QWEST PENSION PLAN
406
LA3:752821.27 QWEST PENSION PLAN
Transcript of QWEST PENSION PLAN
LA3:752821.27
QWEST
PENSION PLAN
LA3:752821.27 i
QWEST
PENSION PLAN
TABLE OF CONTENTS
Page
PREAMBLE .................................................................................................................................. 1
ARTICLE I DEFINITIONS................................................................................................. 4
ARTICLE II SERVICE....................................................................................................... 31
2.1.Pension Calculation Service .................................................................................................. 31
2.2.Term of Employment............................................................................................................. 32
2.3.Vesting Service ...................................................................................................................... 33
2.4.Breaks in Service; Periods of Severance - Bridging Rules.................................................... 33
2.5.Service With Members of the Controlled Group................................................................... 36
2.6.Service with Portability and Interchange Companies............................................................ 38
2.7.Leave of Absence; Disability................................................................................................. 38
2.8.Temporary Layoff.................................................................................................................. 39
2.9.Termination with Separation Payment................................................................................... 39
2.10.Special Rules for Incidental Employees .............................................................................. 40
2.11.Military Service ................................................................................................................... 41
ARTICLE III PARTICIPATION ......................................................................................... 41
3.1.Participation - Required Service ............................................................................................ 41
3.2.Re-employment After Break in Service or Period of Severance ........................................... 42
3.3.Transfer to Time Warner Communications ........................................................................... 43
3.4.Transfer to U S WEST Interactive Video Enterprises, Inc. ................................................... 43
3.5.Employees Transferred to the Company from GTE.............................................................. 43
3.6.Participation - U S WEST Cellular Technical Services......................................................... 43
3.7.Participation - U S WEST Paging.......................................................................................... 44
3.8.Participation - MediaOne of Delaware, Inc. .......................................................................... 44
ARTICLE IV CONTRIBUTIONS ....................................................................................... 44
4.1.Employer Contributions......................................................................................................... 44
4.2.Participant Contributions ....................................................................................................... 44
LA3:752821.27 ii
ARTICLE V OVERVIEW OF ARTICLES V-A THROUGH V-E.................................... 45
5.1.Overview................................................................................................................................ 45
ARTICLE V-A PENSIONS FOR OCCUPATIONAL EMPLOYEES................................... 46
5A.1.Service Pensions ................................................................................................................. 46
5A.2.Disability Pension ............................................................................................................... 51
5A.3.Termination of Employment - Deferred Vested Pension - Vesting Rule ........................... 52
5A.4.Pension Amounts ................................................................................................................ 55
5A.5.Qualified Preretirement Survivor Annuities ....................................................................... 76
ARTICLE V-B GRANDFATHERED PENSIONS FOR MANAGEMENT EMPLOYEES................................................................................................ 78
5B.1.Service Pensions.................................................................................................................. 79
5B.2.Disability Pension ............................................................................................................... 82
5B.3.Termination of Employment - Deferred Vested Pension - Vesting Rule ........................... 82
5B.4.Coordination With Other Plans ........................................................................................... 84
5B.5.Death of a Participant before Commencement of Benefits................................................. 85
5B.6.Application of Article V-B.................................................................................................. 86
ARTICLE V-C GENERAL PENSION PROVISIONS .......................................................... 90
5C.1.Retroactive Pension Benefits .............................................................................................. 90
5C.2.Maximum Annual Benefit................................................................................................... 91
5C.3.Reemployment - Suspension of Benefits ............................................................................ 96
5C.4.No Reduction in Amount of Pension .................................................................................. 99
5C.5.Buy-Backs ........................................................................................................................... 99
5C.6.Benefit Increases ............................................................................................................... 100
5C.7.Application of New 1997 Rules; Pre-97 Plan ................................................................... 101
5C.8.No Benefits for Non-Vested Participants.......................................................................... 103
ARTICLE V-D PENSION FOR MANAGEMENT EMPLOYEES - DEFINED LUMP SUM PENSION........................................................................................... 103
5D.1.Application........................................................................................................................ 103
5D.2.DLS Pension ..................................................................................................................... 104
5D.3.Adjustment for Retirement Before Age 65 ....................................................................... 111
D.4.Disability Benefit ................................................................................................................ 111
5D.5.Death of a Participant before Commencement of Benefits............................................... 111
LA3:752821.27 iii
5D.6.Transfers to or from Cable Companies ............................................................................. 115
5D.7.Coordination With Other Plans......................................................................................... 115
