committee. |
11.09. |
Duties, Powers and Authority of Investment Committee. The Investment Committee shall periodically review the investment performance and methods
of the Trustee and any other funding agency, including any insurance company, under the Plan and shall make recommendations to the Board of Directors of the Company concerning the appointment, continuation, removal or change of the Trustee or any
such funding agency. The Investment Committee shall have the power to direct the Trustee as to the management, acquisition or disposition of Plan assets |
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constituting a portion or portions or all of the Fund. The Investment Committee shall have the power to appoint or remove from time to time one or more investment advisers and to delegate to any
such adviser authority and discretion to manage, acquire or dispose of Plan assets constituting a portion or portions or all of the Fund provided that, |
|
(a) |
each adviser with such authority and discretion shall be a bank, an insurance company or a registered investment adviser under the Investment Advisers Act of 1940 and shall acknowledge in writing that it is a Fiduciary
with respect to the Plan, and |
|
(b) |
the Investment Committee shall periodically review the investment performance and methods of each adviser with such authority and discretion. |
The Investment Committee shall establish investment standards and policies incorporating as pertinent such requirements and objectives of the
Plan or other information (including the Plans funding method and any interest rate or other actuarial assumptions) communicated to it by other Plan Fiduciaries and shall communicate such standards and policies to the Trustee (or other funding
agencies under the Plan) and to any investment advisers. The Investment Committee shall determine the investment options (such as equity, cash equivalent or other funds managed by an investment adviser, the Trustee or others) to be made available
under the Plan from time to time for election by Participants (or their Beneficiaries).
11.10. |
Trust Fund and Trustee. All Plan assets constituting the Fund held for purposes of the Plan shall consist either of assets held in trust by one or more Trustees appointed from time to time by the Company. There
shall be such powers in the Trustees and the Retirement Committee as to investment, reinvestment, control and disbursement of the Fund as provided hereunder and in any such insurance contracts or Trust Agreements; provided, however,
that in the event the Plan is fully insured, any dividends or credits earned on insurance contracts will be applied, within the taxable year of the Company in which received or within the next succeeding taxable year, toward the next premiums due
before any further employer contributions are so applied. Generally, the Trustees shall have authority over and responsibility for the management, acquisition and disposition of Plan assets constituting the portion of the Fund, if any, and even to
the whole thereof, which is not being managed by an insurance company or pursuant to the directions of another Plan Fiduciary or a Plan Participant. The Trustees powers and duties shall be such, and only such, as are expressly set forth in the
Plan, including the Trust Agreement to which it is a party. In the event of any conflict between the provisions of such Trust Agreement and other provisions of the Plan with respect to the Trustees powers and duties, such Trust Agreement shall
control. |
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11.11. |
Agent for Service of Legal Process. The Secretary of the Company or such other person as may from time to time be designated by the Plan Administrator shall be the Plans agent for service of legal process.
|
11.12. |
Company Actions. Whenever under the terms of the Plan the Company is required or permitted to do or perform any act, matter or thing, it shall be done or performed by a duly authorized officer of the Company.
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11.13. |
Communications To and From Plan Fiduciaries. All elections, designations, requests, notices, instructions, and other communications from a Participant, Beneficiary or other person to the Plan Administrator or
other Fiduciary of the Plan which are required or permitted under the Plan shall be in such form as is prescribed by or acceptable to the Plan Administrator from time to time, shall be mailed by first-class mail or delivered to such location as
shall be specified by the Plan Administrator, and shall be deemed to have been given and delivered only upon actual receipt thereof by the Plan Administrator or other appropriate Fiduciary of the Plan at such location. All notices, statements,
reports and other communications from the Company, the Plan Administrator or other Fiduciary of the Plan to any Employee, Participant, Beneficiary or other person which are required or permitted under the Plan shall be deemed to have been duly given
when delivered or mailed first-class, postage prepaid, to the address last appearing on the records of the Plan Administrator for such Employee, Participant, Beneficiary or other person. |
11.14. |
Reliance. The members of the Retirement Committee, Retirement Investment & Administration Committee and Investment Committee and any officer, employee, or director of the Company to whom any duty or
power relating to the administration or interpretation of the Plan or to the management and control of the assets of the Plan may be delegated or allocated shall be entitled to conclusively rely upon all tables, valuations, certificates, opinions
and reports which shall be furnished by any accountant, actuary, auditor, counsel, insurance company or other expert who shall be employed or engaged by the Company, the Retirement Committee, Retirement Investment & Administration Committee
or the Investment Committee. |
11.15. |
Indemnification of Fiduciaries. To the maximum extent permitted by law, no member or officer of the Retirement Committee, Retirement
Investment & Administration Committee or Investment Committee or officer, employee, or director of the Company to whom any duty or power relating to the administration or interpretation of the Plan or to the management and control of the
assets of the Plan may be delegated or allocated shall be personally liable by reason of any contract or other instrument executed by or on behalf of such individual in such individuals capacity as a Fiduciary of the Plan or for any action
taken or omitted or mistake of judgment made in good faith, and the Company |
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shall indemnify and hold harmless, directly from its own assets (including the proceeds of any insurance policy the premiums of which are paid from the Companys own assets) against any cost
or expense (including counsel fees) or liability (including any sum paid in settlement of a claim with the approval of the Company) arising out of any act or omission to act in connection with the Plan unless arising out of such individuals
fraud or bad faith. |
11.16. |
Bonding. Except as otherwise required by ERISA, no bond or other security need be required of any Fiduciary of the Plan in any jurisdiction. The Plan Administrator shall be responsible to assure that every
Fiduciary of the Plan and official of the Plan, as defined in Section 412 of ERISA, shall be bonded in the manner and to the extent required by said Section 412. The amount of any required bond generally shall not be less than 10% of the
amount of funds handled, provided that in no case shall such bond be less than $1,000 or more than $500,000, unless the Secretary of Labor shall properly prescribe an amount in excess of $500,000. |
11.17. |
Voting of Company Stock and Global Stock. Each Participant and Beneficiary is hereby designated as a named fiduciary within the meaning of Section 402(a)(2) of ERISA with respect to the shares of Company
Stock and Global Stock allocated to his Account. |
|
(a) |
Generally. When the Company files preliminary proxy solicitation materials with the Securities and Exchange Commission, the Company shall cause a copy of all materials to be sent simultaneously to the Trustee,
and the Trustee shall prepare a voting instruction form based upon these materials. At the time of mailing of notice of each annual or special stockholders meeting of the Company, the Company shall cause a copy of the notice and all proxy
solicitation materials to be sent to each Plan Participant and Beneficiary, together with a voting instruction form requesting instructions to the Trustee on how to vote the Company Stock or the Global Stock allocated to such Participants or
Beneficiarys Account. Each Participant and Beneficiary shall have the right to direct the Trustee as to the manner in which to vote that number of shares of Company Stock or Global Stock credited to his Accounts. Such direction shall be
communicated in writing and shall be held in confidence by the Trustee and not divulged to the Company, or any officer or employee thereof. Upon receipt of directions, the Trustee shall vote the shares of Company Stock or Global Stock credited to
the Participants or Beneficiarys Accounts as so directed. |
The Trustee shall vote those shares of Company Stock
not credited to Plan Participants or Beneficiaries Accounts, and those shares of Company Stock or Global Stock credited to the Accounts of
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Participants and Beneficiaries for which no valid voting directions are received, in the same proportion on each issue as it votes those shares credited to Participants and
Beneficiaries Account for which it received voting directions. The voting instruction form prepared by the Trustee shall state clearly, and in a manner calculated to be understood by Participants and Beneficiaries, this provision concerning
the voting of unallocated shares of Company Stock and shares for which no valid voting direction is received.
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(b) |
Tender Offers. Upon commencement of a tender offer for any Company Stock or Global Stock, or any exchange offer or offer to purchase Company Stock or Global Stock each Participant and Beneficiary shall have the
right to determine whether shares allocated to their Accounts will be tendered or sold. The Company shall notify each Plan Participant and Beneficiary of this right and distribute, or cause to be distributed to them in a timely manner the same
information that is distributed to other shareholders in connection with the proposed tender offer, exchange or sale, together with a voting instruction form. Directions from a Participant or Beneficiary to the Trustee concerning the tender or sale
of Company Stock or Global Stock shall be communicated in writing, and the Trustee shall tender or sell, or otherwise dispose of the Company Stock or Global Stock allocated to the Participants or Beneficiarys Account as directed. To the
extent that Plan Participants or Beneficiaries do not issue valid directions to the Trustee to sell, exchange or otherwise dispose of the Company Stock or Global Stock allocated to their Accounts such individuals shall be deemed to have directed the
Trustee that such shares remain invested in Company Stock or Global Stock. |
With respect to unallocated shares of Company
Stock, if any, the Trustee shall tender that number of shares of Company Stock not credited to Plan Participants and Beneficiaries accounts determined by multiplying the total number of such shares by a fraction, of which the numerator
is the number of shares of Company Stock credited to Participants and Beneficiaries Accounts for which the Trustee has received valid voting directions to tender, and of which the denominator is the total number of shares of Company
Stock credited to Plan Participants and Beneficiaries Account.
The voting instruction form shall state clearly, and in a
manner calculated to be understood by Participants and Beneficiaries, the effect of the Participant or Beneficiary failing to issue valid voting instructions, and the manner in which unallocated shares of Company Stock will be voted.
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(c) |
The Plan Administrator shall adopt procedures designed to safeguard the confidentiality of information relating to the purchase, holding, and sale of securities, and the exercise of voting, tender and similar rights
with respect to such securities by Participants (and Beneficiaries), except to the extent necessary to comply with Federal laws or state laws not preempted by ERISA. |
|
(d) |
The Secretary of the Company is hereby designated as the Fiduciary of the Plan for the purpose of ensuring, with respect to the purchase, holding and sale of Company securities, that the procedures are in fact
sufficient to safeguard the confidentiality of such information and such procedures are being followed. The Secretary of the Company is also hereby designated as the Fiduciary of the Plan for the purpose of ensuring that an independent Fiduciary is
appointed who shall carry out activities relating to any situations which the Secretary determines involve a potential for undue influence upon Participants and Beneficiaries with regard to the direct or indirect exercise of shareholder rights. For
purposes of the preceding sentence, a Fiduciary is not independent if the Fiduciary is affiliated with any sponsor of the Plan. |
ARTICLE XII
PARTICIPATING
EMPLOYERS
12.01. |
Definition of Company in this Article. For purposes of this Article XII, Company means Frontier Communications and any successor thereto which assumes the Plan or any predecessor employer which
maintained the Plan, and does not include other Participating Employers. |
12.02. |
Extent of Participation. The participation of each Employer in the Plan shall be limited to providing benefits for Participants who are or have been in the employ of such Employer. Contributions by an Employer
shall be determined on the basis of Participants who have been employed by that particular Employer. The Plan shall be administered as a single plan and not as separate plans of the Company and each Employer. Accordingly, unless otherwise directed
by the Company, all funds shall be commingled, held and invested as one fund. All contributions made by the Company and by Employers under the Plan, together with any increment attributable thereto, shall be used to pay benefits to a Participant
under the Plan in accordance with the provisions of the Plan and without regard to which Participating Employer or Employers have funded the Participants benefits. Forfeitures for a Plan Year shall be allocated among all Participants who would
be eligible to share in any discretionary contributions made by their Employer for the Plan Year, whether or not any such discretionary contributions are made. |
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12.03. |
Plan Administration and Expenses. The Company or its Board of Directors shall have authority to appoint a Trustee from time to time, the Retirement and Investment Committees and the Plan Administrator and any
successors thereto. The Plan Administrator may delegate some or all of its duties as they relate to an Employers participation in the Plan to the Employer or a committee appointed by the Employer to serve as plan administrator with respect to
the Employers participation in the Plan; provided, however, that any individual so appointed shall serve without compensation from the Plan for such services. By its adoption of the Plan a Participating Employer shall be deemed
thereby to appoint the Company, the Retirement and Investment Committees, the Plan Administrator, the Trustee and other named Fiduciaries of the Plan its exclusive agents to exercise on its behalf all of the power and authority conferred upon them
by the Plan, said appointment to continue until the Plan is terminated as to such Employer and the portion of the Fund attributable to the then Employees of such Employer has been disposed of as provided in Section 12.06. The Company, or with
its approval, the Plan Administrator, shall have authority to make any and all necessary or appropriate rules and regulations, binding upon all persons, including Employers, Employees, Participants and their Beneficiaries, relating to the
participation of more than one Employer in the Plan. Upon request of the Company or the Plan Administrator each Employer shall pay a proportionate part of the cost of any necessary or appropriate expenses incurred in respect of the Plan. An
Employers proportionate part of any cost shall be determined on the basis of its proportionate share of contributions to the Fund for the Plan Year unless the Company or the Plan Administrator, from time to time or with respect to particular
expenses, determines that another reasonable basis of allocation shall apply. |
12.04. |
Plan Amendment. The Company may amend the Plan as provided in Section 10.01 with respect to any Employer and such Employers Employees as well as with respect to itself and its Employees.
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12.05. |
Termination of an Employers Participation. Without affecting the continuing participation in the Plan of the Company or any other
Employer, the Company, with or without cause, may terminate the participation of any Employer in the Plan by written notice to the Employer, and any Employer may voluntarily terminate its participation in the Plan by written notice to the Company.
If any Employer ceases to be a party to the Plan, the Plan Administrator shall cause to be determined that fraction of the Fund allocable to the then Employees of the terminating Employer. Within a reasonable period of time the Trustee shall set
aside sufficient assets from the Fund to equal in value such fraction of the entire value of the Fund. The Plan Administrator may direct the Trustee to (a) distribute such assets as if the Plan had been terminated on the date such former
Employer ceased to be a party to the Plan, (b) deliver such assets to |
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another plan trustee designated by such former Employer, or (c) take whatever alternative action may be deemed appropriate under the circumstances. |
12.06. |
Restrictions on Amendments, Mergers or Terminations by Employers. Any amendment, merger, consolidation, transfer of assets, termination or partial termination of or with respect to the participation in the Plan
of an Employer shall be subject to the same restrictions that apply to such actions on the part of the Company as set forth in Article X. |
12.07. |
Multiple Employer Plan Rules. With respect to any period during which the Plan is a multiple employer plan described in Section 413(c) of the Code, the provisions of this Section 12.07 shall apply.
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|
(a) |
For purposes of service crediting for eligibility and vesting purposes, all Employees shall be treated as employed by a single Employer. |
|
(b) |
For purposes of applying the Section 8.01 limitation on Annual Additions, all Employees shall be treated as employed by a single Employer. |
|
(c) |
Nondiscrimination testing, including Actual Deferral Percentage and Average Contribution Percentage testing under Sections 8.05 and 8.06, respectively, shall be performed separately with respect to each controlled
group. For purposes of this Section 12.07(c), a controlled group means an affiliated service group under Section 414(m) of the Code, a controlled group of corporations under Section 414(b) of the Code, a group of trades or
businesses under common control under Section 414(c) of the Code, and any other entity required to be aggregated with an Employer pursuant to Section 414(o) of the Code and the regulations thereunder. |
ARTICLE XIII
MISCELLANEOUS PROVISIONS
13.01. |
Plan for Exclusive Benefit of Employees. The Plan has been entered into for the exclusive benefit of Employees, Participants and their Beneficiaries. Except as expressly permitted under the provisions of the Plan
or as may otherwise be permitted or required by law, no funds of the Plan shall at any time revert to or be used or enjoyed by the Company or otherwise than for the benefit of Employees and their Beneficiaries or to pay taxes or Plan administrative
expenses. |
13.02. |
Rights of Participants Not Expanded. Neither the Plan, nor any provisions thereof, nor the action of the Company in establishing or
participating in the Plan, nor any action taken or done by the Plan Administrator, the |
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Retirement Committee, the Trustee or other Fiduciary of the Plan, nor participation in the Plan shall be construed as giving to any person the right to be employed by or to remain in the employ
of the Company or, except to the extent and in the manner provided for in and subject to all the terms and conditions of the Plan, the right to any payment or benefit whatsoever. All Employees shall be subject to discharge to the same extent as if
the Plan had never been adopted and the Company hereby expressly reserves such right to discharge any Employee without liability on the part of it, the Plan Administrator, the Trustee or other Fiduciary of the Plan. |
13.03. |
Plan Subject to Insurance Contracts and Trusts. To the extent that payment of any benefit under the Plan is provided for by an annuity contract or any other contract with an insurance company the payment of such
benefit shall be subject to all the provisions of such contract. In the event that the Employer establishes a Trust, any and all rights or benefits accruing to any persons under the Plan shall be subject to the terms of such trust agreement.
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13.04. |
Governing Law and Savings Clause. To the extent not preempted by federal law, the Plan shall be construed according to the laws of the State of Connecticut. If any provision herein is held invalid or
unenforceable, such invalidity or unenforceability shall not affect any other provisions, and the Plan shall be construed and enforced as if such provision had not been included. |
13.05. |
Headings. The Article and Section headings in the Plan are inserted for convenience of reference only and are not to be considered in the construction or interpretation of the provisions of the Plan.
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13.06. |
Gender and Number. As used in the Plan and unless otherwise plainly required by the context, any gender may be construed to include all genders, and the singular or plural may be construed to include the plural
or singular respectively. |
13.07. |
Definitions. Unless otherwise plainly required by the context, the capitalized words and phrases used in the Plan shall have the meanings set forth in Article 14 (the Glossary). |
13.08. |
Self-Correction Measures. In the event of any error in the administration of the Plan that can be corrected under the Self-Correction Program of the Internal Revenue Service, or any successor program thereto, the
Company may take such action as may be necessary to correct the error and retain the tax-qualified status of the Plan. |
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ARTICLE XIV
GLOSSARY
Account or
Account Balance shall mean the Participants share of the Fund from time to time as shown by the records of the Plan Administrator. The Accounts shall include, as applicable, Matching Contribution Accounts, Supplemental Match
Accounts, Elective Deferral Accounts, Discretionary Contribution Accounts, Fixed Contribution Accounts, Roth Elective Deferral Accounts, After-Tax Accounts, Special Transition-Year Contribution Accounts, Rollover Accounts, Transferred Accounts,
TRASOP Accounts, Retiree Medical Opt-Out Contribution Accounts, LGS Accounts, Global Stock Accounts, and Voluntary After-Tax Contribution Accounts. A Participants Account Balance shall reflect all contributions allocated to his Account as
adjusted for earnings and other accretions to the Fund and distributions, losses and other diminutions to the Fund.
Actual Deferral
Percentage shall mean, with respect to a group of Participants, the average of the ratios, calculated separately for each Participant in the same group, of the amount of Salary Deferral Contributions allocated under the Plan with respect
to a Plan Year (plus any Matching Contributions that are made subject to 401(k) restrictions) to the Participants Compensation for the same Plan Year. Company contributions on behalf of any Participant shall include:
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(a) |
Any Elective Deferral Contributions made pursuant to an Elective Deferral Agreement, including Excess Elective Deferral Contributions of Highly Compensated Employees, but excluding (1) Excess Elective Deferral
Contributions of Non-Highly Compensated Employees that arise solely from Elective Deferral Contributions under the Plan or any Plan of the Company; and (2) Elective Deferral Contributions that are taken into account in the Contributions
Percentage test (provided the ADP test is satisfied both with and without exclusion of these Elective Deferral Contributions); and |
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(b) |
At the election of the Company, Qualified Nonelective Contributions and Qualified Matching Contributions. |
For
purposes of computing Actual Deferral Percentages, an Employee who would be a Participant but for the failure to make an Elective Deferral Contribution shall be treated as a Participant on whose account no Elective Deferral Contributions are made.
Average Contribution Percentage shall mean, with respect to a group of Participants, the average, expressed as a percentage, of the
Contribution Percentages of the Participants in each group.
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Beneficiary or Beneficiaries shall mean the person or persons designated in
accordance with the provisions of Section 7.07 or otherwise entitled under the Plan or as provided in Section 401(a)(9) of the Code and regulations thereunder to receive any benefits to be paid under the Plan on account of, or following,
the death of a Participant.
Board of Directors shall mean the Board of Directors of the Company.
Break in Service shall mean a one-year Period of Severance.
Code shall mean the Internal Revenue Code of 1986, as amended and in force from time to time, or any successor or substitute provisions of
law enacted from time to time.
Code Section 415 Compensation shall, for purposes of applying the benefit limitations of Article
VIII, include a Participants wages, salaries and fees received for personal services actually rendered in the course of employment with the Company, to the extent that the amounts are includable in gross income, but excluding the following:
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(a) |
Company contributions to a plan of deferred compensation which are not includable in the Employees gross income for the taxable year in which contributed, or Company contributions under a simplified employee
pension plan to the extent such contributions are deductible by the Employee, or any distributions from a plan of deferred compensation; |
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(b) |
Amounts realized from the exercise of a non-statutory stock option, or when restricted stock either becomes freely transferable or is no longer subject to a substantial risk of forfeiture; and |
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(c) |
Amounts realized from the sale, exchange, or other disposition of stock acquired under a statutory stock option; and |
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(d) |
Other amounts which receive special tax benefits, or contributions by the Company (whether or not pursuant to a salary reduction agreement) toward the purchase of an annuity described in Section 403(b) of the
Internal Revenue Code. |
Code Section 415 Compensation shall include differential wage payments within the meaning of
Section 3401(h) of the Code.
Code Section 415 Compensation shall include any elective deferral as defined in Section 402(g)(3) of the Code
and any amount which is contributed or deferred by the Company at the election of the Employee and which is not otherwise includable in the gross income of the Employee by reason of Section 125, 132(f), or 457 of the Code.
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The Code Section 415 Compensation of each Employee taken into account under the Plan for any Plan Year shall
not exceed the annual Compensation limit set forth in Section 401(a)(17) of the Code, as adjusted for increases in the cost of living in accordance with Section 401(a)(17)(B) of the Code. Amounts described in the preceding sentence shall
be deemed to include any amounts that are not available to a Participant in cash in lieu of group health coverage solely because the Participant is not able to certify that he or she has other health coverage.
Code Section 415 Compensation does not include any amounts that are paid to a Participant following the date on which a Participant ceases to be an
Employee (severance date) except for any such amounts that are regular compensation for services that would have been paid prior to the Participants severance date if the Participant had continued in employment with the Employer,
including bonuses, and that are paid by the later of 2 1⁄2 months after the severance date or the end of the Plan Year that includes the severance date:. This
paragraph is effective January 1, 2008.
Company Stock shall mean Frontier Communications Company common stock.
Compensation (except for Code Section 415 Compensation, above) shall mean:
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(a) |
Except as otherwise provided below, the base compensation paid to an Employee by the Company with respect to each Plan Year, plus overtime, shift differential and commissions (but excluding commissions earned on or
after January 1, 2013), and any addition to base compensation attributable to credits granted under the Companys cafeteria plan to Employees who elect out of health plan coverage, but excluding all bonuses. Except as otherwise provided
below, Compensation shall exclude any amounts contributed to or the value of benefits under the Plan or any other deferred compensation, employee benefit or fringe benefit program or plan or any other extraneous form of compensation.
Effective January 1, 2009, Compensation shall also include differential wage payments, as defined in Section 3401(h)(2) of the Code, received from the Employer. |
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(b) |
With respect to GTE 2000 Nebraska and Illinois Union Participants (as defined below) Compensation (i) shall consist of base
compensation, sales commissions, sales bonuses, production incentive payments, foreign service premiums, and payment made under team-oriented short-term incentive programs that are specifically included by the Retirement Committee from time to time,
and (ii) shall exclude (except as may otherwise be provided in (i) above) any commissions, incentive payments, service award payments, performance award payments, other management incentives, awards, profit-sharing, stock received pursuant
to |
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employee stock option plans or other stock purchase plans, bonuses, overtime, shift or other premiums, supplemental vacation benefits, moving expense reimbursements, and any other special fees or
allowances paid to a GTE 2000 Nebraska and Illinois Union Participant during the Plan Year. |
GTE 2000 Nebraska and
Illinois Union Participants means Participants who are covered under one of the following collective bargaining agreements: IBEW 21, 51 (former GTE locations only), 196, or 702, or CWA (Nebraska).
|
(c) |
With respect to Frontier Union Participants, Compensation shall mean the total of a Participants basic salary or wages, bonuses, overtime and commissions paid by the Employer for services actually
rendered by the Participant to the Company. A Participants Compensation shall not include imputed long term disability premiums, pension payments or any other form of extra remuneration of whatever nature except bonuses and commissions
included under the preceding sentence. For any Participant receiving disability pay from the Company during a payroll period (other than a disability pension), the term Compensation means such disability pay. |
|
(d) |
For purposes of applying paragraphs (a), (b), and (c), Compensation shall include any elective deferral (as defined in Code Section 402(g)(3)) and any amount which is contributed by the Company at the
election of the Participant and which is not includible in the gross income of the Participant by reason of Code Sections 125, 132(f), or 457. Amounts described in the preceding sentence shall be deemed to include any amounts that are not available
to a Participant in cash in lieu of group health coverage solely because the Participant is not able to certify that he or she has other health coverage. |
|
(e) |
Except for purposes of applying paragraph (f), a Participants Compensation shall in no event include amounts paid prior to his or her becoming a Participant in the Plan. |
|
(f) |
Notwithstanding the foregoing, for purposes of determining Contribution Percentages, the Actual Deferral Percentage, and the Average Contribution Percentage Compensation means wages as defined in
Section 3401 of the Code; provided, however, that Compensation for such purpose shall include any elective deferral (as defined in Code Section 402(g)(3)) and any amount which is contributed by the Company at the election of the
Participant and which is not includible in the gross income of the Participant by reason of Code Sections 125, 132(f), or 457. |
75
|
(g) |
In addition to other applicable limitations set forth in the Plan, and notwithstanding any other provision of the Plan to the contrary, the annual Compensation of each Employee taken into account under the Plan for any
Plan Year shall not exceed the annual Compensation limit set forth in Section 401(a)(17) of the Code, as adjusted 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) beginning in such calendar year. If a determination period consists of fewer than 12 months, the 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. |
|
(h) |
In no event shall Compensation include any item of remuneration that fails to qualify as Code Section 415 Compensation. |
Contribution Percentage shall mean, with respect to a group of Participants, the ratios (expressed as a percentage) of the Matching
Contributions, Supplemental Profit-Sharing Matches, and Voluntary After-Tax Contributions allocated under the Plan on behalf of each Participant in the group, with respect to a Plan Year, to the Participants Compensation for the Plan Year. For
purposes of determining such ratios, Participant is defined below in this Glossary and is further defined to mean:
|
(a) |
an Employee who is directly or indirectly eligible to make an Elective Deferral Contribution or to receive an allocation of Matching Contributions or Supplemental Profit-Sharing Matches (including Matching Contributions
or Voluntary Supplemental Profit-Sharing Matches derived from forfeitures) under the Plan for a Plan Year; |
|
(b) |
an Employee who is unable to make an Elective Deferral Contribution or to receive an allocation of Matching Contributions because the Employee has not contributed to another plan; |
|
(c) |
an Employee who would be eligible to make Elective Deferral Contributions but for a suspension due to a distribution, a loan or an election not to participate in the Plan (other than certain one-time elections), even
though the Employee may not make such Elective Deferral Contributions or receive an allocation of Matching Contributions by reason of such suspension; or |
|
(d) |
an Employee who is unable to make an Elective Deferral Contribution or to receive an allocation of Matching Contributions or Supplemental Profit-Sharing Matches because such Employee may receive no additional annual
additions because of Section 415(c)(1) or 415(e) of the Code. |
76
In the case of a Participant described in paragraphs (a), (b), (c) or (d) who makes no Elective
Deferral Contributions and receives no Matching Contributions under the Plan for a Plan Year, the Contribution Percentage for such Participant that is to be included in determining the Average Contribution Percentage for such Plan Year shall be
zero. In determining the Contribution Percentage, the Plan Administrator may elect, to the extent permitted in regulations, to take into account elective deferrals (defined in Code Section 402(g)(3)(A) and qualified nonelective deferrals which
are subject to Code Section 401(k) restrictions (as defined in Code Section 401(m)(4)(C)) contributed to any Plan maintained by the Company or a Related Employer.
In determining the Contribution Percentage, the following Matching Contributions shall be excluded:
|
(x) |
Matching Contributions or Supplemental Profit-Sharing Matches that a Participant forfeits because they correspond to Elective Deferral Contributions in excess of the permissible dollar limits contained in Code
Section 402(g); |
|
(y) |
Matching Contributions or Supplemental Profit-Sharing Matches forfeited, or returned to the Participant in order to correct an allocation in excess of Section 415(c) of the Code; and |
|
(z) |
Matching Contributions or Supplemental Profit-Sharing Matches that a Participant forfeits in conjunction with a distribution made to correct a failure of the Actual Deferral Percentage test or the Average Contribution
Percentage test. |
Current Market Value shall mean on any business day (a) as applied to Company Stock, the closing
market price thereof as reported on the New York Stock Exchange or such other exchange as the Companys Common Stock may be reported on; and (b) as applied to other investments in the Plan, shall mean the closing market price as of the
Valuation Date, as reported by the Trustee.
Discretionary Contribution Account shall mean that portion of a Participants Account
attributable to Discretionary Contributions as adjusted to reflect their share of earnings and other accretions to the Fund and distributions, losses and other diminutions to the Fund.
Discretionary Contributions shall mean contributions made by the Company on behalf of a Participant in accordance with Section 3.08 of
the Plan. Discretionary Contributions include Profit-Sharing Contributions provided for under the terms of a collective bargaining agreement.
77
Effective Date for purposes of this amended and restated Plan shall mean January 1, 2012
except with respect to specific provisions for which a different effective date is specifically provided under the Plan. The Effective Date of any prior Plan or amendment shall be as specified in each such prior document. Solely for purposes of
applying Section 3.12(d) (relating to after-tax employee contributions made by certain Frontier Nonunion Employees), the effective date of the provisions of this restated Plan document pertaining to Voluntary After-Tax Contributions (including
nondiscrimination requirements and withdrawal restrictions) shall coincide with the effective date set forth in Section 3.12(d).
Elective
Deferral Account shall mean that portion of a Participants Account attributable to salary deferral or Elective Deferral Contributions (other than Roth Elective Deferral Contributions) (i.e., Pre-Tax Elective Deferrals) as adjusted to
reflect their share of earnings and other accretions to the Fund and distributions, losses and other diminutions to the Fund.
Elective Deferral
Contributions shall mean any employer contributions made to the Plan at the election of the Participant, in lieu of unreduced Compensation, and shall include contributions made pursuant to a salary reduction agreement or other deferral
mechanism. With respect to any taxable year, a Participants Elective Deferral Contribution is the sum of all Employer contributions made on behalf of such Participant pursuant to an election to defer under any qualified cash or deferred
arrangement as described in Section 401(k) and 402A of the Code. Elective Deferral Contributions include Roth Elective Deferral Contributions except where otherwise specified.
Employee shall mean any common law employee of the Company.
Employer shall mean any Related Employer participating in the Plan as provided in Article XII. Employer may refer to all Participating
Employers collectively or to each one individually as the context may require.
ERISA shall mean the Employee Retirement Income
Security Act of 1974 as amended and in force from time to time, or any successor or substitute provisions of law enacted from time to time.
Excess Contributions shall mean with respect to any Plan Year, the excess of (a) the aggregate amount of Company contributions
actually taken into account in computing the Actual Deferral Percentage of Highly Compensated Employees for such Plan Year, over (b) the maximum amount of such contributions permitted by the Actual Deferral Percentage test (determined by
hypothetically reducing contributions made on behalf of Highly Compensated Employees in order of the Actual Deferral Percentages, beginning with the highest of such percentages.)
Excess Elective Deferrals shall mean those Elective Deferral Contributions that are includable in a Participants gross income under
Section 402(g) of the Code to the extent such Participants Elective Deferral Contributions exceed the dollar
78
limitation under such Code section. Excess Elective Deferral Contributions shall be treated as Annual Additions under the Plan, unless such amounts are distributed no later than April 15
following the close of the Participants taxable year.
Fiduciary shall mean any person who
|
(a) |
exercises any discretionary authority or discretionary control respecting management of the Plan or exercises any authority or control respecting management or disposition of its assets, |
|
(b) |
renders investment advice for a fee or other compensation, direct or indirect, with respect to any monies or other property of the Plan or has any authority or responsibility to do so, or |
|
(c) |
has any discretionary authority or discretionary responsibility for the administration of the Plan. |
Fixed Contribution Accounts shall mean that portion of a Participants Account attributable to Fixed Contributions as adjusted to
reflect their share of earnings and other accretions to the Fund and distributions, losses and other diminutions to the Fund.
Fixed
Contributions shall mean contributions made by the Company on behalf of a Frontier Union Participant in accordance with Section 3.07 of the Plan.
Frontier Nonunion Employee shall mean an Employee of one of the Companys Frontier subsidiaries who is not covered under a collective
bargaining agreement.
Frontier Nonunion Participant shall mean a Participant who is a Frontier Nonunion Employee.
Frontier Union Employee shall mean an Employee who is covered under one of the following collective bargaining agreements: NY IBEW 503, NY
IBEW 320, NY CWA 1170, NY RTWA, IA CWA 7171, MN CWA 7270, IL IBEW 51 (Lakeside, Midland, Mt. Pulaski, or Prairie), or MI IBEW 1106.
Frontier
Union Participant shall mean a Participant who is a Frontier Union Employee.
Fund shall mean the cash, securities or other
Plan assets held by the Trustee (or other funding agencies under the Plan) for the purposes of the Plan.
Global shall mean Global
Crossing, Ltd.
Global Stock shall mean Global common stock.
79
Global Stock Account shall mean that portion of a Participants Account established under
the Plan to hold Global Stock transferred to the Plan pursuant to the stock purchase agreement between the Company and Global. No additional Global Stock may be contributed or added to the Global Stock Account on or after the date such stock was
transferred to the Plan. A Participant shall at all times be fully vested in his Global Stock Account.
GTE 2000 Nonunion Participant
shall mean a GTE 2000 Participant who is not covered under a collective bargaining agreement.
GTE 2000 Participant shall mean a
Participant that (i) is employed in a business unit that was acquired by a Related Employer in 2000 from a Prior GTE Employer and (ii) was actively employed by such business immediately prior to the date of such acquisition and became
Employees on such date.
GTE 2000 Union Participant means a Participant who is covered under one of the following collective bargaining
agreements: IBEW 21, 51 (former GTE locations only), 196, 702, or 949 or CWA (Nebraska).
Hardship shall mean immediate and heavy
financial need of the Participant resulting from one of the following circumstances: (i) expenses for (or necessary to obtain) medical care that would be deductible under Code Section 213(d) (determined without regard to whether the
expenses exceed 7.5% of adjusted gross income); (ii) costs directly related to the purchase of a principal residence for the Participant (excluding mortgage payments); (iii) payment of tuition, related educational fees, and room and board
expenses, for up to the next 12 months of post-secondary education for the Participant or the Participants spouse, children, or dependents (as defined in Code Section 152 without regard to Code Section 152(b)(l), (b)(2) and
(d)(l)(B)); (iv) payments necessary to prevent the eviction of the Participant from his or her principal residence or foreclosure on the mortgage on that residence; (v) payments for burial or funeral expenses for the Participants
deceased parent, spouse, children, or dependents (as defined in Section 152 without regard to Code Section 152(d)(l)(B)); (vi) expenses for the repair of damage to the Participants principal residence that would qualify for the
casualty deduction under Code Section 165 (determined without regard to whether the loss exceeds 10% of adjusted gross income); or (vii) such other circumstances as the Internal Revenue Service may designate in regulations, rulings, or
other documents of general applicability as giving rise to a deemed immediate and heavy financial need.
Highly Compensated Employee
includes Highly Compensated Active Employees and Highly Compensated Former Employees. A Highly Compensated Active Employee includes any Employee who (a) was a 5% owner at any time during the prior Plan Year, or (b) for the prior Plan Year
had compensation from the Employer in excess of $80,000 (as adjusted pursuant to Section 415(d) of the Code).
80
A Highly Compensated Former Employee includes any Employee who separated from service (or was deemed to have
separated) prior to the current Plan Year, performs no service for the Employer during such Plan Year, and was a Highly Compensated Active Employee for either the separation year or any Plan Year ending on or after the Employees 55th birthday.
The determination of who is a Highly Compensated Employee, including the determinations of the number and identity of Employees in the top-paid group,
the number of Employees treated as 5% owners, and the compensation that is considered, will be made in accordance with Section 414(q) of the Code and the regulations thereunder.
Hour of Service shall mean each hour for which:
|
(a) |
An Employee is paid, or entitled to payment for the performance of duties for the Company or a Related Employer. |
|
(b) |
An Employee is paid, or entitled to payment by the Company or a Related Employer on account of a period of time during which no duties are performed (irrespective of whether the employment relationship has terminated)
due to vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty, leave of absence or the like. |
|
(c) |
Back pay, irrespective of mitigation of damages, is either awarded or agreed to by the Company or a Related Employer. |
|
(d) |
Credit is required under applicable state or federal law, including for periods of service in the Armed Forces of the United States under the Military Selective Service Act as amended. The nature, extent and timing of
such credit shall be as required under applicable law. |
An Hour of Service to be credited to an Employee in connection with a period of no
more than 31 days falling in two Plan Years shall be credited in the second such Plan Year, otherwise Hours of Service shall be credited in the Plan Year in which the duties are performed under paragraph (a), in which occurs the period during which
no duties are performed under paragraph (b), and to which the award or agreement for back pay pertains under paragraph (c). Hours of Service for purposes of paragraph (b), will be calculated and credited pursuant to Section 2530.200b-2 of the
Treasury Regulations, which is incorporated herein by this reference. The number of Hours of Service to be credited under either paragraph (b) or (c) for periods described in paragraph (b) shall be the number of working hours
regularly scheduled for such periods of time. In case of an Employee without a regular work schedule, an average of his actual hours worked for comparable periods of time shall be credited.
81
Notwithstanding the foregoing, the same Hour of Service shall not be credited under more than one of the
foregoing Subparagraphs and for purposes of crediting Hours of Service under either Subparagraph (b) or (c) for periods described in Subparagraph (b):
|
(y) |
Except in the case of an authorized leave of absence or required government service as described in the definition of Break in Service in this Glossary, no more than five hundred one (501) Hours of Service shall be
credited to an Employee on account of any such single continuous period (whether or not such period occurs in a single Plan Year) and such hours shall be credited until exhausted beginning with the first day of such period; and |
|
(z) |
No Hour of Service shall be credited to an Employee for payments made or due under a plan maintained solely for the purpose of complying with applicable workmens compensation, unemployment compensation or
disability insurance or for payments which solely reimburse the Employee for medical or medically related expenses incurred by such Employee. |
Hours of Service will be credited for employment with other members of an affiliated service group under Section 414(m) of the Code, a controlled group
of corporations under Section 414(b) of the Code, a group of trades or businesses under common control under Section 414(c) of the Code which the Company is a member, and other entity required to be aggregated with the Company, pursuant to
Section 414(o) of the Code and the regulations thereunder. Hours of Service will also be credited for any individual considered an Employee for purposes of the Plan under Section 414(n) of the Code.
Investment Committee shall mean the committee appointed by the Retirement Committee pursuant to Article XI to oversee the investment of
Plan assets, or if no such committee is appointed or if there are no members in office, the Retirement Committee.
Key Employee shall
mean any Employee or former Employee (including any deceased Employee) who at any time during the Plan Year that includes the determination date was an officer of the Employer having annual Code Section 415 Compensation greater than $130,000
(as adjusted under Section 416(i)(1) of the Code for Plan Years beginning after December 31, 2002), a 5-percent owner of the Employer, or a 1- percent owner of the Employer having annual Compensation of more than $150,000. The
determination of who is a Key Employee will be made in accordance with Section 416(i)(1) of the Code and the applicable regulations and other guidance of general applicability issued thereunder.
Leased Employee shall mean any person (other than an employee of the recipient) who pursuant to an agreement between the recipient and any
other
82
person (leasing organization) has performed services for the recipient (or for the recipient and related persons determined in accordance with Section 414(n)(6) of the Code) on a
substantially full-time basis for a period of at least one year, and such services are performed under the primary direction and control of the recipient employer. Contributions or benefits provided a leased employee by the leasing organization
which are attributable to services performed for the recipient employer shall be treated as provided by the recipient employer.
A leased employee shall
not be considered an employee of the recipient if: (i) such employee is covered by a money purchase pension plan providing: (1) a nonintegrated employer contribution rate of at least 10% of Code Section 415 Compensation,
(2) immediate participation, and (3) full and immediate vesting; and (ii) leased employees do not constitute more than 20% of the recipients non-highly compensated workforce.
LGS Account shall mean the amount transferred to the Plan on behalf of a Participant as a consequence of the merger of the LGS
Employees Savings and Investment Plan, as adjusted for subsequent investment gain or loss, income and expense. A Participant shall at all times be fully vested in his LGS Account.
Limitation Year shall mean the Plan Year.
Match Rate shall have the meaning set forth in Section 3.05(d)(1).
Match-Eligible Percentage shall have the meaning set forth in Section 3.05(d)(2).
Matching Contribution Account shall mean that portion of a Participants Account attributable to Matching Contributions as adjusted to
reflect their share of earnings and other accretions to the Fund and distributions, losses and other diminutions to the Fund. Amounts contained in this Account shall include amounts attributable to (a) Matching Contributions that are required
to be invested in Company Stock and Matching Contributions that may be invested by Participants and are not required to be invested in Company Stock; (b) Transferred Accounts containing matching contributions, which amounts are subject to
Participant investment direction and not required to be invested in Company stock (Prior Employers Match); (c) matching contributions previously made by the Company with respect to certain covered Participants as an additional
matching contribution to compensate for the elimination of certain retiree medical benefits; and (d) and discretionary matching contributions made by the Company pursuant to collective bargaining.
Matching Contributions shall mean contributions made by the Company on behalf of a Participant in accordance with Section 3.05 of the
Plan.
Non-Highly Compensated Employee shall mean any Employee or former Employee of the Company or a Related Employer who is not a
Highly Compensated Employee.
83
Non-Key Employee shall mean any Employee or former Employee of the Company or of any Related
Employer (and any beneficiary of such an employee) who is not a Key Employee.
Normal Retirement Date shall mean a Participants
65th birthday.
Participant shall mean an Employee or former Employee who has
become a Participant in the Plan in accordance with Article II (whether or not he actually makes Elective Deferral Contributions) and whose interest under the Plan has not been fully distributed or terminated.
Participating Employer shall mean any Related Employer other than (i) a Related Employer designated by the Board of Directors
or Retirement Committee as ineligible to participate in the Plan and (ii) a Related Employer whose participation in the Plan has terminated in accordance with Section 12.05. Notwithstanding the foregoing, Frontier Communications Corporate
Services Inc. is a Participating Employer beginning at the markets close on December 30, 2011, but only in the case of common law employees of Frontier Communications Corporate Services Inc. who are either: (i) not hourly-paid
and not in a unit covered by a collective bargaining agreement, (ii) hourly-paid and not in a unit covered by a collective bargaining agreement, and whose employer has agreed, by resolution of its board of directors (with the approval of the
Company) or by written certification of the most senior Human Resources officer of the Company, to become a co-sponsor under the Plan for such Employees, or (iii) in a unit covered by a collective bargaining agreement with a Participating
Employer that specifically provides for their coverage under the Plan. Employees who are in an employment classification that is eligible for the Frontier Communications Corporate Services Inc. Savings and Security Plan for Mid-Atlantic Associates
are not eligible for this Plan.