5D.8.Ex-NewVector Participants and Former NewVector Participants.................................... 121
ARTICLE V-E PENSION FOR MANAGEMENT EMPLOYEES-ACCOUNT BALANCE PENSION................................................................................. 122
5E.1.Application ........................................................................................................................ 122
5E.2Account Balance Pension ................................................................................................... 123
5E.3.Late Retirement ................................................................................................................. 130
5E.4.Disability Benefit............................................................................................................... 131
5E.5.Death of a Participant before Commencement of Benefits ............................................... 131
5E.6.Coordination With Other Plans ......................................................................................... 133
ARTICLE VI FORMS OF PAYMENT ............................................................................. 134
6.1.Standard Form of Benefit Payment...................................................................................... 134
6.2.Qualified Joint and Survivor Annuities ............................................................................... 135
6.3.Life Annuity With Ten Years Certain ................................................................................. 140
6.4.Increasing Annuity Options ................................................................................................. 141
6.5.Lump Sum Options .............................................................................................................. 142
6.6.Limitations on Form Elected ............................................................................................... 144
6.7.Cash-Outs of $5,000 or Less................................................................................................ 145
6.8.Direct Rollover Election ...................................................................................................... 146
ARTICLE VII DEATH BENEFITS .................................................................................... 147
7.1.Accidental Death Benefits ................................................................................................... 147
7.2.Sickness Death Benefit ........................................................................................................ 148
7.3.Death After Retirement........................................................................................................ 148
7.4.Beneficiaries ........................................................................................................................ 149
7.5.Method of Payment.............................................................................................................. 149
7.6.Death After Termination of Employment............................................................................ 150
7.7.Claims .................................................................................................................................. 150
7.8.Charging of Payments.......................................................................................................... 150
7.9.Definition of Wages............................................................................................................. 150
7.10.Waiver of Death Benefit .................................................................................................... 151
7.11.Termination of Death Benefits........................................................................................... 151
LA3:752821.27 iv
ARTICLE VIII NAMED FIDUCIARIES - ALLOCATION OF RESPONSIBILITIES...... 152
8.1.No Joint Fiduciary Responsibilities ..................................................................................... 152
8.2.The Participating Companies............................................................................................... 152
8.3.The Company....................................................................................................................... 152
8.4.The Committee..................................................................................................................... 153
8.5.Plan Design Committee ....................................................................................................... 153
8.6.Delegation ............................................................................................................................ 153
8.7.The Trustee .......................................................................................................................... 153
8.8.Allocation of Fiduciary Responsibilities ............................................................................. 153
8.9.Organization of the Committees .......................................................................................... 154
8.10.Plan Expenses .................................................................................................................... 155
8.11.Agent for Process............................................................................................................... 155
8.12.Effective Date .................................................................................................................... 155
ARTICLE IX TRUST AGREEMENT - INVESTMENTS ................................................ 155
9.1.Trust Agreement .................................................................................................................. 155
9.2.Expenses of Trust................................................................................................................. 155
ARTICLE X PARTICIPATING COMPANIES ............................................................... 156
10.1.Adoption of Plan ................................................................................................................ 156
10.2.Agency of the Company .................................................................................................... 156
10.3.Disaffiliation and Withdrawal From Plan.......................................................................... 156
10.4.Effect of Disaffiliation or Withdrawal............................................................................... 156
10.5.Vesting Upon Disaffiliation or Withdrawal....................................................................... 158
ARTICLE XI TERMINATION AND AMENDMENT ..................................................... 158
11.1.Termination of Plan ........................................................................................................... 158
11.2.Distribution on Plan Termination ...................................................................................... 158
11.3.Restrictions on Distributions to Certain Participants......................................................... 161
11.4.Amendment by the Company ............................................................................................ 162
11.5.Limitation on Reversions................................................................................................... 162
11.6.Plan Merger or Consolidation............................................................................................ 165
ARTICLE XII TOP-HEAVY PROVISIONS ...................................................................... 165