Period of Service shall mean the period of time commencing on the date on which an Employee first is
credited with an Hour of Service (or his reemployment commencement date, if later) and ending on his next Severance from Service Date. If an Employee has a Severance from Service as the result of a voluntary termination, discharge or retirement and
returns to service within 12 months of his Severance from Service, such period of absence shall be counted for purposes of determining such Employees vesting. If, during an absence from service for any reason other than a voluntary
termination, discharge or retirement, an Employee incurs a Severance from Service as the result of a voluntary termination, discharge or retirement, and the Employee returns to service within 12 months of the date on which he was first absent from
service, the period during which he is absent from service shall be counted for purposes of determining his vesting under the Plan.
|
(a) |
For purposes of determining a Participants vesting under Section 5.03 of the Plan, a Participant shall receive credit for all Periods of Service, including Service credited to the Employee prior to the
Companys adoption of the Plan; provided, however, that: |
84
|
(1) |
if a Participant has a five year Break in Service, then Service credited to the Participant after the five year Break in Service shall not be taken into account for purposes of determining the Participants vesting
in his Account Balance accrued before such Break in Service; and |
|
(2) |
if the Participant has no vested right to his Account as of his Severance from Service, then no Period of Service credited to him prior to his Severance shall be taken into account if the number of his consecutive one
year Breaks in Service equals or exceeds the greater of (A) five years or (B) the number of years of Service he had immediately before his Break. |
|
(b) |
For purposes of determining an Employees eligibility to participate, and determining the vesting percentage under Section 5.03 with respect to transferred Employees of GASCO, Inc. and Ogden Telephone Company
(as that term is defined in the respective purchase agreements for such companies), service recognized under the BHP Retirement Savings Plan and GASCO Bargaining 401(k) Plan shall be treated as Service under the Plan, and service with Ogden
Telephone Company shall be recognized as service under the Plan. For purposes of determining an Employees eligibility to participate and the vesting percentage under Section 5.03 with respect to Transferred Employees of Rhinelander
Telephone Company, GTE, Alltel, and LGS, service credited to such Transferred Employees by such former employers shall be recognized as service under the Plan. For purposes of determining an Employees eligibility to participate and the vesting
percentage under Section 5.03 with respect to Business Employees (as such term is defined in the stock purchase agreement between the Company and Global) of Global and its related entities, service with Global and its related entities shall be
recognized as service under the Plan. If and to the extent that the Board of Directors of the Company or the Retirement Committee so determines by rules uniformly applicable to all Employees similarly situated, an Employee who was in the employ of
any business or enterprise substantially all of whose assets and property are acquired by the Company or a Related Employer by purchase, merger, consolidation or otherwise, may receive credit for his past service with such business or enterprise,
and such service shall be included in his Period of Service under the Plan. |
Period of Severance shall mean the period of
time commencing on an individuals Severance from Service and ending on the date on which he again performs an Hour of Service.
85
Permanently Disabled shall mean that a Participant has qualified for and is receiving
long-term disability benefits from the Company. If the Participant is not covered by the Companys long-term disability plan, Permanently Disabled means that the Participants disability renders the Participant completely
unable to engage in any and every duty pertaining to any occupation or employment for wage or profit for which he is reasonably qualified by training, education, or experience, and that can be expected to result in death or to be of long-continued
and indefinite duration, or that the Participant is approved for a disability pension under the terms of any pension plan maintained by the Company or any Affiliate.
Plan shall mean the Citizens 401(k) Savings Plan, including the Plan document and any other agreement or Trust Agreement forming a part
hereof, together with any and all amendments or supplements thereto.
Plan Administrator shall mean the Companys Retirement
Investment & Administration Committee.
Plan Year shall mean a 12 month period running from the first of January through the
end of the following December.
Pre-Tax Elective Deferral Contributions shall mean Elective Deferral Contributions made on a pre-tax
basis pursuant to Code section 401(k).
Prior GTE Employer shall mean GTE North Incorporated, GTE South Incorporated, GTE Midwest
Incorporated, or Contel of Minnesota, Inc.
Related Employer shall mean a corporation or other business organization during the period
it is
|
(a) |
a member with the Company of a controlled group of corporations, as determined under Section 414(b) of the Code, |
|
(b) |
a member with the Company of a group of trades or businesses under common control, as determined under Section 414(c) of the Code, |
|
(c) |
a member with the Company of an affiliated service group, as determined pursuant to Section 414(m) of the Code, as applicable, or |
|
(d) |
any other entity required to be aggregated with the Company pursuant to regulations under Section 414(o) of the Code. |
Effective January 1, 1994, Related Employer and Participating Related Employer shall also include Mohave Cellular, L.P.
(Mohave) during any period in which the Company is a general partner of Mohave.
86
Required Beginning Date shall mean April 1 of the calendar year following the later of
(i) the calendar year in which the Participant attains 70 1⁄2 and (ii) in the case of a Participant other than a 5% owner, the calendar year in which
the Participant has a termination from service.
Restricted Stock shall mean Company Stock that has been allocated to a Frontier Union
Participants Account for a period of less than five years from the date of the initial allocation.
Retirement Committee shall
mean the Retirement Committee of the Board of Directors of Frontier Communications Company.
Rollover Accounts shall mean those
balances attributable to amounts rolled from another qualified retirement plan to the Plan, which amounts shall be fully vested and subject to the distribution provisions of the Plan. Rollover Accounts include, without limitation, amounts rolled
from the BHP Retirement Savings Plan with respect to non-union GASCO Employees, from the terminated Ogden Telephone Company Tax Deferred Retirement Savings Plan and Trust, from the terminated Rhinelander Telephone Company 401(k) Profit Sharing
Plan & Trust, and any other rollover amounts accepted from time to time by the Plan Administrator.
Rollover Contributions
shall mean rollover contributions (including direct rollovers) made in accordance with Section 3.16.
Roth Elective Deferral
Contributions shall mean the portion of a Participants Elective Deferral Contributions that are includible in the Participants Federal gross taxable income at the time deferred and have been irrevocably designated as Roth
Elective Deferral Contributions by the Participant in his or her deferral election and as provided in section 402A of the Code.
Roth Elective
Deferral Account shall mean that portion of a Participants Account attributable to Roth Elective Deferral Contributions as adjusted to reflect their share of earnings and other accretions to the Fund and distributions, losses and
other diminutions to the Fund.
Severance from Service Date shall mean the earlier of (a) the date the Employee quits, is
discharged, retires or dies, and (b) the first anniversary of the first date of a period in which the Employee remains absent from service for any other reason. Notwithstanding the foregoing, if the Employee has been granted a leave of absence
or layoff and the date of termination of such leave or layoff occurs after the first anniversary of the commencement of his absence from Service under clause (b) above, such termination date will be the Severance from Service Date.
In the event that an Employee is absent from service beyond the first anniversary of the first date of absence occurring as a result of the pregnancy of the
Employee,
87
the birth of a child of the Employee, the placement of a child with the Employee by reason of adoption or for purposes of caring for a child of the Employee immediately following the childs
birth or adoption, a Severance from Service Date shall not occur until the second anniversary of the first date of absence. The period between the first and second anniversary of the first date of such absence from Service shall not count either as
a Period of Service or Period of Severance.
A Severance from Service Date shall not occur as a result of an Employees termination of service to
enter the military service of the United States provided (a) such Employees rights are protected by federal law, and (b) such Employee returns to employment with the Company or a Related Employer within the period required by law for
preservation of his rights. Under such circumstances, an Employee shall receive credit for service for his entire period of absence. If the Employee does not return to Service within the time prescribed by law, then the date he terminated employment
shall be his Severance from Service Date.
Special Transition-Year Contributions shall mean contributions made by the Company on behalf
of a union Participant in accordance with Section 3.09 of the Plan.
Super Top-Heavy shall be determined in the same manner and
shall mean the same as Top-Heavy, except that the present value of accrued benefits for Key Employees must exceed 90% of the accrued benefits for all Employees, rather than 60% as in the case of Top-Heavy.
Supplemental Profit-Sharing Matches shall mean contributions made by the Company on behalf of a Participant in accordance with
Section 3.06 of the Plan.
Top-Heavy shall mean that, as of the determination date with respect to a Plan Year
|
(a) |
if the Plan is not included in a required or permissive aggregation group, the present value of the accrued benefits for Key Employees under the Plan exceeds 60% of the present value of the accrued benefits for both Key
and Non-Key Employees under the Plan, or |
|
(b) |
if the Plan is included in a required or permissive aggregation group, the sum of the present value of accrued benefits for Key Employees under all defined benefit plans and all defined contribution plans included in
such group exceeds 60% of the sum of the present value of accrued benefits for both Key and Non-Key Employees. |
For purposes
of making the above Top-Heavy determination:
|
(1) |
The determination date for a given plan year shall be the last day of the preceding plan year, or, in the case of the first plan year of a plan, the last day of such first plan year. |
88
|
(2) |
A required aggregation group consists of: (A) the Plan; and (B) other qualified plans required to be aggregated with the Plan under Section 416(g) of the Code in testing for top-heaviness, i.e.,
(i) each qualified plan in which at least one Key Employee participates at any time during the determination period (regardless of whether plan has terminated), and (ii) any other qualified plan which enables the Plan or a plan described
in (B)(i) above to meet the requirements of Sections 401(a)(4) and 410 of the Code. |
|
(3) |
A permissive aggregation group consists of: (A) the Plan; (B) any plans required to be aggregated with the Plan under (2)(B) above; and (C) any other qualified plans permitted to be aggregated with
the Plan under Section 416(g) of the Code in testing for top-heaviness, i.e., any other such plan which, when considered as a group with the Plan, and any plans required to be aggregated with the Plan under (2)(B) above, continue to meet
the requirements of Sections 401(a)(4) and 410 of the Code, and which the Plan Administrator in its discretion chooses to include in the group. |
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(4) |
Where more than one plan is involved in the determination, the present value of accrued benefits (including distributions to be included therein in accordance with (10) below) shall be determined separately for
each plan as of its own determination date falling in the same calendar year as the Plans determination date with respect to the Plan Year in question, and the results of such separate determination shall then be aggregated as provided above.
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|
(5) |
The present value of accrued benefits under a plan shall include the present value of accrued benefits derived from all contributions, including employer and employee (both voluntary and mandatory) contributions, except
for the present value derived from tax deductible employee contributions which shall not be taken into account. |
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(6) |
The present value of accrued benefits under a plan shall be determined as of the plans most recent valuation date that falls within the 12 month period ending on the plans determination date. The Plans
valuation date is on December 31. |
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(7) |
The present value of a Participants accrued benefits under a defined contribution plan shall be the sum of the Participants account
balance as of the relevant valuation |
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date, plus an adjustment for contributions due as of the determination date. In the case of a plan not subject to the minimum funding requirements of Section 412 of the Code, the adjustment
is the amount of contributions, if any, actually made after the valuation date but on or before the determination date, except in the first plan year of the plan when the adjustment should also reflect the amount of any contributions whenever made
that would be allocated as of a date not later than the determination date. In the case of a plan subject to the minimum funding requirements of Section 412 of the Code, the adjustment is the amount of contributions whenever made that would be
allocated as of a date not later than the determination date. |
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(8) |
The present value of a Participants accrued benefits under a defined benefit plan shall be based upon reasonable interest and mortality assumptions specified by the plan. The accrued benefit of a Participant (who
is not a Key Employee) under a defined benefit plan shall be determined under (A) the method, if any, that uniformly applies for accrual purposes under all defined benefit plans maintained by the Company, or (B) if no such uniform method
exists, then the slowest accrual method permitted under the fractional rule of Section 411(b)(1)(C) of the Code. |
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(9) |
The accrued benefit of a Participant in a plan who is a Non-Key Employee but who was a Key Employee in a prior year shall be disregarded. |
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(10) |
Generally, any accrued benefit transferred or distributed in the five (5) year period ending on a plans determination date (except any such
accrued benefit otherwise included in the present value of accrued benefits on the determination date) shall be added back and included in the plans present value of accrued benefits as of the determination date. This rule shall apply to
distributions under a terminated plan which, if it had not been terminated, would have been required to be included in an aggregation group. It shall also apply to any unrelated rollover or transfer (i.e., one initiated by the employee and made to a
plan maintained by |
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another, unrelated employer under Sections 414(b), (c) or (m) of the Code). The plan accepting an unrelated rollover or transfer shall not consider the rollover or transfer as part of
its present value of accrued benefits unless the rollover or transfer was accepted prior to December 31, 1983. In the case of a related rollover or transfer (i.e., one not initiated by the employee or made to a plan maintained by the same or
related employer under Sections 414(b), (c) or (m) of the Code), the rollover or transfer shall not be added back but shall be counted in the plan accepting the rollover or transfer whether the rollover or transfer was accepted before or
after December 31, 1983. |
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(11) |
With respect to plan years beginning after December 31, 1984, the accrued benefit of all Participants in a plan who have not performed or received credit for any services for any employer maintaining the plan
(other than benefits under the plan) at any time during the five year period ending on the plans determination date shall be disregarded. |
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(12) |
The Top-Heavy determination, including definition of Top-Heavy terms and application of the above rules and any other rules which may be necessary for the determination shall be made in accordance with Section 416
of the Code. |
Transferred Account shall mean that portion of a Participants Account attributed to direct
trust-to-trust transfers from other qualified retirement plans (including, without limitation, those maintained by Alltel, GTE and Global and its related entities) and those account balances transferred to the Plan as a result of plan merger
(including, without limitation, the mergers of the LGS Retirement Savings Plan, Gasco Bargaining 401(k) Plan, Frontier Union 401(k) Savings Plan, Frontier Communications Corporate Services Inc. Management 401(k) Plan and Frontier Communications
Corporate Services Inc. Savings and Security Plan for West Region Hourly Employees).
Transferred Frontier Savings Plan Accounts shall
mean a Participants accounts in the former Frontier Group Employees Retirement Savings Plan (subsequently renamed the Global Crossing Employees Retirement Savings Plan) that were transferred to the Plan in a trustee-to-trustee
transfer in connection with the Companys acquisition of the Frontier companies from Global Crossing.
TRASOP Account shall mean
that portion of the Participants Account that is attributable to the merger of the Companys TRASOP Plan into the Plan, as adjusted for subsequent investment gains, losses, income and expenses. A Participant shall be at all times vested
in his TRASOP Account.
Trust Agreement shall mean a trust agreement, if such trust agreement is established by the Company, between
the Company and such Trustees as may be appointed by the Company. In the event that a trust agreement is established, the trust shall include any and all amendments or supplements thereto.
Trustee shall mean Putnam Fiduciary Trust Company, and such additional Trustees or successor Trustees as in the future or from time to time
thereafter may be appointed or designated by the Company to hold any portion of the Fund forming a part of the Plan.
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Valuation Date shall mean with respect to all assets held under the Plan for which daily
valuation is performed, the date of liquidation of a Participants investment for distribution, reinvestment, exchange or transfer, or any other applicable transaction. With respect to assets under the Plan for which daily valuation is not
available, Valuation Date shall mean the last business day of the Plan Year, and the last business date of each month in the Plan Year.
Pre-2012 VATC-Eligible Participant shall mean (i) a Frontier Union Participant covered under a collective bargaining agreement that
provides for Voluntary After-Tax Contributions, and (ii) during the period of effectiveness of Section 3.12(d), a Participant described in such section.
Voluntary After-Tax Contributions shall mean a Participants contributions which are designated as such and are included in the
Participants federal gross taxable income in the year in which made (other than Roth Elective Deferral Contributions) and that are maintained under a separate account to which earnings and losses are allocated. Effective January 1, 2012,
and only to the extent authorized by rules established by the Plan Administrator, Voluntary After-Tax Contributions may be made either by direct election of the Participant, or by recharacterization of Participant Elective Deferral Contribution
elections that cannot be honored because of the limits in Section 3.03(f) (Code section 402(g)) or Section 8.05 (nondiscrimination test).
Voluntary After-Tax Contribution Account shall mean that portion of a Participants Account attributable to Voluntary After-Tax
Contributions credited to the Participant.
Year of Vesting Service shall mean a 12 month Period of Service beginning on the first day
a Participant is credited with an Hour of Service, and any anniversary thereof.
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SUPPLEMENT A
Special Rules Affecting Former CTE Employees
Notwithstanding any other provision of the Plan to the contrary, the provisions of this Supplement A shall apply to (i) any individual (a Former
CTE Plan Participant) who was a participant in the Commonwealth Builder 401(k) Plan (the CTE Plan) and whose account balance (CTE Account) under that plan was transferred to the Plan as a result of the merger of the CTE
Plan into the Plan effective December 31, 2007, and (ii) any other individual (Other Former CTE Employee) who was an employee of Commonwealth Telephone Enterprises, Inc. (CTE) immediately before March 8, 2007
(the CTE Acquisition Date).
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1. |
The portion of a Former CTE Plan Participants CTE Account attributable to his or her elective deferrals (including catch-up contributions), as adjusted for investment experience, shall be segregated and maintained
as a separate account under this Plan (the CTE Elective Deferral Account). Except as otherwise provided in this Supplement A, the terms of the Plan applicable to a Participants Elective Deferral Account shall apply to a Former CTE
Plan Participants CTE Elective Deferral Account. |
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2. |
The portion of a Former CTE Plan Participants CTE Account attributable to employer matching contributions, as adjusted for investment experience, shall be segregated and maintained as a separate account (the
CTE Matching Account). Except as otherwise provided in this Supplement A, the terms of the Plan applicable to a Participants Employer Contribution Account shall apply to a Former CTE Plan Participants CTE Matching Account.
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3. |
The portion of a Former CTE Plan Participants CTE Account attributable to rollover contributions, as adjusted for investment experience, shall be segregated and maintained as a separate account (the CTE
Rollover Account). Except as otherwise provided in this Supplement A, the terms of the Plan applicable to a Participants Rollover Account shall apply to a Former CTE Plan Participants CTE Rollover Account. |
|
1. |
A Former CTE Plan Participants CTE Elective Deferral Account and CTE Rollover Account, shall be fully vested and nonforfeitable at all times. |
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|
2. |
A Former CTE Plan Participants CTE Matching Account shall be vested and nonforfeitable in accordance with the vesting schedule applicable to Matching Contributions under the Plan; provided, however, that a CTE
Plan Participants CTE Matching Account shall in any event become fully vested upon the Participants attainment of age 55 as an Employee. |
For purposes of determining an Employees eligibility to participate, and
determining the vesting percentage under Section 5.03 with respect to a Former CTE Plan Participant, service recognized under the CTE Plan shall be treated as service under the Plan and for Other Former CTE Employees, service as an employee of
Commonwealth Telephone Enterprises, Inc. that would have been recognized as service under the CTE Plan shall be recognized as service under the Plan.
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D. |
In-Service Withdrawals |
A Former CTE Plan Participant may withdraw all or a portion of
his or her CTE Rollover Account at any time.
|
1. |
Solely with respect to his or her CTE Account, a Former CTE Plan Participant shall be considered to have a Permanent Disability if either (i) he or she has a Permanent Disability as defined in the Plan or
(ii) he or she has any physical or mental condition which may reasonably be expected to be permanent and which renders the Participant incapable of continuing as an eligible Employee for his or her customary Hours of Service (as provided in the
CTE Plan as of December 31, 2007). |
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F. |
Carryover of Elections |
A Former CTE Plan Participants deferral election (and catch-up
election, if applicable) in effect on December 31, 2007 under the CTE Plan shall constitute his or her deferral election (and catch-up election, if applicable) under this Plan as of January 1, 2008 until such election is changed by the
Participant.
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|
2. |
Beneficiary Designations. |
A Former CTE Plan Participants beneficiary designation
in effect on December 31, 2007 under the CTE Plan shall constitute his or her Beneficiary designation under this Plan, except to the extent that subsequent to the date of such CTE Plan designation the Participant has made a new Beneficiary
designation under this Plan.
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SUPPLEMENT B
Special Rules Affecting Former Participants in the Frontier Communications Corporate Services Inc. Management 401(k) Plan Following its 2011
Merger Into This Plan, and Certain Other Employees of FCCS as Set Forth Below
Merger and Eligibility to Participate: Effective immediately
after the markets close on December 30, 2011 (the Merger Time), the Frontier Communications Corporate Services Inc. Management 401(k) Plan (the Management Plan), which was a tax-qualified retirement plan maintained
by the Company, was merged in its entirety into this Plan (i.e., the Frontier Communications 401(k) Savings Plan) and employees of FCCS became eligible to participate in this Plan exclusively pursuant to the terms of this Plan. Upon such merger, all
assets and liabilities of the Management Plan became assets and liabilities of this Plan, with no reduction in the Companys right to take actions, including amending and terminating actions, with respect to such assets and liabilities. The
merger did not, by itself, create any rights or diminish any rights of any individual who was a participant in the Management Plan (Former Management Plan Participant). Except as may be provided in this Supplement B, Former Management
Plan Participants shall receive and have apply to them, from and after the Merger Time, the same benefits, rights, features, and restrictions as generally apply under this Plan (in lieu of those that had applied under the Management Plan), and this
Plans regular provisions shall govern eligibility to participate in this Plan from and after the Merger Time. All amendments to the Plan necessary to comply with applicable requirements of the Code and ERISA shall also apply to any and all
plans previously merged into the Plan, if any, to the extent necessary to comply with the Code and ERISA.
ESOP Feature: In connection with such
merger, it was and remains the intention of the Company that the non-employee stock ownership plan portion of the Management Plan would become part of this Plans Non-ESOP Portion; that the employee stock ownership plan portion of the
Management Plan would become part of this Plans ESOP Portion, that the Plan after such merger would continue to satisfy the requirements of ERISA and the Code; and that the trust fund maintained under the Plan would continue to be tax-exempt
under Code section 501(a). As of the Merger Date the Management Plan did not have an outstanding exempt loan in connection with its employee stock ownership plan feature.
Prior Plans: Notwithstanding any other provision of this Plan to the contrary, the provisions of this Supplement B apply to Former Management Plan
Participants whose account balances under the Management Plan (Management Plan Accounts) were transferred to this Plan as a result of such merger.
History of the Management Plan: Effective as of the Distribution Date as defined by the Distribution Agreement by and between Verizon
Communications Inc. and New Communications Holdings Inc. dated as of May 13, 2009 (the 2009 Effective Date), a portion of the Verizon Savings Plan for Management
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Employees was spun off to form the Management Plan. That portion related to certain Eligible Employees, Inactive Members, and Beneficiaries (as those terms were defined in the Management Plan) as
of the 2009 Effective Date who had accounts under the Verizon Savings Plan for Management Employees immediately before the 2009 Effective Date. Schedule A to the Management Plan includes provisions reflecting such merger. In connection with such
establishment of the Management Plan, it was the intention of the Company that the non-employee stock ownership plan portion of the Management Plan would be a profit sharing plan; that the employee stock ownership plan portion of the Management Plan
would be both a stock bonus plan and an employee stock ownership plan within the meaning of Section 4975(e)(7) of the Code and described in Section 407(d)(6) of ERISA; that these two portions of the Plan together would constitute a single
plan under Treasury Regulations § 1.414(l)-1(b)(1); that the Management Plan would satisfy the requirements of ERISA; and that the trust fund maintained under the Management Plan would be tax-exempt under Section 501(a) of the Code. As of
the 2009 Effective Date the Management Plan did not have an outstanding exempt loan in connection with its ESOP.
All Former Management Plan Participants as of immediately prior to the Merger
Time shall have their participation and plan interest transferred to this Plan as of the Merger Time and shall become Participants. A Beneficiarys interest in the Management Plan that is derived from an individual described in the preceding
sentence shall also be so transferred, and any reference to a Participant or Participants interest in this Supplement shall also refer to any beneficiary and beneficiarys interest related thereto. The rights and benefits of Former
Management Plan Participants and their beneficiaries (and of those claiming through or on behalf of such individuals) before the Merger Time shall be governed exclusively by the terms of the Management Plan, and such Former Management Plan
Participants shall not be eligible to participate in this Plan before the Merger Time.
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B. |
Management Plan Accounts |
|
1. |
Effective as of the Merger Time, each Former Management Plan Participants account in the Management Plan (including any outstanding loans) shall
be transferred to this Plan and shall become such Participants initial Account balance under this Plan. The actual transfer shall occur as soon as practicable following the Merger Time. The Former Management Plan Participants initial
Account balance shall be invested in the investment funds available under this Plan in accordance with the fund-to-fund mapping announced by the Plan Administrator. In the case of any loan, the promissory note
|
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and documentation related to the loan shall be transferred to this Plan, and this Plan shall succeed to all of the rights that the Management Plan had with respect to such loan immediately prior
to the Merger Time; such loan shall continue on the same payment terms (except that payments shall be made to this Plan) as if no transfer had occurred. Separate accounts shall be established and maintained under Section 4.01 for each Former
Management Plan Participants Member Account that was established under the Management Plan. Such accounts shall hold contributions attributable to the period before the Merger Time, and shall collectively be considered each Former
Management Plan Participants Transferred Account as defined in the Glossary hereto. These accounts may include but are not limited to the following accounts: |
|
a) |
Elective Contributions; |
|
b) |
After-Tax Contributions; |
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c) |
Roth Elective Contributions; |
|
d) |
Catch-up Contributions; |
|
e) |
Company-Matching Contributions to the Profit-Sharing Plan; |
|
f) |
Profit Sharing Contributions to the Profit-Sharing Plan; |
|
g) |
Rollover Contributions; |
|
h) |
Employee Stock Ownership Plan (ESOP) Account; |
|
C. |
Participation and Carry-Over of Elections |
|
1. |
All Former Management Plan Participants shall become Participants in this Plan as of the Merger Time without regard to whether they have met this Plans waiting period for participation. |
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2. |
All elections of Former Management Plan Participants in effect under the Management Plan immediately prior to the Merger Time, including contribution rate elections, beneficiary designations and distribution elections,
shall be transferred to this Plan as of the Merger Time. Such elections shall remain in effect under this Plan until changed in accordance with the terms of this Plan. In the case of investment elections, such elections shall be transferred to this
Plan in accordance with the fund-to-fund mapping announced by the Plan Administrator (under which investments in each fund under the Management Plan were moved to a pre-identified, corresponding fund under this Plan). |
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|
1. |
The portion of a Former Management Plan Participants Account Balance that relates to elective deferrals, after-tax contributions, Roth Elective Deferral Contributions, catch-up contributions, rollover
contributions, transfer accounts and earnings thereon shall be fully vested at all times. |
|
2. |
In the case of a Participant who was hired by FCCS before the Merger Time, such Participant shall be vested in his accounts not listed in paragraph 1 above upon the earlier of such Participants: |
|
a. |
Completion of three Years of Vesting Service (as defined in the Management Plan immediately before the Merger Time); |
|
c. |
Disability (which for this purpose means a total disability of a Participant (1) that renders the Participant completely unable to engage in any and every duty pertaining to any occupation or employment for wage or
profit for which he is reasonably qualified by training, education, or experience, and (2) that can be expected to result in death or to be of long-continued and indefinite duration; provided that a Participant shall be deemed to have a
Disability if the Participant is approved for a disability pension under the terms of any pension plan maintained by the Company or a Related Employer or approved for disability benefits under any long-term disability plan maintained by the Company
or any Related Employer). |
|
d. |
Retirement from the Company or a Related Employer under the terms of any pension plan maintained by the Company or such Related Employer; |
|
e. |
Attainment of age 65; or |
|
f. |
Involuntary termination (other than for cause). |
Notwithstanding the foregoing, if such
Participant is included in a unit of Employees covered by a collective bargaining agreement with FCCS that provides for the Participants participation in the Plan and that specifies a vesting schedule, such vesting schedule shall apply.
|
3. |
The portion of a Former Management Plan Participants Account Balance that relates to matching contributions (whether in his
|
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regular or ESOP account) and any income attributable thereto shall become 100% vested after a Change in Control to the extent provided in Section 20.02 of the Management Plan.
|
|
4. |
A Former Management Plan Participants vested interest in amounts transferred to the Management Plan pursuant to Section 12.03 thereof (Mergers, Consolidations, and Transfers into and out of the
Plan) (including amounts transferred from the Verizon Communications Plan) shall be determined in accordance with Section 12.03(b)(4)(A) of the Management Plan or any applicable schedule thereto. |
|
5. |
A Former Management Plan Participant shall be 100% vested in amounts attributable to his Members Account or ESOP Account under the Management Plan to the extent provided in any Schedule
thereto that may be applicable to the Member. |
|
6. |
A Former Management Plan Participants vested interest in any Profit Sharing Contributions (within the meaning of Section 3.11 of the Management Plan (Profit Sharing Contributions)) allocated to
his Members Account in the Management Plan shall be determined in accordance with Section 3.11(b)(2) thereof (i.e., such Profit-Sharing Contribution shall be 50% vested upon the completion of one year of Vesting Service and
fully vested upon (A) the completion of two Years of Vesting Service or (B) attainment of age 65). |
|
7. |
A Participant shall be 100% vested in dividends that were reinvested in accordance with Section 14.08(b) of the Management Plan or that are reinvested in accordance with Section 3.13(c)(3) of this Plan.
|
|
1. |
A Former Management Plan Participants Vesting Service as determined under the Management Plan for periods before the Merger Time shall be treated as his Years of Vesting Service under this Plan for such periods.
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|
1. |
A Former Management Plan Participant who is entitled to a distribution under Section 7.01(a)(1) of this Plan may elect to have his Management Plan Accounts (but not the remainder of his Accounts) paid in one of the
following optional forms of benefit in lieu of the optional forms the Plan would otherwise permit: |
100
|
a. |
Option 1. In a lump sum in Verizon Shares, to the extent that his Accounts are invested in the Verizon Stock Portfolio and/or in a lump sum in Company Shares to the extent that his Accounts are invested in the Company
Shares Fund, the ESOP Shares Fund, or the PAYSOP Shares Fund, with the balance in cash. |
|
b. |
Option 2. In annual, semiannual, quarterly, or monthly installments in cash of approximately equal amounts to be paid out of his Accounts for a period of 2 to 20 years, as selected by the Participant. If the Participant
dies prior to the payment of the last installment, the remaining installments shall be paid to his designated Beneficiary or, if none, in a single sum to his estate. The period over which installment payments may be paid in accordance with this
paragraph shall in no event be longer than the longer of (A) the life expectancy of the Participant or (B) the joint life expectancies of the Participant and his designated Beneficiary. |
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c. |
Option 3. A Participant who elects to receive his distribution in installments under Option 2 above may elect to receive a pro rata portion of each installment payment in Verizon Shares, to the extent that his Accounts
are invested in the Verizon Stock Portfolio and/or in Company Shares to the extent that his Accounts are invested in the Company Shares Fund, the ESOP Shares Fund, or the PAYSOP Shares Fund, with the balance of each installment in cash.
|
If a Participant elects to receive payment in Verizon Shares and/or in Company Shares in accordance with the foregoing, the
value of any fractional shares (determined after aggregating the Accounts of the Member) shall be paid in cash. In the case of a Participant who elects to receive his benefit in installments pursuant to Option 2 and who has begun receiving such
installment payments, the Participant may elect to have his remaining installments paid to him on any installment schedule offered above with more frequent payments than the original schedule, or in a lump sum. Such election shall specify that the
Participants remaining benefits shall be paid either (A) in Verizon Shares, to the extent that his Accounts are invested in the Verizon Stock Portfolio and/or in Company Shares to the extent that his Accounts are invested in the Company
Shares Fund, the ESOP Shares Fund, or the PAYSOP Shares Fund, with the balance, if any, in cash, or (B) entirely in cash.
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|
2. |
In addition to the foregoing options, to the extent a Schedule to the Management Plan applies to a Participant, he may elect to receive his Management Plan Accounts (but not the remainder of his Accounts) in accordance
with the terms of the applicable Schedule. A Participant who elects to receive his benefit in an annuity option in accordance with a Schedule hereto shall be deemed to have elected to receive his Accounts in cash rather than in Verizon Shares or in
Company Shares. |
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3. |
To the extent a Participants benefit is subject to the survivor annuity requirements of Code sections 401(a)(11) and 417 pursuant to a Schedule or Section 8.07(b), the Participant may elect as an optional
form of benefit a qualified joint and survivor annuity with a survivor percentage between 50% and 100% (inclusive)) that constitutes a qualified optional survivor annuity with respect to the Plan as such term is defined by Code section
417(g). |
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4. |
Notwithstanding any provision of this Plan to the contrary, if assets were transferred to the Management Plan in accordance with Section 12.03 thereof (Mergers, Consolidations, and Transfers into and out of
the Plan) and such assets were previously contributed to a defined benefit or money purchase pension plan qualified under Code section 401(a): |
|
a. |
Any optional form of benefit under the Plan that permits a distribution prior to a Participants retirement, death, disability, or severance from employment and prior to Plan termination shall not be available with
respect to such transferred assets (including post-transfer income thereon), other than any portion of those assets that are separately accounted for and that are attributable to after-tax employee contributions or direct or indirect rollover
contributions, and |
|
b. |
Such assets shall be separately accounted for under the Plan to the extent required by Code sections 401(a)(11) and 417, and any requirements imposed by Code sections 401(a)(11) and 417 shall continue to apply to such
assets (and the post-transfer income thereon). |
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5. |
The Management Plan permitted small sum cashout distributions of Account Balances of up to $5,000 (see Section 8.03(b) thereof). This Plan permits small sum cashout distributions only of Account Balances up to
$1,000 (see Section 7.01(b)). Accordingly, any Accounts Balances of over $1,000 that were not distributed as of the Merger Time (or as soon as practical thereafter) will not be subject to automatic distribution without the Participants
consent unless and until they are valued at $1,000 or less. |
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|
G. |
In-Service Withdrawals |
|
1. |
Section 9.02(b) of the Management Plan provides: A Member who is an Employee shall be entitled, at any time, to take a withdrawal from his Members Account, ESOP Account, or Transfer Account (as
applicable) of his After-Tax Contributions and Income thereon, Rollover Contributions and Income thereon, Transfer Account contributions and Income thereon, and vested Company-Matching Contributions and Income thereon. This right shall be
retained after the Merger Time with respect to a Former Management Plan Participants Management Plan Accounts to the extent required by applicable law (but not to the remainder of his Accounts, if any). |
|
2. |
Section 9.02(c) of the Management Plan provides: A Member with accounts transferred from the Verizon Communications Plan shall also be entitled, at any time, to take a withdrawal of the following amounts so
transferred and Income thereon: Career Level Contributions as defined by the Verizon Communications Plan, amounts transferred to the Verizon Communications Plan from the PAYSOP, profit sharing contributions transferred to the Verizon
Communications Plan from the J.P. Morgan Profit Sharing Plan or made under the Verizon Communications Plan for the benefit of former participants in such plan, and amounts attributable to the Company Contribution Account under the
Verizon Communications Plan (relating amounts transferred to the Verizon Communications Plan from the National Telephone Directory Company Profit Sharing Plan). In addition such a Member shall be entitled to take a withdrawal from his Accounts of
some portion or all of the amounts transferred to the Plan from the Verizon Communications Plan and attributable to the CESOP. This right shall be retained after the Merger Time with respect to a Former Management Plan Participants
Management Plan Accounts to the extent required by applicable law (but not to the remainder of his Accounts, if any). This right shall be retained after the Merger Time with respect to a Former Management Plan Participants Management
Plan Accounts to the extent required by applicable law (but not to the remainder of his Accounts, if any). |
|
3. |
Section 9.04 of the Management Plan provides: Any Inactive Member who is not an Employee, but who is employed by an entity in which the
Company and the Affiliates have an equity interest of not less than 20%, shall have all the rights of a Member who is an Employee to elect to make withdrawals pursuant to this |
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|
Article 9. This right shall be retained after the Merger Time with respect to a Former Management Plan Participants Management Plan Accounts (but not to the remainder of his Accounts,
if any). |
|
4. |
Section 9.05 of the Management Plan provides: A Retired Member may take a withdrawal from his Members Account or ESOP Account; provided that the minimum withdrawal amount is $1,000 for all withdrawals
after the first withdrawal during a Plan Year. An application for a withdrawal pursuant to this Section shall be submitted to the Trustee in accordance with procedures established by the Plan Administrator. This right shall be retained after
the Merger Time with respect to a Former Management Plan Participants Management Plan Accounts to the extent required by applicable law (but not to the remainder of his Accounts, if any). |
|
5. |
Section 9.07 of the Management Plan provides: Pro-Rata Allocation of Withdrawals |
(a) Any amount received by a Member before his Benefit Commencement Date that is attributable to the Members After-Tax
Contributions shall be subject to the following rules:
(1) The first funds withdrawn shall be treated as a return of the
Members After-Tax Contributions that were transferred to the Plan from a plan in which they were held as of December 31, 1986 (provided that such contributions meet the requirement of Code section 72(e)(8)(D)) and that have not been
withdrawn or distributed previously; and
(2) After all of the Members After-Tax Contributions described in subsection (a)(1)
have been withdrawn or distributed, the amount of the withdrawal allocated to the Members After-Tax Contributions shall be the portion of the amount withdrawn that bears the same ratio to the amount withdrawn as the current balance of the
Members After-Tax Contributions bears to the portion of his Accounts allocable to the Members After-Tax Contributions.
(b) After the amounts specified in subsection (a) have been withdrawn and subject to the special rule below for Members with
accounts transferred from the Verizon Communications Plan, amounts in the Accounts of a Member shall be deemed to be withdrawn (to the extent available for withdrawal) in the following order: (1) Rollover Contributions, (2) Transfer
Account contributions, (3) Company-Matching Contributions, (4) Unmatched Elective Contributions, and (5) Matched Elective
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Contributions. For Members with accounts transferred from the Verizon Communications Plan, such amounts shall be deemed to be withdrawn (to the extent available for withdrawal) in the following
order: (1) Rollover Contributions, (2) Transfer Account contributions, (3) amounts transferred to the Verizon Communications Plan from the PAYSOP, (4) Company-Matching Contributions, (5) Career Level
Contributions as defined by the Verizon Communications Plan, (6) amounts transferred to the Verizon Communications Plan from the CESOP and Income thereon, (7) profit sharing contributions transferred or made to the Verizon
Communications Plan from the J.P. Morgan Profit Sharing Plan and amounts attributable to the Company Contribution Account under the Verizon Communications Plan (relating to the National Telephone Directory Company Profit Sharing Plan),
(8) Unmatched Elective Contributions, and (9) Matched Elective Contributions. Except as provided in subsection (c) below, such amounts shall be withdrawn proportionally from all Funds in which the amounts are invested.
(c) A Member may not withdraw a portion of his ESOP Account unless he has first withdrawn all amounts then available for withdrawal
under the Profit-Sharing Plan. A Member who is subject to the requirements of section 16 of the Exchange Act may not withdraw any portion of his Account that is invested in the Company Shares Fund, the ESOP Shares Fund, or the PAYSOP Shares Fund
unless he has first withdrawn all available amounts that are invested in any other Fund under the Plan.
These procedures shall be
retained after the Merger Time with respect to a Former Management Plan Participants Management Plan Accounts to the extent required by applicable law (but not to the remainder of his Accounts, if any).
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6. |
Section 9.08 of the Management Plan provides: Payment of Withdrawals |
Withdrawals pursuant to this Article 9 from Funds other than the Company Shares Fund or the Verizon Stock Portfolio shall be payable
solely in cash. Withdrawals from the ESOP Account or the Verizon Stock Portfolio shall be payable in cash unless the Member elects to receive the withdrawal in, respectively, Company Shares or Verizon Shares. A Members election to receive a
withdrawal under this Article 9 shall not be valid unless it is made within the 180-day period ending on the date of withdrawal and after the Member receives a general description of the material features of, and an explanation of the relative
values of, the optional forms of benefit available under the Plan and an explanation of his right to defer receipt of the withdrawal. The written explanation described in the preceding sentence must be provided not more than 180 days before the date
of withdrawal and it must offer the Member a period
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of at least 30 days in which to consider the Members withdrawal options. Distribution of the withdrawal may commence less than 30 days after the Member receives the notice if the Member is
informed of his right to a period of at least 30 days after receiving the notice to consider whether to elect a withdrawal or a particular withdrawal form and if the Member, after being informed of this right, affirmatively consents to the
withdrawal.
These procedures shall be retained after the Merger Time with respect to a Former Management Plan Participants
Management Plan Accounts to the extent required by applicable law (but not to the remainder of his Accounts, if any).
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1. |
Solely with respect to his or her CTE Account, a Former CTE Plan Participant shall be considered to be Permanently Disabled if either (i) he or she is Permanently Disabled as defined in the Plan or (ii) he or
she has any physical or mental condition which may reasonably be expected to be permanent and which renders the Participant incapable of continuing as an eligible Employee for his or her customary Hours of Service (as provided in the CTE Plan as of
December 31, 2007). |
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2. |
A Former Management Plan Participant who does not meet the Plans definition of being Permanently Disabled (without regard to this Supplement B) shall be considered Permanently Disabled if the
Participants disability renders the Participant completely unable to engage in any and every duty pertaining to any occupation or employment for wage or profit for which he is reasonably qualified by training, education, or experience, and
that can be expected to result in death or to be of long-continued and indefinite duration, or if the Participant is approved for a disability pension under the terms of any pension plan maintained by the Company or any Affiliate. |
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I. |
Change in Control Provisions |
The Change in Control Provisions set forth in Article 20
of the Management Plan continue to apply in this Plan to the extent required by applicable law.
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SUPPLEMENT C
Special Rules Affecting Former Participants in the Frontier Communications Corporate Services Inc. Savings and Security Plan for West Region
Hourly Employees Following its 2011 Merger Into This Plan
Merger and Eligibility to Participate: Effective immediately after the markets
close on December 30, 2011 (the Merger Time), the Frontier Communications Corporate Services Inc. Savings and Security Plan for West Region Hourly Employees (the West Hourly Plan), which was a tax-qualified retirement
plan maintained by the Company, was merged in its entirety into this Plan (i.e., the Frontier Communications 401(k) Savings Plan) and employees of Frontier Communications Corporation Services Inc. (FCCS) became eligible to participate in
this Plan exclusively pursuant to the terms of this Plan. Upon such merger, all assets and liabilities of the West Hourly Plan became assets and liabilities of this Plan, with no reduction in the Companys right to take actions, including
amending and terminating actions, with respect to such assets and liabilities. The merger did not, by itself, create any rights or diminish any rights of any individual who was a participant in the West Hourly Plan (Former West Hourly Plan
Participant). Except as may be provided in this Supplement C, Former West Hourly Plan Participants shall receive and have apply to them, from and after the Merger Time, the same benefits, rights, features, and restrictions as generally apply
under this Plan (in lieu of those that had applied under the West Hourly Plan), and this Plans regular provisions shall govern eligibility to participate in this Plan from and after the Merger Time. All amendments to the Plan necessary to
comply with applicable requirements of the Code and ERISA shall also apply to the West Hourly Plan and to any and all plans previously merged into the West Hourly Plan to the extent necessary to comply with the Code and ERISA.
ESOP Feature: Notwithstanding any other provision of this Plan to the contrary, the provisions of this Supplement C apply to Former West Hourly Plan
Participants whose account balances under the West Hourly Plan (West Hourly Plan Accounts) were transferred to this Plan as a result of such merger. Furthermore, in the case of any group of employees whose participation in the West
Hourly Plan was governed by a collective bargaining agreement that required, immediately before the Merger Time, plan terms that are inconsistent with the terms of this Plan, such groups eligibility to participate, deferral rights, matching
contributions and loan rights under the merged plan (as well as any other feature or right that the plan administrator of this Plan determines is mandated by such bargaining agreement) shall continue under the merged plan as they were in effect
pursuant to the West Hourly Plan immediately before the Merger Time, and as they may be amended thereafter.
Prior Plans: In connection with such
merger, it was and remains the intention of the Company that the non-employee stock ownership plan portion of the West Hourly Plan would become part of this Plans Non-ESOP Portion; that the
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employee stock ownership plan portion of the West Hourly Plan would become part of this Plans ESOP Portion, that the Plan after such merger would continue to satisfy the requirements of
ERISA and the Code; and that the trust fund maintained under the Plan would continue to be tax-exempt under Code section 501(a). As of the Merger Date the West Hourly Plan did not have an outstanding exempt loan in connection with its employee stock
ownership plan feature.
History of the West Hourly Plan: Effective as of the Distribution Date as defined by the Distribution
Agreement by and between Verizon Communications Inc. and New Communications Holdings Inc. dated as of May 13, 2009 (the 2009 Effective Date), a portion of the Verizon Savings and Security Plan for West Region Hourly Employees was
spun off to form the West Hourly Plan. That portion related to certain Eligible Employees, Members, and Beneficiaries (as those terms were defined in the West Hourly Plan) as of the 2009 Effective Date who had accounts under the Verizon Savings and
Security Plan for West Region Hourly Employees immediately before the 2009 Effective Date. Schedule A to the West Hourly Plan includes provisions reflecting such merger. In connection with such establishment of the West Hourly Plan, it was the
intention of the Company that the non-employee stock ownership plan portion of the West Hourly Plan would be a profit sharing plan; that the employee stock ownership plan portion of the West Hourly Plan would be both a stock bonus plan and an
employee stock ownership plan within the meaning of Section 4975(e)(7) of the Code and described in Section 407(d)(6) of ERISA; that these two portions of the Plan together would constitute a single plan under Treasury Regulations §
1.414(l)-1(b)(1); that the West Hourly Plan would satisfy the requirements of ERISA; and that the trust fund maintained under the West Hourly Plan would be tax-exempt under Section 501(a) of the Code. As of the 2009 Effective Date the West
Hourly Plan did not have an outstanding exempt loan in connection with its ESOP.