12.1.Application of Top-Heavy Provisions ............................................................................... 165
12.2.Definitions.......................................................................................................................... 165
LA3:752821.27 v
12.3.Determination of Top-Heavy Status .................................................................................. 166
12.4.Special Vesting Rule.......................................................................................................... 167
12.5.Special Minimum Benefit .................................................................................................. 167
12.6.Change in Top-Heavy Status ............................................................................................. 168
12.7.Super Top-Heavy Limitations............................................................................................ 168
12.8.Modification of the Top-Heavy Rules ............................................................................... 168
ARTICLE XIII MISCELLANEOUS .................................................................................... 169
13.1.Right to Dismiss Employees.............................................................................................. 169
13.2.Claims Procedure ............................................................................................................... 169
13.3.Forms of Notices................................................................................................................ 173
13.4.Applicable Law.................................................................................................................. 173
13.5.Inalienability of Benefits - Domestic Relations Orders..................................................... 174
13.6.Payments Due Minors or Incapacitated Persons................................................................ 174
13.7.Uniformity of Application ................................................................................................. 174
13.8.Disposition of Unclaimed Payments.................................................................................. 174
13.9.Time of Payment................................................................................................................ 175
13.10.Offset for Payments Under Law ...................................................................................... 177
13.11.Gender and Number......................................................................................................... 177
13.12.Claims Release................................................................................................................. 177
13.13.Damage Claims or Suits................................................................................................... 178
13.14.Judgment or Settlement.................................................................................................... 178
13.15.Payment from Trust Fund ................................................................................................ 178
13.16.Cessation of Interest......................................................................................................... 178
ARTICLE XIV HEALTH BENEFITS ACCOUNT.............................................................. 178
14.1.Establishment of Health Benefits Account ........................................................................ 178
14.2.Amounts Transferred to Health Benefits Account............................................................. 179
14.3.Restrictions on Use of Amounts Transferred..................................................................... 180
14.4.Vesting of Accrued Benefits.............................................................................................. 180
14.5.Minimum Benefit and Minimum Cost Requirements ....................................................... 180
14.6.Definitions.......................................................................................................................... 181
APPENDIX A ACTUARIAL ASSUMPTIONS AND ALTERNATIVE BENEFIT FORMS........................................................................................................A-1
LA3:752821.27 vi
APPENDIX B MANDATORY PORTABILITY AND INTERCHANGE AGREEMENTS........................................................................................... B-1
APPENDIX C RETIREMENT REDUCTION FACTORS FOR DEFERRED VESTED PENSIONS (WITHOUT JOINT AND SURVIVOR ANNUITY ELECTION) ............................................................................. C-1
APPENDIX D RETIREMENT REDUCTION FACTORS FOR DEFERRED VESTED PENSIONS (WITH 50% JOINT AND SURVIVOR ANNUITY ELECTION...............................................................................D-1
APPENDIX E MERGER OF U S WEST PROFIT SHARING RETIREMENT PLAN .... E-1
APPENDIX F PENSION BAND CONVERSION TABLES ..............................................F-1
APPENDIX G MONTHLY PENSION FACTORS AND DETERMINATION DATES FOR COMMISSION DIRECTORY ADVERTISING SALES EMPLOYEES..............................................................................................G-1
APPENDIX H PENSION AD HOC GRADING.................................................................H-1
APPENDIX I EX-MEDIAONE EMPLOYEES (effective January 1, 1997)...................... I-1
APPENDIX J MODIFIED DISABILITY PENSIONS (effective January 1, 1997) ........... J-1
APPENDIX K LEAVES OF ABSENCE (effective January 1, 1997).................................K-1
APPENDIX L DEATH BENEFIT ELIGIBILITY CRITERIA........................................... L-1
APPENDIX M ADDITIONAL DEFINED LUMP SUM BENEFIT FOR MANAGEMENT PARTICIPANTS (effective as of August 11, 2000)..... M-1
APPENDIX N EL PASO COUNTY TELEPHONE COMPANY EMPLOYEES ..............N-1
APPENDIX O ENHANCED RETIREMENT PENSION BENEFIT FOR CWA-COMM PARTICIPANTS (effective as of October 12, 2000) ....................O-1
APPENDIX P ENHANCED RETIREMENT PENSION BENEFIT FOR IBEW-COMM PARTICIPANTS (effective as of November 1, 2000) ..................P-1
APPENDIX Q ENHANCED RETIREMENT PENSION BENEFIT FOR CWA-BRI PARTICIPANTS (effective as of November 6, 2000) ...............................Q-1
APPENDIX R ENHANCED RETIREMENT PENSION BENEFIT FOR CWA-DEX PARTICIPANTS (effective as of October 19, 2000) ................................. R-1
APPENDIX S ADDITIONAL DEFINED LUMP SUM BENEFIT (effective as of July 1, 2001)..................................................................................................S-1
APPENDIX T ENHANCED RETIREMENT PENSION BENEFIT FOR CWA-CHOICE TV-OMAHA PARTICIPANTS (effective as of August 11, 2002) ............................................................................................................ T-1
LA3:752821.27 1
QWEST
PENSION PLAN
PREAMBLE
I. Plan History
U S WEST, Inc. (“Old U S WEST”), a Delaware corporation, established the U S WEST Pension Plan, effective January 1, 1984 (the “Occupational Plan”), for its eligible employees and the eligible employees of those of its Subsidiaries that determined, with the concurrence of the Old U S WEST Employee Benefits Committee, to participate in the Occupational Plan. Participation in the Occupational Plan was available to Employees who were either (a) non-management employees who were not covered by a collective bargaining agreement or (b) members of collective bargaining units represented by unions that agreed to participate in the Occupational Plan. Old U S WEST, on behalf of itself and its Subsidiaries, concurrently established a Trust as a part of the Occupational Plan.
Old U S WEST established the U S WEST Management Pension Plan, effective January 1, 1984 (the “Management Plan”), for its eligible salaried management employees and the eligible salaried management employees of certain of its Subsidiaries. Old U S WEST, on behalf of itself and its Subsidiaries, concurrently established a trust as a part of the Management Plan.
Effective January 1, 1993, the Occupational Plan and the Management Plan were merged into a single plan, named the U S WEST Pension Plan (the “Plan”). All references in the Plan to the Occupational Part shall, for periods prior to January 1, 1993, refer to the separate U S WEST Pension Plan and shall, for periods on and after January 1, 1993, refer to the provisions of this Plan that apply to Occupational Employees. All references in the Plan to the Management Part shall, for periods prior to January 1, 1993, refer to the separate U S WEST Management Pension Plan and shall, for periods on and after January 1, 1993, refer to the provisions of the Plan that apply to Management Employees.
Effective January 1, 1997, the Plan was amended to provide a defined lump sum program for Management Employees and to limit the application of the formula in Article V-B to certain current Management Participants. Except as set forth in the Plan, the references in the Plan to the Management Part shall, for periods on or after January 1, 1997, include a reference to the defined lump sum program.
In 1996, Old U S WEST acquired Continental Cablevision, Inc. Continental Cablevision maintained the Continental Cablevision Retirement Plan (“Cablevision Plan”). Continental Cablevision, Inc. was subsequently renamed MediaOne of Delaware, Inc. Effective January 1, 1997, the Cablevision Plan was merged into this Plan. Appendix I of the Plan governed the benefits of Employees and Former Employees of MediaOne of Delaware, Inc. and the other companies that participated in Appendix I.
LA3:752821.27 2
Effective January 1, 2001, Qwest became a Participating Company in the Plan. In addition, the Plan was amended to provide an account balance program for Management Employees and to limit the application of the formula in Articles V-B and V-D to certain current Management Participants.
II. Corporate History
In 1995, pursuant to a Restated Certificate of Incorporation of Old U S WEST, Old U S WEST assets, liabilities and businesses were divided between the Communications Group and the Media Group. Both the Communications Group and Media Group employees participated in this Plan.
In 1998, Old U S WEST determined that it was desirable to separate the Communications Group and the Media Group into two separate public companies. In furtherance of that goal, Old U S WEST effected a restructuring of certain of its assets among the Communications Group and Media Group. In addition, Old U S WEST redeemed all of the Old U S WEST Communications Group Common Stock for all of the capital stock of USW-C, Inc., a wholly-owned subsidiary of Old U S WEST; as a result, USW-C, Inc. ceased to be affiliated with Old U S WEST. Upon such redemption, USW-C, Inc. was renamed U S WEST, Inc. In addition, Old U S WEST was renamed MediaOne Group, Inc. All of the existing shares of Old U S WEST Media Group Common Stock remain outstanding as MediaOne Group, Inc. Common Stock. The foregoing transactions became effective on the “Separation Time”.1
Effective on or about July 1, 2000, U S WEST merged into Qwest Communications International Inc. (Qwest) and Qwest became the Plan Sponsor and the Company (but not a Participating Company until January 1, 2001).
1 In connection with this separation, Old U S WEST determined that it was desirable to transfer sponsorship of the Plan to USW-C, Inc. In addition, MediaOne Group, Inc. adopted the MediaOne Group Pension Plan (said plan, together with any successor plan, referred to as the “Media Plan”) to accept a transfer of assets and liabilities with respect to Media Participants, as set forth in the Employee Matters Agreement between Old U S WEST and USW-C, Inc.
Effective immediately prior to the Separation Time, sponsorship of the Plan was transferred from Old U S WEST to USW-C, Inc (which was renamed U S WEST and which later merged into Qwest). Liabilities associated with all Media Participants were transferred to the new Media Plan from this Plan. As set forth in Section 10.4, no benefits will be paid from this Plan to Media Participants, except as provided in Section 2.5(e).