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All Former West Hourly Plan Participants as of immediately prior to the Merger Time shall have their participation and plan interest transferred to this Plan as of the Merger Time and shall become Participants. A
beneficiarys interest in the West Hourly Plan that is derived from an individual described in the preceding sentence shall also be so transferred, and any reference to a Participant or Participants interest in this Supplement shall also
refer to any beneficiary and beneficiarys interest related thereto. The rights and benefits of Former West Hourly Plan Participants and their beneficiaries (and of those claiming through or on behalf of such individuals) before the Merger Time
shall be governed exclusively by the terms of the West Hourly Plan, and such Former West Hourly Plan Participants shall not be eligible to participate in this Plan before the Merger Time. |
B. |
West Hourly Plan Accounts |
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1. |
Effective as of the Merger Time, each Former West Hourly Plan Participants account in the West Hourly Plan (including any outstanding loans) shall be transferred to this Plan and shall become such
Participants initial Account balance under this Plan. The actual transfer shall occur as soon as practicable following the Merger Time. The Former West Hourly Plan Participants initial Account balance shall be invested in the investment
funds available under this Plan in accordance with the fund-to-fund mapping announced by the Plan Administrator. In the case of any loan, the promissory note and documentation related to the loan shall be transferred to this Plan, and this Plan
shall succeed to all of the rights that the Former West Hourly Plan Participant had with respect to such loan immediately prior to the Merger Time; such loan shall continue on the same payment terms (except that payments shall be made to this Plan)
as if no transfer had occurred. Separate accounts shall be established and maintained under Section 4.01 for each Former West Hourly Plan Participants Member Account that was established under the West Hourly Plan. Such
accounts shall hold contributions attributable to the period before the Merger Time, and shall collectively be considered each Former West Hourly Plan Participants Transferred Account as defined in the Glossary hereto. These
accounts may include but are not limited to the following accounts: |
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Elective Contributions; |
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b) |
After-Tax Contributions; |
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c) |
Roth Elective Contributions; |
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d) |
Catch-up Contributions; |
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e) |
Company-Matching Contributions to the Profit-Sharing Plan; |
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f) |
Profit Sharing Contributions to the Profit-Sharing Plan; |
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g) |
Rollover Contributions; |
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h) |
Employee Stock Ownership Plan (ESOP) Account; |
C. |
Participation and Carry-Over of Elections |
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1. |
All Former West Hourly Plan Participants shall become Participants in this Plan as of the Merger Time without regard to whether they have met this Plans waiting period for participation. |
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2. |
All elections of Former West Hourly Plan Participants in effect under the West Hourly Plan immediately prior to the Merger Time, including contribution rate elections, investment elections, beneficiary designations and
distribution elections, shall be transferred to this Plan as of the Merger Time. Such elections shall remain in effect under this Plan until changed in accordance with the terms of this Plan. |
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1. |
The portion of a Former West Hourly Plan Participants Account Balance that relates to elective deferrals, after-tax contributions, Roth elective deferrals, catch-up contributions, rollover contributions, PAYSOP
Shares Fund under his ESOP Account, transfer accounts and earnings thereon shall be fully vested at all times. |
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2. |
In the case of a Participant who was hired by FCCS before the Merger Time, such Participant shall be vested in his accounts not listed in paragraph 1 above upon the earlier of such Participants: |
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a. |
Completion of three Years of Vesting Service (as defined in the West Hourly Plan immediately before the Merger Time); |
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c. |
Disability (which for this purpose means a total disability of a Participant (1) that renders the Participant completely unable to engage in any and every duty pertaining to any occupation or employment for wage or
profit for which he is reasonably qualified by training, education, or experience, and (2) that can be expected to result in death or to be of long-continued and indefinite duration; provided that a Participant shall be deemed to have a
Disability if the Participant is approved for a disability pension under the terms of any pension plan maintained by the Company or a Related Employer or approved for disability benefits under any long-term disability plan maintained by the Company
or any Related Employer). |
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d. |
Retirement from the Company or a Related Employer under the terms of any pension plan maintained by the Company or such Related Employer; |
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e. |
Attainment of age 65; or |
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f. |
Involuntary termination (other than for cause). |
Notwithstanding the foregoing, if such
Participant is included in a unit of Employees covered by a collective bargaining agreement with FCCS that provides for the Participants participation in the Plan and that specifies a vesting schedule, such vesting schedule shall apply.
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3. |
A Former West Hourly Plan Participant shall be fully vested in the company-matching contributions and any income thereon that were transferred to the West Hourly Plan from the Verizon Communications Plan and that were
fully vested under the Verizon Communications Plan. |
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4. |
Notwithstanding any provision herein to the contrary, the portion of a Former West Hourly Plan Participants Account Balance that represents his Members Account or ESOP Account under
the West Hourly Plan shall be fully vested in in accordance with any designation by the Committee under Section 10.13 of the West Hourly Plan (Special Authority in the Event of a Reduction in Force), Article XV of the West Hourly
Plan (Special Provisions Relating To Business Events), or in accordance with any Schedule to the West Hourly Plan that may be applicable to the Member (see, for example, Section A.05 of Schedule A). |
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A Former West Hourly Plan Participants Vesting Service as determined under the West Hourly Plan for periods before the Merger Time shall be treated as his Years of Vesting Service under this Plan for such periods.
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A Former West Hourly Plan Participant who is entitled to a distribution under Section 7.01(a)(1) of this Plan may elect to have his West Hourly Plan Accounts (but not the remainder of his Accounts) paid in one of
the following optional forms of benefit in lieu of the optional forms the Plan would otherwise permit: |
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a. |
Option 1. In a lump sum in Verizon Shares, to the extent that his Accounts are invested in the Verizon Stock Portfolio and/or in a lump sum in Company Shares to the extent that his Accounts are invested in the Company
Shares Fund, the ESOP Shares Fund, or the PAYSOP Shares Fund, with the balance in cash. |
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b. |
Option 2. In annual, semiannual, quarterly, or monthly installments in cash of approximately equal amounts to be paid out of his Accounts for a period of 2 to 20 years, as selected by the Participant. If the Participant
dies prior to the payment of the last installment, the remaining installments shall be paid to his designated Beneficiary or, if none, in a single sum to his estate. The period over which installment payments may be paid in accordance with this
paragraph shall in no event be longer than the longer of (A) the life expectancy of the Participant or (B) the joint life expectancies of the Participant and his designated Beneficiary. |
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c. |
Option 3. A Participant who elects to receive his distribution in installments under Option 2 above may elect to receive a pro rata portion of each installment payment in Verizon Shares, to the extent that his Accounts
are invested in the Verizon Stock Portfolio and/or in Company Shares to the extent that his Accounts are invested in the Company Shares Fund, the ESOP Shares Fund, or the PAYSOP Shares Fund, with the balance of each installment in cash.
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If a Participant elects to receive payment in Verizon Shares and/or in Company Shares in accordance with the foregoing, the
value of any fractional shares (determined after aggregating the Accounts of the Member) shall be paid in cash. In the case of a Participant who elects to receive his benefit in installments pursuant to Option 2 and who has begun receiving such
installment payments, the Participant may elect to have his remaining installments paid to him on any installment schedule offered above with more frequent payments than the original schedule, or in a lump sum. Such election shall specify that the
Participants remaining benefits shall be paid either (A) in Verizon Shares, to the extent that his Accounts are invested in the Verizon Stock Portfolio and/or in Company Shares to the extent that his Accounts are invested in the Company
Shares Fund, the ESOP Shares Fund, or the PAYSOP Shares Fund, with the balance, if any, in cash, or (B) entirely in cash.
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2. |
In addition to the foregoing options, to the extent a Schedule to the West Hourly Plan applies to a Participant, he may elect to receive his West Hourly Plan Accounts (but not the remainder of his Accounts) in
accordance with the terms of the applicable Schedule. A Participant who elects to receive his benefit in an annuity option in accordance with a Schedule hereto shall be deemed to have elected to receive his Accounts in cash rather than in Verizon
Shares or in Company Shares. |
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3. |
To the extent a Participants benefit is subject to the survivor annuity requirements of Code sections 401(a)(11) and 417 pursuant to a Schedule or Section 8.07(b), the Participant may elect as an optional
form of benefit a qualified joint and survivor annuity with a survivor percentage between 50% and 100% (inclusive)) that constitutes a qualified optional survivor annuity with respect to the Plan as such term is defined by Code section
417(g). |
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4. |
Notwithstanding any provision of this Plan to the contrary, if assets were transferred to the West Hourly Plan in accordance with Section 12.03 thereof (Mergers, Consolidations, and Transfers into and out of
the Plan) and such assets were previously contributed to a defined benefit or money purchase pension plan qualified under Code section 401(a): |
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a. |
Any optional form of benefit under the Plan that permits a distribution prior to a Participants retirement, death, disability, or
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severance from employment and prior to Plan termination shall not be available with respect to such transferred assets (including post-transfer income thereon), other than any portion of those
assets that are separately accounted for and that are attributable to after-tax employee contributions or direct or indirect rollover contributions, and |
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b. |
Such assets shall be separately accounted for under the Plan to the extent required by Code sections 401(a)(11) and 417, and any requirements imposed by Code sections 401(a)(11) and 417 shall continue to apply to such
assets (and the post-transfer income thereon). |
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5. |
The West Hourly Plan permitted small sum cashout distributions of Account Balances of up to $3,500 (see Section 8.03(b) thereof). This Plan permits small sum cashout distributions only of Account Balances up to
$1,000 (see Section 7.01(b)). Accordingly, any Accounts Balances of over $1,000 that were not distributed as of the Merger Time (or as soon as practical thereafter) will not be subject to automatic distribution without the Participants
consent unless and until they are valued at $1,000 or less. |
G. |
In-Service Withdrawals |
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1. |
Section 9.02 of the West Hourly Plan provides: (a) A Member who is an Employee shall be entitled at any time to take a withdrawal from his Members Account, ESOP Account, or Transfer Account (as
applicable) of his After-Tax Contributions and Income thereon, Rollover Contributions and Income thereon, Transfer Contributions and Income thereon, and vested Company-Matching Contributions and Income thereon. The minimum amount a Member is
permitted to withdraw pursuant to this Section is $300.00. Payment of a withdrawal made pursuant to this Section shall be made as soon as practicable after a Member has given the required notice of his election to make a withdrawal. (b) In
addition to subsection (a), above, a Member shall be entitled, upon giving notice to the Plan Administrator, to make a withdrawal from his Accounts of some portion or all of the amounts transferred to this Plan from the Consolidated Employee Stock
Ownership Plan of GTE Corporation. (c) In addition to the withdrawal rights specified in the foregoing provisions of this Section or under Section 9.03, a Member also shall have any additional withdrawal rights specified in
Section 14.15. (d) An application for a withdrawal pursuant to this Section shall be submitted to the Trustee in accordance with procedures established by the Committee. These rights shall be retained after the Merger Time with
respect to a Former West Hourly Plan Participants West Hourly Plan Accounts to the extent required by applicable law (but not to the remainder of his Accounts, if any). |
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2. |
Section 9.06 of the West Hourly Plan provides: Pro-Rata Allocation of Withdrawals |
(a) Any amount received by a Member before his Benefit Commencement Date that is attributable to the Members After-Tax Contributions
shall be subject to the following rules:
(1) The first funds withdrawn shall be treated as a return of the Members After-Tax
Contributions that were held by the Plan as of December 31, 1986 (or that were transferred to the Plan from a plan in which they were held as of December 31, 1986, provided that such contributions meet the requirement of Code section
72(e)(8)(D)) and that have not been withdrawn or distributed previously; and
(2) After all of the Members After-Tax Contributions
described in subsection (a)(1) above, have been withdrawn or distributed, the amount of the withdrawal allocated to the Members After-Tax Contributions shall be the portion of the amount withdrawn that bears the same ratio to the amount
withdrawn as the current balance of the Members After-Tax Contributions bears to the portion of the Members Account, Transfer Account, and/or ESOP Account allocable to the Members After-Tax Contributions.
(b) After the amounts specified in subsection (a), above, have been withdrawn, amounts in the Members Account, Transfer Account, and/or
ESOP Account shall be deemed to be withdrawn (to the extent available for withdrawal) in the following order: (1) Rollover Contributions, (2) Transfer Contributions, (3) Company-Matching Contributions, (4) amounts transferred to
this Plan from the Consolidated Employee Stock Ownership Plan of GTE Corporation and Income thereon, (5) Unmatched Elective Contributions, and (6) Matched Elective Contributions. Except as provided in Section 14.15, such amounts shall
be withdrawn proportionally from all Funds in which the amounts are invested.
(c) A Member may not withdraw a portion of his ESOP Account
unless he has first withdrawn all amounts then available for withdrawal under the Profit-Sharing Plan. A Member who is subject to the requirements of section 16 of the Exchange Act may not withdraw any portion of his Account that is invested in the
Company Shares Fund, the ESOP Shares Fund, or the PAYSOP Shares Fund unless he has first withdrawn all available amounts that are invested in any other Fund under the Plan.
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These procedures shall be retained after the Merger Time with respect to a Former West Hourly
Plan Participants West Hourly Plan Accounts to the extent required by applicable law (but not to the remainder of his Accounts, if any).
3. |
Section 9.07 of the West Hourly Plan provides: Payment of Withdrawals |
Withdrawals pursuant to this Article from Funds other than the Company Shares Fund and the Verizon Stock Portfolio shall be payable solely in
cash. Withdrawals from the Verizon Stock Portfolio shall be payable in cash unless the Member or Transfer Employee elects to receive the withdrawal in Verizon Shares. Withdrawals from the Company Shares Fund shall be payable in cash unless the
Member or Transfer Employee elects to receive the withdrawal in Company Shares. A Members election to receive a withdrawal under this Article shall not be valid unless it is made within the 180-day period ending on the date of withdrawal and
after the Member receives a general description of the material features of, and an explanation of the relative values of, the optional forms of benefit available under the Plan and an explanation of his right to defer receipt of the withdrawal. The
written explanation described in the preceding sentence must be provided not more than 180 days before the date of withdrawal and it must offer the Member a period of at least 30 days in which to consider the Members withdrawal options.
Distribution of the withdrawal may commence less than 30 days after the Member receives the notice if the Member is informed of his right to a period of at least 30 days after receiving the notice to consider whether to elect a withdrawal or a
particular withdrawal form and if the Member, after being informed of this right, affirmatively consents to the withdrawal.
These
procedures shall be retained after the Merger Time with respect to a Former West Hourly Plan Participants West Hourly Plan Accounts to the extent required by applicable law (but not to the remainder of his Accounts, if any).
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1. |
Solely with respect to his or her CTE Account, a Former CTE Plan Participant shall be considered to be Permanently Disabled if either (i) he or she is Permanently Disabled as defined in the Plan or (ii) he or
she has any physical or mental condition which may reasonably be expected to be permanent and which renders the Participant incapable of continuing as an eligible Employee for his or her customary Hours of Service (as provided in the CTE Plan as of
December 31, 2007). |
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2. |
A Former West Hourly Plan Participant who does not meet the Plans definition of being Permanently Disabled (without regard to this
Supplement C) shall be considered Permanently Disabled if |
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the Participants disability renders the Participant completely unable to engage in any and every duty pertaining to any occupation or employment for wage or profit for which he is
reasonably qualified by training, education, or experience, and that can be expected to result in death or to be of long-continued and indefinite duration, or if the Participant is approved for a disability pension under the terms of any pension
plan maintained by the Company or any Affiliate.
I. |
Change in Control Provisions |
The Change in Control Provisions set forth in Article 20 of the
West Hourly Plan continue to apply in this Plan to the extent required by applicable law.
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Exhibit 99.2
Frontier Communications Corporate Services Inc.
Savings and Security Plan
for Mid-Atlantic
Associates
(As Amended and Restated Effective January 1, 2012)
[Subject to Approval by the Internal Revenue Service]
Savings and Security Plan
for Mid-Atlantic Associates
CONTENTS
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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Contents
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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Contents
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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Contents
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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Contents
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Savings and Security Plan |
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Contents
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1. PURPOSE
The purpose of the Frontier Communications Corporate Services Inc. Savings and Security Plan for Mid-Atlantic Associates is to provide a convenient way for
Mid-Atlantic Associates of the Company to save on a regular and long-term basis and to encourage employees to make and continue careers with the Company and other Employing Companies.
The Profit-Sharing Plan is a profit-sharing plan within the meaning of Code Section 401(a). The ESOP is both a stock bonus plan and an employee stock
ownership plan intended to qualify under both Code Section 401(a) and Code Section 4975(e)(7), respectively, and as such is designed to invest primarily in Company Shares. As of the Effective Date the Plan does not have an unpaid
Acquisition Loan. The Profit-Sharing Plan and the ESOP together shall constitute a single plan under Treasury Regulation Section 1.414(l)-1(b)(1)
All amendments to the Plan necessary to comply with applicable requirements of the Code shall also apply to any and all plans previously merged into the Plan,
if any. The provisions of this Plan shall be effective as of the Effective Date; provided that when a provision of the Plan states an effective date other than the Effective Date or a provision of the Plan is required to have an earlier or later
effective date by applicable law or regulation, such stated or required effective date shall apply as to that provision.
Effective as of the Effective
Date, a portion of the Verizon Communications Plan was spun off to form the Plan. Appendix II to the Plan includes provisions reflecting such spinoff.
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2. DEFINITIONS
For the purposes of the Plan the following terms shall have the following meanings unless the context clearly indicates otherwise or the words and phrases are
given different meanings. The masculine gender, where appearing in the Plan, shall be deemed to include the feminine gender, unless the context clearly indicates to the contrary.
Account
Account shall mean one or
more of a Participating Employees or Inactive Participants Accounts.
Accounts
Accounts shall mean a Participating Employees or Inactive Participants Basic Tax-Deferred Contributions Account, Basic After-Tax
Contributions Account, Supplementary Tax-Deferred Contributions Account, Supplementary After-Tax Contributions Account, Employing Company Matching Allocations Account, ESOP Allocation Contribution Account, ESOP Employing Company Matching Allocations
Account, and Pension Contribution Account under Section 27 (Pension Accounts for CCR Employees). Amounts transferred to this Plan from other plans shall be credited to the account hereunder which the Retirement
Investment & Administration Committee determines to be most similar to the account under the transferor plan.
Acquisition Loan
Acquisition Loan shall mean a loan or other extension of credit described in Code Section 4975(d)(3) which is used to finance
the purchase of Company Shares by the Trustee or to repay a prior Acquisition Loan. Any Acquisition Loan shall provide for payments of principal and interest to be made at least annually over a definitely ascertainable number of years, determined
without taking into account any possible extensions or renewal periods.
Active International Equity Fund
Active International Equity Fund shall have the meaning as set forth under the definition of Funds.
Active U.S. Equity Fund
Active
U.S. Equity Fund shall have the meaning as set forth under the definition of Funds.
Active U.S. Small Capitalization Fund
Active U.S. Small Capitalization Fund shall have the meaning as set forth under the definition of Funds.
Affiliate
Affiliate shall mean
any Frontier Company which is not an Employing Company.
After-Tax Contributions
After-Tax Contributions shall mean Basic After-Tax Contributions and Supplementary After-Tax Contributions.
Allocated Dividends
Allocated
Dividends shall mean cash dividends on those Leveraged Shares which have been credited under Section 5.3 (Additional Allocations) at the time of reference to the Participating Employees ESOP Employing Company Matching
Allocations Accounts.
Annual Additions
Annual Additions shall mean, with respect to additional Units allocated to the Account of a Participating Employee for a Limitation Year, an
amount determined based on the sum of the items set forth below:
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his Employee Contributions, Employing Company Matching Allocations, and ESOP Allocation Contributions. |
If in any Limitation Year no more than one-third of the ESOP Debt Service Contributions applied to repayment of an Acquisition Loan are
allocated to Highly Compensated Employees, the term Annual Additions shall not include amounts credited to the Participating Employees Account as a result of either (i) forfeitures of Company Shares under the ESOP portion of
the Plan (if such
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Savings and Security Plan |
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Definitions
Shares were acquired with the proceeds of an Acquisition Loan or are attributable to other employer securities acquired with the proceeds of an
Acquisition Loan), or (ii) the portion of the ESOP Debt Service Contributions used to make interest payments under an Acquisition Loan.
The fair market value of the ESOP Employing Company Matching Allocations, ESOP Share Performance Additional Allocations, and Forfeitures
allocated to the Account of a Participating Employee determined as of the date such amounts are credited to the Participating Employees Account.
Approved Form of Timely Prior Notice
Approved Form of Timely Prior Notice means a form of notice given by a Participating Employee (or an Inactive Participant or Beneficiary, where
applicable) to exercise an election to participate or an election with respect to contributions, investment directions, withdrawals, distributions, or other matters affecting one or more Accounts under this Plan. To be effective, such a notice must
be delivered in a form or in a manner approved by the Plan Administrator, and must be received by the Benefit Administrator by the applicable deadline established by the Plan Administrator. The Plan Administrator may require that an Approved Form of
Timely Prior Notice must be submitted solely in the form of a signed writing, or solely by electronic means of communications, or by either means, in the discretion of the Plan Administrator. The Plan Administrator shall determine, in the case of
each such Approved Form of Timely Prior Notice, the applicable number of days (if any) in advance of the intended effective date which the notice must be received. In cases where an act of God prevents delivery of notice, the election specified in
such notice shall not be binding upon the Plan until such time as the notice is actually received by the Benefits Administrator.
AT&T
AT&T shall mean American Telephone and Telegraph Company or its successor.
Basic After-Tax Contributions
Basic After-Tax Contributions shall mean the amount of a Participating Employees contributions to the Plan, which are made on an
after-tax basis (for federal income tax purposes) pursuant to Section 4.1 (Basic Contributions), or to a union sponsored trust pursuant to Section 24 (Provisions for Employees Who Elect to Participate in a Union-Sponsored
Trust for Savings), and which entitle the Participating Employee, if eligible under Section 3 (Participation), to receive ESOP Employing Company Matching Allocations.
Basic After-Tax Contributions Account
Basic After-Tax Contributions Account shall mean the account maintained for a Participating Employee or Inactive Participant to record his
Basic After-Tax Contributions to the Plan, including adjustments relating thereto.
Basic Contributions
Basic Contributions shall mean Basic After-Tax Contributions and Basic Tax-Deferred Contributions.
Basic Tax-Deferred Contributions
Basic Tax-Deferred Contributions shall mean the amount of contributions made to the Plan on a tax-deferred basis (for federal income tax
purposes) on a Participating Employees behalf pursuant to Section 4.1. (Basic Contributions), and as provided in Code Section 401(k), and which entitle the Participating Employee to receive ESOP Employing Company Matching
Allocations.
Basic Tax-Deferred Contributions Account
Basic Tax-Deferred Contributions Account shall mean the account maintained for a Participating Employee or Inactive Participant to record his
share of the Basic Tax-Deferred Contributions made to the Plan on his behalf, including adjustments relating thereto.
Basic Weekly Pay
Basic Weekly Pay shall mean the sum of the items of remuneration which are enumerated below and which are actually paid (or deemed paid in the
case of the base rate of pay of an Eligible Employee of a core Employing Company) to an Employee who then satisfies the definition of an Eligible Employee as follows:
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Definitions
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the base rate of pay, as determined from the Employing Companys payroll records; |
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for Eligible Employees of a non-reg Employing Company, benefits under the Sickness and Accident Disability Benefit Plan for Mid-Atlantic Associates or any other short-term disability benefit plan maintained
by such Employing Company; |
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for Eligible Employees of Connected Solutions Inc. (or its successor that is a Frontier Company, if applicable) technical incentive pay; |
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for Eligible Employees of Verizon Directory Services, Inc. (or its successor that is a Frontier Company, if applicable) average daily commissions, directory services commissions, CPS award payments for Eligible
Employees represented by CWA; |
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the Corporate Profit Sharing (CPS) award, if and when paid; and |
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those items of pay which include the term differential in their description and which at the time of payment are benefit-bearing for purposes of the Supplemental Monthly Pension benefit formula under the
Frontier Communications Corporate Services Inc. Pension Plan for West Virginia Associates, when paid. |
The items described
above shall be taken into account before reducing such pay by any Tax-Deferred Contributions under this Plan (other than a CPS award for which an Eligible Employee affirmatively elects a 100% Tax-Deferred Contribution rate under Sections 4.1
(Basic Contributions) and 4.2 (Supplementary Contributions)), without adjusting such pay to reflect any pre-tax contributions to any cafeteria plan as that term is defined in Code Section 125, and, effective
as of the Effective Date (or such later date as agreement may be reached between the Employing Company and the Employees collective bargaining representative), without adjusting such pay to reflect any pre-tax contributions to any
transportation fringe benefit plan within the meaning of Code Section 132(f)(4).
For each weekly pay period that an Eligible Employee
of a core Employing Company is entitled, for all or part of such pay period, to be paid wages or a benefit under either the Sickness and Accident Disability Benefit Plan for Mid-Atlantic Associates or any other short-term disability
benefit plan maintained by such Employing Company, the base rate of pay deemed paid during such weekly pay period shall be the quotient determined by dividing the Eligible Employees then applicable annual base rate of pay by 52.2. Effective
for any weekly pay period in which amounts are received as workmens compensation benefits, the base weekly pay determined under the immediately preceding sentence for such weekly pay period shall be reduced by the amount of such benefits
received.
No Employee Contributions shall be made for any pay period if the amount available for payment to the Eligible Employee for such
pay period, after applicable tax and other withholdings and deductions as determined in accordance with the payroll practices of the Employing Company, leaves a remaining amount which is insufficient to fulfill the contribution percentage of Basic
Weekly Pay which the Eligible Employee then has in effect.
The compensation of each Eligible Employee taken into account as Basic Weekly
Pay under the Plan for any Plan Year shall not exceed $150,000, or such other amount as may apply under Code Section 401(a)(17) for such Plan Year. Employee Contributions shall not be made to the Plan with respect to Basic Weekly Pay in excess
of this amount.
Bellcore
Bellcore shall mean Bell Communications Research, Inc. or its successor.
Bellcore Savings Plan
Bellcore
Savings Plan shall mean the Bellcore Savings Plan for Salaried Employees (or its successor) or the Bellcore Savings and Security Plan (or its successor).
Beneficiary
Beneficiary shall
mean the person or persons (natural or otherwise) designated by a Participating Employee or Inactive Participant in accordance with the provisions of Section 17 (Designation of Beneficiaries) to receive any benefit under this Plan
which is occasioned by the death of the Participating Employee or Inactive Participant.
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Definitions
Benefit Administrator
Benefit
Administrator means the person or entity designated by the Plan Administrator from time to time with the authority and responsibility to perform day-to-day benefit administration services for Participating Employees and Beneficiaries under the Plan.
Benefit Claims Committee
Benefit Claims
Committee shall mean the benefit claims committee appointed by the Retirement Investment & Administration Committee to process and decide claims under the Plan pursuant to Section 23.4. Board, or Board of
Directors
Board, or Board of Directors shall mean the Board of Directors of the Company.
Break-in-Service or One-Year Break-in-Service
For purposes of eligibility to participate in the Plan, Break-in-Service or One-Year Break-in-Service shall mean an eligibility computation period (as
defined in Section 3 (Participation)) of twelve consecutive months during which an Employee has not completed more than 500 Hours of Service with an Employing Company or with an Affiliate.
For purposes of determining a Participating Employees or Inactive Participants vested percentage, Break-in-Service or One-Year Break-in-Service shall mean a Period of Severance of twelve consecutive months from an
Employees Severance from Service Date to the first anniversary of such date, or from one anniversary of such date to the next subsequent anniversary of such date, during which the Employee is entitled to be credited with no Hours of Service.
For both eligibility and vesting purposes, solely for purposes of determining whether a Break-in-Service has occurred, an Employee shall not be deemed to have incurred a One-Year
Break-in-Service under either of the following circumstances:
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During a leave of absence granted to an Employee in writing by an Employing Company or an Affiliate for service in the Armed Forces of the United States, provided such Employee returns to employment with the company
that granted the leave within ninety days of his release from active military service, or within any shorter or longer period during which his right to reemployment is protected by applicable law; or |
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In the case of a person who is absent from work for parental reasons, credit shall be given for the Hours of Service the individual would have accrued but for such parental absence, or, where such hours
cannot be determined, eight Hours of Service per business day shall be credited. Parental reasons means an absence (A) by reason of the pregnancy of the individual, (B) by reason of the birth of a child of the individual,
(C) by reason of the placement of a child with the individual at the time of adoption of the child, or (D) for purposes of caring for any such child for a period beginning immediately after such birth or placement. The Hours of Service
credited under this paragraph shall be credited (A) in the computation period in which the absence begins if the crediting is necessary to prevent a Break-in-Service in that period, or (B) in all other cases, in the following computation
period. For purposes of vesting, this rule shall apply only to the period from the Employees Severance from Service Date to the first anniversary of such date. |
Code
Code shall mean the Internal
Revenue Code of 1986, as amended.
Committee or Retirement Investment & Administration Committee
Committee or Retirement Investment & Administration Committee means the committee appointed by the Board of Directors of the Company
to administer the Plan pursuant to Section 23.
Company
Company means Frontier Communications Corporation, its successors and assigns. Prior to the merger of New Communications Holdings Inc. with and
into Frontier Communications Corporation, the Company means New Communications Holdings Inc., its successors and assigns. Company under the Predecessor Plan meant Bell Atlantic for periods prior to July 1, 2000, and Verizon Communications,
Inc., thereafter.
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Definitions
Company Shares
Company Shares
shall mean securities of the Company or another Frontier Company which are employer securities within the meaning of Code section 409(l).
Company Shares Fund
Company
Shares Fund shall have the meaning as set forth under the definition of Funds.
Compensation
Compensation shall mean all of an Employees compensation as reported in Box 1 of IRS Form W-2 and as defined in Treasury
Regulation Section 1.415-2(d)(11)(i) for the taxable year that coincides with the Plan Year (or, where the context so provides, during an applicable portion of a Plan Year), plus any amount contributed by an Employing Company pursuant to a
salary reduction agreement that complies with Code Section 125, 402(e)(3), 402(h), or 403(b), and any amount not includible in gross income by reason of Code Section 132(f)(4). The Compensation of each Eligible Employee taken into account
under the Plan for any Plan Year shall not exceed $150,000, or such other amount as may apply under Code Section 401(a)(17) for such Plan Year.
CWA Employee
CWA Employee shall
mean an Employee whose terms and conditions of employment are determined in accordance with a collective bargaining agreement with the Communications Workers of America.
Effective Date
Effective Date
shall mean the Distribution Date as defined by the Distribution Agreement by and between Verizon Communications Inc. and New Communications Holdings Inc. dated as of May 13, 2009.
Eligible Employee
Eligible
Employee shall mean any Non-Salaried Employee of an Employing Company who has satisfied the requirements of Section 3 (Participation), other than a Rehired Associate Retiree; provided, however, that an Employee shall not be treated
as having the status of an Eligible Employee for purposes of this Plan if the Employee is then (a) an individual hired by a Frontier Company under the terms of a written agreement which characterizes the individual as an independent
contractor, consultant, or otherwise as a person who is not treated by a Frontier Company as an employee for purposes of withholding federal employment taxes, regardless of any contrary governmental or judicial determination or holding relating to
such status or tax withholding; or (b) an individual who renders services to a Frontier Company under circumstances in which his or her wages or remuneration is paid by a third party service provider or temporary service agency, regardless of
any governmental or judicial determination or holding which characterizes the individual as an employee of a Frontier Company.
Employee
Employee means an individual who is a common law employee of a Frontier Company. An individual who is not a common law employee of
a Frontier Company shall be deemed to be an Employee of such company if the individual is a Leased Employee to whom Code Section 414(n)(5) does not apply.
Employee Contributions
Employee
Contributions shall include Basic and Supplementary Tax-Deferred Contributions, and Basic and Supplementary After-Tax Contributions.
Employing
Company
Employing Company shall mean any company included on Appendix I and any other Frontier Company which, by action of
its board of directors, subject to the approval of the Retirement Investment & Administration Committee, elects to participate in the Plan.
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Definitions
Employing Company Matching Allocations
Employing Company Matching Allocations shall mean the matching amount, measured with respect to a Participating Employees Basic
Contributions, which was allocated to a Participating Employees Employing Company Matching Allocations Account under the Verizon Communications Plan, from time to time on one or more monthly Valuation Dates prior to January 1, 1990 and
which was transferred to the Plan.
Employing Company Matching Allocations Account
Employing Company Matching Allocations Account means the account maintained for a Participating Employee or Inactive Participant to record
(i) the Employing Company Matching Allocations made on his behalf prior to January 1, 1990 under the Verizon Communciations Plan and transferred to the Plan, (ii) rollover contributions contributed at any time, and (iii) account
balances which were previously forfeited and which are reinstated in connection with a restoral payment at any time.
Employing Company Matching
Percentage
Employing Company Matching Percentage means the percentage of an eligible Participating Employees Basic
Contributions to the Plan for a given month which the Employees Employing Company will cause to be matched in the form of ESOP Employing Company Matching Allocations. The Employing Company Matching Percentage shall be 82%, except as set forth
below.
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For Eligible Employees of Connected Solutions Inc. (or its successor that is a Frontier Company, if applicable) the Employing Company Matching Percentage shall be 60%. |
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If a matching contribution is made for a payroll period during the term of a collective bargaining agreement, and the collective bargaining agreement specifies a different Employing Company Matching Percentage for the
collective bargaining unit to which the Eligible Employee belongs, the Employing Company Matching Percentage specified in the collective bargaining agreement shall be the Employing Company Matching Percentage with respect to the
Eligible Employee. |
Enrollment Date
Enrollment Date shall mean a periodic date, occurring not less frequently than monthly and not more frequently than daily, on which new
enrollments in the Plan are made effective, in a manner which is determined by the Benefit Administrator to be administratively practicable.
ERISA
ERISA shall mean the Employee Retirement Income Security Act of 1974, as amended.
ESOP
ESOP shall mean the portion
of the Plan that is intended to constitute an employee stock ownership plan within the meaning of Code Section 4975(e)(7).
ESOP Allocation
Contributions
ESOP Allocation Contributions shall mean the top-up contributions made by
the Employing Companies to the Trust pursuant to Section 5.1.2 (ESOP Allocation Contributions), which are intended to be used to ensure that the ESOP Employing Company Matching Allocation obligations are satisfied, to the extent
that those obligations are not fully satisfied from Leveraged Shares released as a consequence of the repayment of one or more Acquisition Loans.
ESOP Allocation Contributions Account
ESOP Allocation Contributions Account shall mean the account maintained for a Participating Employee or Inactive Participant to record ESOP
Allocation Contributions made to the Plan on his behalf.
ESOP Debt Service Contributions
ESOP Debt Service Contributions shall mean contributions by the Employing Companies to the Trust which are intended to be used (with any
earnings thereon) to repay principal, interest, and any premiums or other administrative expenses, under the terms of one or more Acquisition Loans.
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Definitions
ESOP Employing Company Matching Allocations
ESOP Employing Company Matching Allocations shall mean the matching amount, measured with respect to a Participating Employees Basic
Contributions to the Plan, which is allocated to a Participating Employees ESOP Employing Company Matching Allocations Account, from time to time on one or more Valuation Dates pursuant to Section 5.2 (ESOP Employing Company
Matching Allocations).
ESOP Employing Company Matching Allocations Account
ESOP Employing Company Matching Allocations Account shall mean the account maintained for a Participating Employee or Inactive Participant to
record ESOP Employing Company Matching Allocations and any ESOP Share Performance Additional Allocations made to the Plan on his behalf.
ESOP
Intermediate Holding Account
ESOP Intermediate Holding Account shall mean the account which shall hold Leveraged Shares which have
been released from the ESOP Unallocated Shares Account but which are not yet allocated to Participating Employees ESOP Employing Company Matching Allocations Accounts.
ESOP Released/Allocated Account
ESOP Released/Allocated Account shall mean an account which holds Leveraged Shares released from the ESOP Unallocated Shares Account which have
been allocated to Participating Employees ESOP Employing Company Matching Allocation Accounts.
ESOP Share Performance Additional Allocations
ESOP Share Performance Additional Allocations shall mean a number of Units representing Leveraged Shares which may be allocated to
the ESOP Employing Company Matching Allocations Accounts of certain Participating Employees in the amount, and under the circumstances, stated in Section 5.3 (Additional Allocations) of the Plan.
ESOP Unallocated Shares Account
ESOP Unallocated Shares Account shall mean the account under which Leveraged Shares are held as Plan assets which are not then allocated to the
Account of any specific Participating Employee, pending the release and allocation of such assets to credit Participating Employee ESOP Employing Company Matching Allocations Accounts.
Excess 401(k) Contributions
Excess 401(k) Contributions shall mean, with respect to each Plan Year, the amount of Tax-Deferred Contributions for a Highly Compensated
Eligible Employee which exceeds the limits set forth in Code Section 401(k)(3) and applicable Treasury Regulations. The amount of a Highly Compensated Eligible Employees Excess 401(k) Contributions shall be determined as follows: The
Highly Compensated Eligible Employee with the highest individual contribution percentage shall have his contributions reduced to the extent necessary to cause his contribution percentage to equal the contribution percentage of the Highly Compensated
Eligible Employee with the second highest individual contribution percentage. This process shall continue until the applicable nondiscrimination requirements under Code Section 401(k)(3) and Treasury Regulation § 1.401(k)-1(b) are
satisfied. The total of the dollar amounts by which the contributions of all Highly Compensated Eligible Employees are reduced for a Plan Year pursuant to this process is the amount of Excess 401(k) Contributions for the Plan Year. Excess 401(k)
Contributions for a Plan Year shall be allocated by assigning to the Highly Compensated Eligible Employee with the largest dollar amount of Tax-Deferred Contributions for the Plan Year the dollar amount necessary to reduce the dollar amount of his
Tax-Deferred Contributions to that of the Highly Compensated Eligible Employee with the next-largest dollar amount of Tax-Deferred Contributions for the Plan Year, and continuing in the same manner until all Excess 401(k) Contributions for the Plan
Year have been allocated.
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Excess 401(m) Contributions
Excess
401(m) Contributions shall mean, with respect to each Plan Year, the amount of After Tax Contributions, ESOP Employing Company Matching Allocations and ESOP Share Performance Additional Allocations for a Highly Compensated Eligible Employee which
exceeds the limits set forth in Section 6.2 (Limitations on After-Tax Contributions, ESOP Employing Company Matching Allocations and Additional Allocations). The amount of a Highly Compensated Eligible Employees Excess 401(m)
Contributions shall be determined as follows: The Highly Compensated Eligible Employee with the highest individual contribution percentage shall have his contributions reduced to the extent necessary to cause his contribution percentage to equal the
contribution percentage of the Highly Compensated Eligible Employee with the second highest individual contribution percentage. This process shall continue until the applicable nondiscrimination requirements under Code Section 401(m) and
Treasury Regulation § 1.401(m) are satisfied. The total of the dollar amounts by which the contributions of all Highly Compensated Eligible Employees are reduced for a Plan Year pursuant to this process is the amount of Excess 401(m)
Contributions for the Plan Year. Excess 401(m) Contributions for a Plan Year shall be allocated by assigning to the Highly Compensated Eligible Employee with the largest dollar amount of applicable contributions for the Plan Year the dollar amount
necessary to reduce the dollar amount of such contributions to that of the Highly Compensated Eligible Employee with the next-largest dollar amount of such contributions for the Plan Year, and continuing in the same manner until all Excess 401(m)
Contributions for the Plan Year have been allocated.
Forfeiture
Forfeiture shall mean that portion of a Participating Employees or Inactive Participants Employing Company Matching Allocations
Account and ESOP Employing Company Matching Allocations Account that is forfeited in accordance with Section 7 (Vesting; Application of Forfeitures) and Section 10 (Distribution and Withdrawal) due to incomplete
vesting at termination of employment or in connection with compliance with the limitations described in Section 6 (Limitations on Contributions).
Frontier Company
Frontier Company
shall mean the Company or any direct or indirect subsidiary or company which is included as a member with the Company in a controlled group of corporations (as defined by Code Section 414(b)), an affiliated service group (as defined under Code
Section 414(m)), or group of trades or businesses under common control (as defined under Code Section 414(c)), or which is otherwise required to be aggregated with the Company pursuant to Code Section 414(o) and regulations
thereunder. The term Frontier Company shall apply to an entity described in this paragraph only for the period of time during which the entity is, in fact, affiliated with the Company in the manner described herein.
Funds
Funds shall mean any of the
investment funds described below:
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Active International Equity Fund shall mean an investment fund under the Plan, substantially all of the assets of which are invested in a portfolio of publicly-traded non-U.S. company stocks in developed and
emerging market countries and other investments of a short-term nature, including, but not limited to, futures purchased pending the selection and purchase of other investments of the type described in this paragraph or pending Plan distributions,
as the Trustee or an Investment Manager in its discretion may choose. |
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Active U.S. Equity Fund shall mean an investment fund under the Plan, substantially all of the assets of which are invested in a portfolio of publicly-traded U.S. stocks including, but not limited to, futures
purchased pending the selection and purchase of other investments of the type described in this paragraph or pending Plan distributions, as the Trustee or an Investment Manager in its discretion may choose. |
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Institutional Government Money Market Portfolio shall mean an investment fund under the Plan, substantially all of the assets of which are invested in obligations of the U.S. Government or its agencies,
obligations guaranteed or insured by the U.S. Government or its |
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agencies and repurchase agreements collateralized by such obligations (either directly or indirectly through commingled funds) and other investments of a short-term nature, purchased pending the
selection and purchase of other investments of the type described in this paragraph or pending Plan distributions, as the Trustee or an Investment Manager in its discretion may choose. |
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Passive International Equity Index Fund shall mean an investment fund under the Plan, substantially all of the assets of which are invested, directly or indirectly, in a portfolio of stocks of companies in
countries outside of the U.S. designed to track the Morgan Stanley Capital International Europe Australia Far East Index, weighted by gross domestic product, net dividends and other investments of a short-term nature, including, but not limited to,
futures purchased pending the selection and purchase of other investments of the type described in this paragraph or pending Plan distributions, as the Trustee or an Investment Manager in its discretion may choose. |
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Passive U.S. Equity Index Fund shall mean an investment fund under the Plan, substantially all of the assets of which are invested, directly or indirectly, in a portfolio of publicly-traded U.S. stocks designed
to track the Standard & Poors 500 Stock Index and other investments of a short-term nature including, but not limited to, futures purchased pending the selection and purchase of other investments of the type described in this paragraph or
pending Plan distributions, as the Trustee or Investment Manager in its discretion may choose. |
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Active U.S. Small Capitalization Fund shall mean an investment fund under the Plan, substantially all of the assets of which are invested in a portfolio of publicly-traded U.S. stocks designed to track the
Russell 2000 Index and other investments of a short-term nature including, but not limited to, futures purchased pending the selection and purchase of other investments of the type described in this paragraph or pending Plan distributions, as the
Trustee or an Investment Manager in its discretion may choose. |
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Verizon Shares Fund shall mean an investment fund under the Plan, substantially all of the assets of which are invested in Verizon Shares, including Verizon Shares received from the Verizon Communications Plan
pursuant to Appendix II. A separate Verizon Shares Fund shall be maintained for amounts transferred to the Plan from the Verizon Communications Plan and attributable to amounts transferred to the Verizon Communications Plan from the PAYSOP under
Section 26 (Transfer of Accounts from Bell Atlantic Employee Stock Ownership Plan). A Participating Employee shall be allowed to direct the investment of the portion of his Account invested in the Verizon Shares Fund, including
amounts attributable to Employing Company Matching Allocations made prior to the Effective Date, out of such Fund in accordance with the provisions of Section 8.1. A Participating Employee shall not be allowed to direct the investment of any
portion of his Account or future contributions into the Verizon Shares Fund. |
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Company Shares Fund shall mean a Fund under the Plan, substantially all of the assets of which are invested in Company Shares. |
The Funds shall also include the Conservative Strategy Portfolio, the Conservative Growth Strategy Portfolio, the Moderate Growth Strategy
Portfolio, the Long-Term Growth Strategy Portfolio, the Aggressive Growth Strategy Portfolio, the PIMCO Real Return Bond Fund-Class I, the Fidelity REIT Collective Pool, the PIMCO Total Return Fund-Class I, the Clipper Fund, the Fidelity Diversified
International Fund, the Fidelity Dividend Growth Fund, the Fidelity Magellan Fund, and the TCW Galileo Select Equities Fund-Class I, subject to the deletion or addition of funds in accordance with Sections 8, 12 and 20 of the Plan and to any
requirement for collective bargaining.
Government Money Market Fund
Government Money Market Fund shall have the meaning as set forth under the definition of Funds.
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Definitions
Highly Compensated Eligible Employees
Highly Compensated Eligible Employees shall mean those Eligible Employees who, on a given testing date, are Highly Compensated Employees.
Highly Compensated Employees
Highly Compensated Employees shall include highly compensated active employees and highly compensated former employees within the meaning of
Code Section 414(q) and the regulations thereunder.
A highly compensated active employee shall mean any Employee who performs service
for a Frontier Company at any time during a Plan Year (the Determination Year) and who either:
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during the Plan Year immediately preceding the Determination Year (the Look-Back Year) received Compensation in excess of $80,000, as adjusted pursuant to Code Section 415(d); or |
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during either the Determination Year or the Look-Back Year was an Employee (including persons aggregated with the Employee) who owned 5% or more of the common stock of the Company. |
A highly compensated former employee includes any Employee who separated from service (or was deemed to have separated from service) prior to
the Determination Year, performs no service for any Frontier Company during the Determination Year, and was a Highly Compensated Employee for an applicable year, specifically, either the separation year or any determination year ending on or after
the Employees 55th birthday.
Hour of Service
Hour of Service shall mean an hour described under any of the following subsections:
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Performance of Duties. Each actual hour for which an Employee is paid or entitled to be paid by a Frontier Company, for the performance of duties as an employee of such company. |
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Nonworking Paid Time. Each hour for which an Employee is paid or entitled to be paid by a Frontier Company on account of a period of time during which no duties are performed (irrespective of whether the
employment relationship has terminated) due to vacation, holiday, illness, incapacity, disability, layoff (under circumstances not constituting a termination of employment), jury duty, military duty or leave of absence; provided, however, no more
than 501 Hours of Service shall be credited to an Employee on account of any single continuous period during which he performed no duties for such a company; and provided further that no credit shall be given for periods during which the only
remuneration paid or due is under a severance pay plan or a plan providing for medical care or reimbursement of medically related expenses incurred by the Employee. |
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Back Pay. Each hour for which back pay, irrespective of mitigation of damages, is either awarded or agreed to by a Frontier Company; provided, however, Hours of Service credited under paragraphs (a), (b) and
(c) above shall not be double credited by operation of this paragraph. |
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Pre-Acquisition or Other Prior Service. Each Hour of Service credited to an Employee under the terms of the Predecessor Plan or for the purposes stated in Appendix II of the Plan. |
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Equivalencies. For counting Hours of Service for purposes of determining eligibility to participate under the Plan, 45 Hours of Service shall be credited for each week in which the Employee is entitled to at
least one Hour of Service. Service for vesting purposes shall be based upon elapsed time. |
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Miscellaneous Rules. The Plan Administrator, with advice of counsel, may adopt methods of determining Hours of Service when payments are made for other than the performance of duties and of crediting such Hours
of Service to Plan Years in accordance with Regulations Section 2530.200b-2(b) and (c) promulgated by the Secretary of Labor which are incorporated by reference into the Plan. Participants on
military leaves of absence who are not directly or indirectly compensated or entitled to be compensated by an Employing Company while on such leave shall be credited with Hours of Service as required by Sections 2021-2027 of Title 38 of the United
States Code. Notwithstanding any other provision of this Plan to the contrary, an Employee shall not be credited with Hours of Service more than once with respect to the same period of time. |
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for Mid-Atlantic Associates |
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Definitions
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Aggregation of Certain Individuals. In addition to the rules described above, Hours of Service will be credited for any individual who is considered an employee of a Frontier Company under Code
Section 414(n) or 414(o) and the regulations thereunder. |
IBEW Employee
IBEW Employee shall mean an Employee whose terms and conditions of employment are determined in accordance with a collective bargaining
agreement with the Locals 827 or 1944 of the International Brotherhood of Electrical Workers.
Inactive Participant
Inactive Participant shall mean any of the following individuals: an employee who is actively employed by (or is on an approved leave of
absence from) a Frontier Company or Bellcore, and who has an Account balance in the Plan but who has suspended his contributions to the Plan or is not then eligible to contribute to the Plan; a former Employee who is then receiving installment
distributions; a former Employee who defers distribution up to age 70-1/2; or an alternate payee under a qualified domestic relations order.
Income
Income shall mean the net gain or loss of each investment fund maintained under the Plan, from investments, as reflected by
interest, dividends, realized and unrealized gains and losses on securities, other investment transactions and expenses incurred by any investment fund. In determining Income for any period, assets shall be valued on the basis of their Value. Except
to the extent that dividends under the Company Shares Fund are used to pay principal or interest on an Acquisition Loan or are withdrawn pursuant to Section 10.2.6 (Withdrawal and Distribution of Dividends), the dividends, interest
and other earnings received by the Trustee with respect to any investment fund shall be reinvested in the investment fund from which such distributions were received.
Interchange Company Savings Plan
Interchange Company Savings Plan shall mean a qualified savings plan maintained by an interchange company as defined in
Section 559(c)(5)(D) of the Tax Reform Act of 1984.
Investment Manager
Investment Manager shall mean an investment manager qualified as such under Section 3(38) of ERISA.
Leased Employee
Leased Employee
shall mean any person who (i) is not employed in an employer-employee relationship with a Frontier Company and (ii) provides services to a Frontier Company if (A) such services are provided pursuant to an agreement between the
Frontier Company and any other person (a leasing organization), (B) such person has performed such services for the Frontier Company (or for the Frontier Company and an affiliated company) on a substantially full-time basis for a
period of at least one year, and (C) such services are performed under primary direction or control by the Frontier Company. This definition, effective January 1, 1997, is intended to be coextensive with Code Sections 414(n) and
(o) and any applicable regulations and shall be interpreted so as to further this intent.
Leveraged Shares
Leveraged Shares means Company Shares acquired by the Trustee with the proceeds of an Acquisition Loan, pursuant to Section 5.4, and
Verizon Shares and Company Shares attributable to Verizon Shares acquired under the Verizon Communications Plan with the proceeds of an Acquisition Loan and transferred to the Plan pursuant to Appendix II. Except as required by Code
Section 409(h) and by Treasury Regulation Sections 54.4975-7(b)(9), (10), or as otherwise required by applicable law, no Leveraged Shares may be subject to a put, call or other option, or buy-sell or similar arrangement while held by, and when
distributed from, the Plan, whether or not the Plan is an employee stock ownership plan, within the meaning of Code Section 4975(e)(7) at that time.
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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12 |
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Definitions
Limitation Year
Limitation Year
shall mean the 12-month period during which the limitations of Code Section 415 are applied. The Limitation Year shall be the Plan Year.
Non-Salaried Employee
Non-Salaried Employee shall mean an Employee who is not a Salaried Employee and whose terms and conditions of employment are subject to a
collective bargaining agreement; provided, however, that the term Non-Salaried Employee shall not include: (i) a Leased Employee; (ii) an Employee who transfers from salaried to non-salaried status and retains non-salaried status for a
period of less than 30 days; or (iii) any Employee who would otherwise constitute a Non-Salaried Employee whose terms and conditions of employment are governed by a collective bargaining agreement that provides either for the Employee not to be
eligible for the Plan or which expressly provides for participation in some other savings plan maintained by a Frontier Company.
Non-Vested Amounts
Non-Vested Amounts shall mean, as of
a given date, the aggregate Account balances of the Participating Employees or Inactive Participants Employing Company Matching Allocations Account, ESOP Employing Company Matching Allocations Account and Pension Contributions under
Section 27 (Pension Accounts for CCR Employees), to the extent that the Participating Employee or Inactive Participant has not, on the given date, become vested under any provision of Section 7 (Vesting; Application of
Forfeitures) of the Plan.
Normal Retirement Age
Normal Retirement Age for a Participating Employee or Inactive Participant shall mean the participants 65th birthday.
Participating Employee
Participating Employee shall mean an Eligible Employee who is participating in the Plan as provided under Section 3
(Participation).
Passive International Equity Index Fund
Passive International Equity Index Fund shall have the meaning as set forth under the definition of Funds.
Passive U.S. Equity Index Fund
Passive U.S. Equity Index Fund shall have the meaning as set forth under the definition of Funds.
Payroll Office
Payroll Office
shall mean the Employees payroll office, human resources department or such other person or entity, as may be designated by the Employing Company.
Period of Service
Period of
Service for an Employee of a Frontier Company means the aggregate of the one or more Periods of Elapsed Time which said Employee is entitled to have credited on his behalf, either separately, or in combination, in accordance with the
service bridging rules in Section 7 (Vesting; Application of Forfeitures) and the definition of Break-in-Service. A Period of Elapsed Time is a continuous period of days, months, and/or years, which
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on the first date on which an individual accrues an Hour of Service as an Employee of a Frontier Company, during a period in which such company was a Frontier Company; or |
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on the first date following a Period of Severance on which an Employee accrues an Hour of Service as an Employee of any such company; and |
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ends on the next following Severance from Service Date. |
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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13 |
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Definitions
The Period of Service shall be computed from the payroll records and/or service crediting records of a Frontier Company, and such records may
be maintained by making use of an adjusted employment commencement date, adjusted service date, adjusted net credited service date, or any other means which the Plan Administrator, with advice of counsel, determines to be a reasonable method for
computing the Period of Service. An Employees Period of Service shall also include any prior service credit that may apply to the Employee as described in Appendix II of the Plan. In no event, however, shall an Employees Period of
Service be less than his years of ERISA Service as determined under the Frontier Communications Corporate Services Inc. Pension Plan for West Virginia Associates.
Period of Severance
Period of
Severance for an Employee of a Frontier Company means a continuous period of days, months and/or years which commences on a Severance from Service Date and continues until the next subsequent date (if any) on which the Employee is entitled to be
credited with an Hour of Service.
Plan Administrator or Administrator
Plan Administrator shall mean the Retirement Investment & Administration Committee.
Plan
Plan shall mean this
Frontier Communications Corporate Services Inc. Savings and Security Plan for Mid-Atlantic Associates, as it may be amended from time to time.
Plan
Year
Plan Year shall mean the period beginning with the Effective Date and ending on the next following December 31, and each
calendar year thereafter. With respect to an Employee whose Account includes amounts attributable to participation in the Verizon Communications Plan or any other transferor plan, the term shall also refer to a plan year under the transferor plan.
Predecessor Plan
Predecessor
Plan shall mean the Bell System Savings and Security Plan.
Profit Sharing Plan
Profit Sharing Plan shall mean the portion of the Plan that is intended to constitute a profit sharing plan within the meaning of Code section
401(a).
Rehired Associate Retiree
Rehired Associate Retiree shall mean a former Non-Salaried Employee who is receiving retiree benefits under one or more retirement benefit
plans sponsored by the Company, and who is reemployed as a Non-Salaried Employee under the terms of a written offer of employment which states that the Employee will be treated as a Rehired Associate Retiree, Working Retiree,
or similar classification in accordance with an applicable written agreement with the appropriate collective bargaining representative(s), and in accordance with a written acknowledgement signed by the Employee.
Retirement Plan Committee
Retirement Plan Committee means the committee of the Board to which the Board has: (a) delegated the authority to amend the Plan pursuant
to Sections 20 and 21; and (b) granted the discretion, responsibility and authority to oversee the management of the Plans assets pursuant to Section 23.
Salaried Employee
Salaried
Employee shall mean a regular full-time, a regular part-time or a term Employee of an Employing Company whose pay is at a weekly, semi-monthly, monthly or annual rate
and whose position is not subject to automatic wage progression; provided, however, that the term Salaried Employee shall not include: (i) any Leased Employee; (ii) an Employee whose employment is covered by a collective bargaining
agreement; (iii) an Employee who transfers from non-salaried to salaried status and retains salaried status for a period of less than 30 days; or (iv) an employee-at-will of Verizon Professional
Services, Inc. (or its successor that is a Frontier Company, PSI) or an employee who is a party to an employment contract with PSI, who is hired as a full-time or
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Savings and Security Plan |
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Definitions
part-time employee of PSI and who, at the time of hiring, is advised in writing by PSI that the position carries with it a term of employment which will not be greater than a stated period, which
may be subject to renewal or extension in the discretion of PSI.
Severance from Service Date
Severance from Service Date means the earlier of (i) the date on which an Employee terminates employment with a Frontier Company,
including without limitation by reason of retirement, resignation, discharge, or death, or (ii) the first anniversary of the date on which an Employee is absent from the employ, or ceases to render active service as an employee, of such a
company on account of paid or unpaid leave of absence, disability, or for any reason other than either (a) a termination of employment as described in clause (i), or (b) a transfer to a Frontier Company.
Supplementary After-Tax Contributions
Supplementary After-Tax Contributions shall mean the amount of a Participating Employees contributions to the Plan which are contributed
on an after-tax basis (for federal income tax purposes) pursuant to Section 4.2 (Supplementary Contributions).
Supplementary
After-Tax Contributions Account
Supplementary After-Tax Contributions Account shall mean the account maintained for a
Participating Employee or Inactive Participant to record his Supplementary After-Tax Contributions made to the Plan, including adjustments relating thereto.
Supplementary Contributions
Supplementary Contributions shall mean Supplementary After-Tax Contributions and Supplementary Tax-Deferred Contributions.
Supplementary Tax-Deferred Contributions
Supplementary Tax-Deferred Contributions shall mean the amount of contributions credited to a Participating Employees Account on a
tax-deferred basis (for federal income tax purposes), as described under Code Section 401(k), pursuant to Section 4.2 (Supplementary Contributions).
Supplementary Tax-Deferred Contributions Account
Supplementary Tax-Deferred Contributions Account shall mean the account maintained for a Participating Employee or Inactive Participant to
record his Supplementary Tax-Deferred Contributions made to the Plan, including adjustments relating thereto.
Tax-Deferred Contributions
Tax-Deferred Contributions shall mean Basic and Supplementary Tax-Deferred Contributions.
Trustee
Trustee shall mean the
trustee appointed by the Treasurer of the Company under the Trust Agreement.
Trust Agreement
Trust Agreement shall mean the agreement between the Company and the Trustee, in which the responsibilities of the Trustee are stated for the
administration of the trust associated with the Plan.
Unallocated Dividends
Unallocated Dividends shall mean dividends on Leveraged Shares held in the ESOP Unallocated Shares Account or in the ESOP Intermediate Holding
Account.
Unit Value
Unit
Value is the Value of the Unit within each Fund valued in accordance with the methodology contained in the definition of Valuation Date contained herein.
Units
Units shall mean the Units
which are utilized by the recordkeeper for recordkeeping purposes to ascertain the value of Accounts under the Plan.
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Savings and Security Plan |
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Definitions
Valuation Date
Valuation Date
shall mean each day on which the New York Stock Exchange is open for business. The Unit Value of each fund shall be determined as of the close of regular trading on the New York Stock Exchange and is computed by dividing the value of each
funds adjusted net assets by the total number of its units outstanding. To the extent reliable quotations are not readily available for any reason, the Company, the Trustee and/or the recordkeeper will determine a quotation they believe
accurately reflects fair value. If a fair value is unavailable for a significant amount of securities or other assets, a Unit Value will not be determined that day. The Unit Value is determined after taking account of expenses allocable to the
applicable Fund.
Value
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With respect to the purchase of Company Shares by the Trustee for the ESOP Unallocated Shares Account of the Plan with the proceeds of an Acquisition Loan, Value shall mean adequate consideration (as defined
in Section 3 of ERISA), as determined by the fiduciary to whom the Company has granted the investment discretion to acquire Company Shares for that purpose or by an independent appraiser (within the meaning of Code § 401(a)(28)(C)).
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With respect to Company Shares (other than with respect to the purchase of Company Shares pursuant to the preceding paragraph) Value shall be determined as of the Valuation Date for purposes of the valuation of Accounts
under the Plan, and shall be determined as of the date of any purchase of Company Shares from the Company for purposes of Section 12 (Duties of Trustee), and shall mean market value based on the closing price per share on the
applicable date as reported on the New York Stock Exchange. |
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With respect to Company Shares released from the ESOP Unallocated Shares Account or ESOP Intermediate Holding Account to fund the ESOP Employing Company Matching Allocation, Value shall mean market value based on the
closing price per share on the applicable date as reported on the consolidated tape that appears in the Wall Street Journal. |
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With respect to Funds other than the Company Shares Fund, Value shall be determined by the Trustee at the fair market value on the close of business on each Valuation Date. The Trustee in the reasonable exercise of its
discretion shall determine fair market value. |
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Valuations of distributed Company Shares that are not readily tradable on an established securities market, if any, shall be made by an independent appraiser (within the meaning of Code § 401(a)(28)(C)).
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Verizon
Verizon shall mean Verizon Communications Inc., a Delaware corporation.
Verizon Communications Plan
Verizon Communications Plan shall mean the Verizon Savings and Security Plan for Mid-Atlantic Associates, as amended.
Verizon Shares
Verizon Shares
shall mean the common shares of Verizon.
Verizon Shares Fund
Verizon Shares Fund shall have the meaning as set forth under the definition of Funds.
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Savings and Security Plan |
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3. PARTICIPATION
An Eligible Employee is a Non-Salaried Employee, other than a Salaried
Employee who has become a Non-Salaried Employee for a period of 30 days or less or a Rehired Associate Retiree, who is a regular, term, or temp Employee in the active service of an Employing Company (on a full-time or part-time basis).
An individual who is an Eligible Employee on the Effective Date and who was a participating employee in the Verizon Communications
Plan on the day prior to the Effective Date shall automatically be a Participating Employee in the Plan on the Effective Date. Provisions regarding the initial contribution and investment elections of such Participating Employees are set forth in
Appendix II.
3.2 |
Resumption of Participation After an Absence |
Notwithstanding anything in the Plan to the contrary, a
Non-Salaried Employee who was, at any prior time (whether or not an intervening Break-in-Service has occurred, and whether or not the individual was formerly vested in any account balance in the Plan), either a participant in the Predecessor Plan,
the Verizon Communications Plan, or this Plan, or an Employee who previously satisfied the definition of Eligible Employee under this Plan or the Verizon Communications Plan, shall be immediately treated as an Eligible Employee who is eligible to
enroll as a Participating Employee in this Plan pursuant to Section 3.4 (Voluntary Election to Participate) upon re-commencing employment as a Non-Salaried Employee of an Employing Company.
3.3 |
Former Salaried Status |
An Employee who was eligible to participate in Verizons Bell Atlantic
Savings Plan for Salaried Employees or any successor plan (including the Frontier Communications Corporate Services Inc. Management 401(k) Plan), and who has been hired into, or transferred to, a position as a Non-Salaried Employee, shall be
eligible to enroll as a Participating Employee in the Plan pursuant to Section 3.4 (Voluntary Election to Participate) on any Enrollment Date on or after the date on which the Employee is employed in Non-Salaried Employee status.
3.4 |
Voluntary Election to Participate |
Subject to such rules and procedures as the Retirement
Investment & Administration Committee may prescribe, an Eligible Employee may elect to participate in the Plan, and thus become a Participating Employee, beginning on any Enrollment Date on or after the date on which he becomes an Eligible
Employee, by authorizing After-Tax Contributions and/or Tax-Deferred Contributions in accordance with Section 4 (Contributions From Pay), and directing the investment of Employee Contributions in accordance with Section 8
(Investment Directions); provided, however, that an Eligible Employee who is a Group 3 Employee in the bargaining unit represented by Local 1944, International Brotherhood of Electrical Workers, AFL-CIO shall not be eligible
to receive ESOP Employing Company Matching Allocations in any Plan Year. Such authorization and direction must be communicated by the Participating Employee by means of an Approved Form of Timely Prior Notice.
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Savings and Security Plan |
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4. CONTRIBUTIONS FROM
PAY
Subject to the limitations described in Section 6 (Limitations on
Contributions), each Eligible Employee shall have the option to authorize the Employing Company, by giving notice in an Approved Form of Timely Prior Notice, to contribute Basic Tax-Deferred Contributions and/or Basic After-Tax Contributions
to the Plan on his behalf in an aggregate amount each pay period equal to 1%, 2%, 3%, 4%, 5%, or 6% of Basic Weekly Pay. In addition, an Eligible Employee who at the time of payment of the Corporate Profit Sharing (CPS) award is making either Basic
or Supplementary Contributions to the Plan may authorize an additional Tax-Deferred Contribution equal to the full amount of the CPS award, less union dues and other deductions that are required to be applied to a compensation item that is being
contributed on a tax-deferred basis to the Plan. The first 6% of this additional Tax-Deferred Contribution (before reduction for union dues and other deductions that are required to be applied to a compensation item that is being contributed on a
tax-deferred basis to the Plan) shall be treated as a Basic Tax-Deferred Contribution and the balance shall be treated as a Supplementary Contribution. If an Eligible Employee does not authorize an additional Tax-Deferred Contribution equal to the
full amount of the CPS award, both the percentage of Basic Weekly Pay and the type of contribution (pre-tax or after-tax) which the Eligible Employee has authorized and are in effect (if any) at the time the CPS award is paid shall be applied to the
CPS award in determining the amount and type of the contribution. In the event the last paragraph of Section 6.1.2 (401(k) Limit) of this Plan applies, the applicable aggregate percentage may be a fractional percentage not in excess
of the percentage required to satisfy such paragraph.
4.2 |
Supplementary Contributions |
Subject to the limitations described in Section 6 (Limitations
on Contributions), each Participating Employee shall have the option to authorize the Employing Company to contribute Supplementary Tax-Deferred Contributions and/or Supplementary After-Tax Contributions to the Plan on his behalf in an
aggregate amount each pay period equal to any whole percentage (or, in the event that the last paragraph of Section 6.1.2 (401(k) Limit) applies, a whole or fractional percentage) of his Basic Weekly Pay not to exceed 10%. No
Participating Employee may authorize Supplementary Contributions on his behalf in the absence of a concurrent election by the Participating Employee to contribute 6% of his Basic Weekly Pay in the form of Basic Contributions. In addition, an
Eligible Employee who at the time of payment of the CPS award is making either Basic or Supplementary Contributions to the Plan may authorize an additional Tax-Deferred Contribution equal to the full amount of the CPS award, less union dues and
other deductions that are required to be applied to a compensation item that is being contributed on a tax-deferred basis to the Plan. The first 6% of this additional Tax-Deferred Contribution (before reduction for union dues and other deductions
that are required to be applied to a compensation item that is being contributed on a tax-deferred basis to the Plan) shall be treated as a Basic Tax-Deferred Contribution and the balance shall be treated as a Supplementary Contribution. If an
Eligible Employee does not authorize an additional Tax-Deferred Contribution equal to the full amount of the CPS award, both the percentage of Basic Weekly Pay and the type of contribution (pre-tax or after-tax) which the Eligible Employee has
authorized and are in effect (if any) at the time the CPS award is paid shall be applied to the CPS award in determining the amount and type of the contribution.
4.3 |
Authorization of Employee Contributions |
An Eligible Employees authorization for the Employing
Company to withhold the Employee Contributions described in Section 4.1 (Basic Contributions) and/or Section 4.2 (Supplementary Contributions) shall be in an Approved Form of Timely Prior Notice to have his Basic
Weekly Pay for subsequent pay periods reduced by means of payroll withholding.
4.4 |
Commencement of Contributions |
The Employee Contributions which are elected by an Eligible Employee will
begin as soon as administratively possible on or after the Enrollment Date on which the Eligible Employee begins participation in the Plan pursuant to Section 3.4 (Voluntary Election to Participate).
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Savings and Security Plan |
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Contributions From Pay
4.5 |
Changes in Authorized Contributions |
A Participating Employee, by giving notice on an Approved Form of
Timely Prior Notice, may change the percentage of Basic Weekly Pay authorized for any or all of the forms of Employee Contributions to any other permissible percentage. Any change in the rate at which a Participating Employee is contributing one or
more forms of Employee Contributions shall take effect as soon as administratively possible after the change is made. No limitations shall apply to the number of rate changes which may occur in any Plan Year.
4.6 |
Changes in Basic Weekly Pay |
In the event of a change in the Basic Weekly Pay of a Participating
Employee, the authorized percentage of the respective forms of Employee Contributions currently in effect shall be applied as soon as practicable with respect to such changed Basic Weekly Pay, without action by the Participating Employee; provided,
however, that with regard to changes intended to commence in the month of January of any calendar year, such change shall be effective with the first payment of Basic Weekly Pay received in January.
4.7 |
Remittance of Contributions to Trustee |
An amount of cash equal to all Employee Contributions withheld
from pay pursuant to this Section 4 shall be transmitted to the Trustee by the Employing Company as soon as practicable, but not later than 15 business days, following the last day of the month in which ends the pay period with respect to which
such amounts are withheld.
If the Basic Weekly Pay of a Participating Employee in any payroll period is not
sufficient (after all deductions required by law, or otherwise, have been made) to allow the full contribution of a particular type to be made at the level designated by the Participating Employee, no contributions of that type shall be made for
that payroll period. For purposes of this Section, Tax Deferred Contributions and After-Tax Contributions, and Basic and Supplementary Contributions, are each treated as separate types of contributions. A participant who has insufficient pay due to
union business may authorize the Employing Company, once per calendar year, to withhold from his weekly pay for the next practicable pay period(s) following the missed deduction(s) and to contribute to his Account under the Plan, an amount not to
exceed two times (including the regularly scheduled deduction) his previously elected Basic Contribution, and Supplementary Contribution, if any. An ESOP Employing Company Matching Allocation shall be applied to the total Basic Contribution in
accordance with Section 5.2 (ESOP Employing Company Matching Allocations). The applicable Participant will have the option to choose either automatic make-up deductions, or make-up deductions on a per call
basis. If this latter option is chosen, an approved Form of Timely Prior Notice must be provided not more than one week following the missed deduction.
4.9 |
Catch-Up Contributions |
All Participating Employees who (1) are eligible to make Tax-Deferred
Contributions under the Plan, (2) have attained age 50 before the close of the Plan Year, and (3) are contributing at least 6% of Basic Weekly Pay as a Tax-Deferred Contribution or are precluded from making additional Tax-Deferred
Contributions pursuant to Section 6.1.2, shall be eligible to make catch-up contributions in accordance with, and subject to the limitations of, Section 414(v) of the Code and this Section.
A Participating Employee who is eligible to make catch-up contributions may make such a contribution by electing to reduce the Participating Employees
Basic Weekly Pay in accordance with procedures established by the Plan Administrator (or its delegate). The amount of such catch-up contributions for a payroll period shall range from a minimum amount of 1% to a maximum amount of 60% of the
Participating Employees Basic Weekly Pay for such payroll period (such that the total contribution from pay under this Section and Sections 4.1 and 4.2 cannot exceed 76% of the Participating Employees Basic Weekly Pay), and shall be
expressed as a whole percentage of such Basic Weekly Pay.
Such catch-up contributions shall not be taken into account for purposes of the provisions of
the Plan implementing the required limitations of Sections 402(g) and 415 of the Code. The Plan shall not be treated as failing to satisfy the provisions of the Plan implementing the requirements of Section 401(k)(3), 401(k)(11), 401(k)(12),
410(b), or 416 of the Code, as applicable, by reason of the making of such catch-up contributions.
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Contributions From Pay
The determination of whether a contribution qualifies as a catch-up contribution rather than a Tax-Deferred Contribution or other employee contribution shall
be made by the Plan Administrator (or its delegate) in its sole discretion.
A contribution that is determined to be a catch-up contribution shall not be
considered a Basic Contribution and shall not be matched by Employing Company Matching Allocations or contributions under Section 5; however, such contribution shall be considered an Employee elective contribution for purposes of Sections 7, 8,
9, 10, 11, 16, and 32.
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Savings and Security Plan |
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5. EMPLOYING COMPANY
MATCHING ALLOCATIONS
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5.1.1 |
ESOP Debt-Service Contributions |
ESOP Debt Service Contributions shall be made by
Employing Companies in cash at such times and in such amounts which will enable the Trustee to pay any currently maturing obligation under an Acquisition Loan, after such contributions are aggregated with: (A) any earnings attributable to any
ESOP Debt Service Contributions, (B) any Allocated Dividends and Unallocated Dividends, (C) any earnings on Unallocated Dividends, and (D) any other moneys available to repay an Acquisition Loan (including earnings attributable to the
proceeds of an Acquisition Loan earned prior to the acquisition of Company Shares with such proceeds and an Acquisition Loan made for the purpose of repaying a prior Acquisition Loan). To the extent the total of such ESOP Debt Service Contributions
(when aggregated with the sums referred to in clauses (A) through (D) above) exceeds the amount required to pay any such currently maturing obligations, the Trustee shall, in accordance with the direction of the chief financial officer of
the Company, either (i) apply such excess amount promptly to pre-pay some or all of the obligations under any outstanding Acquisition Loan, (ii) hold such excess amount in an unallocated suspense account until a date not later than the
last day of the Plan Year in which actually contributed for application at that time to pay any obligations then payable under the Acquisition Loan, or which it is then permissible under the terms of the Acquisition Loan to pre-pay, or
(iii) treat such excess ESOP Debt Service Contributions as additional ESOP Allocation Contributions. During the nonallocation period defined in Code § 409(n)(2)(C), no assets of the Plan attributable to (or allocable in lieu of) Company
Shares acquired by the Plan in a sale to which Code § 1042 (sales of stock to ESOPs and certain cooperatives) applied could accrue (or be allocated directly or indirectly under any Company-sponsored Code § section 401(a) plan) for the
benefit of persons specified in Code § 409(n).
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5.1.2 |
ESOP Allocation Contributions |
In addition to the ESOP Debt Service Contributions
referred to in Section 5.1.1 (ESOP Debt-Service Contributions), each Employing Company shall contribute for each Plan Year, at the time or times determined by the chief financial officer of the Company, with the advice of counsel,
ESOP Allocation Contributions in cash in an amount (not less than zero) equal to:
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the aggregate dollar amount of all ESOP Employing Company Matching Allocations required for the Plan Year pursuant to Section 5.2 (ESOP Employing Company Matching Allocations), plus |
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the value of any Allocated Dividends which were utilized during the Plan Year to repay any Acquisition Loan, |
minus
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the aggregate Value of all Leveraged Shares allocated to the Participating Employees ESOP Employing Company Matching Allocations Accounts during the Plan Year in accordance with Section 5.2 (ESOP
Employing Company Matching Allocations). |
5.2 |
ESOP Employing Company Matching Allocations |
Subject to the limitations of Section 6
(Limitations on Contributions), as of each Valuation Date there shall be allocated to the ESOP Employing Company Matching Allocations Account of a Participating Employee, an amount then equal in Value to the product of the applicable
Employing Company Matching Percentage times the aggregate amount of Basic Contributions which were withheld from his pay for the pay period ending on such Valuation Date. There shall be no amount allocated to the ESOP Employing Company Matching
Allocations Account with respect to a Participating Employees Supplementary Contributions. To the extent made in Company Shares, such allocations shall be based on the Value of
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Savings and Security Plan |
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Employing Company Matching Allocations
Company Shares determined in accordance with Section 5.5.3(Valuation of Allocated Shares). The ESOP Employing Company Matching Allocation to the ESOP Employing Company Matching
Allocations Account of a Participating Employee on such Valuation Date shall be drawn from any or all of the following sources: (i) Leveraged Shares released directly from the ESOP Unallocated Shares Account (or indirectly, through the ESOP
Intermediate Holding Account) during the Plan Year containing the Valuation Date or in January of the immediately following Plan Year, (ii) cash from the ESOP Allocation Contributions made pursuant to Section 5.1.2 (ESOP Allocation
Contributions), and (iii) reallocated Forfeitures. In any case where the cash and/or Company Shares available for allocation on a Valuation Date are less than the amount required to fund the ESOP Employing Company Matching Allocation
required as of such Valuation Date, Units shall be credited to the ESOP Employing Company Matching Allocation Account of each affected Participating Employee which evidences that Participating Employees entitlement to the cash and/or Company
Shares. The Employing Companies shall be obligated to provide cash and/or shares equal to the Units previously allocated to Accounts of Participating Employees by making either ESOP Allocation Contributions or ESOP Debt Service Contributions. The
Retirement Investment & Administration Committee shall reflect the Participating Employees entitlement to such cash and/or shares on its books and records.
5.3 |
Additional Allocations |
The provisions of this Section shall apply in the event that the Value, on the
Valuation Date on the last day of any Plan Year, of all Leveraged Shares released from the ESOP Unallocated Shares Account and not yet allocated to the ESOP Employing Company Matching Allocations Accounts of Participating Employees is expected to
exceed (by an amount referred to herein as the Share Performance Excess Amount) the Value necessary to satisfy the ESOP Employing Company Matching Allocations requirements for that Plan Year. In that event, the Company shall attempt
through negotiations with the Trustee and/or appointment of an independent fiduciary to refinance the Acquisition Loan either by entering into an arrangement with the Trustee that all or a portion of the required ESOP Debt Service
Contributions for that Plan Year be loaned, rather than contributed, to the Trust so that the Value of the Leveraged Shares which are required to be released from the ESOP Unallocated Shares Account does not exceed the Value necessary to satisfy the
ESOP Employing Company Matching Allocation requirements for that Plan Year or by such other method as may be legally permissible. If the Company is unable to effectuate such a refinancing and a Share Performance Excess Account exists for the Plan
Year, there shall then be allocated to the ESOP Employing Company Matching Allocations Account of each Participating Employee who on the last day of the Plan Year is an Eligible Employee with respect to ESOP Employee Matching Allocations pursuant to
Section 3.1 (Eligibility) and Section 5.2 (ESOP Employing Company Matching Allocations) (each, a Then-Active Participant) a per capita allocation known as an
ESOP Share Performance Additional Allocation. The ESOP Share Performance Additional Allocation for each Then-Active Participant shall be in an amount equal to the quotient of (i) the Share
Performance Excess Amount, divided by (ii) the number of Then-Active Participants. Such Additional Allocations shall be credited to the ESOP Employing Company Matching Allocations Accounts of the
Then-Active Participants as of the Valuation Date on the last day of said Plan Year.
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5.4.1 |
Terms of Acquisition Loans |
The Company may from time to time on or after the
Effective Date, direct the Trustee to deliver notes and incur indebtedness in the form of one or more Acquisition Loans either to finance the acquisition of Leveraged Shares or to repay a prior Acquisition Loan. An Acquisition Loan shall be on such
terms and conditions as the Company shall determine. The Company shall direct the Trustee to take such actions as the Company shall determine with respect to any such Acquisition Loan, including, without limitation, entering into loan agreements,
stock purchase agreements, and related documents in accordance with interest rates, maturities and other terms negotiated by the Company. The indebtedness under any Acquisition Loan shall be incurred primarily for the benefit of Participating
Employees and their Beneficiaries. The proceeds of any Acquisition Loan shall be used within a reasonable time, as determined by the Company or a fiduciary to whom the
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Employing Company Matching Allocations
responsibility to acquire Leveraged Shares is delegated, solely to finance the acquisition of Leveraged Shares or to repay a prior Acquisition Loan. Any Acquisition Loan shall be an obligation of
the trust associated with the Plan and shall be for a specific term, shall bear a reasonable rate of interest, and shall not be payable on demand except in the event of a default under the terms of the Acquisition Loan. In the event of a default
under the terms of an Acquisition Loan, the value of Trust assets transferred in satisfaction of any Acquisition Loan shall not exceed the amount due upon default; provided, however, that if the lender is a party in interest within the
meaning of Section 3(14) of ERISA, a transfer of Trust assets upon default shall be made only if, and to the extent of, the Trusts failure to meet the Acquisition Loans payment schedule. Any Acquisition Loan may be secured by a
collateral pledge of the Leveraged Shares so acquired or Leveraged Shares acquired with the proceeds of a prior Acquisition Loan that was repaid with the proceeds of the current Acquisition Loan. No other Trust assets may be pledged as collateral
for an Acquisition Loan. Whether or not initially pledged to the lenders, Leveraged Shares shall be released from the ESOP Unallocated Shares Account during a Plan Year on a pro rata basis to the extent that principal and interest on the Acquisition
Loan is repaid during such Plan Year by the Trustee from a source other than an Acquisition Loan. Upon the release of Leveraged Shares from the ESOP Unallocated Shares Account, such shares shall either be allocated immediately to ESOP Employing
Company Matching Allocations Accounts or be held in the ESOP Intermediate Holding Account, as provided under Section 5.4.2 (ESOP Inter-Account Transfers). Except upon termination of the Plan or the leveraged ESOP portion of the
Plan, repayments of obligations under any Acquisition Loan shall be made by the Trustee (as directed by the Company) only from (a) ESOP Debt Service Contributions made by Employing Companies to enable the Trustee to repay such Acquisition Loan,
(b) Allocated Dividends and Unallocated Dividends (which dividends shall be used to repay principal on any Acquisition Loan prior to any interest payment), (c) earnings attributable to the proceeds of the Acquisition Loan earned prior to
the acquisition of Leveraged Shares with such proceeds, (d) earnings attributable to ESOP Debt Service Contributions and Unallocated Dividends, and (e) an Acquisition Loan made for the purpose of repaying a prior Acquisition Loan. No
person entitled to payment under an Acquisition Loan shall be entitled to payment from the Trust other than to the following extent: (i) from the portion of the ESOP Unallocated Shares Account representing the balance of Leveraged Shares
acquired with proceeds of the Acquisition Loan, (ii) from ESOP Debt Service Contributions made under the Plan for the purpose of satisfying the obligations under the Acquisition Loan, (iii) from Allocated Dividends and Unallocated
Dividends, (iv) from earnings attributable to ESOP Debt Service Contributions and Unallocated Dividends, (v) from earnings attributable to the proceeds of the Acquisition Loan earned prior to the acquisition of Leveraged Shares with such
proceeds, and (vi) such other assets, if any, as to which recourse may be permitted under Code Section 4975.
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5.4.2 |
ESOP Inter-Account Transfers |
Any Leveraged Shares shall initially be credited to
the ESOP Unallocated Shares Account and held in the ESOP. Leveraged Shares shall be released from the ESOP Unallocated Shares Account and transferred to the ESOP Intermediate Holding Account during the Plan Year that debt service installments on the
Acquisition Loan are paid by the Trustee. The chief financial officer of the Company shall direct the Trustee to release Leveraged Shares in proportion to the amount of principal and interest which are repaid on the Acquisition Loan during the Plan
Year. With respect to each such debt service installment, the number of Leveraged Shares to be released from the ESOP Unallocated Shares Account and transferred to the ESOP Intermediate Holding Account (and thereafter to ESOP Employing Company
Matching Allocation Accounts) during the Plan Year shall equal the number of Leveraged Shares in the ESOP Unallocated Shares Account immediately before release multiplied by a fraction. The numerator of the fraction shall be the amount of such
payments of principal and interest to be paid on the Acquisition Loan for the Plan Year, excluding payments attributable to Acquisition Loans made for the purpose
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Employing Company Matching Allocations
of repaying a prior Acquisition Loan. The denominator of the fraction shall be the sum of the numerator plus the principal and interest to be paid on the Acquisition Loan for all future Plan
Years over the duration of the Acquisition Loan repayment period, including any Acquisition Loan made for the purpose of repaying a prior Acquisition Loan. If the interest rate under any Acquisition Loan is variable, the interest to be paid in
future periods shall be computed by using the interest rate applicable as of the end of the year of payment.
5.5 |
Allocation of Released Leveraged Shares |
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5.5.1 |
Leveraged Shares Attributable to Allocated Dividends |
In connection with the
release of Leveraged Shares from the ESOP Unallocated Shares Account as a result of a payment of obligations under the Acquisition Loan, to the extent Allocated Dividends are being used to pay part of such obligations, a portion of the Leveraged
Shares released from the ESOP Unallocated Shares Account, which shall be equal in Value to the Allocated Dividends so used, shall be allocated to the ESOP Employing Company Matching Allocations Accounts of the Participating Employees (not later than
the last Valuation Date of the Plan Year in which the applicable dividend payment date or dates occurred). Units representing such Leveraged Shares with respect to Allocated Dividends shall be allocated among the Participating Employees
Accounts in the same proportion that each Participating Employees Allocated Dividends used to repay the Acquisition Loan bears to the total amount of such Allocated Dividends. For each Plan Year, the Employing Companies shall make an
additional ESOP Allocation Contribution to the Plan if and to the extent that (i) the amount required to restore the amount of the Allocated Dividends to the Participating Employees ESOP Employing Company Matching Allocations Account in
accordance with the requirements of the last paragraph of Code Section 404(k)(2), exceeds (ii) the sum of (A) the Value of Leveraged Shares available to be allocated to such Accounts from those released from the ESOP Unallocated
Shares Account, plus (B) the value of reallocated Forfeitures.
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5.5.2 |
Other Leveraged Shares |
Company Shares in the ESOP Intermediate Holding Account
that have not and will not be allocated pursuant to subsection 5.5.1 (Leveraged Shares Attributable to Allocated Dividends) shall be allocated to the Participating Employees ESOP Employing Company Matching Allocations Accounts in
accordance with Section 5.2 (ESOP Employing Company Matching Allocations) and, where applicable, Section 5.3 (Additional Allocations).
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5.5.3 |
Valuation of Allocated Shares |
The number of Leveraged Shares that are to be
allocated to the Participating Employees ESOP Employing Company Matching Allocations Accounts to satisfy the company match obligation on a Valuation Date shall be based on the Value of such stock as of the Valuation Date coinciding with the
date as of which such allocation is made.
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6. LIMITATIONS ON
CONTRIBUTIONS
6.1 |
Limitations on Tax-Deferred Contributions |
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6.1.1 |
Average Deferral Percentage |
The amount of Tax-Deferred Contributions made in
each Plan Year on behalf of all Eligible Employees under the Plan shall comply with either version of the average deferral percentage test, as follows:
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The average deferral percentage for the Highly Compensated Eligible Employees for the Plan Year shall not exceed the average deferral percentage for all other Eligible Employees for the Plan Year multiplied by 125%; or
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The average deferral percentage for Highly Compensated Eligible Employees for the Plan Year shall not be greater than the average deferral percentage of all other Eligible Employees for the Plan Year multiplied by 200%
(or such lesser amount as prescribed in regulations issued by the Secretary of the Treasury to prevent the multiple use of this limitation with respect to any Highly Compensated Eligible Employee whose terms and conditions of employment are
not subject to a collective bargaining agreement), and the excess of the average deferral percentage for Highly Compensated Eligible Employees for the Plan Year over all other Eligible Employees for the Plan Year shall not exceed two
percentage points. |
Compliance with the average deferral percentage tests above shall be determined in accordance with the
rules set forth in Code Section 401(k)(3) and Treasury Regulations Section 1.401(k)-1(b), or any successors thereto, or any related guidance issued by the Secretary of the Treasury and such tests shall be performed using methods permitted
or required therein including, but not limited to, the rule which requires the portion of the Plan covering Eligible Employees whose terms and conditions of employment are subject to collective bargaining to be tested separately from the remainder
of the Plan. Testing shall be performed on the basis of the current year. In calculating the deferral percentage for an Eligible Employee, Compensation for the entire Plan Year shall be taken into account even where the Eligible Employee was not an
Eligible Employee for the entire Plan Year. If the Plan Administrator determines, with the advice of counsel, with respect to any Plan Year, that the Plan will (or may) fail the average deferral percentage tests above, said Plan Administrator shall,
with or without the consent of affected Highly Compensated Eligible Employees, take any action that the Plan Administrator deems appropriate, including without limitation imposing a limitation, or a series of limitations, on the maximum rate of
Tax-Deferred Contributions which may be made during one or more subsequent months of such Plan Year by Highly Compensated Eligible Employees, for the Plan to satisfy either of the average deferral percentage tests above.
If the amount of Tax-Deferred Contributions authorized by Highly Compensated Eligible Employees in a Plan Year does not comply with either of
the average deferral percentage tests above, then, within twelve months of the Plan Year with respect to which such Tax-Deferred Contributions are made, the Excess 401(k) Contributions for such Plan Year (including any Income attributable to such
contributions) shall be distributed to Highly Compensated Eligible Employees on the basis of the respective portions of such Excess 401(k) Contributions attributable to each such Highly Compensated Eligible Employee as follows:
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The amount of the Excess 401(k) Contributions for the Plan Year, and any income allocable to such contributions, shall be distributed to Highly Compensated Eligible Employees, on the basis of the respective portions of
the Excess 401(k) Contributions attributable to each such Highly Compensated Eligible Employee, and, with respect to any distributed Basic Tax-Deferred Contributions, any related ESOP Employing Company Matching Allocation (and associated earnings)
shall be forfeited and applied as described in Section 7.6 (Forfeitures); or |
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Limitations on Contributions
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In accordance with Treasury Regulations, and subject to such other rules as the Plan Administrator shall prescribe, a Highly Compensated Eligible Employee may elect in writing to treat as an After-Tax Contribution the
amount of the Excess 401(k) Contributions attributable to him, except to the extent that such After-Tax Contribution would cause Plan to exceed (or further to exceed) the contribution percentage limit described in Section 6.2 for that Plan
Year. Tax-Deferred Contributions that are recharacterized pursuant to this paragraph shall be subject to the nonforfeitability requirements and distribution limitations that otherwise apply to Tax-Deferred Contributions. |
The distribution described above shall be made notwithstanding any other provision of the Plan. The amount of the Excess 401(k) Contributions
to be distributed or recharacterized for a Plan Year with respect to a Highly Compensated Eligible Employee shall be reduced by any excess deferrals previously distributed from the Plan to such Highly Compensated Eligible Employee for his taxable
year ending with or within such Plan Year.