LA3:752821.27 3
III. Current Plan
Effective January 1, 2001, the Plan was renamed the Qwest Pension Plan. It was also amended to provide an Account Balance program for Management Employees and to limit the application of the formulas in Article V-B and Article V-D for certain Management Participants. Except as set forth in the Plan, the references in the Plan to the Management Part shall, for periods on or after January 1, 2001, include a reference to the Account Balance program.
Except as otherwise provided herein or by law, the terms of the U S WEST Pension Plan as in effect from time to time before December 31, 1996 (“Pre-97 Plan”) (and, to the extent applicable, the Continental Cablevision Retirement Plan) will govern the determination of rights and liabilities under the Plan with respect to events before January 1, 1997. Communications Participants who are Former Participants not employed by Old U S WEST (or its Subsidiaries) or U S WEST (or its Subsidiaries) after December 31, 1996 shall be entitled to receive only such benefits and rights to benefits as were provided under the terms of the Pre-97 Plan as in effect upon their Termination and shall not be entitled to any benefits under this Plan or the New Rules.
Except as otherwise provided herein or by law, the terms of the U S WEST Pension Plan as in effect from time to time before December 31, 2000 will govern the determination of rights and liabilities under the Plan with respect to events before January 1, 2001.
The Plan and Trust are intended to comply with the provisions of the Internal Revenue Code of 1986, as amended, and the Employee Retirement Income Security Act of 1974, as amended.
This restatement is generally effective January 1, 2001. In addition, it supersedes all Plan amendments adopted prior to the date it is executed, provided, however, that any such amendment adopted on or after January 1, 2001 that is incorporated in this restatement shall not be effective prior to the date set forth in said amendment.
LA3:752821.27 4
ARTICLE I
DEFINITIONS
The following terms shall have the meaning set forth below, unless the context clearly indicates otherwise:
1.0 “Account” means a fictitious bookkeeping account maintained under Article V-E for each Participant to reflect the sum of the Compensation Credits and Interest Credits credited to the Participant. No assets shall be allocated to any Participant’s Account.
1.0A “Account Balance” means the sum of Compensation Credits and Interest Credits in a Participant’s Account on a particular date.
1.0B “Accrued Benefit” means (1) as to Occupational Employees, the benefit to which a Participant is entitled in accordance with Article V-A as of the applicable date of calculation and (2) as to Management Employees, the benefit to which a Participant is entitled under Article V-B, V-D and/or V-E, using Final Average Compensation, Pension Calculation Service, Percentage Credits, Compensation Credits and Interest Credits as of the applicable date of calculation. Notwithstanding the preceding, the Accrued Benefit under Article V-D shall be calculated in the form of a lump sum until the Participant incurs an Eligible Separation; the Accrued Benefit under Article V-E shall be calculated in the form of a lump sum until the Participant’s Annuity Starting Date. See Section 5D.2(g) and 5E.2(h). Accrued Benefits shall not include any benefits under Article VII, under Appendix J, under Appendices M, O, P, Q, R, S or T (or any similar appendix) or any benefit that is not an accrued benefit under Section 411(d)(6) of the Code.
1.1 “Active Participant” means a Participant who is employed as a Covered Employee by a Participating Company.
1.2 “Actuarial Equivalent” means a benefit having the same value as the benefit that such Actuarial Equivalent replaces. The determination of Actuarial Equivalent shall be based on the actuarial assumptions, methods and factors set forth in Appendix A. For purposes of this definition, except as explicitly stated otherwise in this Plan, the Participant’s Beneficiary or Spouse shall be deemed to be the same age as the Participant.
1.3 “Adjustment Factor” means the cost of living adjustment factor prescribed by the Secretary of the Treasury under Code section 415(d) for years beginning after December 31, 1987, applied to such items and in such manner as the Secretary shall prescribe.
1.3A “Allocation Date” means the last day of each Plan Year, commencing December 31, 2001.
1.4 “Annuity Starting Date” means the first day with respect to which an amount is paid as an annuity (or would be paid if a lump sum were not paid), but not prior to the
LA3:752821.27 5
Pension Effective Date. In the case of a lump-sum payment, the Annuity Starting Date shall be the Pension Effective Date.
1.4A “Applicable Occupational Participants” means any Occupational Participant whose Eligible Separation occurs on or after July 1, 2001. For purposes of Section 6.5, an Occupational Participant shall not be an Applicable Occupational Participant if his Eligible Separation occurs after the expiration of the applicable collective bargaining agreement (including extensions) in effect on the date set forth in the following paragraph (accordingly, such persons may not elect lump sums).