In the event an Employing Company maintains another plan which together with this Plan is
treated as a single plan for purposes of Code Sections 401(a)(4) and 410(b) (other than Section 410(b)(2)(A)(ii)), all Tax-Deferred Contributions and other amounts taken into account in determining a Participants average deferral
percentage made under the two plans shall be treated as made under a single plan, and if two or more of such plans are permissively aggregated for purposes of Code Section 401(k), such plans shall be treated as a single plan for purposes of
satisfying Code Sections 401(a)(4) and 410(b). In determining the average deferral percentage of a Highly Compensated Eligible Employee, all cash or deferred arrangements in which such a Highly Compensated Eligible Employee is eligible to
participate shall be treated as a single arrangement.
Notwithstanding the provisions of Section 4.1 (Basic
Contributions), it shall not be permissible for the aggregate amount of Tax-Deferred Contributions contributed to a Participating Employees Account throughout a Plan Year (when added to the aggregate amount of tax-deferred contributions
contributed during the same year to any other plan governed by Code Section 401(k) which is maintained by a Frontier Company) to exceed the applicable limit for such year under Code Section 402(g) (the 401(k) Limit), as such
limit is adjusted from year to year by the Internal Revenue Service in accordance with Code Section 402(g)(4). If the 401(k) Limit is exceeded under the immediately preceding sentence, then not later than April 15 of the immediately
following Plan Year, the excess Tax-Deferred Contributions shall be distributed to the Participating Employee, as adjusted for investment experience.
In any case in which the cumulative Tax-Deferred Contributions of a Participating Employee under this Plan (when combined with all other
amounts deferred pursuant to Code Section 401(k) under any other plan maintained by any Frontier Company) and under any other plan which the Participating Employee has identified for this purpose (on such forms and in such manner as may be
prescribed by the Plan Administrator) would cause the 401(k) Limit to be exceeded in any one tax year of such Participating Employee, said Plan Administrator may take, or cause the Employing Companies to take, such action as saidPlan Administrator,
with the advice of counsel, deems appropriate to: (A) curtail such Tax-Deferred Contributions so as not to exceed the 401(k) Limit in the aggregate, (B) notify the Participating Employee that such contributions have reached the 401(k)
Limit; and (C) if previously elected by the Participating Employee, to cause subsequent Supplementary Contributions in such tax year for such Participating Employee to be contributed solely in the form of Supplementary After-Tax Contributions,
at the same aggregate contribution rate as the Participating Employee had last elected to contribute Supplementary Contributions of all types. If the 401(k) Limit is exceeded under the immediately preceding sentence, a Participating Employee may
withdraw the excess amount allocated to this Plan, together with investment experience, by requesting a withdrawal no later than March 1 of the immediately following Plan Year. Distribution from the Plan shall be made no later than
April 15 of such Plan Year.
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Limitations on Contributions
6.2 |
Limitations on After-Tax Contributions, ESOP Employing Company Matching Allocations and Additional Allocations |
In the event the Plan is amended to permit participation by Employees whose terms and conditions of employment are not subject to a collective bargaining
agreement, the sum of all After-Tax Contributions, ESOP Employing Company Matching Allocations, ESOP Allocation Contributions, and ESOP Share Performance Additional Allocations on behalf of all such Eligible Employees shall comply with either
version of the average contribution percentage test, as follows:
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The average contribution percentage for all such Highly Compensated Eligible Employees for the Plan Year shall not exceed the average contribution percentage for all such other Eligible Employees for the Plan Year
multiplied by 125%; or |
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The average contribution percentage for all such Highly Compensated Eligible Employees for the Plan Year shall not be greater than the average contribution percentage of all other such Eligible Employees for the Plan
Year multiplied by 200% (or such lesser amount as permitted under Reg. §1.401(m)-2(b) to prevent the multiple use of this limitation with respect to any such Highly Compensated Eligible Employee) and the excess of the average contribution
percentage for Highly Compensated Eligible Employees for the Plan Year over all other such Eligible Employees for the Plan Year shall not exceed two percentage points. |
Compliance with the average contribution percentage tests above, shall be determined in accordance with the rules set forth in Code Section 401(m)(2) and
Treasury Regulations Section 1.401(m)-1(b), or any successors thereto, or any related guidance issued by the Secretary of the Treasury and such tests shall be performed using methods permitted or required therein. Testing shall be performed on
the basis of the current year and, to the extent required by Treasury Regulation § 54.4975-11(e), shall be applied separately with respect to the portion of the Plan that is intended to be an employee stock ownership plan. In calculating the
contribution percentage for an Eligible Employee, Compensation for the entire Plan Year shall be taken into account even where the Eligible Employee was not an Eligible Employee for the entire Plan Year.
In the event an Employing Company maintains another plan which together with this Plan is treated as a single plan for purposes of Code Sections 401(a)(4) and
410(b) (other than Code Section 410(b)(2)(A)(ii)), all After-Tax Contributions, ESOP Employing Company Matching Allocations, ESOP Allocation Contributions, and ESOP Share Performance Additional Allocations, and other amounts taken into account
in determining an Eligible Employees average contribution percentage made under the two plans shall be treated as made under a single plan, and if two or more of such plans are permissively aggregated for purposes of Code Section 401(k),
such plans shall be treated as a single plan for purposes of satisfying Code Sections 401(a)(4) and 410(b). In determining the average contribution percentage of a Highly Compensated Eligible Employee, all plans subject to Code Section 401(m)
in which such a Highly Compensated Eligible Employee is eligible to participate shall be treated as a single plan.
If the Plan Administrator, with the
advice of counsel, determines with respect to any Plan Year that the Plan will (or may) fail either of the average contribution percentage tests above, said Plan Administrator shall, with or without the consent of affected Highly Compensated
Eligible Employees, take any action that the Plan Administrator deems appropriate, including without limitation imposing a limitation, or a series of limitations, on the maximum rate of After-Tax Contributions which may be made during one or more
subsequent months of such Plan Year by Highly Compensated Eligible Employees, for the Plan to satisfy either of the average contribution percentage tests above.
If the amount of After-Tax Contributions, ESOP Employing Company Matching Allocations, ESOP Allocation Contributions, and ESOP Share Performance Additional
Allocations made on behalf of or by Highly Compensated Eligible Employees in a Plan Year does not comply with either of the average contribution percentage tests above, then by the last day of the following Plan Year, the Excess 401(m) amounts for
such Plan Year (including any Income attributable to such excess amounts) shall be distributed to Highly Compensated Eligible Employees, or forfeited (if and to the extent that the vested, withdrawable ESOP Employing Company Matching Allocations
Account balance of a Participating Employee is insufficient), as provided under Section 7 (Vesting; Application of Forfeitures), on the basis of the respective portions of such Excess 401(m) amounts attributable to each such Highly
Compensated Eligible Employee in accordance with Code Section 401(m)(6)(C) and applicable Treasury Regulations. The
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Limitations on Contributions
Income attributable to a participants Excess 401(m) amounts for the Plan Year during which such Excess 401(m) amounts arose shall be determined in accordance with Treasury Regulations
Section 1.401(m)-1(e)(3)(ii) or any successor thereto. In the event of the refunding of any Excess 401(m) amounts which were contributed to the Plan as Basic After-Tax Contributions, the associated ESOP Employing Company Matching Allocation
(and associated earnings) shall be forfeited and applied as described in Section 7.6 (Forfeitures).
6.3 |
Limitations on Employee Contributions and Matching Allocations |
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6.3.1 |
Section 415 Single Plan Limitations |
The maximum Annual Additions that may
be credited for the benefit of a Paricipating Employee for any Limitation Year under this Plan in combination with annual additions as defined in Code Section 415(c) under any other qualified plan (whether or not terminated) maintained by a
Frontier Company shall not exceed the lesser of: (i) $40,000, as adjusted for increases in cost of living pursuant to Code Section 415(d); or (ii) one hundred percent (100%) of the amount of a Participating Employees
Compensation for such Limitation Year.
For purposes of the limitation imposed by clause (ii) above, the following contributions shall
not be treated as Annual Additions:
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Any contribution for medical benefits (within the meaning of the funded welfare benefit rules of Code Section 419A(f)(2)); and |
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Any amount contributed to an individual medical account of a pension plan, as described in Code Section 415(l)(1). |
The Trustee shall apply the remedies described in
Section 6.3.3 (Remedies for Justifiable Error) in the event that the Account of a Participating Employee is credited with contributions or allocations which cause his Annual Additions to exceed the limitations prescribed in
Section 6.3.1 (Section 415 Single Plan Limitations), as a result of either (A) the allocation of Forfeitures, (B) a reasonable error in estimating a Participating Employees compensation for a Limitation Year,
(C) an error due to fluctuation in the Value of Company Shares from one Valuation Date to the next (which causes the amount of a Participating Employees Annual Addition that is attributable to ESOP Debt Service Contributions to vary in an
unpredictable manner), (D) a reasonable error in determining the amount of elective deferrals (within the meaning of Code Section 402(g)(3)) that may be made with respect to a Participating Employee, or (E) any other limited facts and
circumstances which the Commissioner of Internal Revenue finds justify the availability of remedies such as those described in Section 6.3.3 (Remedies for Justifiable Error).
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6.3.3 |
Remedies for Justifiable Error |
In the event of a justifiable error as described
in Section 6.3.2 (Justifiable Error), effective as of December 31 of the Limitation Year in which the limit is exceeded, the Trustee shall reduce the Participating Employees Annual Additions to the acceptable limit by the
following procedures, in the following order:
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by returning to the Participating Employee some or all of the After-Tax Contributions or Tax-Deferred Contributions (and any associated earnings), if any, for the Limitation Year,
and |
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to the extent the limit is still exceeded, excess amounts in the Participating Employees Account (and associated earnings) shall be held unallocated in a suspense account for the Limitation Year and used to reduce
employer contributions for the next Limitation Year (and succeeding Limitation Years, as necessary) for all Participating Employees. |
The provisions of this paragraph shall be accomplished by reducing the Annual Additions:
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first, in the Participating Employees Supplementary After-Tax Contributions Account or Supplementary Tax-Deferred Contributions Account, and |
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Limitations on Contributions
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second, in the Participating Employees After-Tax or Tax-Deferred Basic Contributions Account, and the associated match in the ESOP Employing Company Matching Allocations Account, as of December 31 of the year
of the excess, and holding such excess matching amount unallocated in a suspense account for the Plan Year to be allocated and reallocated in the next Plan Year to all of the remaining Participating Employees entitled to allocation of contributions,
but only to the extent that such allocation or reallocation would not cause the Annual Additions to such Participating Employees to violate the limitations of Code Section 415 for such Plan Year. If a suspense account is in existence at any
time during a Plan Year, all amounts in the suspense account must be allocated or reallocated before any contributions which would constitute Annual Additions may be made to the Plan for the Plan Year (and succeeding Plan Years, as necessary) in
accordance with the rules set forth in Treasury Regulation Section 1.415-6(b)(6)(i). If a suspense account is in effect, it shall not share in investment gains or losses. In the event the Plan is terminated, suspense accounts shall revert to
the Employer to the extent such accounts may not then be allocated on behalf of any remaining Participating Employees. |
In
the case of excess Annual Additions in the Account of a Participating Employee who is not covered by the Plan at the end of the Limitation Year, any excess amounts which remain after the application of the remedies of this Section 6.3.3
(Remedies for Justifiable Error) must, as provided by Treas. Reg. § 1.415-6(b)(6)(ii), be held unallocated in a suspense account for the Limitation Year and reallocated in the next Limitation Year to all of the remaining
Participating Employees in the next Limitation Year, thereby to reduce employer contributions for such Limitation Year.
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6.3.4 |
Preventative Measures Authorized |
If the Plan Administrator (or its delegatee)
determines, with respect to any Limitation Year, that a Participating Employees Account appears likely to accumulate Annual Additions which exceed the limitations of Section 6.3.1 or Section 6.3.2, said Plan Administrator (or
delegatee) may, with or without the consent of the affected Participating Employee, take action that the Plan Administrator (or delegatee), with the advice of counsel, deems appropriate, including without limitation imposing a limitation, or a
series of limitations, on the maximum rate of Employee Contributions which may be withheld from the pay of the Participating Employee for contribution to the Plan during one or more subsequent months of such Limitation Year. In taking such remedial
action, the Plan Administrator (or delegatee) shall have the discretion to reduce the Participating Employees contributions to a level several percentage points below the precise rate then estimated to be necessary to avoid exceeding the
Annual Additions limits of the Plan, thereby providing a reasonable margin for error in administering the limitation process.
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7. VESTING; APPLICATION
OF FORFEITURES
7.1 |
Employee Contributions |
A Participating Employees or Inactive Participants Basic and
Supplementary After-Tax Contributions Account, and Basic and Supplementary Tax-Deferred Contributions Account, and rollover contributions made pursuant to Section 15.8 (Rollovers) and Income thereon shall at all times be 100%
vested.
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7.2.1 |
Company Allocations |
Any Non-Vested Amount which constitutes all or part of the
balance of a Participating Employees or Inactive Participants Employing Company Matching Allocations Account (other than amounts attributable to rollover contributions vested pursuant to Section 7.1 (Employee
Contributions)) and his ESOP Employing Company Matching Allocations Account shall vest and become nonforfeitable on the date on which such individual accrues a Period of Service of three full years; provided that dividends that are reinvested
in the Plan at the election of a Participating Employee or Inactive Participant in accordance with Section 10.2.6 shall be fully vested upon reinvestment and shall not constitute Non-Vested Amounts.
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7.2.2 |
Normal Retirement Age |
The Account of a Participating Employee or Inactive
Participant shall fully vest and become nonforfeitable upon his attainment of Normal Retirement Age at a time when he is in active service as an Employee.
7.3 |
Bridging of Period of Service Upon Reemployment |
For purposes of vesting, but not for purposes of
eligibility to participate in the Plan, the rules of this Section 7.3 shall apply.
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7.3.1 |
Less than One Year Break-in-Service |
In the case of an Employee with a Period of Severance of less than 12 months followed by a resumed Period of Service, there shall be no break
in the Period of Service and, on the date of the first Hour of Service following the Period of Severance, the Employee shall be credited not only with the Period of Service prior to the Severance from Service Date but also with a Period of Service
equal to the Period of Severance.
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7.3.2 |
Vested Participant with Break-in-Service of One Year or More |
If, on an Employees Severance from Service Date, he has a vested interest in any portion of his Account (other than the portion
attributable to his After-Tax Contributions or rollover contributions made pursuant to Section 15.8 (Rollovers)), or he previously received a distribution of such vested portion of his Account, his Period of Service for the period
prior to the Severance from Service Date shall be credited, following a Period of Severance of twelve months or more, if and when he resumes his Period of Service as a consequence of being hired or re-hired by
a Frontier Company.
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7.3.3 |
Non-Vested Participant with Break-in-Service of One Year or More |
If, on an Employees Severance from Service Date, he is not vested in any portion of his Account balance in the Plan (other than the
portion attributable to his After-Tax Contributions or rollover contributions made pursuant to Section 15.8 (Rollovers)), his Period of Service for the period prior to said Severance from Service Date shall be credited, following a
Period of Severance of twelve months or more, if and when he resumes his Period of Service as a consequence of being hired or re-hired by a Frontier Company, but only if the number of his consecutive One-Year Breaks-in-Service following the Severance from Service Date is less than the greater of (i) the number of years of his
pre-break Period of Service or (ii) five years.
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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30 |
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Vesting; Application of Forfeitures
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7.3.4 |
Crediting of Pre-Break Service |
In a case in which pre-break service is credited
under the terms of Section 7.3.2 (Vested Participant with Break-in-Service of One Year or More) or Section 7.3.3
(Non-Vested Participant with Break-in-Service of One Year or More) for an Employee who has incurred fewer than five
consecutive One-Year Breaks-in-Service, the Plan shall retroactively credit the additional Period of Service which accrues after the Break in Service for purposes of determining whether any Non-Vested Amount of the Account balance on the Severance
from Service Date shall be vested. The foregoing sentence notwithstanding, any Non-Vested Amount which may have been forfeited on a Severance from Service Date shall not be reinstated to an Account unless the Participating Employee makes a restoral
payment in accordance with Section 10.7 (Restoral of Forfeited Amounts). If an Employee does not resume his Period of Service prior to incurring five consecutive One-Year Breaks-in-Service, his Period of Service earned after his
Breaks-in-Service shall not be applied to increase his vested interest in his pre-break account balance and previously forfeited Non-Vested Amounts shall not be restored under any circumstances.
7.4 |
Vesting Upon Termination or Retirement; Miscellaneous Vesting Provisions |
The Account of a Participating
Employee or Inactive Participant shall be 100% vested upon the retirement or termination of employment of the Participating Employee or Inactive Participant, where any of the following circumstances apply:
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the termination qualifies as a retirement with eligibility for an immediate service pension under the Frontier Communications Corporate Services Inc. Pension Plan for West Virginia Associates; |
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the termination is on account of disability, including a termination as described in Section 14.3 (Absence Due to Total Disability); |
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the termination is on account of death; |
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the termination of employment qualifies for benefits under an Employing Companys Income Security Plan (ISP), Supplemental Income Protection Plan (SIPP), Voluntary Income Protection Plan (VIPP), or the termination
occurs under the Employing Companys practices regarding technological displacement or layoff; or |
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the terminating Employee is a covered employee who becomes employed by an entity subject to the modified final judgment within 30 days of termination of employment, or the terminating Employee is
a Shared Services Employee who becomes employed within 30 days of the termination date by AT&T or any company then affiliated with AT&T and within the appropriate period described in Section 2.2(b) of the divestiture
interchange agreement. For purposes of this paragraph, the terms covered employee, entity subject to the modified final judgment, and divestiture interchange agreement shall have the meanings assigned to
them in Section 559 of the Tax Reform Act of 1984, and the term shared services employee shall have the meaning assigned to it in Section 1.28 of the divestiture interchange agreement. |
For purposes of determining a Participating Employees or Inactive
Participants vested percentage, Periods of Service shall include his service with a Frontier Company, but not any period of service for an employer prior to the time such employer became a Frontier Company; provided, however, that service
credited under the Predecessor Plan, and any prior service credited in accordance with Appendix II of the Plan, shall also be credited as a Period of Service. In addition, Periods of Service shall also include service with NYNEX Corporation and its
subsidiaries prior to August 14, 1997 to the extent such service would have been recognized under the Plan had it been with a Frontier Company.
If a portion of a Participating Employees Account is forfeited, assets that were
withdrawn from the ESOP Unallocated Shares Account or ESOP Intermediate Holding Account will be forfeited only after other assets. This provision applies notwithstanding anything in the Plan to the contrary and only to the extent required under
Treasury Regulation § 54.4975-11(d)(4).
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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31 |
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Vesting; Application of Forfeitures
All Forfeitures during a Plan Year shall be applied either as a credit to reduce subsequent ESOP Debt Service Contributions or ESOP Allocation Contributions or
as a ESOP Employing Company Matching Allocation for the Plan Year in which the Forfeiture occurs. If, in any Plan Year, the sum of (1) the value of the Forfeitures which are available for reallocation to Accounts as an ESOP Employing Company
Matching Allocation, plus (2) the Value of the Leveraged Shares released from the ESOP Unallocated Shares Account, exceeds the aggregate amount of ESOP Employing Company Matching Allocations, the excess amount of such Forfeitures shall be
applied to increase the amount of ESOP Share Performance Additional Allocations available for allocation pursuant to Section 5.3 (Additional Allocations).
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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32 |
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8. INVESTMENT DIRECTIONS
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8.1.1 |
Participant Direction |
Each Participating Employee may direct that all Employee
Contributions and ESOP Allocation Contributions be invested, in increments of 1%, in any of the Funds available from time to time. Subject to the investment objectives of each respective fund and to guidelines provided by the Retirement Plan
Committee (or its delegatee), the Trustee and Investment Managers of the various funds may invest a portion of the assets of the funds in derivatives to adjust portfolio duration or as interest rate or foreign currency hedges or for such other
purposes that are consistent with such respective guidelines and objectives as the Retirement Plan Committee (or its delegatee) may determine.
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8.1.2 |
Released Leveraged Shares |
ESOP Employing Company Matching Allocations
attributable to released Leveraged Shares which are allocated to the Account of a Participating Employee shall be invested in the Company Shares Fund. Such ESOP Employing Company Matching Allocations shall be credited to the ESOP Employing Company
Matching Allocations Account.
Except as provided in Section 8.3 (Diversification of Leveraged Stock in the ESOP Employing
Company Matching Allocations Account), no amounts credited to a Participating Employees ESOP Employing Company Matching Allocations Account and invested in the Company Shares Fund pursuant to this Section 8.1.2 (Released
Leveraged Shares) may be transferred to any of the investment funds. Nor shall the balance of any account other than an ESOP Employing Company Matching Allocations Account be transferred or transferable to that account.
8.2 |
Change in Investment Direction |
Any investment direction given by a Participating Employee or Inactive
Participant shall continue in effect until changed by him or her. A Participating Employee or Inactive Participant may make the following changes in the investment of Employee Contributions and Account balances in the Employee Contributions
Accounts:
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A Participating Employee on any day may change investment direction as to future Employee Contributions and ESOP Allocation Contributions, and an Inactive Participant who continues to repay a Plan loan may change
investment direction as to future loan installments, by giving an Approved Form of Timely Prior Notice directing that such contributions or loan installments be invested, in 1% increments, in one of the other investment funds specified above. Any
such change shall become effective as soon as administratively possible with respect to such future contributions or loan installments. |
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A Participating Employee or Inactive Participant on any Valuation Date may direct that up to 100%, in 1% increments, of the balance of his or her
Employee Contributions Accounts and the balance of his or her Employing Company Matching Allocations Account and ESOP Employing Company Matching Account that is not a Restricted Account subject to Section 8.3 (Diversification of Leveraged
Stock in the ESOP Employing Company Matching Allocations Account) (which balance includes amounts transferred from the PAYSOP under Section 26 (Transfer of Accounts from Bell Atlantic Employee Stock Ownership Plan)) that are
then held in any investment fund shall be reinvested in one or more of the other investment funds by giving an Approved Form of Timely Prior Notice directing that the Value of such Accounts be invested in one or more of the other investment funds,
provided, however, that in any case where the notice is received after 12 noon or, if earlier, the time the New York Stock Exchange closes for trading) Eastern Time (daylight or standard, whichever is in effect on the date of the notice), the
transaction shall be processed and the Accounts shall be valued as of the close of business on the next Valuation Date. Transfers and any other account activity may be restricted or refused (i) if the fund receives or anticipates simultaneous
orders affecting significant portions of the funds assets, (ii) if a proper fund valuation is unavailable, (iii) during times of drastic economic or |
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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33 |
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Investment Directions
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market changes, (iv) if there is an imbalance in orders or, (v) for any other reason, including natural disasters. Transfers between Funds shall be subject to such further limitations and
restrictions as may be imposed by the Retirement Investment & Administration Committee, or the Trustee or any insurance company contract or other instrument governing investments in any Fund. shall be eligible for diversification under this
Section 8.3.2 the same as any other Restricted Accounts |
8.3 |
Diversification of Leveraged Stock in the ESOP Employing Company Matching Allocations Account |
The
provisions of this Section apply to the portion of a Participating Employees or Inactive Participants Employing Company Matching Allocations Account and ESOP Employing Company Matching Account invested in the Company Shares Fund and
attributable to Leveraged Shares released on or after the Effective Date (if any) (such portion is referred to as the Restricted Account).
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8.3.1 |
Age 55 and One Year of Service |
Any Participating Employee or Inactive
Participant who has attained age 55 and completed a Period of Service of one or more years shall be permitted to direct, by giving an Approved Form of Timely Prior Notice, that up to 100% of the number of Company Shares allocated to his Restricted
Account be transferred in 1% increments among the other investment funds available under the Plan in the manner described in Section 8.2 (Change in Investment Direction).
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8.3.2 |
Age 50 and One Year of Service |
Any Participating Employee or Inactive
Participant who has attained age 50 and completed a Period of Service of one or more years shall be permitted to direct once during any Plan Year, by giving an Approval Form of Timely Prior Notice, that up to 50% of the number of the Company Shares
allocated to his Restricted Account be transferred in 1% increments, among the other investment funds available under the Plan in the same manner described in Section 8.2 (Change in Investment Direction). The number of Company
Shares which may be transferred under this Section 8.3.2 on any Valuation Date shall be determined under the following formula: %(A+D)-D, where % is the percentage elected by the Participating Employee and Inactive Participant which is 1% to
50% (in 1% increments); A is the number of Company Shares allocated to his Restricted Account on such Valuation Date; and D is the number of Company Shares previously transferred under this Section 8.3.2(b). No more than one election under this
Section 8.3.2(b) shall be allowed during any Plan Year.
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8.3.3 |
Pension Protection Act |
A Participating Employee who has completed three years of
service (as defined by Code section 401(a)(35)(G)(vi)) shall be permitted to direct, by giving an Approved Form of Timely Prior Notice, that up to 100% of his Restricted Account be transferred in 1% increments among the other investment funds
available under the Plan in the manner described in Section 8.2 (Change in Investment Direction).
8.4 |
Union Sponsored Trust |
Section 24 (Provisions for Employees Who Elect to Participate in a
Union-Sponsored Trust for Savings) contains provisions applicable to Participating Employees who elect to participate in a union-sponsored trust.
It is intended that the Plan constitute an ERISA Section 404(c)
Plan. To the extent that a Participant exercises control over the assets in his Account, as determined under Section 404(c) of ERISA and the regulations thereunder, the Retirement Investment & Administration Committee, the
Trustee and all other Plan fiduciaries shall not be liable for any loss, nor shall they be liable by reason of any breach of fiduciary duty, which results from such Participants exercise of control.
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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34 |
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8.6 |
ESOP and Profit Sharing Plan Investments |
The Company Shares Fund shall consist of two separate
portions, a Profit-Sharing Plan portion maintained under the Profit-Sharing Plan and an ESOP portion maintained under the ESOP. Any transfer of amounts between the Profit-Sharing Plan and the ESOP shall be an intra-plan transfer. The Trustee shall
properly account for any transferred amounts as part of the Profit-Sharing Plan or the ESOP, as applicable, but shall not be required to give advance notice of such transfer or to observe any other requirements that would apply to a transfer of
assets and liabilities between two separate plans. Such transfers shall not be considered annual additions under Section 6.3 (Limitations on Employee Contributions and Matching Allocations).
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8.6.1 |
Transfers from the Profit Sharing Plan |
All amounts accumulating in the
Profit-Sharing Plan portion of the Company Shares Fund after the Effective Date and attributable to Participating Employees who are or were Employees of Frontier Companies that are corporations shall be transferred periodically to the ESOP portion
of the Company Shares Fund after the contributions are made. Any Company Shares transferred in accordance with the preceding sentence shall be held in the ESOP portion of the Company Shares Fund.
To the extent that a Participating Employee who is or was an Employee of a Frontier Company that is a corporation has elected to transfer a
portion of his Accounts from any other Fund to the Company Shares Fund, such amount shall be transferred to the ESOP portion of the Company Shares Fund.
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8.6.2 |
Transfers from the ESOP |
To the extent that a Participating Employee has elected
to transfer a portion of his Account invested in the Company Shares Fund to any other Fund, the amount transferred shall be taken first ratably from the Profit Sharing Plan portion of his Accounts and then, to the extent the amount transferred
exceeds the amounts in such other Accounts, from the ESOP portion of his Accounts.
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8.6.3 |
Contributions to the ESOP |
Notwithstanding anything herein to the contrary,
Employee Contributions, rollover contributions, Employing Company Allocations, and amounts transferred to the Plan pursuant to Section 15 (Change of Status; Reassignment to Bellcore; Rollovers; Plan to Plan Asset Transfers), which
are initially contributed to and invested in the Company Shares Fund on behalf of individuals who are Employees of Frontier Companies that are members of a controlled group of corporations (as defined by Code Section 409(l)) with
the Company shall be considered contributed to the ESOP.
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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35 |
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9. MAINTENANCE AND VALUATION OF
EMPLOYEES ACCOUNTS
9.1 |
Maintenance of Separate Accounts |
There shall be established for each Participating Employee a Basic
Tax-Deferred Contributions Account, a Basic After-Tax Contributions Account, a Supplementary Tax-Deferred Contributions Account, a Supplementary After-Tax Contributions Account, an Employing Company Matching Allocations Account and an ESOP Employing
Company Matching Allocations Account which shall respectively reflect all Employee Contributions and all amounts which Employing Companies shall cause to be allocated to the Accounts of Participating Employees. In certain cases, the Accounts
described above are broken down into sub-accounts for recordkeeping purposes. Each Participating Employee, and each Inactive Participant, will be furnished a statement of account not less than annually, and electronic access to Account information
which shall be updated not less frequently than monthly. An additional statement will be provided upon any reinvestment of account balances, distribution, withdrawal or restoral. Such a statement shall be considered to reflect accurately the status
of an Account for all purposes under the Plan, unless the Participating Employee or Inactive Participant reports a discrepancy to the Benefit Administrator within 30 days after receipt of the statement. Discrepancies reported within 30 days will be
handled by the person delegated by the Plan Administrator, but discrepancies reported after that date must be submitted as a claim to the Benefit Claims Committee. Each Participating Employee and each Inactive Participant requesting duplicate copies
of advices or confirmations of transactions and elections, tax forms, or statements in connection with a Plan Account shall be required to pay a fee not in excess of ten dollars ($10) in advance for each such duplicate copy.
9.2 |
Valuation of Accounts |
The interest of a Participating Employee or an Inactive Participant in each
investment fund, and in amounts allocated pursuant to Sections 4 (Contributions From Pay) and 5 (Employing Company Matching Allocations), shall be represented by Units, which shall be valued and credited to the account as
follows:
The Income of an investment fund shall be allocated as of each Valuation
Date to the Accounts of Participating Employees and Inactive Participants who then have Account balances invested in the fund, in proportion to the balances in such Accounts immediately after the preceding Valuation Date, but before reducing each
such Account by any distributions, withdrawals or transfers from such Account during the interim period and before increasing each such Account by any transfers to such Account from another Account in the Plan. All valuations hereunder shall be
based on the Value of the assets in the Trust Fund on the Valuation Date.
Except to the extent that Allocated Dividends under the Company
Shares Fund are temporarily diverted to repay principal or interest on an Acquisition Loan or are withdrawn pursuant to Section 10.2.6 (Withdrawal and Distribution of Dividends), Income on each investment fund shall be reinvested in
the same investment fund.
Unless and to the extent that the Trustee is directed by the chief financial officer of the Company from time to
time not to do so, all (i) Allocated Dividends, (ii) Unallocated Dividends, (iii) earnings on Unallocated Dividends, and (iv) earnings attributable to the proceeds of the Acquisition Loan earned prior to the acquisition of
Company Shares with such proceeds, shall be utilized to repay an Acquisition Loan until such Acquisition Loan is repaid. With respect to the Leveraged Shares which are allocated to the ESOP Employing Company Matching Allocations Accounts of
Participating Employees and Inactive Participants, the chief financial officer of the Company may, in his or her sole discretion, direct the Trustee to use either all, a portion, or none of the Allocated Dividends on such shares to repay one or more
installments of principal and interest on an Acquisition Loan, until the Acquisition Loan is repaid. To the extent that the Treasurer directs the Trustee to utilize such Allocated Dividends from such Accounts to make payments on the Acquisition
Loan, the amount of such dividends derived from such Accounts shall be used to repay an Acquisition Loan in the manner described under Section 5 (Employing Company Matching Allocations). Any cash dividends which the Treasurer
directs the Trustee not
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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36 |
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Maintenance and Valuation of Employees Accounts
to use to repay an Acquisition Loan, and any other earnings received by the Trustee under the Company Shares Fund shall be reinvested in the Company Shares Fund unless otherwise withdrawn
pursuant to Section 10.2.6 (Withdrawal and Distribution of Dividends).
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9.2.2 |
Allocations and Contributions |
Basic or Supplementary Tax-Deferred Contributions
to the Plan shall be allocated to the Participating Employees respective Basic or Supplementary Tax-Deferred Contributions Account as of the Valuation Date on which the Trustee credits the contributions to the Participating Employees
Account, which date shall be no later than the last Valuation Date of the month following the month in which such amounts were actually contributed to the Plan.
Basic or Supplementary After-Tax Contributions shall be allocated to the Participating Employees respective Basic or Supplementary
After-Tax Contributions Account as of the Valuation Date on which the Trustee credits the contributions to the Participating Employee Account, which date shall be no later than the last Valuation Date of the month following the month in which such
amounts were actually contributed to the Plan.
As of the Valuation Date coinciding with the date on which a Participating Employees
Account is credited with Basic Contributions, there shall be allocated to the Participating Employees ESOP Employing Company Matching Allocations Account the amount of the ESOP Employing Company Matching Allocation and Additional Allocations
to which the Participating Employee is entitled pursuant to Section 5 (Employing Company Matching Allocations).
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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37 |
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10. DISTRIBUTION AND
WITHDRAWAL
Upon any distribution or withdrawal from the Account of a Participating Employee or
Inactive Participant, payment shall be made in the following manner:
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With respect to Units representing investments in the Verizon Shares Fund, payment shall, at the election of the Participating Employee or Inactive Participant, be in Verizon Shares or cash; except that, payment shall
be in cash if the individual makes no election or in the case of any fraction of a Verizon Share, or in the case of a hardship withdrawal under Section 10.2.5 (Withdrawals of Tax-Deferred Contributions). Distributions in cash shall
be on the basis of the Value on the Valuation Date as of which distribution or withdrawal is made. For the purposes of distributions or withdrawals of Verizon Shares, there shall be deemed to be in the Account, on the Valuation Date as of which
distribution or withdrawal is made, a number of Verizon Shares (carried to the fourth decimal place) determined by dividing the total value of the Units in the Verizon Shares Fund on such date by the Value per share of Verizon Shares on such date.
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With respect to Units representing investments in the Company Shares Fund, payment shall, at the election of the Participating Employee or Inactive Participant, be in Company Shares or cash; except that, payment shall
be in cash if the individual makes no election or in the case of any fraction of a Company Share, or in the case of a hardship withdrawal under Section 10.2.5 (Withdrawals of Tax-Deferred Contributions). Distributions in cash shall
be on the basis of the Value on the Valuation Date as of which distribution or withdrawal is made. For the purposes of distributions or withdrawals of Company Shares, there shall be deemed to be in the Account, on the Valuation Date as of which
distribution or withdrawal is made, a number of Company Shares (carried to the fourth decimal place) determined by dividing the total value of the Units in the Company Shares Fund on such date by the Value per share of Company Shares on such date
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Except as provided below, with respect to investment funds other than Verizon Shares Fund and the Company Shares Fund, payment shall be in cash and shall be based on the respective Values of the Accounts as of the
Valuation Date as of which distribution or withdrawal is made. |
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A distribution or withdrawal shall be processed and the value of the Accounts shall be determined as of the close of business on the Valuation Date on which the Approved Form of Timely Prior Notice is received by the
Benefit Administrator; provided, however, that in any case where the notice is received after 4:00 p.m. (or, if earlier, the time the New York Stock Exchange closes for trading) Eastern Time (daylight or standard, whichever is in effect on the date
of the notice), the transaction shall be processed and the Accounts shall be valued as of the close of business on the next Valuation Date. |
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With respect to amounts representing collateral for any Plan Loan, in the case of distributions as a consequence of death or separation from service (where the Participating Employee or Inactive Participant has not
elected to continue loan repayments in accordance with Section 11.9 (Default and Remedies)), in the absence of the prompt repayment of the Plan Loan, distribution shall be made in the form of an assignment of the promissory note
securing the outstanding balance of such Plan Loan, in the manner described in Section 11.9 (Default and Remedies), and such promissory note shall be valued based upon the outstanding balance of such promissory note on the Valuation
Date as of which distribution is made. |
10.2 |
In-Service Withdrawals |
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10.2.1 |
In-Service Withdrawals Generally |
A Participating Employee or an Inactive
Participant (who is an alternate payee under a qualified domestic relations order, or who is then an employee of (or on a leave of absence from) Bellcore or a Frontier Company) may elect to withdraw amounts from his Account under the Plan in
accordance with the terms of this section. Requests for withdrawal shall be made on an Approved Form of Timely Prior Notice, and must be for a specific dollar amount which shall be a multiple of $50 or for the maximum amount available under a
particular option. In-service withdrawals are
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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38 |
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Distribution and Withdrawal
not permitted for any Participating Employee or Inactive Participant who has a loan in default, as determined under Section 11.9 (Default and Remedies). Payment shall be made as
soon as practicable after the Valuation Date of withdrawal designated in such notice. The transaction shall be processed and the value of the Accounts shall be determined as of the close of business on the Valuation Date on which the Approved Form
of Timely Prior Notice is received by the Benefit Administrator; provided, however, that in any case where the notice is received after 4:00 p.m. (or, if earlier, the time the New York Stock Exchange closes for trading) Eastern Time (daylight or
standard, whichever is in effect on the date of the notice), the transaction shall be processed and the Accounts shall be valued as of the close of business on the next Valuation Date.
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10.2.2 |
Non-Hardship Non-Suspension Withdrawals |
A non-hardship non-suspension withdrawal
will not subject a Participating Employee to suspension of participation in the Plan. Non-hardship non-suspension withdrawals shall be made from the Accounts according to the order in which the following items are presented, as the amounts described
in each successive item are exhausted:
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Employee Supplemental After-Tax Contributions contributed prior to January 1, 1987 under the Verizon Communications Plan or a predecessor thereto; |
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Employee Basic After-Tax Contributions contributed prior to January 1, 1987 under the Verizon Communications Plan or a predecessor thereto; |
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Employee Supplementary After-Tax Contributions contributed after December 31, 1986 (including earnings thereon); |
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Employee Basic After-Tax Contributions contributed after December 31, 1986 and at least 24 calendar months prior to the Valuation Date on which the withdrawal occurs (including earnings thereon); |
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Earnings attributable to Employee Supplementary and Basic Contributions contributed prior to January 1, 1987 under the Verizon Communications Plan or a predecessor thereto; |
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Rollover contributions (including earnings thereon); |
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Transferred PAYSOP amounts; and |
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Employing Company Matching Allocations Account, ESOP Employing Company Matching Allocations Account and ESOP Allocation Contributions Account (to the extent such contributions are Vested) (including earnings thereon)
made to match Basic Contributions at any time at least 24 calendar months prior to the Valuation Date on which the withdrawal occurs (except for Participating Employees or Inactive Participants who have completed five or more years of participation
who may withdraw any such amounts made within such 24 calendar months). |
Notwithstanding the order of withdrawal for Plan
accounting purposes, the amounts withdrawn shall be taxed in accordance with the order and sequence required by Code Section 72, in conjunction with administrative guidelines adopted by the Plan Administrator.
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10.2.3 |
Non-Hardship Suspension Withdrawals |
A non-hardship suspension withdrawal will
subject a Participating Employee to a loss of ESOP Employing Company Matching Allocations for a period of six months from the Valuation Date on which the withdrawal occurs. During this period, the Participating Employee shall not receive any ESOP
Employing Company Matching Allocation (or ESOP Allocation Contributions) with respect to Basic Contributions made during this period. Non-hardship suspension withdrawals shall be made from the Accounts according to the order presented in
Section 10.2.2 (Non-Hardship Non-Suspension Withdrawals) until such amounts are exhausted, and then from Employee Basic After-Tax Contributions (and earnings thereon) contributed after December 31, 1986 and within 24 calendar
months prior to the Valuation Date on which the withdrawal occurs;
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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39 |
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Distribution and Withdrawal
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10.2.4 |
Debiting of Investment Funds |
Withdrawals shall be deemed to be made pro rata
from each of the investment funds in which the Account is invested (except any investment in the form of a note securing a Plan Loan) on the basis of the Value in such Accounts on the Valuation Date as of which the withdrawal is effective.
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10.2.5 |
Withdrawals of Tax-Deferred Contributions |
A Participating Employee or Inactive
Participant may withdraw up to 100% of his Tax-Deferred Contributions, but only under the following circumstances: (i) at or after attaining the age of 59-1/2, or (ii) on account of an immediate financial hardship as defined in this
section. In the case of a withdrawal at or after attaining age 59-1/2, the withdrawal shall be made in the order specified in Section 10.2.3 (Non-Hardship Suspension Withdrawals) without suspension until all such amounts have been
exhausted. Thereafter, the withdrawal shall be made from the Supplementary Tax Deferred Contribution Account until exhausted, and then from the Basic Tax-Deferred Contribution Account. In the case of a qualifying hardship withdrawal, it shall also
be permissible to withdraw Basic After-Tax Contributions (and Income thereon) which were contributed during the immediately preceding 24 calendar months, and such After-Tax Contributions shall be the first dollars withdrawable in the event of a
qualifying hardship. In no event may a participant who is under age 59-1/2 withdraw any Income attributable to his Tax-Deferred Contributions which Income was allocated to the Account after January 1, 1989.
A withdrawal in the case of an immediate financial hardship shall only be permitted if (i) it is not in excess of the amount of the
immediate and heavy financial need of the participant, adjusted upwards to reflect the imposition of applicable state, local and federal taxes, and (ii) the Benefit Administrator determines that the withdrawal is necessary in light of immediate
and heavy financial needs of the Participating Employee because it is only on account of:
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medical expenses described in Code Section 213(d) and incurred by the Participating Employee or Inactive Participant, his spouse, or any of his dependents (as defined in Code Section 152), as long as such
expenses are ineligible for reimbursement under any health care plans; |
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the purchase (excluding mortgage payments) of a principal residence for the Participating Employee or Inactive Participant; |
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the payment of tuition related educational fees, and room and board expenses for the next twelve months of post-secondary education for the Participating Employee or Inactive Participant, his Spouse, children or other
dependents; |
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the need to prevent the eviction of the Participating Employee or Inactive Participant from his principal residence, or foreclosure on the mortgage of his principal residence; or |
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funeral expenses for a family member of the Participating Employee or Inactive Participant. |
The Plan Administrator, with the advice of counsel, shall establish procedures for implementing the hardship withdrawal rules of the Plan. To
qualify for a hardship withdrawal, the applying Participating Employee or Inactive Participant:
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must exhaust all funds which are otherwise available for withdrawal or borrowing under all plans maintained by any Frontier Company (if financial hardship is not increased as a result). |
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shall have his Employee Contributions to the Plan and all other plans maintained by a Frontier Company suspended for 12 months from the date the payroll department of the Employing Company is notified of the hardship
withdrawal; and |
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shall have his Tax-Deferred Contributions to the Plan and all other plans maintained by a Frontier Company for the next taxable year limited to the applicable limit under Code Section 402(g) for that year minus his
Tax Deferred Contributions for the year of the hardship withdrawal. |
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10.2.6 |
Withdrawal and Distribution of Dividends |
Each Participant with respect to an
ESOP Employing Company may elect to withdraw from his Account any dividends payable with respect to Company Shares held under the ESOP portion of
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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Distribution and Withdrawal
the Plan during the Plan Year for which such election is made to the extent such dividends are not otherwise applied to the repayment of any currently maturing obligation under an Acquisition
Loan; provided, however, that any dividends attributable to Company Shares transferred from the PAYSOP pursuant to Section 26 (Transfer of Accounts from Bell Atlantic Employee Stock Ownership Plan) shall automatically be distributed
to Participating Employees, Inactive Participants, and Beneficiaries. The Retirement Investment & Administration Committee shall prescribe rules governing the timing and revocability of such elections. Dividends to be distributed in
accordance with the foregoing shall be accumulated during the Plan Year and invested in a short-term interest fund pending their distribution. The interest earned on such fund shall be used to pay Plan expenses. All such withdrawals and
distributions shall be in cash. Dividends payable with respect to Company Shares held under the ESOP portion of the Plan and not distributable in accordance with the foregoing shall be reinvested in accordance with Section 9.2.1 and shall be
fully vested upon reinvestment in accordance with Section 7.2.2.