Prior to October 12, 2000, there were no Applicable Occupational Participants. Effective October 12, 2000 or such later date set forth below, the following are Applicable Occupational Participants: (i) Occupational Participants employed by Qwest Corporation covered by a CWA collective bargaining agreement whose Eligible Separation occurs on or after October 12, 2000, (ii) Occupational Participants employed by Qwest Dex, Inc. covered by a CWA collective bargaining agreement whose Eligible Separation occurs on or after October 19, 2000, (iii) Occupational Participants employed by Qwest Corporation (or Qwest Business Resources, Inc.) covered by an IBEW collective bargaining agreement whose Eligible Separation occurs on or after November 1, 2000, (iv) Occupational Participants employed by Qwest Business Resources, Inc. covered by a CWA collective bargaining agreement whose Eligible Separation occurs on or after November 6, 2000, (v) Occupational Participants employed by Qwest Dex, Inc. covered by an IBEW collective bargaining agreement whose Eligible Separation occurs on or after December 22, 2000, (vi) Occupational Participants not covered by any collective bargaining agreement whose Eligible Separation occurs on or after January 1, 2001, and (vii) Occupational Participants employed by Qwest Corporation covered by an Agent Services collective bargaining agreement whose Eligible Separation occurs on or after February 19, 2001. In no event shall a person be an Applicable Occupational Participant prior to the applicable date set forth in the preceding sentence. For example, no Dex-IBEW Participant shall be an Applicable Occupational Participant prior to December 22, 2000. Prior to July 1, 2001, Occupational Participants covered by the TeleChoice collective bargaining agreement were not Applicable Occupational Participants.
1.5 “Associated or Allied Company” means Bell Communications Research, Inc. and Advanced Mobile Phone Service, Inc., and either or both Southern New England Telephone Company and Cincinnati Bell, Inc., through but not after December 31, 1984.
1.6 “AT&T” means the American Telephone and Telegraph Company, a New York corporation, or its successors.
1.6A “Beneficiary” means, as the context warrants, (i) the contingent annuitant elected by a Participant with respect to a pension benefit, (ii) only in the case of a Management Participant, the Beneficiary elected pursuant to Section 5D.5(f) or 5E.5(e) with respect to a pre-retirement death benefit payable in Section 5D.5 and/or 5E.5, and/or (iii) the Beneficiary set forth in Section 7.4 with respect to benefits payable under Article VII.
1.7 “Break in Service” shall have the meaning set forth in Article II.
LA3:752821.27 6
1.7A “Cable Companies” mean, for periods prior to the Separation Time, MediaOne of Delaware, Inc. (f/k/a Continental Cablevision, Inc.), MediaOne, Inc. and MediaOne of Michigan, Inc. (f/k/a Booth Communications). See Section 3.8.
1.7B “Cessation Date” is defined in Section 5D.2(c)(2).
1.8 “Code” means the Internal Revenue Code of 1986, as amended from time to time, and the regulations and rulings in effect thereunder from time to time.
1.8A “Commencement Date” means the first day with respect to which a pre-retirement benefit is paid as an annuity (or would be paid if a lump sum were not paid). In the case of a lump-sum payment, the Commencement Date shall be the Pension Effective Date.
1.9 “Committee” means the Employee Benefits Committee provided for in Section 8.4.
1.9A “Communications Participants” mean persons who are both (1) Participants in the Plan at the Separation Time and (2) “Communications Employees” or “Terminated Communications Employees,” as such terms are defined in the Employee Matters Agreement.
1.9B “Company” means Qwest and any successor entity. Prior to June 30, 2000, it meant U S WEST, Inc., a Delaware corporation, which entity was merged into Qwest. Up and until immediately prior to the Separation Time, Company meant Old U S WEST.
1.10 “Compensation” means:
(a) For purposes of determining the maximum annual benefit under Section 5C.2 and the special minimum benefit under Section 12.5 when the Plan is top-heavy, Compensation shall mean wages, as defined in Code section 3401(a) for purposes of income tax withholding, and all other payments of compensation by the Company in the course of its trade or business for which the Company is required to furnish a written statement to the Employee, pursuant to Code sections 6041(d) and 6051(a)(3). Compensation shall also include elective contributions that are not includible in the Employee’s income pursuant to Code sections 125 or 402(g), or effective January 1, 2001, section 132(f)(4). Compensation shall be determined without regard to any rules under Code section 3401(a) that limit the remuneration included in wages based on the nature or location of employment or based on the Services performed such as the exception for agricultural labor in Code section 3401(a)(2).
(b) For purposes of identifying Highly Compensated Employees under Section 1.26 and Key Employees under Section 12.2, Compensation shall mean Compensation as determined above for purposes of Sections 5C.2 and 12.5.
(c) For purposes of calculating service, disability or deferred vested pensions under Sections 5B.1, 5B.2 and 5B.3, and the DLS Lump Sum in Section 5D.2(c), the following rules shall apply in determining an Employee’s Compensation.
LA3:752821.27 7
(1) Compensation shall mean basic pay (determined prior to any election by the Employee to reduce his salary under section 125 or section 401(k) or effective January 1, 2001, section 132(f)(4) of the Code), differential paid for night tours, differentials paid for temporary work in a higher classification, area differentials, annual or periodic bonus payments, lump sum payments in the nature of merit or performance awards including lump sums paid as a buy-out of base pay due to demotion or resulting from pay parity (but excluding in all cases any gross-up for such awards), incentive compensation and commissions, but excluding non-cash payments, vacation buy-outs, overtime pay, hiring bonuses, “stay bonuses,” relocation allowances, expatriate differentials, officers’ long- and short-term awards, stock options and similar payments, deferred compensation and payment of any previously deferred compensation. Compensation shall also exclude severance payments and payment of any compensation made after Termination, except that, for Management Employees whose employment ends on or after August 2, 1996, (i) commissions paid within 90 days after Termination shall be considered Compensation (such commissions shall be treated as being paid on the date of Termination and shall be prorated in accordance with paragraph (2) below) and (ii) annual or periodic bonus payments paid within 30 days after Termination pursuant to either the Management Separation Plan or a Company negotiated severance arrangement shall be considered Compensation.
With respect to a Non-Salaried Employee who becomes a Salaried Employee, the compensation described in the preceding paragraph shall be included if paid during and for any period of service an Employee was covered by the Occupational Part if such service is included in Pension Calculation Service in computing such Employee’s monthly pension benefit under the Management Part.
(2) For purposes of determining Compensation for any month, the following shall apply: (i) annual lump sum bonus payments shall be divided by twelve, and spread over the twelve months prior to the month in which the lump sum bonus was paid; provided that if the annual lump sum bonus is made during the first twelve months of employment, such lump sum bonus shall be pro-rated over the months in which the individual is employed prior to the month in which the lump sum bonus was paid; (ii) other non-annual lump sum bonus payments shall be divided by the number of months for which they are paid, and spread over the months for which they are paid; (iii) the sum of the incentive and differential payments and commissions (solely for purposes of this paragraph (2), referred to collectively as “eligible payments”) paid during a calendar year shall be divided by twelve and spread over the twelve months of the calendar year in which the eligible payments were paid; (iv) if the Employee Terminates before December 1 of a calendar year, the eligible payments paid during the calendar year of the Employee’s Termination shall be pro-rated over the months in the calendar year before the Employee’s Termination; and (v) if eligible payments are made within the first calendar year an individual is employed, the eligible payments shall be pro-rated over the months in that calendar year during which the individual was employed.
(3) For an Employee who has any period of time during the applicable averaging period determined in accordance with Section 1.21 during which such
LA3:752821.27 8
Employee receives short-term disability benefits under a Participating Company’s Disability Plan (as defined in Section 1.15) or any predecessor of or successor to such plan, the Employee’s basic pay on any day during such period of disability benefits shall be considered as an amount that is equal to the Employee’s basic rate of pay immediately prior to the disability period. For an Employee who has any period of time during the applicable averaging period determined in accordance with Section 1.21 during which such Employee is on a leave of absence to a subsidiary of the Company or such other entity as a Participating Company’s Board of Directors may designate in which a Participating Company has a substantial interest and during such period, such Employee’s compensation for the period on such a leave shall be, the Compensation, as defined in this subsection (c) for such subsidiary company or such other entity.
(4) Notwithstanding any other provision of this Section 1.10, if during any period during the applicable averaging period determined in accordance with Section 1.21 below, an Employee was employed on a part-time basis, the Employee’s Compensation shall be considered the Compensation such Employee would have received had such Employee been employed on a full-time basis during such period of part-time employment.
(5) Compensation shall not include any amounts paid to a Participant who is not a Covered Employee or who is employed by a Non-Participating Company, or, except as explicitly stated elsewhere in the Plan, an Interchange Company or a Portability Company.