10.3 |
Distribution on Termination of Employment Except Death or Transfer |
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10.3.1 |
Form and Timing of Distribution |
Upon a Participating Employees or Inactive
Participants retirement or termination of employment with an Employing Company for any reason other than death, transfer or reassignment to another Frontier Company (see Section 13 (Reassignments Among Employing Companies)),
and other than a transfer or reassignment to Bellcore (see Section 15 (Change of Status; Reassignment to Bellcore; Rollovers; Plan to Plan Asset Transfers)), distribution of the Value of the participants Account (other than Non-Vested Amounts which shall be forfeited) shall be payable in a lump sum (or, if applicable, a form of distribution described in Section 10.5 (Optional Form of Distribution)) as soon as
practicable after the determination of the Value of the participants Account in accordance with the provisions of Section 10.8 (Determination of Value of Account); provided, however, that in the case of a participants
Account with a vested balance greater than $3,500, no such distribution shall be made prior to the date specified in Section 10.3.2 (Deferral of Distribution to Age 70-1/2) unless he consents to such distribution as described in
Section 10.3.3 (Consent to Distribution). In the event of a mandatory distribution greater than $1,000 in accordance with the provisions of this Section, if the participant does not elect to have such distribution paid directly to
an eligible retirement plan specified by the participant in a direct rollover or to receive the distribution directly in accordance with this Section, then the Benefit Administrator will direct payment of the distribution in a direct rollover to an
individual retirement plan designated by the Plan Administrator.
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10.3.2 |
Deferral of Distribution to Age 70-1/2 |
In the case of a Participating Employee
or Inactive Participant who does not consent to a distribution of an Account with a vested balance greater than $3,500, as provided in the preceding paragraph, then: (1) any Non-Vested Amounts shall be
forfeited as of the date specified in Section 10.3.4 (Forfeitures), (2) after the forfeiture of Non-Vested Amounts (if any), all of the vested Account balance shall remain in the Plan until December 31 of the year in which
occurs the later of: the date such person attains age 70-1/2; or the date such person ceases to be an Employee, and (3) the distribution of such vested Account shall be paid in either a lump sum or installments described in Section 10.5
(Optional Form of Distribution) as soon as practicable thereafter. No distributions, whether on account of hardship or otherwise, shall be permitted before such date; provided, however, that a Participating Employee or Inactive
Participant who has elected or is deemed to have elected to defer distribution may thereafter elect to receive distribution prior to such date in the manner described in Section 10.3.3 (Consent to Distribution).
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10.3.3 |
Consent to Distribution |
An election of, or consent to, a distribution shall be
made in the manner prescribed by the Plan Administrator and delivered to the Benefit Administrator within the 180-day period ending on the
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benefit payment date elected by the Participating Employee or Inactive Participant and in no event earlier than the date the Participating Employee or Inactive Participant is provided with
information relating to his right to defer payment in accordance with the preceding paragraph, the forms of payment available to him, the relative values of each and his right to make a direct rollover as described in Section 10.9 (Direct
Rollovers). Such information, which is required to be provided under Treasury Regulation Section 1.411(a)-11(c), must be supplied not less than 30 days and not more than 180 days prior to the benefit payment date provided, however, that
distributions may commence less than 30 days after the notice required under Treasury Regulation Section 1.411(a)-11(c) is given if:
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the Benefit Administrator clearly informs the participant that the participant has a right to a period of at least 30 days after receiving the notice to consider the decision of whether or not to elect a distribution
(and, if applicable, a particular distribution option), and |
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the Participating Employee or Inactive Participant, after receiving the notice, affirmatively elects a distribution. |
In the case of a Participating Employee or Inactive Participant who
terminates employment, any Non-Vested Amounts in such individuals Account shall be forfeited on the earlier of: (A) the date on which he receives a distribution of his entire vested Account balance which is less than 100%, or (B) the
date on which he incurs 5 consecutive One-Year Breaks-In-Service.
In case of death of a Participating Employee or an Inactive Participant who is an employee of a
Frontier Company or Bellcore, any Non-Vested Amounts shall be vested, and all of the Units in the Employees Accounts will be distributed in accordance with Section 17 (Designation of Beneficiaries).
10.5 |
Optional Form of Distribution |
A Participating Employee or an Inactive Participant who has a vested
balance greater than $3,500 may elect, instead of a single payment as provided in Section 10.3 (Distribution on Termination of Employment Except Death or Transfer), to receive payments in either of the two following forms:
(1) in a number of annual installments (not less than two nor more than 20), but in any event less than the number of years of life expectancy of such person at the time of benefit commencement, or (2) in monthly or annual installments
over a period equal to the life expectancy of such person, in accordance with regulations under Code Section 401(a)(9), including the minimum distribution incidental benefit requirements of Proposed Treasury Regulation Section 1.401(a)(9)-2 (determined as of December 31 of the year preceding the year in which the installment payment is made). The installments shall consist of approximately equal number of Units each year
or month, as applicable, payable as of the date provided for distribution in Section 10.3 (Distribution on Termination of Employment Except Death or Transfer) and as of the same date in each year or month, as applicable, thereafter
until payment of all such installments is made. Payment of each such installment shall be made in the manner provided for in Section 10.1 (Method of Payment) and on the basis of the valuation provided for in Section 10.8
(Determination of Value of Account). Such an election shall be made in the manner prescribed by the Plan Administrator and delivered to the Benefit Administrator at any time within the 180-day period prior to the benefit payment date
elected by the participant in accordance with Section 10.3.3 (Consent to Distribution). For the purpose of this Section 10.5 (Optional Form of Distribution), an election to receive installment payments made by a
participant under the comparable provisions of the Predecessor Plan shall be considered as an election to receive installments under this Plan.
Notwithstanding any other provision of this section, an election under this Section 10.5 shall apply solely to the balance of the Account without
reference to any portion of such balance which serves as collateral for a Plan Loan which is outstanding at the time of separation from service; any such portion which serves as collateral for a Plan Loan, for which the Participating Employee or
Inactive Participant does not elect to continue repayment in accordance with Section 11.9 (Default and Remedies) and which is not promptly repaid in full at the time of termination shall be distributable only in the form of a single
in-kind distribution of the note securing the Plan Loan in the manner described in Section 10.1 (Method of Payment).
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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Distribution and Withdrawal
A Participating Employee or Inactive Participant who has elected to receive installment payments may revoke such election by giving notice, in an Approved Form
of Timely Prior Notice, and upon such revocation the remaining Value in such persons Account, determined as of the Valuation Date on which the notice is received, shall be distributed in a single payment in the manner provided in
Section 10.1 (Method of Payment); provided, however, that in any case where the notice is received after 4:00 p.m. (or, if earlier, the time the New York Stock Exchange closes for trading) Eastern Time (daylight or standard,
whichever is in effect on the date of the notice), the transaction shall be processed and the Accounts shall be valued as of the close of business on the next Valuation Date.
If any Participating Employee or Inactive Participant dies before receiving all such installments, all Units remaining at death shall be distributed in
accordance with Section 17. (Designation of Beneficiaries)
If a Participating Employee or Inactive Participant elects under the
provisions of this Section 10.5 (Optional Form of Distribution), or under the comparable provisions of the Predecessor Plan, to receive installment payments and is thereafter reemployed before receiving all such installments, the
installment payments shall cease upon reemployment unless the Participating Employee elects to continue such payments during the period of reemployment with respect to the Units in the participants Account immediately prior to the period of
reemployment. Any Units credited to the participants Accounts during the period of reemployment shall be distributed after the subsequent termination of reemployment, as provided in Section 10.3 (Distribution on Termination of
Employment Except Death or Transfer). However, if after the subsequent termination of reemployment, there remain any number of installment payments with respect to Units which were in the participants Account prior to the period of
reemployment, an election under Section 10.5 (Optional Form of Distribution) with respect to Units credited during the period of reemployment must be for that same number of installments. For the purpose of this Section 10.5
(Optional Form of Distribution), the effect of reemployment on a prior election to receive installments shall apply only if the prior election was made in connection with a participants retirement or termination of employment from
an Employing Company and the individual is reemployed as other than a Rehired Associate Retiree.
An Inactive Participant who has retired from a Frontier
Company after satisfying the requirements of Section 7.4 (Vesting Upon Termination or Retirement; Miscellaneous Vesting Provisions) may elect no more than once a year to withdraw amounts from his Account in accordance with the terms
of Section 10.2.1 (In-Service Withdrawals Generally).
10.6 |
Required Distributions |
Notwithstanding any other provisions of the Plan relating to the distribution of
a participants Account, the distribution of the Account of a Participating Employee or Inactive Participant shall commence not later than April 1 following the year in which the participant attains age
70-1/2, or if later, the year such person ceases to be an Employee, and shall be distributed either in a lump sum or in approximately equal annual installments over a period not greater than the life
expectancy of such person, or the joint life expectancy of such person and his spouse or designated beneficiary, pursuant to such persons election, and in accordance with regulations promulgated by the Secretary of the Treasury under Code
Section 401(a)(9), including the minimum distribution incidental benefit requirements of Proposed Treasury Regulation Section 1.401(a)(9)-2. A Participating Employee or Inactive Participant who is an Employee and who attained age 70-1/2 in
a calendar year prior to 1999 shall have the right to receive payments in accordance with the immediately preceding sentence while an Employee. A Participating Employee or Inactive Participant who is an Employee, whose Accounts were transferred to
the Plan from the Verizon Communications Plan, and who was receiving required installment distributions on July 1, 1998 under such plan shall continue to receive such installment distributions. Section 28 provides rules for determining the
amount of required distributions under Code Section 401(a)(9).
10.7 |
Restoral of Forfeited Amounts |
Notwithstanding the provisions of this Section 10 relating to the
forfeiture of units representing Non-Vested Amounts upon distribution of the vested portion of a participants Account following termination of employment, the Employing Company shall cause the previously forfeited Non-Vested Amounts to be
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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Distribution and Withdrawal
subsequently reinstated if the Participating Employee or Inactive Participant, in accordance with this section, makes a lump-sum restoral payment in cash to the Trustee in an amount equal to the
total value (of cash, or cash plus shares, whichever is applicable) which was distributed or withdrawn at the time of the forfeiture.
A Participating
Employee or Inactive Participant shall have the right to have his forfeited Non-Vested Amount (unadjusted by any subsequent investment gains or losses after the date of the forfeiture) reinstated under this section, only if and when such person is
re-employed (or, in the case of an in-service withdrawal, remains employed) as an Employee prior to the occurrence of five consecutive One-Year Breaks-in-Service, and makes the restoral lump-sum payment in full to the Trustee before the fifth
anniversary of his reemployment commencement date (or the fifth anniversary of the forfeiture, in the case of an in-service withdrawal). The restoral payment must be paid in full in a lump sum equal to the full amount of cash, plus the full Value of
shares (if any), which were withdrawn or distributed, and which occasioned the Forfeiture.
Amounts forfeited under the Predecessor Plan, the Verizon
Communications Plan, or an Interchange Company Savings Plan shall be reinstated under this section if the Participating Employee makes a lump-sum cash restoral payment to the Trustee (within the time periods specified above with respect to amounts
forfeited under the Plan) in an amount equal to the cash plus the Value (on the date of withdrawal or distribution) of shares, if any, which the employee received in the withdrawal or distribution which resulted in the forfeiture.
The Participating Employees lump-sum restoral payment shall be invested according to his or her investment direction except that the portion of the
restoral which represents a formerly vested balance in the ESOP Employing Company Matching Allocations Account that is subject to Section 8.3 (Diversification of Leveraged Stock in the ESOP Employing Company Matching Allocations
Account) shall be invested in the Company Shares Fund. The amount reinstated to the Employees Account shall not reflect any investment gains or losses since the date on which the amount was forfeited. The number of Units credited to the
Employees Accounts shall be based on the value of the Units representing each type of investment as of the Valuation Date on which such restoral payment is made.
The Trustee shall, for purposes of determining the year in which a portion of an Account balance shall first be withdrawable from the Plan, credit the
restoral payment to the Plan Years to which they were credited prior to being withdrawn or distributed. Similarly, the Trustee shall credit the reinstated Account balances which were previously forfeited to the same Plan Years to which they were
credited prior to being forfeited.
10.8 |
Determination of Value of Account |
With respect to withdrawals and distributions made under this
section, the Value of the Accounts shall generally be determined as of the close of business on the Valuation Date coincident with the later of (1) the date on which the Benefit Administrator receives the Approved Form of Timely Prior Notice
requesting distribution of the Employees Account; provided, however, that in any case where the notice is received after 4:00 p.m. (or, if earlier, the time the New York Stock Exchange closes for trading) Eastern Time (daylight or standard,
whichever is in effect on the date of the notice), the Accounts shall be valued as of the close of business on the next Valuation Date or (2) the effective date on such form; provided, however, that in the event of a mandatory distribution of
an Account with a vested Account balance under $3,500, the Value of the Account shall be determined on the Valuation Date which coincides with the effective date of the distribution.
Notwithstanding any provision of the Plan to the contrary that would otherwise limit a
distributees election under this section, a distributee may elect, at the time and in the manner prescribed by the Retirement Investment & Administration 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.
Definitions:
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Eligible rollover distribution: An eligible rollover distribution is any distribution of all or any portion of the balance of 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 |
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Savings and Security Plan |
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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 distributees designated
beneficiary, or for a specified period of ten years or more; any distribution to the extent such distribution is required under Code Section 401(a)(9); the portion of any distribution that is not includible in gross income (determined without
regard to the exclusion for net unrealized appreciation with respect to employer securities); and the portion of any hardship withdrawal under Section 10.2.5 (Withdrawals of Tax-Deferred Contributions) which is described in Code
Section 401(k)(2)(B)(i)(IV); and the portion of any other distribution or withdrawal made on account of hardship. |
A
portion of a distribution shall not fail to be an eligible rollover distribution merely because the portion consists of after-tax employee contributions which are not includible in gross income. However, such portion may be transferred only to an
individual retirement account or annuity described in Section 408(a) or (b) of the Code or to a qualified defined contribution plan described in Section 401(a) or 403(a) of the Code that agrees to separately account for amounts so
transferred, including separately accounting for the portion of such distribution which is includible in gross income and the portion of such distribution which is not so includible. Such portion may also be transferred to an individual retirement
plan under Section 408A of the Code or to any other qualified plan under Code Section 401(a) or annuity contract described in Section 403(b) of the Code that agrees to separately account for amounts so transferred in accordance with
the foregoing.
A direct rollover of a distribution from a Roth contributions sub-account under the Plan constitutes an Eligible Rollover
Distribution only if made to another Roth contributions account under an applicable retirement plan described in Code Section 402A(e)(1) or to a Roth individual retirement plan described in Code Section 408A.
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Eligible retirement plan: An eligible retirement plan is an individual retirement account described in Code Section 408(a), an individual retirement annuity described in Code Section 408(b), an annuity plan
described in Code Section 403(a), or a qualified trust described in Code Section 401(a), that accepts the distributees eligible rollover distribution. However, in the case of an eligible rollover distribution made to a surviving
spouse, an eligible retirement plan is limited to an individual retirement account or individual retirement annuity. |
An
Eligible Retirement Plan shall also mean an annuity contract described in Section 403(b) of the Code and an eligible plan under Section 457(b) of the Code which is maintained by a state, political subdivision of a state, or any agency or
instrumentality of a state or political subdivision of a state and which agrees to separately account for amounts transferred into such plan from this Plan. The definition of Eligible Retirement Plan shall also apply in the case of a distribution to
a surviving spouse, or to a spouse or former spouse who is the alternate payee under a qualified domestic relation order, as defined in Section 414(p) of the Code.
An Eligible Retirement Plan includes a Roth individual retirement plan under Section 408A.
An Eligible Retirement Plan with respect to a distribute who is a non-spouse Beneficiary is limited to an individual retirement account or
annuity that is an inherited individual retirement account or annuity under Section 408(d)(3)(C)(ii) of the Code.
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Distributee: A distributee includes an Employee or former Employee. In addition, the Employees or former Employees surviving spouse and the Employees or former Employees spouse or former spouse
who is the alternate payee under a qualified domestic relations order, as defined in Code Section 414(p), are distributees with regard to the interest of the spouse or former spouse. Distributee includes a designated beneficiary who is not a
spouse. |
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Direct rollover: A direct rollover is a payment by the Plan to the eligible retirement plan specified by the distributee. |
In the case of any Participating Employee, Inactive Participant, or Beneficiary whose
Account has become payable under the Plan and whose whereabouts are unknown to the Retirement Investment & Administration Committee after reasonable and diligent efforts to locate such person, the Account of such person shall be forfeited.
If a claim for benefits is subsequently made by a person entitled to such Account, the forfeited Account shall be reinstated to what it would have been had no forfeiture occurred. Forfeitures reinstated under this section shall be paid from current
forfeitures, and if insufficient, from additional Employing Company contributions.
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11. LOANS TO
EMPLOYEES
Loans to (i) Participating Employees and (ii) Inactive Participants who are
Employees (including an Employee on a leave of absence) or parties in interest within the meaning of Section 3(14) of ERISA (Plan Loans) shall be allowed.
The Plan Administrator shall adopt, and may amend from time to time, pursuant to this
section 11 of the Plan, uniform and nondiscriminatory rules governing Plan Loans. Participating Employees and Inactive Participants shall apply for a Plan Loan in accordance with procedures communicated by the Plan Administrator. Persons designated
by the Plan Administrator (the Designated Reviewers) shall review, and approve or deny, an application for a Plan Loan. Upon the approval of any application for a Plan Loan, the Company shall direct the Trustee to make a Plan Loan to the
Participating Employee or Inactive Participant. No more than two Plan Loans shall be outstanding to a Participating Employee or an Inactive Participant at any time. For Participating Employees and Inactive Participants of Connected Solutions Inc.
(or its successor that is a Frontier Company, if any), only one outstanding loan is permitted.
11.3 |
Limitation on Amount |
The minimum principal amount of a Plan Loan shall be $1,000, and Plan Loans shall
be available in $100 increments in excess of such minimum amount; provided, however, that under no circumstances shall a Plan Loan exceed the maximum amount indicated by the following table:
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Vested Balance Account |
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Maximum Amount of Loan Available |
Less than $2,000 |
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Not permitted |
$2,000 to $100,000 |
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50% of vested balance |
More than $100,000 |
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$50,000 |
provided, further, that under no circumstances shall a Plan Loan be approved:
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to the extent that upon the granting of the Plan Loan an applicants total loans under all qualified plans maintained by Frontier Companies will exceed the lesser of (A) $50,000, reduced by the excess, if any,
of (I) the highest outstanding balance of all loans to the applicant under all such plans during the twelve months prior to the date the new loan is made over (II) the outstanding balance of the applicants loans under all such plans on
the date the new loan is made, or (B) 50% of the vested balance credited to the applicants accounts under all such plans as of the date the new loan is made (amounts transferred from the PAYSOP under Section 26 (Transfer of
Accounts from Bell Atlantic Employee Stock Ownership Plan) shall be taken into account in applying the limitations of this section but no such amounts shall be available to fund the proceeds of any Plan loan); or |
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in excess of the maximum amount which may be repaid per month in level installments of principal and interest based on the applicants pay frequency over the term of the loan, where each such installment is not
more than 25% of the applicants Basic Weekly Rate at the time of the application for the loan (or, in the case of an applicant on leave of absence, at the time the applicant was last employed by a Frontier Company). For the purpose of
determining the applicants vested Account balance, the Value shall be determined as of the close of business on the Valuation Date which precedes the date on which the application is received by the Designated Reviewer, provided, however, that
in any case where the application is received after 4:00 p.m. (or, if earlier, the time the New York Stock Exchange closes for trading) Eastern Time (daylight or standard, whichever is in effect on the date of the application), the transaction shall
be processed and the Accounts shall be valued as of the close of business on the next Valuation Date. |
11.4 |
Equality of Borrowing Opportunity |
Plan Loans shall be available to all eligible applicants on a
reasonably equivalent basis; provided, however, that the Retirement Investment & Administration Committee may make reasonable distinctions among
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Loans to Employees
prospective borrowers on the basis of creditworthiness. Loans shall normally be repayable by means of payroll deduction or by personal check in the case of a borrower who is not an employee of a
Frontier Company or Bellcore or who is absent on a leave of absence. The Retirement Investment & Administration Committee may make reasonable distinctions among prospective borrowers on the basis of whether or not repayment of the Plan Loan
can be administered by means of payroll deduction. Loans shall not be made available to Highly Compensated Employees in an amount that is proportionally greater (as a percentage of vested Account balances) than the amount available to other
Employees.
11.5 |
Plan Loans as Fund Investments |
A Plan Loan to a Participating Employee or Inactive Participant shall be
considered a fixed income investment held for the segregated account of such individual. Repayments of Plan Loan principal and interest will be invested in accordance with the Participating Employees or Inactive Participants then current
investment election under Section 8 (Investment Directions) (or the most recent investment election in effect for the individual under Section 8 (Investment Directions), if no current election is in effect);
provided, however, that a portion of each loan repayment representing the percentage of the loan proceeds taken from Accounts required to be invested in the Company Shares Fund pursuant to Section 8.1.2 (Released Leveraged Shares)
shall be automatically reinvested in the Company Shares Fund.
The full principal amount of each Plan Loan, plus any accrued but unpaid interest and other
amounts payable but unpaid hereunder, shall be secured by the pledge of a like amount of the Participating Employees or Inactive Participants vested Account balance in the Plan, but not in excess of 50% of such individuals vested
Account balance at the time the Plan Loan is made. A Plan Loan shall be secured (for the full amount described in the preceding sentence) against collateral in the following order: first, against the individuals Tax-Deferred Contributions
Account (and earnings thereon); second, the After-Tax Contributions Account (and earnings thereon); and, third, the vested portion of the Employing Company Matching Allocations Account (and earnings thereon), the ESOP Employing Company Matching
Allocations Account (and earnings thereon) and the ESOP Allocation Contributions Account (and earnings thereon), taken pro rata from the one or more investment funds in which such amounts are invested at the time the Plan Loan is made. At the time
and to the extent that the principal amount (and any accrued and unpaid interest or other costs) are actually repaid by the borrower, a like amount of the Account balance that secures such Plan Loan shall automatically be released from collateral.
Any and all of the Account balance which, at the time of the processing of an in-service withdrawal, is collateral for a Plan Loan shall not be available for in-service withdrawal.
The interest rate for each Plan Loan shall be determined at the time the loan is
approved, and the rate shall remain fixed for the full term of the Plan Loan. Any loan for a period of up to and including 60 months shall bear interest at a rate equal to the prime rate published in The Wall Street Journal on the last business day
of the calendar month immediately prior to the date on which the loan is made, and home loans for a period longer than 60 months shall bear interest at such rate plus one percent.
Plan Loans shall be repayable in level weekly installments of principal and interest over a
period of not less than six months nor more than five years from the date of the loan; provided, however, that a Participating Employee or Inactive Participant may apply for and repay a Plan Loan for purposes of home acquisition in level weekly
installments over a period of 61 months to 180 months, but only in a case in which the loan is for the purpose of acquiring a dwelling unit which, within a reasonable period of time (determined at the time the Plan Loan is made), is to be used as
the principal residence of the applicant. A Plan Loan may be prepaid without penalty in full, but not in part, at any time.
11.9 |
Default and Remedies |
Notwithstanding any other provision of the Plan, in the event of a default, as
defined in the terms of a Plan Loan, any or all of the following remedies may be pursued by the Retirement Investment & Administration
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Committee, the Trustee, the Employing Company, or any person or entity to whom the Retirement Investment & Administration Committee may have delegated responsibility with respect to
defaulted Plan Loans:
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assignment and distribution of such promissory note to the borrower (or, in the event of death, his or her estate), and treatment of such assignment and distribution as a distribution to the recipient of a corresponding
portion of the balance then credited to the borrowers Account; provided, however, that no such distribution shall be made prior to the date on which the borrower either separates from service or attains age 59-1/2; |
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disqualification of the borrower from future borrowing under the Plan; or |
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pursuit of any other remedies under such promissory note. |
In the event of any such default, the outstanding
balance (with interest) of any outstanding Plan Loan shall be deducted from any benefit which is or becomes payable to the borrower or his beneficiary(ies) under the Plan. The Participating Employee or Inactive Participant who executed the
promissory note securing any such Plan Loan in default (and, in the event of death, his or her heirs, assigns and representatives) shall remain liable for any deficiency. The definition of default under any such promissory note shall include,
without limitation: (i) delinquency in the repayment of principal and/or interest on the loan, or (ii) the death of the borrower, or the borrowers retirement from, or other termination of employment with, an Employing Company without
repayment of the loan within the period prescribed by the promissory note; provided, however, that default shall not include (A) a termination of employment occasioned by a rotational assignment to Bellcore or transfer to any other Frontier
Company, or (B) a termination of employment on or after the applicable effective date where a Participant does not receive any distribution of his or her Account and agrees to continue loan repayments via coupons or automatic monthly debits to
checking or other acceptable accounts. In the event of default, all Employee Contributions to the plan shall be suspended until such time as the amount of the unpaid debt (including any interest thereon) is deducted from any interest in, or payment
or distribution from, the accounts of the Participating Employee in accordance with this Section 11.9.
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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48 |
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12. DUTIES OF
TRUSTEE
The chief financial officer of the Company shall have authority to appoint and remove
Trustees, and to enter into, and to amend and terminate, the trust agreement with the Trustee. Upon removal or resignation of a Trustee, the chief financial officer of the Company shall appoint a successor Trustee.
The chief financial officer of the Company shall have the authority to appoint,
review, and terminate one or more Investment Managers for any of the investment funds, and to enter into, amend, and terminate, any and all investment manager agreements. The chief financial officer of the Company shall also have the authority to
direct that all or a portion of the assets invested in an investment fund be segregated into one or more separate accounts, each of which shall be invested by the Trustee or an Investment Manager designated by the Company, and to determine the flow
of funds into, from and between different portions of any such investment fund. The chief financial officer of the Company shall have authority to issue general guidelines governing investments by the Trustee and Investment Managers, and to delegate
to other persons the authority and powers granted hereunder.
12.3 |
Purchase of Company Shares |
The Trustee shall purchase any Company Shares required for the Company
Shares Fund, or the chief financial officer of the Company shall cause such Shares to be purchased by the Trustee or an Investment Manager, in the open market or by private purchase, from any seller including the Company; provided, however, that
nothing in this paragraph is intended to alter the procedures for the allocation of Leveraged Shares from the ESOP Unallocated Shares Account or the ESOP Intermediate Holding Account to ESOP Employing Company Matching Allocations Accounts pursuant
to Section 5 (Employing Company Matching Allocations) hereof. The chief financial officer of the Company may appoint an Investment Manager to direct the Trustee as to the purchase of Company Shares with the proceeds of an
Acquisition Loan. In the absence of such an appointment, the Trustee shall utilize the proceeds of an Acquisition Loan to acquire Company Shares in accordance with this section and the Trust Agreement. Any purchase from the Company shall be at a
price no greater than the Value on the date of purchase. Any cash proceeds of an Acquisition Loan may be invested in short-term, interest-bearing, highly liquid,
investments pending the use of such proceeds to purchase Company Shares pursuant to this paragraph.
12.4 |
Purchase of Investments for Investment Funds |
As soon as practicable after receipt of funds for
investment in any investment fund, the Trustee (or an Investment Manager appointed by the chief financial officer of the Company) shall invest in investments that are appropriate within the meaning of that fund. Purchases may be made in the open
market, or directly from the issuer or through financial intermediaries.
12.5 |
Voting and Tendering Verizon Shares |
It is intended that the Trustees functions and
responsibilities with respect to Verizon Shares in the Verizon Shares Fund, the Verizon Shares in the ESOP Employing Company Matching Allocations Account, and the Verizon Shares in the ESOP Unallocated Shares Account and the ESOP Intermediate
Holding Account (collectively, the Unallocated Accounts), shall be exercised as described in this Section 12.5.
Each Participating Employee and Inactive Participant (and each
Beneficiary of a deceased participant): (1) is hereby designated as a named fiduciary (as that term is defined under ERISA) with respect to the Verizon Shares allocated to his Account which are held in the Verizon Shares Fund, and
(2) shall have the right to direct the Trustee with respect to the voting of such shares on each matter brought before any meeting of the stockholders of Verizon.
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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Duties of Trustee
Before each such meeting of stockholders, the Company shall cause to be furnished to each participant and beneficiary a copy of the proxy
solicitation materials, together with a form requesting confidential directions to the Trustee on how the whole and fractional Verizon Shares in the Verizon Shares Fund, which are allocated to such participants or beneficiarys Account,
shall be voted on each such matter. Upon timely receipt of such directions, the Trustee shall on each such matter vote as directed the number of Verizon Shares (including fractional shares) allocated to such participants or beneficiarys
Account, and the Trustee shall have no discretion in such matter. The instructions received by the Trustee from participants and beneficiaries shall be held by the Trustee in confidence and shall not be divulged or released to any person, including
the Retirement Investment & Administration Committee, or the officers or employees of the Company or any Frontier Company.
The
Trustee shall, in the case of the Verizon Shares Fund, vote the whole and fractional allocated Verizon Shares for which it has not received direction in the same proportion as the directed shares of such investment fund are voted. The Trustee shall
have no discretion in such matter.
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12.5.2 |
Tendering in Response to a Tender Offer |
The provisions of this
Section 12.5.2 shall apply in the event a tender offer or exchange offer for Verizon Shares is commenced by a person or persons (hereinafter, a tender offer), including, but not limited to, a tender offer or exchange offer within
the meaning of the Securities Exchange Act of 1934, as from time to time amended and in effect. The Trustee shall have no discretion or authority to sell, exchange or transfer any Verizon Shares pursuant to such tender offer except to the extent,
and only to the extent, provided in this Plan and the Trust Agreement.
In the event a tender offer is commenced, the Retirement
Investment & Administration Committee, promptly after receiving notice of the commencement of any such tender offer, shall transfer certain of the Plans record-keeping functions to an independent record-keeper (which, if the Trustee
consents in writing, may be the Trustee). The functions so transferred shall be those necessary to preserve the confidentiality of any directions given by the Participating Employees and Inactive Participants, and Beneficiaries of deceased
participants, in connection with the tender offer. The Company shall use its best efforts to timely distribute or cause to be distributed to each participant and Beneficiary such information as it is distributing to other stockholders of Verizon in
connection with any such tender offer.
Each Participating Employee and Inactive Participant, and each Beneficiary of a deceased
participant, is hereby designated as a named fiduciary (as that term is defined under ERISA) with respect to the decision whether to tender or exchange certain Verizon Shares, as follows. Each such named fiduciary shall have the right to
direct the Trustee in writing as to the manner in which to respond to a tender offer, to the extent of: (1) the number of whole Verizon Shares attributable to Units in the Verizon Shares Fund which are allocated to his Account and (2) a
pro rata portion of the aggregate of the fractional Verizon Shares in the Verizon Shares Fund which are held in Accounts of the named fiduciaries.
Upon timely receipt of such directions from the named fiduciaries, the Trustee shall respond as instructed with respect to such shares. The
directions received by the Trustee from the named fiduciaries shall be held by the Trustee in confidence and shall not be divulged or released to any person, including the Retirement Investment & Administration Committee, or the officers or
employees of the Company or any Frontier Company.
If the Trustee does not receive timely instructions from a named fiduciary as to the
manner in which to respond to such a tender offer, the Trustee shall not tender or exchange any of the whole number of Verizon Shares which are held in the Verizon Shares Fund allocated to such named fiduciarys Account, and the Trustee shall
have no discretion in such matter.
For the fractional shares that are allocated to the named fiduciaries Accounts in the Verizon
Shares Fund, the portion of the fractional shares which shall be tendered or exchanged by the Trustee shall be the same proportion as the proportion of the whole shares allocated under that fund to the named fiduciaries Accounts which the
named fiduciaries have directed the Trustee to tender. The Trustee shall have no discretion in such matters.
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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50 |
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Duties of Trustee
The independent record-keeper shall solicit confidentially from each participant and beneficiary the directions described in this
Section 12.5.2 as to whether shares are to be tendered. The independent record-keeper, if different from the Trustee, shall instruct the Trustee as to the amount of shares to be tendered, in accordance with the above provisions.
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12.5.3 |
Investment of Plan Assets after Tender Offer |
Any securities or other property
received by the Trustee as a result of having tendered Verizon Shares shall be held, and any cash so received shall be held, in the account or investment fund from which the corresponding shares were tendered. Such proceeds of tendering shall be
invested in short term investments, pending any further action which the Trustee may be directed to take by the Company pursuant to the Plan. Any Verizon Shares which, following the Trustees tender thereof, have not been accepted by the party
making such a tender offer and are returned to the Trustee, shall be credited to the accounts of Participants for whom such shares were tendered in proportion to the shares that were tendered by each such Participant.
12.6 |
Voting and Tendering Company Shares |
It is intended that the Trustees functions
and responsibilities with respect to Company Shares in the Company Shares Fund (including Company Shares in the ESOP Employing Company Matching Allocations Account) (the Shares Fund) and the Company Shares in the ESOP Unallocated Shares
Account and the ESOP Intermediate Holding Account (collectively, the Unallocated Accounts), shall be exercised as described in this Section 12.6.
Each Participating Employee and Inactive Participant (and each
Beneficiary of a deceased participant): (1) is hereby designated as a named fiduciary (as that term is defined under ERISA) with respect to the Company Shares allocated to his Account which are held in the Shares Fund and with
respect to a pro rata portion of the shares held in the Unallocated Accounts, and (2) shall have the right to direct the Trustee with respect to the voting of such shares on each matter brought before any meeting of the stockholders of the
Company.
Before each such meeting of stockholders, the Company shall cause to be furnished to each participant and beneficiary a copy of
the proxy solicitation materials, together with a form requesting confidential directions to the Trustee on how the whole and fractional Company Shares in the Shares Fund, which are allocated to such participants or beneficiarys Account,
shall be voted on each such matter. Upon timely receipt of such directions, the Trustee shall on each such matter vote as directed the number of Company Shares (including fractional shares) allocated to such participants or beneficiarys
Account, and the Trustee shall have no discretion in such matter. The instructions received by the Trustee from participants and beneficiaries shall be held by the Trustee in confidence and shall not be divulged or released to any person, including
the Retirement Investment & Administration Committee, or the officers or employees of the Company or any Frontier Company.
The
Trustee shall, separately, in the case of each of the Shares Fund, vote the whole and fractional allocated Company Shares for which it has not received direction in the same proportion as the directed shares of such investment fund are voted.
Moreover, the Trustee shall vote all Company Shares in the Unallocated Accounts in the same proportion as the directed shares are voted which are held in the Shares Fund collectively. The Trustee shall have no discretion in such matter.
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12.6.2 |
Tendering in Response to a Tender Offer |
The provisions of this
Section 12.6.2 shall apply in the event a tender offer or exchange offer for Company Shares is commenced by a person or persons (hereinafter, a tender offer), including, but not limited to, a tender offer or exchange offer within
the meaning of the Securities Exchange Act of 1934, as from time to time amended and in effect. The Trustee shall have no discretion or authority to sell, exchange or transfer any Company Shares pursuant to such tender offer except to the extent,
and only to the extent, provided in this Plan and the Trust Agreement.
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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51 |
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Duties of Trustee
In the event a tender offer is commenced, the Retirement Investment & Administration Committee, promptly after receiving notice of the
commencement of any such tender offer, shall transfer certain of the Plans record-keeping functions to an independent record-keeper (which, if the Trustee consents in writing, may be the Trustee). The functions so transferred shall be those
necessary to preserve the confidentiality of any directions given by the Participating Employees and Inactive Participants, and Beneficiaries of deceased participants, in connection with the tender offer. The Company shall use its best efforts to
timely distribute or cause to be distributed to each participant and Beneficiary such information as it is distributing to other stockholders of the Company in connection with any such tender offer.
Each Participating Employee and Inactive Participant, and each Beneficiary of a deceased participant, is hereby designated as a named
fiduciary (as that term is defined under ERISA) with respect to the decision whether to tender or exchange certain Company Shares, as follows. Each such named fiduciary shall have the right to direct the Trustee in writing as to the manner in
which to respond to a tender offer, to the extent of: (1) the number of whole Company Shares in the Shares Fund which are allocated to his Account and (2) a pro rata portion of (i) the Company Shares held in the Unallocated Accounts,
and (ii) the aggregate of the fractional Company Shares in the Shares Fund which are held in Accounts of the named fiduciaries.
Upon
timely receipt of such directions from the named fiduciaries, the Trustee shall respond as instructed with respect to such shares. The directions received by the Trustee from the named fiduciaries shall be held by the Trustee in confidence and shall
not be divulged or released to any person, including the Retirement Investment & Administration Committee, or the officers or employees of the Company or any Frontier Company.
If the Trustee does not receive timely instructions from a named fiduciary as to the manner in which to respond to such a tender offer, the
Trustee shall not tender or exchange any of the whole number of Company Shares which are held in the Shares Fund allocated to such named fiduciarys Account, and the Trustee shall have no discretion in such matter.
For the Unallocated Accounts, the number of Company Shares to be tendered or exchanged by the Trustee shall be equal to the product of:
(1) the number of shares in the Unallocated Accounts, times (2) a fraction, the numerator of which is the number of whole Company Shares which the named fiduciaries have, in aggregate, directed the Trustee to tender from their individual
Accounts in the Shares Fund, and the denominator of which is the total number of whole shares in the Shares Fund allocated to the individual Accounts of all of the named fiduciaries. For the fractional shares that are allocated to the named
fiduciaries Accounts in the Shares Fund, the portion of the fractional shares which shall be tendered or exchanged by the Trustee shall be the same proportion as the proportion of the whole shares allocated under that fund to the named
fiduciaries Accounts which the named fiduciaries have directed the Trustee to tender. The Trustee shall have no discretion in such matters.
The independent record-keeper shall solicit confidentially from each participant and beneficiary the directions described in this
Section 12.6.2 as to whether shares are to be tendered. The independent record-keeper, if different from the Trustee, shall instruct the Trustee as to the amount of shares to be tendered, in accordance with the above provisions.
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12.6.3 |
Investment of Plan Assets after Tender Offer |
Any securities or other property
received by the Trustee as a result of having tendered Company Shares shall be held, and any cash so received shall be held, in the account or investment fund from which the corresponding shares were tendered. Such proceeds of tendering shall be
invested in short term investments, pending any further action which the Trustee may be directed to take by the Company pursuant to the Plan. Any Company Shares which, following the Trustees tender thereof, have not been accepted by the party
making such a tender offer and are returned to the Trustee, shall be credited to the accounts of Participants for whom such shares were tendered in proportion to the shares that were tendered by each such Participant. To the extent that unallocated
shares constituted a fraction of the total number of shares tendered from the Trust, a corresponding fraction of the returned shares shall be credited to the Unallocated Accounts of the Trust.
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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52 |
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Duties of Trustee
12.7 |
Temporary Investments and Uninvested Funds |
The Trustee temporarily may hold in cash, may deposit at
reasonable interest rates with banks, including deposits with itself or affiliated banks, and may invest in short-term investments, either directly or through a commingled trust fund maintained by the Trustee, funds received for investment in the
investment funds. The Trustee may keep uninvested an amount of cash sufficient in its opinion to enable it to carry out the purposes of the Plan; provided however, that the Trustee shall be responsible for assuring, to the extent practicable, the
daily investment of all cash balances at any time held by the Trustee, so as to maintain uninvested cash balances at a minimum. No income shall accrue to an Account of any employee on such uninvested funds.
The chief financial officer of the Company shall select a firm of independent certified public
accountants to examine and report on the financial position and the results of operations of the Plan.
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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13. REASSIGNMENTS AMONG
EMPLOYING COMPANIES
13.1 |
Transfer to an Employing Company |
Transfer or reassignment of a Participating Employee from one
Employing Company to another Employing Company as an Eligible Employee shall not affect participation under the Plan.
13.2 |
Transfer to an Affiliate |
In the event that a Participating Employee ceases to be employed by an
Employing Company and becomes an employee of a Frontier Company which is not an Employing Company, the Employees Contributions shall be suspended while the Employee is employed by the non-participating company, and the Employees Accounts
shall be maintained under the Plan pending the occurrence of an event giving rise to a distribution or an in-service withdrawal under Section 10 (Distribution and Withdrawal).
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Savings and Security Plan |
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14. LEAVE OF
ABSENCE, LAYOFF AND ABSENCE ON DISABILITY
If a Participating Employee is granted a leave of absence by his or her Employing
Company, there shall be no payroll Contributions during the period of the leave, and Contributions shall be deemed to be suspended during such period. The Participating Employee shall continue to be eligible to make in-service withdrawals and loans
during the leave of absence pursuant to Section 10.2 (In-Service Withdrawals) and Section 11 (Loans to Employees) and shall continue to make loan repayments, if applicable, as described in Section 11.4
(Equality of Borrowing Opportunity).
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14.2.1 |
Layoffs With No Termination of Employment |
If a Participating Employee is laid
off (with express rights to recall under circumstances not constituting a termination of employment), there shall be no contributions during the period of layoff (while the Employee remains subject to recall), and contributions shall be deemed to be
suspended during such period. If, at the end of twelve months of such status, the Employee has not resumed active service as a Non-Salaried Employee, then, notwithstanding any other provision of the Plan, the Employees participation in the
Plan shall terminate at such time, and employment shall be deemed to have terminated at such time for purposes of eligibility for a distribution under Section 10 (Distribution and Withdrawal) of the Plan. Such distribution will
involve no forfeiture by the Employee.
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14.2.2 |
Termination of Employment Referred to as Layoff |
If a Participating
Employee terminates employment due to technological displacement, an offer under the Income Security Plan, or any other voluntary or involuntary force downsizing (sometimes commonly referred to as a layoff), his Account shall be fully
vested upon termination of employment. In such a case, the Participating Employee shall have the same rights to an immediate distribution of his or her vested Account balance as a Participating Employee who terminates employment pursuant to
Section 10.3.1 (Form and Timing of Distribution).
14.3 |
Absence Due to Total Disability |
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14.3.1 |
Period of Short-Term Disability |
If a Participating Employee is absent on account
of total disability and is receiving disability benefits under the Sickness and Accident Disability Benefit Plan, Employee Contributions will be withheld from such disability benefits, and references in the Plan to Employee Contributions withheld
from basic weekly wages shall be deemed to include contributions withheld from such benefits. In such a case, the Participating Employee shall have the same rights to suspend and resume contributions as a Participating Employee who is in active
service.
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14.3.2 |
Long-Term Disability |
Upon the Participating Employees separation from
service on account of total disability, and the commencement of benefits under the disability pension provisions of a qualified defined benefit pension plan maintained by an Employing Company, or upon the commencement of benefits under a long-term
disability plan maintained by an Employing Company, and no leave of absence is in effect, the individual shall become an Inactive Participant and shall be eligible for the forms of distribution described in Section 10.5 (Optional Form of
Distribution). Such distribution will involve no forfeiture by the Employee.
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14.3.3 |
Accident Disability |
An Eligible Employee who is entitled to receive accident
disability benefits under the Sickness and Accident Disability Benefit Plan for Mid-Atlantic Associates shall, so long as he is entitled to
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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Leave of Absence, Layoff and Absence on Disability
receive such benefits, be treated as an Eligible Employee in active service for purposes of this Plan, and shall be entitled to contribute to the Plan from the disability benefits paid to him by
his Employing Company, and to make in-service withdrawals in accordance with the rules applicable to Participating Employees in active service.
14.4 |
Qualified Military Service |
Notwithstanding any provision of this Plan to the contrary, contributions,
benefits and service credit with respect to qualified military service will be provided in accordance with Code Section 414(u).
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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15. CHANGE OF
STATUS; REASSIGNMENT TO BELLCORE; ROLLOVERS; PLAN TO PLAN ASSET TRANSFERS
15.1 |
Assignment to Salaried Status |
The making of Employee Contributions from the pay of a Participating
Employee and related Employing Company Matching Allocations shall be suspended upon reassignment to Salaried Employee status. If such reassignment is permanent, the Inactive Participant may direct that his Account be transferred to an account
established under the Frontier Communications Corporate Services Inc. Management 401(k) Plan or any successor plan (Management Plan) if he or she is eligible to participate in that plan, and shall be invested in the same manner as the
Account was invested in this Plan. Thereafter, such account shall be governed entirely by the terms of the Management Plan. In the absence of such a direction, no transfer of the Account shall be made.
15.2 |
Assignment to Non-Salaried Status |
Upon the reassignment, to the status of Non-Salaried Employee, of an
individual who was a Participating Employee in the Management Plan, the Participating Employee may request that his Account be transferred to this Plan if the individual is an Eligible Employee by virtue of such reassignment, whether or
not a Plan Loan (as defined in that plan) is outstanding at the time under the Management Plan. In such a case, the account shall initially be invested in the investment funds of this Plan which correspond to the investment funds in
which the Account was previously invested in the transferor plan. In the absence of such a direction, no transfer of the Account shall be made.
15.3 |
Assignment to Bellcore |
If a Participating Employee transfers to Bellcore and the Bellcore Savings Plan
maintained by Bellcore does not recognize the employees service with the Employing Company, then, notwithstanding any other provisions of the Plan, the employees Accounts shall remain in the Plan during the twelve-month period beginning
with the effective date of transfer, and at the end of such twelve-month period, distribution shall be made of all the Units in the employees Accounts. Such distribution shall involve no forfeiture by the Employee.
15.4 |
Asset Transfer to Bellcore Plan |
Notwithstanding the provisions of Section 15.3 (Assignment
to Bellcore), an Inactive Participant may elect, within six months of the effective date of transfer to Bellcore, to have the employees Account transferred to an account established under the Bellcore Savings Plan, but only if the terms
of the Bellcore Savings Plan permit such a transfer. Thereafter, such account shall be governed entirely by the terms of the Bellcore Savings Plan. The value of the Units credited to such new account shall be determined in accordance with the
provisions of Section 10 (Distribution and Withdrawal), treating the transfer as a distribution for purposes of that Section.
15.5 |
Former Participants in Bellcore Savings Plan |
With respect to an Eligible Employee who was a participant
in a Bellcore Savings Plan, if the Employees service with Bellcore is not recognized by the Plan, then the Employee may elect, under the provisions of such plan, and under this Plan, within 6 months of the effective date of transfer to an
Employing Company from Bellcore, to have the value of the Employees account in the Bellcore Savings Plan transferred to the corresponding Accounts (including the corresponding Employee Contributions Accounts, and the non-ESOP Employing Company
Matching Allocations Account) in the Plan for investment in any of the ways authorized in this Plan. In transferring the account balance to this Plan, the recordkeeper shall take account of the calendar year in which various account balances were
initially contributed to the Bellcore Savings Plan.
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Savings and Security Plan |
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Change of Status; Reassignment to Bellcore; Rollovers; Plan to Plan Asset Transfers
15.6 |
Trust-to-Trust Transfers to this Plan |
In addition to the transfers of account balances described
elsewhere in this Section 15, the Retirement Investment & Administration Committee may, in its discretion, elect to instruct the Trustee to accept one or more direct trustee-to-trustee transfers of accounts (and associated assets) from
an individual account plan maintained by a previous employer of one or more Participating Employees, where (1) each transferring Participating Employee is a shared services employee as defined in the Plan of Reorganization
promulgated by the United States District Court for the District of Columbia, on December 16, 1982, (2) each such transferring Employee is an Eligible Employee who is then being reassigned pursuant to the terms of such Plan of
Reorganization which are applicable to shared services employees, and (3) the other plan is a qualified plan under Code Section 401(a). In the case of any such direct trustee-to-trustee transfers of account, the transfer shall be
administered in the manner described below, or, in the discretion of the Retirement Investment & Administration Committee, such transfer may be administered in some other appropriate manner as may be established by the Retirement
Investment & Administration Committee. Such transferred accounts shall be credited to Participating Employees corresponding Accounts (including the corresponding After-Tax or Tax-Deferred Employee Contributions Accounts, and the
non-ESOP Employing Company Matching Allocations Account) in the Plan. In transferring the account balance to this Plan, the recordkeeper shall take account of the calendar year in which various account balances were initially contributed to the
transferor plan.
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With respect to a transferor plan in which each of the types of investment funds available under this Plan, other than Company Shares, is the same as each of the types of investment available under such transferor plan
(other than a fund consisting of the shares of the company which maintains such transferor plan, or shares of its parent corporation), then the account, after transfer to this Plan, shall continue to be invested in the same type of investment fund,
except that the amount invested in the fund consisting of the shares of the company that maintains the transferor plan (or its parent corporation) shall be invested in the Company Shares Fund under the Plan. |
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With respect to a transferor plan with two or more investment funds which are dissimilar to the investment funds under the Plan, the chief investment officer of the Company, with the approval of the Plan Administrator,
shall have the discretion to determine the procedures applicable to the investment of assets received from the transferor plan. |
15.7 |
Asset Transfers from this Plan |
The Retirement Investment & Administration Committee may, in
its discretion, elect to instruct the Trustee to transmit one or more direct trustee-to-trustee transfers of Accounts (and associated assets) to a qualified plan maintained by another employer where each of the conditions described in
Section 15.6 (Trust-to-Trust Transfers to this Plan) applies. If an Account is transferred to another plan, the Trustee shall transfer an amount equal to the value of the Account in cash to the trustee of such other plan as soon as
practicable after such value has been determined.
A Non-Salaried Employee of an Employing Company (whether or not he or she is a Participating
Employee) may, upon presenting documents indicating that the applicable conditions under the Code are satisfied, make a rollover contribution to the Plan. In addition, to the extent, and subject to such timing or other restrictions, as may be agreed
between the Company or one or more Employing Companies and the collective bargaining agent representing a former Eligible Employee, the former Eligible Employee may roll over to the Plan, if he otherwise satisfies the conditions of this Section, an
eligible rollover distribution that he receives from a defined benefit pension plan maintained by a Frontier Company. The rollover contribution must be in cash, in the form of a check or be transferred directly to the Plan from another qualified
plan as a direct rollover within the meaning of Code Section 401(a)(31). The contributor must present documents which demonstrate that the amount presented is attributable to a distribution or a direct rollover: (1) which is from any other
employer-sponsored employee benefit plan (or an IRA which holds only assets that were rolled over from an employer-sponsored employee benefit plan) that is tax qualified under Code Section 401(a), and (2) which is eligible for rollover
under Code Sections 402(c) or 408(d)(3)(A)(ii). Such rollover contributions shall be credited to the Employing Company Matching Allocations Account of such Non-Salaried Employee and shall be treated (for purposes of Section 10.2
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Savings and Security Plan |
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Change of Status; Reassignment to Bellcore; Rollovers; Plan to Plan Asset Transfers
(In-Service Withdrawals)) in the same manner as Employing Company Matching Allocations attributable to Plan Years at least three years prior to the Plan Year in which the rollover
contribution is made, except that rollover contributions shall be invested and reinvested, at the Eligible Employees direction, in accordance with the provisions of Section 8 (Investment Directions) applicable to Employee
Contributions. An Employee shall always have a 100% vested interest in his rollover contributions and Income thereon.
15.9 |
Transfers to and From Verizon Companies which are Employing Companies under the Verizon Savings and Security Plan for New York and New England Associates (Verizon North Company) |
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15.9.1 |
Transfers to a Verizon North Company |
The making of contributions from the
Compensation of a Participating Employee and related Employing Company Contributions shall be suspended upon termination of employment with all Frontier Companies and employment by a Verizon North Company. Such a Participating Employee may direct
that his Account be distributed and rolled over to an account established under the Verizon Savings and Security Plan for New York and New England Associates if he or she is eligible to participate in that plan, and shall be invested in the same
manner as the Account was invested in this Plan. Thereafter, such account shall be governed entirely by the terms of the Verizon Savings and Security Plan for New York and New England Associates. In the absence of such a direction, no distribution
and rollover of the Account shall be made.
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15.9.2 |
Transfers from a Verizon North Company |
Upon employment in the status of Eligible
Employee hereunder of an individual who was a Participating Employee in the Verizon Savings and Security Plan for New York and New England Associates, the Eligible Employee may request that his account under such plan be distributed and
rolled over to this Plan, whether or not a Plan Loan (as defined in that plan) is outstanding at the time under that plan. In such a case, the account shall initially be invested in the investment funds of this Plan which correspond to
the investment funds in which the Account was previously invested in the Verizon Savings and Security Plan for New York and New England Associates. In the absence of such a direction, no distribution and rollover of the Account shall be made.
15.10 |
Other Trust-to-Trust Transfers to this Plan |
The Retirement Investment & Administration
Committee may, in its discretion, elect to instruct the Trustee to accept one or more direct trustee-to-trustee transfers (including elective transfers) from a qualified plan maintained by another employer provided that the conditions of
Section 20.3 are satisfied with respect to such transfer. If assets are transferred from another plan, the Trustee shall accept an amount equal to the value of the transferred account from the trustee of such other plan as soon as practicable
after such value has been determined. Amounts transferred to this Plan from other plans shall be credited to the account hereunder which the Retirement Investment & Administration Committee determines to be most similar to the account under
the transferor plan. In the case of any such direct trustee-to-trustee transfer, the transfer shall be administered in an appropriate manner as may be established by the Retirement Investment & Administration Committee.
15.11 |
Treatment of Transferred Amounts |
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15.11.1 |
Protected Benefits |
Notwithstanding any other provisions of this Plan, if another
qualified plan is merged into the Plan or the assets of another qualified plan are transferred in a trust (or group annuity contract)-to-trust transfer to this Plan, the merged or transferred assets (and earnings thereon) shall remain subject to any
protected forms of benefit distribution to which they were subject immediately prior to the merger or transfer to the extent required to comply with the requirements of section 411(d)(6) of the Code.
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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59 |
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Change of Status; Reassignment to Bellcore; Rollovers; Plan to Plan Asset Transfers
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15.11.2 |
Distribution Restrictions |
Any such merged or transferred amounts that are
subject to the distribution limitations of Code section 401(k)(2)(B) may not be distributed or withdrawn earlier than as permitted under Code section 401(k)(2)(B). With respect to any such amounts transferred from a defined benefit or money purchase
pension plan, (i) any optional form of benefit under the Plan that permits a distribution prior to a Participating Employees retirement, death, disability, or severance from employment and prior to Plan termination shall not be available
with respect to such transferred assets (including earnings thereon), other than any portion of those assets that are separately accounted for and that are attributable to after-tax employee contributions or direct or indirect rollover
contributions, and (ii) such amounts shall be separately accounted for under the Plan to the extent required by Code sections 401(a)(11) and 417, and any requirements imposed by Code sections 401(a)(11) and 417 shall continue to apply to such
amounts (including earnings thereon).
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15.11.3 |
Transferred Roth Contributions |
This subsection is intended to implement
applicable requirements with respect to any Roth contributions (including Roth catch-up contributions) and related earnings that qualify under Code section 402A and that are transferred to this Plan. This subsection does not permit and shall not be
construed to permit elective contributions directly to the Plan on a Roth basis; such contributions shall be permitted only to the extent provided in Section 32. This subsection is intended as good faith compliance with the requirements of Code
section 402A and related Treasury regulations under Code section 401(k) applicable to such contributions and is to be construed in accordance therewith. Except as specifically stated otherwise, Roth contributions will be treated as elective 401(k)
contributions for all purposes under the Plan.
Transferred Roth contributions and the earnings thereon shall be allocated to a separate
account maintained for such contributions. Additional transfers and withdrawals of Roth contributions will be credited and debited to the Roth contributions sub-account maintained for each Participating Employee within the Participating
Employees Account. The Plan will maintain a record of the amount of Roth contributions in each such sub-account. Gains, losses, and other credits or charges must be separately allocated on a reasonable and consistent basis to each
Participating Employees Roth contributions sub-account and the Participating Employees other sub-accounts within the Participating Employees Account under the Plan. No amounts other than Roth contributions and properly attributable
earnings will be credited to a Participating Employees Roth contributions sub-account.
Notwithstanding anything to the contrary in
Section 10.9, a direct rollover of a distribution from a Roth contributions sub-account under the Plan will only be made to another Roth contributions account under an applicable retirement plan described in Code section 402A(e)(1) or to a Roth
IRA described in Code section 408A and only to the extent the rollover is permitted under the rules of Code section 402(c). Eligible rollover distributions from a Participating Employees Roth contributions sub-account are taken into account in
determining whether the total amount of the Participating Employees account balances under the Plan exceeds $1,000 for purposes of mandatory distributions from the Plan.
For purposes of Section 10.2.5, Roth contributions shall be withdrawn in accordance with Section 32.6.
Notwithstanding anything herein to the contrary, the vesting percentage of any amounts
transferred to the Plan shall not be reduced in connection with such transfer. Accordingly, amounts that were fully vested prior to such transfer shall remain fully vested thereafter. If a vesting schedule applicable to transferred amounts prior to
the transfer is more favorable than the applicable vesting schedule under Section 7, the more favorable vesting schedule shall continue to apply after the transfer. Service credited under the plan from which assets are transferred shall be
credited under this Plan to the extent required by Code section 414(a)(1).
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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60 |
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16. SUSPENSION OF
CONTRIBUTIONS
16.1 |
Suspension of Contributions |
A Participating Employee may voluntarily suspend Employee Contributions to
his Account and such suspension shall be effective as soon as administratively possible following receipt of the notice of suspension. Notice of any such suspension shall be given on an Approved Form of Timely Prior Notice.
16.2 |
Resumption of Contributions |
A Participating Employee who has voluntarily suspended Employee
Contributions may thereafter resume Employee Contributions by giving prior notice, on an Approved Form of Timely Prior Notice. Employee Contributions shall resume as soon as administratively possible following receipt of such notice.
16.3 |
Effects of Suspension |
Whenever Contributions are suspended, related Employing Company Matching
Allocations and ESOP Employing Company Matching Allocations shall also be suspended. There shall be no make-up of authorized Contributions from pay or of allocations by an Employing Company with respect to a period of suspension.
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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61 |
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17. DESIGNATION OF
BENEFICIARIES
17.1 |
Lump Sum Payable Upon Death |
Subject to Section 17.2 (Rights of Spouse On Date of
Death), upon the death of a Participating Employee or Inactive Participant, the vested balance of his or her Accounts shall be paid to the Beneficiary or Beneficiaries most recently designated by the deceased in a lump sum to the extent the
participants Beneficiary designation is valid and enforceable under applicable law. Payment shall, at the election of the Beneficiary, be in Company Shares, Verizon Shares or cash, except that payment shall be made entirely in cash if the
Beneficiary makes no election or in the case of any fraction of a Company Share or Verizon Share. If the spouse of the Participating Employee or Inactive Participant is designated as Beneficiary, the surviving spouse Beneficiary shall have the right
to defer distribution until required under Code Section 401(a)(9) and the regulations promulgated thereunder. Such spouse Beneficiary also shall have the right to direct investments under Section 8.2 (Change in Investment
Direction) and to elect a method of distribution under Section 10.3 (Distribution on Termination of Employment Except Death or Transfer) subject, however, to Code Section 401(a)(9). When there is any question regarding
the legal right of any person to receive a distribution under the Plan, the amount in question may be paid to the participants estate, and the Trustee, the Company and the Employing Company shall have no liability to anyone with respect to the
amount paid to the participants estate.
17.2 |
Rights of Spouse On Date of Death |
In the case of a Participating Employee or Inactive Participant who
is married at the time of death, the entire vested amount in the participants Accounts shall be paid to the participants surviving spouse in a lump sum, unless (1) at any time prior to such death, the surviving spouse consents in
writing, on an Approved Form of Timely Prior Notice, to the participants designation of a specific alternate beneficiary and the spouses consent is witnessed by a notary public, or (2) it is established to the satisfaction of the
appropriate Savings Plan Administrator that the spouses consent cannot be obtained because the spouse cannot be located or because of other circumstances that may be prescribed in regulations promulgated under Code Section 417(a)(2)(B).
17.3 |
No Beneficiary Designation on File |
When a Participating Employee or Inactive Participant dies without a
valid and enforceable beneficiary designation and without a surviving spouse, the vested amount in the participants Accounts shall be distributed to the participants estate.
17.4 |
Death of Beneficiary |
In the event that the Beneficiary dies after the death of a Participating Employee
or Inactive Participant but prior to the distributions of the vested Account balance, the balance shall be paid to the Beneficiarys estate. If more than one person is designated as Beneficiary, and a designated Beneficiary predeceases the
Participating Employee or Inactive Participant, the deceased Beneficiarys share of the vested Account balance shall be divided equally among those Beneficiaries who survive the Participating Employee or Inactive Participant, unless otherwise
directed by the Participating Employee or Inactive Participant on a beneficiary designation form.
17.5 |
Form of Beneficiary Designation |
A Participating Employees or Inactive Participants
designation of a beneficiary or beneficiaries to receive all or part of the vested amount in the participants Accounts on the participants death shall be made on a beneficiary designation form signed by the participant, approved by the
Plan Administrator and delivered to the appropriate office before the participants death. Any notarized consent of a participants spouse, as described in Section 17.2 (Rights of Spouse On Date of Death), must be
evidenced on the same beneficiary designation form used by the participant to designate a beneficiary or beneficiaries. A participant may at any time replace a beneficiary designation with a new beneficiary designation or revoke a beneficiary
designation, subject to the requirement of spousal consent, if applicable.
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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62 |
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Designation of Beneficiaries
17.6 |
Disclaimer of Beneficiary Interest |
A Beneficiary entitled to receive the Account of a deceased
Participating Employee or Inactive Participant may elect to disclaim any interest in such Account in which event the Account will be paid to the person or entity who would have received the Account if the disclaiming Beneficiary had predeceased the
Participating Employee or Inactive Participant. A Beneficiarys disclaimer hereunder will not be effective unless accompanied by an opinion of counsel to the effect that the disclaimer election satisfies the requirements of both applicable
state law and Code Section 2518.
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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63 |
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18. BENEFITS NOT
ASSIGNABLE
Benefits payable under this Plan shall not be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, charge, garnishment, execution, or levy of any kind, either voluntary or involuntary, including any such liability which is for alimony or other payments for the support of a spouse or former spouse, or for any other
relative of a Participating Employee or Inactive Participant, prior to actually being received by the person entitled to the benefit under the terms of the Plan, except as required under (a) a qualified domestic relations order (as
defined in Code Section 414(p)(1)(A)) or (b) a Federal tax levy made pursuant to Code Section 6331 or (c) subject to the provisions of Code Section 401(a)(13), a judgment, order, decree or settlement agreement between the
Participating Employee or Inactive Participant and the Secretary of Labor relating to a violation (or an alleged violation) of Part 4 of Subtitle I of ERISA. Any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, charge or
otherwise dispose of any right to benefits payable hereunder, shall be void. The Plan shall not in any manner be liable for, or subject to, the debts, contracts, liabilities, or torts of any person entitled to benefits hereunder. Subject to the
terms of the qualified domestic relations order, any alternate payee entitled to a portion of the Account of a Participating Employee or Inactive Participant shall have the right to direct the investment of such portion of the Account under
Section 8.2 (Change in Investment Direction) and to elect a method of distribution under Section 10.3 (Distribution on Termination of Employment Except Death or Transfer).
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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64 |
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19. EXPENSES
19.1 |
Securities Transaction Costs |
Investment management fees, brokerage fees, transfer taxes and other
expenses incident to the purchase or sale of securities for the Plan by the Trustee shall be deemed to be part of the cost of such securities, or deducted in computing the proceeds therefrom, as the case may be.
19.2 |
Certain Plan and Trust Administration Expenses |
Expenses in connection with the administration of the
Plan or Trust which are described in this paragraph shall be paid in the manner described in this paragraph and in Section 11 of the Trust Agreement. To the extent permitted by ERISA, Plan and Trust expenses for: (i) trustee and
recordkeeping services; (ii) investment management, advisory and consulting services; (iii) audit and accounting services; and (iv) other professional, financial or administrative services provided by third parties (including,
third-party expenses attributable to Plan communications and printing expenses), shall be chargeable to the Trust. Investment management fees, brokerage fees, transfer taxes and other expenses incident to any investment fund shall be deemed to be
part of the cost of such investment fund, or shall be deducted from the earnings or proceeds therefrom, to the extent such expenses are attributed to such investment fund in Plan expense records and subject to such limitations as may be agreed upon
between the Trustee and the Company.
19.3 |
Expenses Chargeable to ESOP Unallocated Shares Account |
Notwithstanding any other provision of this
Section 19, any expenses of the Plan and Trust which may lawfully be paid out of Trust assets, other than any expenses chargeable to the Trust under the terms of Section 19.2 (Certain Plan and Trust Administration Expenses),
shall be chargeable to the ESOP Unallocated Shares Account, to the extent directed by the chief financial officer of the Company, but in no event in an amount which exceeds the balance of interest earnings then held in such Account which were earned
either (i) on the proceeds of any Acquisition Loan, or (ii) on any dividends on Company Shares held in the ESOP Unallocated Shares Account.
Any expenses to be charged to the Plan and the Trust under the terms of
Section 19.2 (Certain Plan and Trust Administration Expenses) and Section 19.3 (Expenses Chargeable to ESOP Unallocated Shares Account) hereof shall be charged and allocated to and among the investment funds, or to
the ESOP Unallocated Shares Account (whichever is applicable), as directed by the chief financial officer of the Company. Each direction to the Trustee pursuant to this Section 19 shall constitute a representation by the chief financial officer
of the Company that such direction is in accordance with applicable law and the terms of the Plan and the Trust Agreement, and the Trustee shall have no duty either to make any independent inquiry or investigation with the Company or any third party
as to the foregoing before acting upon such direction, or to see to the application of any moneys paid over.
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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65 |
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20. AMENDMENT AND
MERGER OF PLAN
The Board or the Retirement Plan Committee may amend the Plan to make such changes
as may be required to obtain continued approval of the Plan as a qualified plan by the Internal Revenue Service or to comply with changes in applicable laws or regulations. In addition, the Plan will be amended automatically to incorporate any
amendments that result from an agreement between the Company and a collective bargaining agent representing Eligible Employees or that are required by the Internal Revenue Service as a condition to issuance of a favorable determination letter on the
qualified status of the Plan. Furthermore, the Board or the Retirement Plan Committee may otherwise modify and amend the Plan; provided, however, that, except with respect to a change that is mandated by law as described in the first sentence of
this paragraph, no part of the corpus or income attributable to any funds received by the Trustee for the purposes of the Plan shall be used for, or diverted to, purposes other than for the exclusive benefit of Participating Employees, Inactive
Participants or their Beneficiaries. The Board has delegated authority to the Retirement Investment & Administration Committee to make amendments to the Plan; provided, however, that amendments that materially increase or decrease benefits
under the Plan or materially alter the structure of the Plan (other than such amendments required or made appropriate by applicable law or resulting from collective bargaining) shall be made only by the Board of Directors or the Retirement Plan
Committee. Any modification shall be effective at such date as the Board, the Retirement Plan Committee, or the Retirement Investment & Administration Committee may determine, except that no material modification, other than one of a minor
nature, may apply to any period prior to the announcement of the modification by the Board, the Retirement Plan Committee, or the Retirement Investment & Administration Committee unless, in the opinion of the Board, the Retirement Plan
Committee, or the Retirement Investment & Administration Committee, such modification is necessary or advisable in order to comply with the provisions of the Code (including any regulations or rulings thereunder) relating to the
qualification of similar plans or relating to the exemption of a trust established pursuant thereto, or would not adversely affect the rights of Participating Employees in respect of the Plan. Notice of any material modification of the Plan shall be
given promptly to the Trustee and to all Employing Companies and, except for changes of a minor nature which did not adversely affect their interests, shall also be given to all Participating Employees. A modification may affect employees then
participating in the Plan as well as future participants. Notwithstanding the preceding sentence, and without the necessity of a delegation of authority from the Board or the Retirement Plan Committee, the Companys Vice President
Benefits, Compensation and Risk Management may adopt at any time amendments to the Plan that reflect changes required by legal, regulatory, or contractual obligations; clarifying amendments that facilitate Plan operation; and discretionary
amendments that update the Plan for changes in law and have a negligible impact on Plan expenses.
20.2 |
Amendments to the Vesting Schedule |
If the vesting schedule under this Plan is amended, each
Participating Employee who has completed at least three years of service prior to the end of the election period described below may elect, during such election period, to have the vested percentage of his Account determined without regard to such
amendment.
For the purposes of this section, the election period shall begin as of the date on which the amendment changing the vesting schedule is
adopted, and shall end on the latest of the following dates:
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the date occurring 60 days after the Plan amendment is adopted; or |
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the date which is 60 days after the day on which the Plan amendment becomes effective; or |
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the date which is 60 days after the day the Participant is issued written notice of the Plan amendment by the Retirement Investment & Administration Committee; or |
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such later date as may be specified by the Retirement Investment & Administration Committee. |
The
election shall be made in writing and shall be irrevocable when made.
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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66 |
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Amendment and Merger of Plan
There shall be no merger or consolidation of the Plan with, or transfer of assets or
liabilities of the Plan to, any other plan unless each Participating Employee, Inactive Participant and Beneficiary of the Plan would (if the Plan then terminated) receive a benefit immediately after the merger, consolidation or transfer which is
equal to or greater than the benefit the Participating Employee, Inactive Participant or Beneficiary would have been entitled to receive immediately before the merger, consolidation or transfer (if the Plan had then terminated).
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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67 |
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21. TERMINATION OF
ALLOCATIONS UNDER PLAN; LIQUIDATION OF PLAN
21.1 |
Authority to Terminate |
The Company, by or pursuant to resolutions of the Board or the Retirement Plan
Committee, may at any time terminate the Plan or terminate the making of Employee Contributions from pay of all Participating Employees and of contributions by all Employing Companies. The Company, at the request of any Employing Company, shall
terminate the making of Employee Contributions from pay of Participating Employees of such Employing Company and of contributions by such Employing Company, by or pursuant to resolution of the Board of Directors.
21.2 |
Earnings and Profits |
If at any time the current profits and accumulated earned surplus of the Company
and all Frontier Companies which are joined (or could be joined) with it in a consolidated federal income tax return shall be less than twice the combined contributions of all such companies under the Plan and the Management Plan (or any successor
plan) since the preceding January 1, the making of Contributions from pay of all Participating Employees and of contributions by all Employing Companies shall be terminated. If (i) an Employing Company ceases to be a Frontier Company, or
(ii) at any time the current profits and accumulated earned surplus of an Employing Company which could not be joined with the Company in a consolidated federal income tax return shall be less than twice the combined contributions of such
Employing Company under the Plan and the Management Plan (or any successor plan) since the preceding January 1, the making of Contributions from the pay of Participating Employees of such Employing Company and of contributions by such Employing
Company shall be terminated.
21.3 |
No Diversion of Account Balances |
No termination shall have the effect of diverting the amounts held by
the Trustee to purposes other than as provided in the Plan.
21.4 |
Termination Procedures |
Prior to a termination of the making of Contributions from pay and of
contributions by all Employing Companies or by an Employing Company, each Participating Employee of any such Employing Company shall be given at least thirty days notice thereof in writing, which notice shall advise the employee that from the
date of the notice, except as provided below, the employee will no longer have the withdrawal and distribution rights specified in Section 10 (Distribution and Withdrawal), and that the employee may, by giving notice in an Approved
Form of Timely Prior Notice, elect either (1) to leave all Units credited to the employees Accounts in the trust held by the Trustee until termination of employment, subject only to the distribution rights specified in Section 10.2
(In-Service Withdrawals) to have all the Units distributed in a single distribution, as soon as practicable after the last date of making such an election, or (3) to receive payment with respect to the Units over a period of up to
five years in annual installments, consisting of approximately equal numbers of Units each year, payable as soon as practicable after the last date of making such an election and annually thereafter until payment of all such installments is made.
Such an election shall be made on an Approved Form of Timely Prior Notice. If an employee elects the alternative described in clause (3) above, payment of each installment shall be made in the manner and on the basis of valuation provided for
in Section 10.1 (Method of Payment). If such an employee dies, all Units remaining in the Accounts at death shall be distributed as soon as practicable pursuant to Section 17 (Designation of Beneficiaries). If the
employment of such an employee should be terminated for any reason other than death, all the Units remaining in the Accounts shall be distributed in a single distribution as soon as practicable after such termination of employment, in accordance
with Section 10.3 (Distribution on Termination of Employment Except Death or Transfer).
Upon a termination of the making of Employee Contributions from pay and of contributions by
all Employing Companies or by any Employing Company, the Plan shall nevertheless remain in effect as to any such Employing Company in other respects, except that (i) no employee of such an Employing
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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68 |
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Termination of Allocations under Plan; Liquidation of Plan
Company shall thereafter forfeit any amounts in the Accounts and (ii) instead of the withdrawal and distribution rights specified in Section 10 (Distribution and
Withdrawal), each employee of such an Employing Company shall thereafter have only the withdrawal and distribution rights specified in Section 21.4 (Termination Procedures), whichever the employee elected.
21.6 |
Liquidation of Trust Assets |
Notwithstanding the foregoing, following such a termination of the making
of Employee Contributions and of contributions by an Employing Company, such Employing Company may, at any time after such termination, determine that the Plan and related trust shall be terminated and liquidated as to such Employing Company, in
which event distribution shall be made to each of its Participating Employees (or the person or persons entitled thereto) of all Units.
As soon as practicable after the partial termination of the Plan and subject to
Section 21.9 (Effect of Termination on Tax-Deferred Accounts), each employee affected by such partial termination shall have the right to receive a distribution of all the Units in the employees Accounts. Such distribution
will involve no forfeiture to the employee. This paragraph will not apply if the occurrence of an event which constitutes a partial termination of the Plan is subject to other provisions of the Plan.
21.8 |
Effect of Termination Upon ESOP |
Notwithstanding anything in the Plan to the contrary, upon a complete
termination of the Plan, or of the leveraged employee stock ownership portion of the Plan, any unallocated Leveraged Shares shall be sold to the Company or on the open market. The proceeds of such sale shall be used to satisfy any outstanding
Acquisition Loan and the balance of any funds remaining shall be allocated to each Participating Employees ESOP Employing Company Matching Allocations Account based on the proportion that each such Participating Employees ESOP Employing
Company Matching Allocations Account balance bears to the total of all ESOP Employing Company Matching Allocations Account balances.
21.9 |
Effect of Termination on Tax-Deferred Accounts |
The foregoing notwithstanding, in no event shall
distributions of Tax-Deferred Contributions be made under this Section 21 to the extent the distribution of such Contributions would cause the Plan to be in violation of Code Section 401(k).
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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69 |
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22. NOTICES, REPORTS,
ETC.
Notices, reports and statements to be given, made or delivered to a Participating Employee or Inactive Participant, shall be
deemed duly given, made or delivered, when addressed to the participant, and delivered by ordinary mail, or by Employing Company mail, to the participants last known business or home address.
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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70 |
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23. ADMINISTRATION AND
INTERPRETATION OF PLAN
23.1 |
Sponsor; Plan Administrator |
The Company shall be the sponsor of the Plan and the Retirement
Investment & Administration Committee shall be the Plan Administrator as those terms are defined in ERISA.
23.2 |
The Plan Administrator |
The Plan Administrator shall have such powers as may be necessary to enable it
to administer the Plan, except for powers reserved to the Company, the chief financial officer of the Company, the Treasurer of the Company, the Retirement Investment & Administration Committee, or the Trustee, or delegated to the Benefit
Claims Committee, the Benefit Administrator, or to investment managers or other designated fiduciaries or service providers to the trust of the Plan. The Plan Administrator shall have the authority and full discretion to adopt such rules for the
administration of the Plan as it may find appropriate; provided, however, that such rules shall be consistent with the terms of the Plan and applicable law.
The Board, the Retirement Plan Committee, the Company and the Retirement
Investment & Administration Committee may delegate authority to administer specified aspects of the Plan to officers or employees of the Company, to one or more Employing Companies, to committees composed of such individuals or to
third-party administrators. The Plan Administrator shall have the authority to appoint or provide for the appointment of one or more persons or committees that shall have authority as the Benefit Claims Committee to grant or deny claims for benefits
under the Plan. Except as provides in the trust agreement, the Retirement Plan Committee may delegate to the chief financial officer of the Company the authority and responsibility to make the necessary determinations to execute the investment
policies and guidelines Funding Policy established by the Retirement Plan Committee pursuant to Section 8. The Company, the Plan Administrator, the Retirement Plan Committee, the Retirement Investment & Administration Committee, and
the Benefit Claims Committee, may each delegate any of their respective responsibilities for the operation and administration of the Plan consistent with the terms of the Plan, including without limitation, the delegation by any of such committees
of certain responsibilities to third-party administrators. The Company and other named fiduciaries may employ persons to advise or assist them in the performance of any of their respective responsibilities. The Retirement Plan Committee may delegate
certain of its responsibilities and duties under this Plan to the chief financial officer.
Under the Plan, the Benefit Claims Committee is a fiduciary to whom the Retirement
Investment & Administration Committee hereby grants full discretion, with the advice of counsel, to do the following: to make findings of fact; to interpret the Plan and resolve ambiguities therein; to make factual determinations; to
determine whether a claimant is eligible for benefits; to decide the amount, form, and timing of benefits; and to resolve any other matter under the Plan which is raised by the claimant or identified by the Benefit Claims Committee. The Benefit
Claims Committee has exclusive authority to decide all claims under the Plan, and the Retirement Investment & Administration Committee has exclusive authority to review and resolve any appeal of a denied claim. In the case of an appeal, the
decision of the Retirement Investment & Administration Committee shall be final and binding upon all parties to the full extent permitted under applicable law, unless and to the extent that the claimant subsequently proves that a decision
of the Retirement Investment & Administration Committee was an abuse of discretion.
Claims will be processed in accordance with ERISA and regulations thereunder, and
shall include but not be limited to the following procedures:
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Any application or request for benefits, and any question or notice concerning benefits, under the Plan by a Participating Employee, Inactive Participant, or Beneficiary shall initially be directed to the Benefit
Administrator, in a form or manner, whether by written, telephonic or other means approved by and acceptable to the Benefit Administrator. |
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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71 |
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Administration and Interpretation of Plan
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Any disagreement or dispute regarding a Participating Employees, Inactive Participants or Beneficiarys benefit under the Plan (referred to herein as a Claim) must be submitted in
writing by the Participating Employee, Inactive Participant, or Beneficiary to the Benefit Claims Committee for decision. Adequate notice shall be provided in writing to any person whose Claim has been denied by the Benefit Claims Committee, setting
forth the specific reasons for such denial. |
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Any person whose Claim for benefits has been denied by the Benefit Claims Committee may, within 60 days after receipt of notice of denial, submit a written request to the Retirement Investment &
Administration Committee for review of the decision denying the Claim. The Retirement Investment & Administration Committee shall notify the claimant in writing of its decision, specifying the reasons for such decision. |
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A claimant who appeals the decision of the Benefit Claims Committee may review all pertinent documents that are to be submitted to the Retirement Investment & Administration Committee for review and
decision, and may submit comments and further evidence and testimony in writing. |
No Participating Employee, Inactive Participant, or
Beneficiary, and no attorney or other representative of any such person, shall have a right to a hearing in person before the Benefit Administrator, Benefit Claims Committee or Retirement Investment & Administration Committee, and all
decisions by the Benefit Administrator, Benefit Claims Committee and Retirement Investment & Administration Committee shall be based on the written record prepared for the respective administrators review, with the assistance of the
respective administrators staff and legal advice of counsel to the administrator and the Plan.
The Company, the chief financial officer of the Company, the Trustee, the Retirement
Investment & Administration Committee, the Benefit Claims Committee and the Plan Administrator and the , are each named fiduciaries as that term is used in ERISA, with respect to the particular duties and responsibilities which are assigned
to each of them under this Plan, with respect to which they exercise discretion. Any person or group of persons may serve in more than one fiduciary capacity with respect to the Plan. The named fiduciaries of the Plan may delegate to other persons
the duties and responsibilities assigned to them hereunder.
23.7 |
Notices; Communications |
Communications to the Benefit Claims Committee shall be addressed to: Savings
Plan Benefit Claims Committee, at the address set forth in the summary plan description for the Plan. The Savings Plan Benefit Claims Committee, at the address stated in the previous sentence, is hereby designated as agent for service of legal
process with respect to any claims arising under the Plan, with a mandatory requirement that a copy of any such notice be served on the Company, c/o Legal Department, Employee Benefits, at the address set forth in the summary plan description for
the Plan.
The validity, construction and operation of the Plan shall be governed by applicable
federal law including, but not limited to, ERISA. To the extent not superseded by ERISA or any other applicable federal law, questions regarding the adoption or amendment of the Plan shall be governed by the laws of the State of Delaware and
questions pertaining to any other matter shall be governed by the laws of the State of New York.
23.9 |
Contingent Nature of Contributions |
All Tax-Deferred Contributions and Employing Company and ESOP
Employing Company Matching Allocations contributed pursuant to the provisions of Section 4 (Contributions From Pay) and Section 5 (Employing Company Matching Allocations) are hereby made expressly contingent on the
deductibility thereof for federal income tax purposes for the fiscal year with respect to which such contributions are made, and no such contribution shall be made for any year to the extent it would exceed the deductible limit for such year as set
forth in Code Section 404.
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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72 |
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Administration and Interpretation of Plan
23.10 |
Exclusive Benefit; Refund of Contributions |
All contributions made to the Plan are made for the
exclusive benefit of the participants and their beneficiaries, and such contributions shall not be used for, nor diverted to, purposes other than for the exclusive benefit of the participants and their beneficiaries (including the costs of
maintaining and administering the Plan and corresponding trust). Notwithstanding the foregoing, to the extent that such refunds do not, in themselves, deprive the Plan of its qualified status, refunds of contributions shall be made to the Employing
Companies under the following circumstances and subject to the following limitations:
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23.10.1 |
Disallowance of Deduction |
To the extent that a federal income tax deduction is
disallowed for any contribution made by an Employing Company, the Trustee shall refund to the Employing Company the amount so disallowed within one (1) year of the date of such disallowance.
In the case of a contribution which is made in whole or in part
by reason of a mistake of fact, so much of the Employing Company contribution as is attributable to the mistake of fact shall be returnable to the Employing Company upon demand, upon presentation of evidence of the mistake of fact to the Trustee and
of calculations as to the impact of such mistake. Demand and repayment must be effectuated within one (1) year after the payment of the contribution to which the mistake applies.
In the event that any refund is paid to the Employing Company hereunder, such refund shall be made without regard to net investment gains
attributable to the contribution, but shall be reduced to reflect net investment losses attributable thereto.
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Savings and Security Plan |
|
|
|
|
for Mid-Atlantic Associates |
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73 |
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24. PROVISIONS FOR
EMPLOYEES WHO ELECT TO PARTICIPATE IN A UNION-SPONSORED TRUST FOR
SAVINGS
24.1 |
Union Sponsored Trust |
Instead of authorizing Employee Contributions from pay under the Plan, an
Eligible Employee may elect to contribute, through payroll deductions, After-Tax Contributions to a trust for savings which (i) is sponsored by a board of trustees (the UST Board), that includes representation from the Participating
Employees collective bargaining representative and complies with applicable provisions of the Taft-Hartley Act, (ii) constitutes a qualified trust under Code Section 401(a), and (iii) to which the Employing Company has agreed to
remit amounts it is directed to withhold from pay. Where it is directed to do so, the Participating Employees Employing Company shall remit such After-Tax Contributions on behalf of such Participating Employee to the custodian designated by
the UST Board, to the same extent and in the same manner as if such Employee had authorized After-Tax Contributions from pay under the Plan. An election to participate in a union sponsored trust shall be in accordance with the procedures in
Section 3 (Participation). A Participating Employee who elects to participate in a union sponsored trust shall be subject to the following provisions:
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The amount of payroll deductions to a union-sponsored trust shall be in accordance with the provisions of Section 4 (Contributions From Pay) and shall be deemed to be After-Tax Contributions from pay
under that Section. No Tax-Deferred Contributions may be made to a union-sponsored trust. |
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Changes in the amount of payroll deductions to a union-sponsored trust shall be treated as a change of allotment amount for purposes of Section 4 (Contributions From Pay). |
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Each Employing Company shall, in accordance with the provisions of Section 5 (Employing Company Matching Allocations) of the Plan, cause Employing Company Matching Allocations to be allocated to the
Participating Employees Employing Company Matching Allocations Account or ESOP Employing Company Matching Allocations Account, as the case may be, with respect to the Participating Employees payroll deductions to a union-sponsored trust
to the extent such payroll deductions are deemed to be Basic After-Tax Contributions from pay. Such Employing Company Matching Allocations shall not be made with respect to employee payroll deductions to a union-sponsored trust under conditions when
Employee Contributions from pay would have been suspended under the terms of the Plan. |
Employing Company Matching Allocations shall be
invested as provided in Section 8 (Investment Directions):
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A Participating Employee may change either (i) from payroll deductions to a union-sponsored trust to Employee Contributions from pay under the Plan, or (ii) from Employee Contributions from pay under the Plan
to payroll deductions to a union-sponsored trust, and any such change shall be deemed a change of investment direction for the purposes of Section 8 (Investment Directions) and shall be subject to the same limitations as are imposed
on changes of investment direction. |
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Up to four times in any Plan Year, but not more frequently than once in any period of three consecutive months, a Participating Employee may direct either (i) that the entire amount accumulated in a union-sponsored
trust (which exceeds the amount required to be retained under the terms of that trust) be transferred to the Company Shares Fund, or (ii) that all of the Units derived from the Participating Employees After-Tax Contributions invested in
the Company Shares Fund be transferred to a union-sponsored trust, and either such change shall be deemed a change of investment direction for the purposes of Section 8 (Investment Directions). |
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A Participating Employee participating in a union-sponsored trust who thereafter becomes ineligible to continue making payroll deductions may continue participation in the Plan by changing to Employee Contributions from
pay under the Plan no later than twenty days prior to the end of the third month following the month in which the loss of eligibility occurred, and such change will be in addition to any other change of investment direction permitted in this
paragraph. |
Withdrawal of amounts accumulated in a union-sponsored trust shall have the same effect as a comparable withdrawal under
Section 10 (Distribution and Withdrawal):
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Savings and Security Plan |
|
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|
for Mid-Atlantic Associates |
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74 |
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Provisions for Employees Who Elect to Participate in a Union-Sponsored Trust for Savings
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To the extent not prohibited under any provision of a union-sponsored trust, a Participating Employee may elect to make an in-service withdrawal in the manner described in Section 10.2 (In-Service
Withdrawals). |
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Section 10.3 (Distribution on Termination of Employment Except Death or Transfer) shall apply in accordance with its terms to all Units in a Participating Employees Accounts under the Plan without
regard to distributions which may occur under the terms of the union-sponsored trust. |
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The restoral of forfeited amounts provided for in Section 10.7 (Restoral of Forfeited Amounts) shall be available to Participating Employees who make lump-sum cash payments to the union-sponsored trust
to the same extent such a restoral would have been made if such lump-sum payment had been made to the Trustee hereunder, provided that such lump-sum payment is submitted to the Employing Company for transmittal to the union-sponsored trust.
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An election by a Participating Employee who is participating in a union-sponsored trust which results in a cessation of payroll deductions
shall be deemed to be a suspension of Contributions from pay for the purposes of Section 16 (Suspension of Contributions) and shall result in a suspension of Employing Company Matching Allocations for the period of such cessation.
Any period during which an Employing Company is relieved of an obligation to make an allocation of Employing Company Matching Allocations by reason of a
Participating Employees election to withdraw amounts from a union sponsored trust shall be deemed a period of suspension of Employee Contributions from pay within the meaning of Section 16 (Suspension of Contributions) even
though such Participating Employee in fact made payroll deductions to the union-sponsored trust during such period.
Notwithstanding any provision in this
Plan to the contrary, in the event a Participating Employee who participates in a union-sponsored trust is no longer eligible to participate in such trust as a result of his becoming a Salaried Employee, his Units in the Plan may be transferred, if
he so elects, to the Management Plan or any successor plan in the same investment directions. Amounts under the union-sponsored trust to which the employee has an entitlement under this Section 24 (Provisions for Employees Who Elect to
Participate in a Union-Sponsored Trust for Savings) may be transferred to the Management Plan or any successor plan and (1) shall be invested entirely in the Company Shares Fund maintained by such plan, and (2) shall be subject to
the terms and conditions of such plan.
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Savings and Security Plan |
|
|
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|
for Mid-Atlantic Associates |
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75 |
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25. TOP-HEAVY
PROVISIONS
The purpose of this Section 25 is to comply with the requirements of Code Section 416. The provisions of this
Section 25 shall be effective for each Plan Year in which the Plan is a top-heavy plan within the meaning of Code Section 416(g).
In general, the Plan will be a top-heavy plan for any Plan Year if, as of the
determination date (that is the last day of the preceding Plan Year), the sum of the amounts in (1), (2), and (3) below for key employees (as defined generally below and in Code Section 416(i)(1)) exceeds 60 percent of the sum
of such amount for all Employees who are or have been covered by this Plan or by a defined contribution plan or defined benefit plan which is aggregated with this Plan in accordance with Section 25.3 (Aggregated Plans) below:
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(1) |
the aggregate Account balances of such individuals under this Plan; |
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(2) |
the aggregate Account balances of such individuals under any other defined contribution plan included in Section 25.3 (Aggregated Plans) below; and |
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(3) |
the present value of the cumulative accrued benefits of such individuals calculated under any defined benefit plan included in Section 25.3 (Aggregated Plans) below. For this purpose the accrued benefit
shall be determined under a uniform accrual method which applies to all defined benefit plans maintained by the Frontier Companies or, where there is no such method, as if such benefit accrued not more rapidly than the slowest rate of accrual
permitted under the fractional rule of Code Section 411(b)(1)(C). |
In making the foregoing determination, (i) an individuals
account balances or cumulative accrued benefits shall be increased by the aggregate distributions, if any, made with respect to the individual during the 1-year period ending on the determination date, including distributions under a terminated plan
which, if it had not been terminated, would have been required to be included in the aggregation group under Code section 416(g)(2)(A)(i), (ii) the account balances or cumulative accrued benefits of an individual who was previously a key
employee, but who is no longer a key employee, shall be disregarded, (iii) the account balances or cumulative accrued benefits of a beneficiary of an individual shall be considered accounts or accrued benefits of the individual, (iv) the
account balances or cumulative accrued benefits of an individual who has not performed any services for a Frontier Company at any time during the 1-year period ending on the determination date shall be disregarded and (v) any rollover
contribution (or similar transfer) initiated by a Participant from a plan maintained by an employer other than a Frontier Company to this Plan or a plan which is aggregated with this Plan in accordance with Section 25.3 (Aggregated
Plans) below shall not be taken into account as part of the aggregate account balances for the purposes of this Section 25. In the case of a distribution made for a reason other than severance from employment, death or disability, this
provision shall be applied by substituting five year period for 1-year period.
In general, a key employee is an Employee (or a former or deceased Employee)
who, at any time during the one-year period ending on the determination date, is or was:
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an officer of a Frontier Company receiving annual compensation from such Frontier Company greater than $130,000 (as adjusted under Section 416(i)(l) of the Code for Plan Years beginning after December 31,
2002); |
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a five percent owner of a Frontier Company; or |
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a one percent owner of a Frontier Company receiving annual compensation from the Frontier Company of more than $150,000. |
For this purpose, annual compensation means compensation within the meaning of Section 415(c)(3) of the Code. The determination of who is a
Key Employee will be made in accordance with Section 416(i)(1) of the Code and the applicable regulations and other guidance of general applicability issued thereunder. For purposes of determining any individuals ownership interest in a
Frontier Company, ownership shall include constructive or deemed ownership within the meaning of Code Section 318 (but shall be determined without reference to Code Sections 414(b), (c) and (m)).
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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76 |
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Top-Heavy Provisions
Each other defined contribution plan and defined benefit plan maintained by a Frontier
Company which covers a key employee as a participant or which is maintained by a Frontier Company in order for a plan covering a key employee to satisfy Code Section 401(a)(4) or 410 (relating to minimum, nondiscriminatory coverage
of employees) shall be aggregated with this Plan in determining whether this Plan is top-heavy. In addition, any other defined contribution or defined benefit plan of a Frontier Company may be included if all such plans which are included, when
aggregated, will not discriminate in favor of officers, shareholders or highly compensated employees and will satisfy all of the applicable requirements of Code Sections 401(a)(4) and 410.
25.4 |
Minimum Employing Company Contribution |
Subject to the following provisions of this Section and
Section 25.5 (Coordination of Benefits), for any Plan Year in which this Plan is a top-heavy plan with respect to the Frontier Companies, the Employing Company contributions credited to each Participant who is not a key employee and
who was employed by a Frontier Company in a Plan Year in which this Plan was a top-heavy plan, shall not be less than three percent of such Participants total Compensation for that year. In no event, however, shall the Employing Company
contributions credited in any year to a Participant who is not a key employee (expressed as a percentage of such Participants Compensation from the Frontier Companies) exceed the maximum employer contribution credited in that year to a key
employee (expressed as a percentage of such key employees Compensation from the Frontier Companies). ESOP Employing Company Matching Allocations and any other Employing Company matching contributions (matching contributions) shall
be taken into account for purposes of satisfying the minimum contribution requirements of Section 416(c)(2) of the Code and the Plan. Matching contributions that are used to satisfy the minimum contribution requirements shall be treated as
matching contributions for purposes of the actual contribution percentage test and other requirements of Section 401(m) of the Code. Tax-Deferred Contributions shall not be considered Employing Company contributions for purposes of this Section
except as otherwise provided by regulations. The minimum benefit requirement shall be satisfied under this Plan for any Participating Employee who participates in this Plan and another plan maintained by a Frontier Company or otherwise required to
be aggregated with the Plan for purposes of satisfying such requirement; provided that the amount of minimum Employing Company contributions otherwise required to be allocated to any Participant for any Plan Year under this section shall be reduced
by the amount of Employing Company contributions allocated to him (and the amount of any forfeitures reallocated to him) for a plan year ending with or within that Plan Year under any other tax-qualified defined contribution plan maintained by any
Frontier Company with respect to which this Plan is a top-heavy plan.
25.5 |
Coordination of Benefits |
For any Plan Year in which the Plan is top-heavy, in the case of a Participant
who is a non-key employee and who is a Participant in a top-heavy tax-qualified defined benefit plan which is maintained by a Frontier Company and which is subject to Code Section 416, Section 25.4 (Minimum Employing Company
Contribution) above shall not apply, and the minimum benefit to be provided to each such Participant in accordance with this Section 25 and Code Section 416(c) shall be the minimum annual retirement benefit to which he is entitled
under such defined benefit plan in accordance with said Section 416(c), reduced by the amount of annual retirement benefit purchasable with his Plan Accounts (or portions thereof) attributable to employer contributions (and the amount of
forfeitures allocated to him) under this Plan and any other tax-qualified defined contribution plan maintained by a Frontier Company.
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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77 |
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26. TRANSFER OF
ACCOUNTS FROM BELL ATLANTIC EMPLOYEE STOCK OWNERSHIP PLAN
Effective January 1, 1998, the account balance of any participant under the Bell Atlantic Employee Stock Ownership Plan (PAYSOP) who is or
was an Eligible Employee under the Verizon Communications Plan was transferred to the Verizon Communications Plan. All amounts transferred from the PAYSOP to the Verizon Communications Plan and then to the Plan in accordance with Appendix II shall
be (i) initially invested in the Verizon Shares Fund or the Company Shares Fund, as applicable, subject to the Participating Employees election in accordance with Section 8.2 (Change in Investment Direction),
(ii) fully vested, and (iii) subject to the distribution and withdrawal options of Section 10 (Distribution and Withdrawal) as though such amounts originated from ESOP Employing Company Matching Allocations.
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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78 |
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27. PENSION ACCOUNTS
FOR CCR EMPLOYEES
Notwithstanding any provision in the Plan to the contrary, the provisions of this
Section 27 shall govern with regard to any Pension Contribution Accounts, if any, transferred to the Plan from the Verizon Communications Plan.
The following terms shall have the following meanings:
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CCR Employee shall mean an IBEW Employee whose terms and conditions of employment are determined in accordance with a collective bargaining agreement with Local 1944 of the International Brotherhood of
Electrical Workers and whose job title is either Carrier Call Representative or any other title which may subsequently be considered within the definition of Group 3 Employees, as defined in the Verizon Memorandum of Understanding dated
May 21, 1995, as it may be amended from time to time. |
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Eligible CCR Employee shall mean a CCR Employee who has completed one or more years of eligibility service within the meaning of Section 3 (Participation), as of December 31
of the Plan Year for which a Pension Contribution is made, and who was either actively employed by a Frontier Company (or a predecessor Verizon company) as of such December 31 (whether or not as a CCR Employee) or who died, retired
(as defined in Section 7.4 (Vesting Upon Termination or Retirement; Miscellaneous Vesting Provisions)), or became disabled (after accruing a Period of Service of five full years) during such Plan Year. |
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Pension Contribution Account shall mean the account maintained for an Eligible CCR Employee or Inactive Participant to record the Pension Contributions made to the Verizon Communications Plan on such
persons behalf and transferred to the Plan, including all adjustments thereto. |
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Pension Contributions shall mean the contributions described in Section of the Verizon Communications Plan that were transferred to the Plan. |
The Pension Contribution Account of an Eligible CCR Employee shall vest and become
nonforfeitable in accordance with the following schedule:
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Period of Service |
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Vested Percentages |
less than 2 years |
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0% |
2 years but less than 3 years |
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25% |
3 years but less than 4 years |
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50% |
4 years but less than 5 years |
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75% |
five years or more |
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100% |
Vesting will be accelerated upon the occurrence of an event specified in Section 7.4 (Vesting Upon Termination or
Retirement; Miscellaneous Vesting Provisions). In addition, all persons who were Eligible CCR Employees on December 31, 2001 under the Verizon Communications Plan shall be fully vested in their Pension Contribution Account without regard
to their Period of Service.
Forfeitures of the nonvested portion of a Pension Contribution Account shall be determined
in accordance with Section 10.3.4 (Forfeitures). Any forfeited amounts shall be applied to reduce future Pension Contributions and other Employing Company contributions to the Plan.
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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79 |
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Pension Accounts for CCR Employees
27.5 |
Investment Directives |
Investment of the Pension Contribution Account shall be governed by
Section 8 (Investment Directions). The Pension Contribution Account shall be combined with other Accounts for purposes of applying the limitations of Section 8 (Investment Directions).
27.6 |
In-Service Withdrawals and Loan |
No portion of the Pension Contribution Account shall be withdrawn
pursuant to Section 10.2 (In-Service Withdrawals) or borrowed pursuant to Section 11 (Loans to Employees). The Pension Contribution Account shall not be taken into account in determining the maximum amount of loans
available under Section 11 (Loans to Employees).
Except as provided in Section 27.6 (In-Service Withdrawals and Loan)
above, the forms of distribution specified in Section 10 shall apply with respect to the Pension Contribution Account.
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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80 |
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28. PROVISIONS RELATING
TO THE ECONOMIC GROWTH AND TAX RELIEF RECONCILIATION ACT OF 2001
The special interim provisions relating to the Economic Growth and Tax Relief Reconciliation Act of 2001 have been incorporated into the appropriate
provisions of the Plan as set forth herein.
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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81 |
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29. ADDITIONAL MINIMUM
DISTRIBUTION REQUIREMENTS
The requirements of this Section will take precedence over any inconsistent provisions of
the Plan. All distributions required under this Section will be determined and made in accordance with the Treasury regulations under Section 401(a)(9) of the Code.
This Section 29 applies for purposes of determining required
minimum distributions for distribution calendar years beginning with the calendar year containing the Effective Date.
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29.1.2 |
Preservation of TEFRA Designations |
Notwithstanding the other provisions of this
Section, distributions may be made under a designation made before January 1, 1984, in accordance with Section 242(b)(2) of the Tax Equity and Fiscal Responsibility Act (TEFRA) and the provisions of the Plan that relate to
Section 242(b)(2) of TEFRA.
29.2 |
Time and Manner of Distribution |
The Participants entire interest will be distributed, or
begin to be distributed, to the Participant no later than the Participants required beginning date.
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29.2.2 |
Death Before Distributions Begin |
If the Participant dies before distributions
begin, the Participants entire interest will be distributed, or begin to be distributed, no later than as follows:
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29.2.2(a) |
Spouse is Sole Designated Beneficiary |
If the Participants surviving spouse is the
Participants sole designated beneficiary, then, except as provided in Sections 29.2.4 and 29.2.5 below, distributions to the surviving spouse will begin by December 31 of the calendar year immediately following the calendar year in which
the Participant died, or by December 31 of the calendar year in which the Participant would have attained age 70 1⁄2, if later.
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29.2.2(b) |
Non-Spouse Designated Beneficiary |
If the Participants surviving spouse is not the
Participants sole designated beneficiary, then, except as provided in Sections 29.2.4 and 29.2.5 below, distributions to the designated beneficiary will begin by December 31 of the calendar year immediately following the calendar year in
which the Participant died.
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29.2.2(c) |
No Designated Beneficiary |
If there is no designated beneficiary as of September 30
of the year following the year of the Participants death, the Participants entire interest will be distributed by December 31 of the calendar year containing the fifth anniversary of the Participants death.
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29.2.2(d) |
Death of Surviving Spouse Before Distributions Commence |
If the Participants
surviving spouse is the Participants sole designated beneficiary and the surviving spouse dies after the Participant but before distributions to the surviving spouse begin, this Section 29.2.2, other than Section 29.2.2(a), will
apply as if the surviving spouse were the Participant.
For purposes of this Section 29.2.2 and Section 29.4, unless
Section 29.2.2(d) applies, distributions are considered to begin on the Participants required beginning date. If Section 29.2.2(d) applies, distributions are considered to begin on the date distributions are required to begin to the
surviving spouse under Section 29.2.2(a). If distributions under an annuity purchased from an insurance company irrevocably commence to the Participant before the Participants
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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82 |
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Additional Minimum Distribution Requirements
required beginning date (or to the Participants surviving spouse before the date distributions are required to begin to the surviving spouse under Section 29.2.2(a)), the date
distributions are considered to begin is the date distributions actually commence.
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29.2.3 |
Distribution Amount under Life Expectancy Rule |
Unless the Participants
interest is distributed in the form of an annuity purchased from an insurance company or in a single sum on or before the required beginning date, as of the first distribution calendar year distributions will be made in accordance with Sections 29.3
and 29.4 of this Section. If the Participants interest is distributed in the form of an annuity purchased from an insurance company, distributions thereunder will be made in accordance with the requirements of Section 401(a)(9) of the
Code and the Treasury regulations.
If the Participant dies before distributions begin and there is a
designated beneficiary, distribution to the designated beneficiary is not required to begin by the date specified in Section 29.2.2, but the Participants entire interest will be distributed to the designated beneficiary by
December 31 of the calendar year containing the fifth anniversary of the Participants death. If the Participants surviving spouse is the Participants sole designated beneficiary and the surviving spouse dies after the
Participant but before distributions to either the Participant or the surviving spouse begin, this election will apply as if the surviving spouse were the Participant.
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29.2.5 |
Election of Life Expectancy or 5-Year Rule |
A Participant or beneficiary may
elect on an individual basis whether the 5-year rule or the life expectancy rule in Sections 29.2.2, 29.2.4, and 29.4.2 applies to distributions after the death of a Participant who has a designated beneficiary. The election must be made no later
than the earlier of September 30 of the calendar year in which distribution would be required to begin under Section 29.2.2, or by September 30 of the calendar year which contains the fifth anniversary of the Participants (or,
if applicable, surviving spouses) death.
29.3 |
Required Minimum Distributions During Participants Lifetime |
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29.3.1 |
Lifetime Distribution Amounts |
During the Participants lifetime, the
minimum amount that will be distributed for each distribution calendar year is the lesser of:
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the quotient obtained by dividing the Participants account balance by the distribution period in the Uniform Lifetime Table set forth in Section 1.401(a)(9)-9 of the Treasury regulations, using the
Participants age as of the Participants birthday in the distribution calendar year; or |
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if the Participants sole designated beneficiary for the distribution calendar year is the Participants spouse, the quotient obtained by dividing the Participants account balance by the number in the
Joint and Last Survivor Table set forth in Section 1.401(a)(9)-9 of the Treasury regulations, using the Participants and spouses attained ages as of the Participants and spouses birthdays in the distribution calendar
year. |
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29.3.2 |
Period for Applying Lifetime Distribution Rule |
Required minimum distributions
will be determined under this Section 29.3 beginning with the first distribution calendar year and up to and including the distribution calendar year that includes the Participants date of death.
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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83 |
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Additional Minimum Distribution Requirements
29.4 |
Required Minimum Distributions After Participants Death |
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29.4.1 |
Death on or after Date Distributions Begin |
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29.4.1(a) |
Designated Beneficiary |
If the Participant dies on or after the date distributions
begin and there is a designated beneficiary, the minimum amount that will be distributed for each distribution calendar year after the year of the Participants death is the quotient obtained by dividing the Participants account balance
by the longer of the remaining life expectancy of the Participant or the remaining life expectancy of the Participants designated beneficiary, determined as follows:
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The Participants remaining life expectancy is calculated using the age of the Participant in the year of death, reduced by one for each subsequent year. |
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If the Participants surviving spouse is the Participants sole designated beneficiary, the remaining life expectancy of the surviving spouse is calculated for each distribution calendar year after the year of
the Participants death using the surviving spouses age as of the spouses birthday in that year. For distribution calendar years after the year of the surviving spouses death, the remaining life expectancy of the surviving
spouse is calculated using the age of the surviving spouse as of the spouses birthday in the calendar year of the spouses death, reduced by one for each subsequent calendar year. |
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If the Participants surviving spouse is not the Participants sole designated beneficiary, the designated beneficiarys remaining life expectancy is calculated using the age of the beneficiary in the
year following the year of the Participants death, reduced by one for each subsequent year. |
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29.4.1(b) |
No Designated Beneficiary |
If the Participant dies on or after the date distributions
begin and there is no designated beneficiary as of September 30 of the year after the year of the Participants death, the minimum amount that will be distributed for each distribution calendar year after the year of the Participants
death is the quotient obtained by dividing the Participants account balance by the Participants remaining life expectancy calculated using the age of the Participant in the year of death, reduced by one for each subsequent year.
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29.4.2 |
Death Before Date Distributions Begin |
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29.4.2(a) |
Designated Beneficiary |
Except as provided in Sections 29.2.4 and 29.2.5, if the
Participant dies before the date distributions begin and there is a designated beneficiary, the minimum amount that will be distributed for each distribution calendar year after the year of the Participants death is the quotient obtained by
dividing the Participants account balance by the remaining life expectancy of the Participants designated beneficiary, determined as provided in Section 29.4.1.
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29.4.2(b) |
No Designated Beneficiary |
If the Participant dies before the date distributions begin
and there is no designated beneficiary as of September 30 of the year following the year of the Participants death, distribution of the Participants entire interest will be completed by December 31 of the calendar year
containing the fifth anniversary of the Participants death.
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29.4.2(c) |
Spouse is Sole Designated Beneficiary |
If the Participant dies before the date
distributions begin, the Participants surviving spouse is the Participants sole designated beneficiary, and the surviving spouse dies before distributions are required to begin to the surviving spouse under Section 29.2.2(a), this
Section 29.4.2 will apply as if the surviving spouse were the Participant.
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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84 |
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Additional Minimum Distribution Requirements
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29.5.1 |
Designated Beneficiary |
The individual who is designated as the beneficiary under
Section 17 of the Plan and is the designated beneficiary under Section 401(a)(9) of the Internal Revenue Code and Section 1.401(a)(9)-1, Q&A-4, of the Treasury regulations.
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29.5.2 |
Distribution Calendar Year |
A calendar year for which a minimum distribution is
required. For distributions beginning before the Participants death, the first distribution calendar year is the calendar year immediately preceding the calendar year which contains the Participants required beginning date. For
distributions beginning after the Participants death, the first distribution calendar year is the calendar year in which distributions are required to begin under Section 29.2.2. The required minimum distribution for the
Participants first distribution calendar year will be made on or before the Participants required beginning date. The required minimum distribution for other distribution calendar years, including the required minimum distribution for
the distribution calendar year in which the Participants required beginning date occurs, will be made on or before December 31 of that distribution calendar year.
Life expectancy as computed by use of the Single Life Table in
Section 1.401(a)(9)-9 of the Treasury regulations.
A Participating Employee or Inactive Participant.
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29.5.5 |
Participants Account Balance |
The account balance as of the last valuation
date in the calendar year immediately preceding the distribution calendar year (valuation calendar year) increased by the amount of any contributions made and allocated or forfeitures allocated to the account balance as of dates in the valuation
calendar year after the valuation date and decreased by distributions made in the valuation calendar year after the valuation date. The account balance for the valuation calendar year includes any amounts rolled over or transferred to the plan
either in the valuation calendar year or in the distribution calendar year if distributed or transferred in the valuation calendar year.
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29.5.6 |
Required Beginning Date |
The applicable date specified in Section 10.6 of
the Plan.
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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85 |
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30. PROVISIONS RELATING
TO THE
FINAL 401(K) AND 401(M)
REGULATIONS
This Section is intended to implement applicable requirements of final regulations under
Code sections 401(k) and 401(m), as revised by Treasury Decision 9169 (as amended, the Final 401(k) Regulations). This Section is intended as good faith compliance with the requirements of the Final 401(k) Regulations and shall be
construed in accordance with such regulations, the mandatory provisions of which are incorporated herein.
The provisions of this Section will take
precedence over any inconsistent provisions of the Plan.
Section 7.1 provides that Tax-Deferred Contributions are always fully vested and
nonforfeitable. The Plan shall disregard Tax-Deferred Contributions in applying the vesting provisions of the Plan to other contributions or benefits under Code section 411(a)(2). However, the Plan shall otherwise take a Participating
Employees or Inactive Participants Tax-Deferred Contributions into account in determining the Participating Employees or Inactive Participants vested benefits under the Plan, including for purposes of
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determining whether a Participating Employee or Inactive Participant has a nonforfeitable right to contributions under the Plan for purposes of forfeitures; |
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applying provisions requiring the repayment of distributions to have forfeited amounts restored; and |
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to the extent applicable, applying the provisions of Code sections 410(a)(5)(D)(iii) and 411(a)(6)(D)(iii) (the rule of parity). |
In addition to the reasons described in Section 10.2.5, a distribution under the
Plan is deemed to be on account of an immediate and heavy financial need of a Participating Employee or Inactive Participant if the distribution is for one of the following reasons:
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Expenses for the repair of damage to the Employees or Inactive Participants principal residence that would qualify for the casualty deduction under Code section 165 (determined without regard to whether the
loss exceeds 10% of adjusted gross income). |
For purposes of Sections 28.14 and 10.3.1, a Participating Employee or Inactive Participant is
considered to have a severance from employment when the Participating Employee or Inactive Participant ceases to be an Employee. An Employee does not have a severance from employment if, in connection with a change of employment, the
individuals new employer maintains the Plan (or a portion thereof) with respect to the individual.
The Plan will not transfer the portion of a
Participating Employees or Inactive Participants Account attributable to Tax-Deferred Contributions to another plan unless the Administrator reasonably determines that the other plan satisfies Code section 401(k)(2)(B) with respect to
the transferred amounts or unless the transfer is a direct rollover or is an elective transfer of otherwise distributable amounts.
30.4 |
Actual Deferral Percentage (ADP) Test |
The Plan does not provide for qualified nonelective contributions
and therefore is not subject to any limitations with respect to such contributions. The actual deferral ratio, as defined in Treasury Regulation section 1.401(k)-2(a)(3) of any Participating Employee who is a Highly Compensated Employee for the Plan
Year and who is eligible to have Tax-Deferred Contributions allocated to such Participating Employees accounts under two or more cash or deferred arrangements described in Code section 401(k) that are maintained by any Frontier Company
shall be determined as if such Tax-Deferred Contributions were made under a single arrangement. If a Highly Compensated Employee participates in two or more
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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86 |
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Final 401(k) and 401(m) Regulations
cash or deferred arrangements of any Frontier Company that have different plan years, then all Tax-Deferred Contributions made during the plan year being tested under all such cash or deferred
arrangements shall be aggregated, without regard to the plan years of the other plans. However, for Plan Years beginning before the effective date of this Section, if the plans have different plan years, then all such cash or deferred arrangements
ending with or within the same calendar year shall be treated as a single cash or deferred arrangement. Notwithstanding the foregoing, plans shall be treated as separate if mandatorily disaggregated for purposes of Code section 401(k).
30.5 |
Adjustment to ADP Test |
Distributions of Excess 401(k) Contributions must be adjusted for income (gain
or loss). The Benefit Administrator has the discretion to determine and allocate income using any of the methods set forth below:
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The Benefit Administrator may use any reasonable method for computing the income allocable to Excess 401(k) Contributions, provided that the method does not violate Code section 401(a)(4), is used consistently for all
Participating Employees and for all corrective distributions under the Plan for the Plan Year, and is used by the Plan for allocating income to Participating Employees accounts. The Plan will not fail to use a reasonable method for computing
the income allocable to Excess 401(k) Contributions merely because such income is determined on a date that is no more than seven days before the distribution. |
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The Benefit Administrator may allocate income to Excess 401(k) Contributions for the Plan Year by multiplying the income for the Plan Year allocable to the Elective Contributions and other amounts taken into account
under the ADP test (including contributions made for the Plan Year), by a fraction, the numerator of which is the Excess 401(k) Contributions for the Employee for the Plan Year, and the denominator of which is the sum of the: (1) Account
balance attributable to Elective Contributions and other amounts taken into account under the ADP test as of the beginning of the Plan Year, and (2) Any additional amount of such contributions made for the Plan Year. |
30.1 |
Actual Contribution Percentage (ACP) Test |
The Plan is a collectively bargained plan that is considered
to automatically satisfy the ACP test pursuant to Treasury regulation section 1.401(m)-1(b)(2).
|
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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87 |
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31. PROVISIONS RELATING
TO THE FINAL 415 REGULATIONS
This Section is intended to implement applicable requirements of final regulations under
Code section 415, as revised by Treasury Decision 9319 published on April 5, 2007 (as amended and including any successor regulations, the Final 415 Regulations). The provisions of this Section are intended as good faith compliance
with the requirements of the Final 415 Regulations and shall be construed and applied in accordance with such regulations. This Section shall not be construed in a manner that would impose limitations that are more stringent than those required by
Code section 415.
The provisions of this Section shall take precedence over any inconsistent provisions of the Plan. Subject to any specific optional
elections made in this Section 31, the mandatory provisions of Code section 415 are hereby incorporated by reference and shall control over any provision in the Plan in conflict therewith.
31.2 |
Limits on Contributions. |
(a) Except to the extent permitted by subsection (b) below and
Plan provisions implemented in accordance with Code section 414(v) and notwithstanding any other provision to the contrary in the Plan, the annual addition with respect to a Participating Employees Account under the Plan in any Limitation Year
shall not exceed the lesser of:
(1) $40,000 or such other dollar amount as is set forth in section 415(c)(1)(A) of the
Code (as adjusted by the Secretary of the Treasury or his delegate for increases in the cost-ofliving under section 415(d) of the Code); or
(2) 100% (or such other percentage as is set forth in section 415(c)(1)(B) of the Code) of the Participating Employees
Compensation for the Limitation Year.
(b) If no more than one-third of the ESOP Debt Service Contributions for a Limitation Year that are
deductible under Code section 404(a)(9) are allocated to Participating Employees who are Highly Compensated Employees, the limitation imposed by subsection (a) above shall not apply to:
(1) forfeitures of Company Shares that were acquired with the proceeds of an Acquisition Loan as described in Code section
404(a)(9)(A), or
(2) ESOP Debt Service Contributions that are deductible under Code section 404(a)(9)(B) and that are
charged against a Participating Employees Account.
The terms annual addition, Compensation and Limitation
Year as used in this Section 31 shall have the meanings given to them below:
(a) The term annual addition means the
sum of Employer contributions, excluding employee elective deferrals, allocated to a participants account; Employee contributions, including elective deferrals; and forfeitures allocated to a Participating Employees Account, but reduced
by any amount permitted by the Final 415 Regulations. The term annual addition shall also include any amount allocated to an individual medical account as described in Code section 415(l), and any amount allocated to a key employees
post-retirement medical benefit account, as described in Code section 419A(d); provided, however, that any amount described in this sentence shall not be subject to the percentage-of-compensation limit in subsection 31.2(a)(2) above. Except as
provided in Section 31.2(b), the term annual addition also includes any Company-Matching Contributions of principal and interest used to repay an Exempt Loan for the Limitation Year. For purposes of the immediately preceding
sentence, the amount of the annual addition shall be determined by reference to the lesser of (i) the amount of the ESOP Debt Service Contribution used to repay an Acquisition Loan and (ii) the value of the Company Shares released from a
Suspense Account and allocated to a Participating Employees ESOP Allocation Contributions Account for the Limitation Year. The term annual addition shall not include any dividend paid with respect to Company Shares that are held in
a Suspense Account or allocated to a Participating Employees ESOP
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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88 |
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Final 415 Regulations
Allocation Contributions Account. The term annual addition also shall not include the value of any Company Shares that are allocated to a Participating Employees ESOP Allocation
Contribution Account to replace any dividends that are used to make payments on an Acquisition Loan.
(b) Compensation for the
purposes of this Section 31 shall have the meaning given to it under subsection (1) below, subject to the timing rules of subsection (2):
(1) Compensation shall mean all of an Employees compensation as reported in Box 1 of IRS Form W-2
and as defined in Treasury Regulation Section 1.415(c)-2(d)(4) for the taxable year that coincides with the Limitation Year (or, where the context so provides, during an applicable portion of a Limitation Year) plus any amount contributed by an
Employing Company pursuant to a salary reduction agreement that complies with Code Section 125, 132(f)(4), 402(e)(3), 402(h), or 403(b). A Participating Employees Compensation for any Limitation Year shall not be taken into account to the
extent it exceeds the annual dollar limitation set forth in Code section 401(a)(17)(A) for the Plan Year (as adjusted pursuant to Code section 401(a)(17)(B)).
(2) Timing Rules. For these purposes, Compensation generally includes only compensation paid before severance from
employment, as defined in Treasury regulation section 1.415(a)-1(f)(5) of the Final 415 Regulations, except that Compensation for these purposes shall also include the following:
(A) Regular Pay. Compensation shall include amounts paid by the later of
2 1⁄2 months after a Participating Employees severance from employment with the Employer or Affiliate or the end of the Limitation Year that includes the
date of such severance from employment, provided that such amounts (1) constitute regular compensation for services during regular working hours or for services outside regular working hours (such as overtime or shift differential),
commissions, bonuses, or other similar payments, and (2) would have been paid to the Participating Employee prior to the severance from employment if the Participating Employee had continued in the Employers or Affiliates
employment.
(B) Leave Cash-Outs. Compensation includes amounts paid by the later of
2 1⁄2 months after a Participating Employees severance from employment with the Employer or Affiliate or the end of the Limitation Year that includes the
date of such severance from employment, provided that such amounts represent payment for unused, accrued bona fide sick, vacation, or other leave that the Participating Employee would have been entitled to use if employment had continued.
(C) Disability Pay. Total Compensation includes amounts paid to a Participating Employee who is permanently and totally
disabled (as defined in Code section 22(e)(3)) to the extent contributions may be made from such amounts pursuant to Section 14.3.
(D) Military Service. Compensation also includes payments to an individual who does not currently perform services for
the Employer or Affiliate by reason of qualified military service, as defined in section 414(u)(1) of the Code, to the extent that such payments do not exceed the amount that the individual would have received had he or she continued in the
Employers or Affiliates employment instead of entering qualified military service.
(c) Limitation Year shall mean
the Plan Year.
Notwithstanding any provision of the Plan to the contrary, the Plan may correct an annual
addition in excess of the limitation under this Section 31 in accordance with the Employee Plans Compliance Resolution System as set forth in Revenue Procedure 2008-50 or any superseding guidance (EPCRS). In accordance with the
provisions of Section 6.06(2) of EPCRS, the annual addition to the Participating Employees Account for a Limitation Year shall be reduced in the order and manner described in Section 6.06(2) of EPCRS to the extent necessary to reduce
such annual addition to an amount that does not exceed the limitations imposed by this Section 31.
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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89 |
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Final 415 Regulations
If a Participating Employee is covered by any other plan aggregated pursuant to Section 31.5, and if the annual addition for the Limitation Year would
otherwise exceed the amount that may be applied for the Participating Employees benefit under the limitation contained in this Section 31, such excess shall be allocated first to the plan in which the participant last participated during
the Limitation Year and, if the total contributions to such plan are less than the excess, then to the preceding plan, and so on until the entire excess is allocated among the plans aggregated for purposes of this Section 31. Within each plan,
the excess allocated to the plan shall be reduced in the order of correction described in Section 6.06(2) of EPCRS. If a Participating Employee participated in more than one such plan at the same time, the excess shall be allocated among such
plans in the same ratio as the annual additions allocated to such plans.
To the extent permitted by Code Section 415, the Final 415 Regulations, and
as described in EPCRS, amounts deemed to be forfeitures under this Section shall be held unallocated in a suspense account. If a suspense account is in existence at any time during a Limitation Year, all amounts in the suspense account shall be used
to offset and reduce any subsequent employer contributions of whatever nature other than elective deferrals, before any further employer contributions may be made to the Plan on behalf of Participating Employees.
31.5 |
Aggregation of Plans. |
For purposes of this Section 31, all defined contribution plans (whether or
not terminated and including any plans under which annual additions are allocated) of the Frontier Companies shall be treated as one defined contribution plan; provided that for the purpose of defining Frontier Company and applying Code
sections 1563(a), 414(b), and 414(c) to this Section, the phrase more than 50 percent shall be substituted for the phrase at least 80 percent.
|
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Savings and Security Plan |
|
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|
for Mid-Atlantic Associates |
|
90 |
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32. ROTH CONTRIBUTIONS
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32.1.1 |
Qualified Roth Contribution Program |
This Section is intended to implement
applicable requirements with respect to the establishment of a qualified Roth contribution program under the Plan in accordance with Code section 402A. This amendment is intended as good faith compliance with the requirements of Code section 402A
and related Treasury regulations under Code section 401(k) and is to be construed in accordance therewith.
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32.1.2 |
Provisions take Precedence |
The provisions of this Section will take precedence
over any inconsistent provisions of the Plan.
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32.1.3 |
Roth Elective Contribution |
A Roth Elective Contribution is an elective deferral
(including a catch-up contribution) that is:
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designated irrevocably by the Participating Employee at the time of the cash or deferred election as a Roth elective deferral that is being made in lieu of all or a portion of the Tax Deferred Contributions (that is,
Basic Tax Deferred Contributions and Supplementary Tax Deferred Contributions otherwise collectively referred to in this Section 32 as Elective Contributions) and/or pre-tax catch-up contributions the Participating Employee is
otherwise eligible to make under the Plan; and |
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treated by the Employing Company as includible in the Participating Employees income at the time the Participating Employee would have received that amount in cash if the Participating Employee had not made a cash
or deferred election. |
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32.1.4 |
Roth Catch-up Contributions |
Except as specifically provided otherwise,
references in this Section to Elective Contributions shall include catch-up contributions, and references to Roth Elective Contributions shall include Roth catch-up contributions.
32.2 |
Roth Elective Contributions |
|
32.2.1 |
Irrevocable Election |
An Eligible Employee shall be permitted to irrevocably
designate in his or her cash or deferral election, including an election to make catch-up contributions, that a portion or all of the Elective Contributions the Eligible Employee is otherwise eligible to make under the Plan shall be treated as Roth
Elective Contributions.
The Plan will accept Roth Elective Contributions made on behalf
of eligible Participating Employees. A Participating Employees Roth Elective Contributions will be allocated to a separate account maintained for such contributions.
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32.2.3 |
Presumptive Treatment |
Unless specifically stated otherwise, Roth Elective
Contributions will be treated as Elective Contributions and Roth catch-up contributions will be treated as catch-up contributions for all purposes under the Plan.
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Savings and Security Plan |
|
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for Mid-Atlantic Associates |
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91 |
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Roth Contributions
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32.3.1 |
Roth Contributions Sub-account |
Contributions and withdrawals of Roth Elective
Contributions will be credited and debited to the Roth Elective Contributions sub-account maintained for each Participating Employee within the Participating Employees Account.
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32.3.2 |
Maintain Record of Roth Elective Contributions |
The Plan will maintain a record
of the amount of Roth Elective Contributions in each such sub-account.
|
32.3.3 |
Gains, Losses and Other Credits or Charges |
Gains, losses, and other credits or
charges must be separately allocated on a reasonable and consistent basis to each Participating Employees Roth Elective Contributions sub-account and the Participating Employees other sub-accounts within the Participating Employees
Account under the Plan.
No contributions other than Roth Elective Contributions
(including properly rolled over Roth Elective Contributions) and properly attributable earnings will be credited to each Participating Employees Roth Elective Contributions sub-account.
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32.4.1 |
Direct Rollovers of Roth Contributions Sub-account |
Notwithstanding anything to
the contrary in Section 10.9, a direct rollover of a distribution from a Roth Elective Contributions sub-account under the Plan will only be made to another Roth Elective Contributions account under an applicable retirement plan described in
Code section 402A(e)(1) or to a Roth IRA described in Code section 408A and only to the extent the rollover is permitted under the rules of Code section 402(c).
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32.4.2 |
Roth Direct Rollovers to the Plan |
An Eligible Employee or Participating Employee
otherwise eligible to make a rollover contribution to the Plan shall be permitted to make Roth direct rollover contributions to the Plan. Notwithstanding anything to the contrary in Section 15.8, the Plan will accept a rollover contribution to
a Roth Elective Contributions sub-account if it is a direct rollover from another Roth Elective Contributions account under an applicable retirement plan described in Code section 402A(e)(1) and only to the extent the rollover is permitted under the
rules of Code section 402(c).
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32.4.3 |
Rollover of Otherwise Taxable Portion of Distribution |
An Eligible Employee or
Participating Employee otherwise eligible to make a rollover contribution to the Plan shall be permitted to roll over the otherwise taxable portion of a distribution from a designated Roth account under an applicable retirement plan described in
Code section 402A(e)(1) to the extent such rollover is permitted under Code sections 402(c) and 402A.
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32.4.4 |
Eligible Rollover Distributions Considered for $1,000 Threshold |
Eligible
rollover distributions from a Participating Employees Roth Elective Contributions sub-account are taken into account in determining whether the total amount of the Participating Employees account balances under the Plan exceeds $1,000
for purposes of mandatory distributions from the Plan.
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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92 |
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Roth Contributions
32.5 |
Correction of Excess Contributions |
In the case of a distribution of excess contributions to a Highly
Compensated Employee, such excess contributions shall be deemed to be pre-tax Elective Contributions to the extent such Highly Compensated Employee made pre-tax Elective Contributions for the year, and any remainder shall be deemed to be Roth
Elective Contributions.
32.6 |
Distribution and Withdrawal of Roth Elective Contributions |
For purposes of Section 10.2.5, a
Participating Employee may elect whether to withdraw Roth Elective Contributions before or after Tax Deferred Contributions (in each case, Basic Tax Deferred Contributions shall be withdrawn after Supplemental Tax Deferred Contributions). If a
Participating Employee requests a withdrawal but does not specify the order of withdrawal, Roth Supplementary Elective Contributions (including Roth catch-up contributions) shall be withdrawn after Basic Tax Deferred Contributions, and Roth Basic
Elective Contributions shall be withdrawn after Roth Supplementary Elective Contributions.
32.7 |
Transferred Roth Contributions |
See Section 15.11.3 for provisions concerning Roth contributions
(including Roth catch-up contributions) and related earnings that qualify under Code section 402A and that are transferred to the Plan.
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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93 |
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33. APPENDIX I
EMPLOYING COMPANIES
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Company Name |
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Payroll Code |
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Previously Named |
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Participation Effective Date |
New Communications Holdings Inc., its successors and assigns |
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Effective Date |
Frontier Communications Corporate Services Inc. |
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Effective Date |
* |
Indicates non-reg Employing Company. All other Employing Companies are CORE Employing Companies. |
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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94 |
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34. APPENDIX II
This Appendix II shall apply solely to Participating Employees and Beneficiaries who were
participating employees or beneficiaries in the Verizon Communications Plan immediately prior to the Effective Date and who are considered Spinco Employees under the Employee Matters Agreement, dated as of
May 13, 2009, by and between Verizon Communications Inc., New Communications Holdings Inc.. and Frontier Communications Corporation (collectively, the Verizon Communications Plan Participants, and individually, a Verizon
Communications Plan Participant).
Except as specifically provided in this Appendix II, the rights of Verizon Communications Plan Participants shall
be governed by the terms of the Plan as set forth herein.
34.2 |
Transfer from the Verizon Communications Plan |
On the Effective Date, or as soon as practicable
thereafter, the Plan shall accept the direct trustee-to-trustee spinoff and transfer of each Verizon Communications Plan Participants accounts from the Verizon Communications Plan and the assets related thereto, provided the transfer is
effected in accordance with Section 15.10 (Other Trust-to-Trust Transfers to this Plan).
34.3 |
Carryover of Elections, Designations, and Notices |
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34.3.1 |
Contribution Elections |
Effective as of the Effective Date, Employee
Contributions (including catch-up contributions) shall be made to the Plan on behalf of a Verizon Communications Plan Participant who is an Eligible Employee in accordance with the Participating Employees elections with respect to such
contributions that were in effect immediately before the Effective Date under the Verizon Communications Plan (taking into account any suspension for hardship withdrawals and subject to the limitations under Sections 4 and 6 and any subsequent
contribution election in accordance with Section 4.5).
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34.3.2 |
Investment Elections for Future Contributions |
Employee Contributions (including
catch-up contributions), rollover contributions, and non-Restricted Account ESOP Employing Company Matching Allocations that are made to the Plan on behalf of a Verizon Communications Plan Participant after the Effective Date shall be invested in
accordance with his investment election for future contributions in effect immediately before the Effective Date with respect to his similar contributions to the Verizon Communications Plan; provided that contribution investment elections for the
Verizon Shares Fund shall be changed to the default fund or Funds designated by the Committee. Such investment elections shall remain in effect until the Verizon Communications Plan Participant directs otherwise in accordance with Section 8.2.
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34.3.3 |
Investment of Transferred Amounts |
The balance of a Verizon Communications Plan
Participants accounts under the Verizon Communications Plan that are transferred to the Plan as of the Effective Date shall be invested, as of or as soon as administratively practicable after such date, in one or more Funds available under the
Plan in accordance with the manner in which such accounts were invested immediately before the Effective Date in the similar or predecessor funds available under the Verizon Communications Plan or in such other manner as is determined by the Plan
Administrator.
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34.3.4 |
Beneficiary Designations |
A Verizon Communications Plan Participants
Beneficiary designation in effect under the Verizon Communications Plan immediately before the Effective Date shall apply under the Plan until changed or revoked in accordance with Section 17.
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Savings and Security Plan |
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for Mid-Atlantic Associates |
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95 |
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Appendix I
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34.3.5 |
Other Elections and Designations |
Other elections, designations, and notices of a
Verizon Communications Plan Participant under the Verizon Communications Plan as of the Effective Date shall apply under the Plan to the extent provided in guidelines established by the Plan Administrator.
34.4 |
Additional Forms of Benefit and Other Features |
|
34.4.1 |
Optional Benefit Forms |
Any optional forms of benefit (within the meaning of Code
Section 411(d)(6)) that were available under the Verizon Communications Plan immediately prior to the Effective Date shall continue to be available under the Plan for a Verizon Communications Plan Participant, but only with respect to the
portion of such participants Accounts transferred to the Plan from the Verizon Communications Plan. Except as provided in the preceding sentence, a Verizon Communications Plan Participant shall receive his entire benefit under the Plan in
accordance with the provisions of Section 10 hereof.
To the extent provided in guidelines established by the Plan
Administrator and communicated to the Trustee, specified features of the Verizon Communications Plan shall be preserved for specified Verizon Communications Plan Participants. Except as specifically provided in such guidelines, Verizon
Communications Plan Participants shall be subject to all of the applicable terms of this Plan.
|
34.5.1 |
Vesting of Transferred Amounts |
A Verizon Communications Plan Participants
vested interest in amounts transferred to the Plan from the Verizon Communications Plan shall be determined in accordance with the terms of the Verizon Communications Plan as in effect as of the Effective Date, the provisions of which are
incorporated herein by this reference. The vested interest of a Verizon Communications Plan Participant in amounts transferred to the Plan from the Verizon Communications Plan shall in no event be less than his vested interest in such amounts under
the Verizon Communications Plan immediately before such transfer.
|
34.5.2 |
Prior Service under the Verizon Communications Plan |
The Period of Service of a
Verizon Communications Plan Participant shall include such individuals period of service under the Verizon Communications Plan as of the Effective Date, without duplication for any service already required to be credited under the other terms
of the Plan.
The Plan Administrator shall allocate the balance from a Verizon Communications Plan
Participants account in the Verizon Communications Plan to and among the participants Accounts under the Plan to the extent such Accounts most closely correspond to the account from the Verizon Communications Plan from which such amounts
originated.
|
|
|
|
|
Savings and Security Plan |
|
|
|
|
for Mid-Atlantic Associates |
|
96 |
|
|
Frontier Communications (NASDAQ:FTR)
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