(d) (1) For all purposes of the Plan, Compensation taken into account for any Plan Year or limitation year, as the case may be, shall not exceed the compensation limit in effect for the calendar year in which the Plan Year or limitation year begins. The compensation limit is (1) for Plan Years beginning on or after January 1, 1989 through and including January 1, 1993, $200,000, (2) for Plan Years beginning on or after January 1, 1994 through and including January 1, 2001, $150,000; provided that the $150,000 compensation limit shall apply to Employees who are subject to collective bargaining on the later of January 1, 1994, or the date on which the collective bargaining agreement terminates (without regard to any extension, amendment, or modification of such agreement on or after August 10, 1993), and (3) for Plan Years beginning on or after January 1, 2002, $200,000. The foregoing compensation limits shall be adjusted by the Commissioner for increases in the cost of living in accordance with Code section 401(a)(17)(B). The cost-of-living adjustment in effect for a calendar year applies to any Plan Year over which Compensation is determined beginning in such calendar year.
(2) Subject to the following, the foregoing limit shall be applied on a Plan Year basis. However, if Compensation for any Plan Year is taken into account for a period of less than a full year (either because there is a short Plan Year or the Participant’s Final Average Compensation is calculated by using part of a Plan Year), then the limitation for that part of the year shall equal the limit that would otherwise apply for the Plan Year multiplied by a fraction equal to the number of months taken into account divided by 12. Notwithstanding the previous sentence to the contrary, for
LA3:752821.27 9
purposes of Compensation under Section 1.10(h), Compensation for a period within a Plan Year shall not be limited to a prorated limit. Instead, all Compensation for the calendar year after the Member’s Compensation exceeds the limit for the Plan Year shall be ignored.
(3) Effective January 1, 1994, if Compensation for any prior Plan Year is taken into account in determining an Employee’s benefits accruing in the current Plan Year, the Compensation limit for that prior Plan Year is $150,000.
(4) For purposes of this limit, for years prior to 1997, the Compensation of the following people is aggregated, and their combined Compensation is limited to $200,000 or $150,000, as applicable (as adjusted by the Secretary of the Treasury): an Employee who is either a Five-Percent Owner or one of the ten most highly compensated Highly Compensated Employees; the Spouse of an Employee described in paragraph (i); and any descendant under the age of 19 of an Employee described in paragraph (i).
(5) The increase in the compensation limit from $150,000 to $200,000 on January 1, 2002 shall not apply retroactively to prior years, except as set forth in this paragraph. If a Participant is continuing to accrue benefits (including accruals based solely on increase in increases in Final Average Compensation) on or after January 1, 2002 under a formula based on Final Average Compensation, then the $200,000 limit shall apply retroactively with respect to that particular formula. For example, assume a Participant’s benefit formula as of January 1, 2002 is the greater of the Article V-B benefit (frozen as of December 31, 1996) or his or her Article V-D benefit. The $200,000 limit will be applied retroactively for the Article V-D limit, but not the Article V-B limit; the result is the same if the Participant is no longer earning Percentage Credits under Article V-D but has not had a Cessation Date as of December 31, 2001 and is thus still earning Final Average Compensation on that date under Article V-D. No retroactive increases apply for purposes of the regular pension band formula or supplemental pension set forth in Section 5A.4(c) or (d), or except as set forth in Section 5E.2(c)(5), the Article V-E benefit.
(6) The foregoing limit shall apply to another compensation amount set forth in the Plan, including all Appendices. Accordingly, to the extent any benefit is calculated with reference to annual base salary, pay, salary, compensation or any similar amount, such amount shall be limited by the foregoing limit.
(e) Unless otherwise provided under the Plan, each section 401(a)(17) employee’s accrued benefit under this Plan will be the greater of the Accrued Benefit determined for the Employee under 1 or 2 below:
1. the Employee’s Accrued Benefit determined with respect to the benefit formula applicable for the Plan Year beginning on or after January 1, 1994, as applied to the Employee’s total years of service taken into account under the Plan for the purposes of benefit accruals, or
LA3:752821.27 10
2. the sum of:
(a) the Employee’s Accrued Benefit as of the last day of the last Plan Year beginning before January 1, 1994, frozen in accordance with section 1.401(a)(4)-13 of the regulations, and
(b) the Employee’s Accrued Benefit determined under the benefit formula applicable for the Plan Year beginning on or after January 1, 1994, as applied to the employee’s years of service credited to the employee for Plan Years beginning on or after January 1, 1994, for purposes of benefit accruals.
A section 401(a)(17) employee means an Employee whose current Accrued Benefit as of a date on or after the first day of the first Plan Year beginning on or after January 1, 1994, is based on Compensation for a year beginning prior to the first day of the first Plan Year beginning on or after January 1, 1994, that exceeded $150,000.
(f) For purposes of calculating service, disability or deferred vested pensions under Section 5A.4(c)(ii)(C) and Section 5A.4(c)(iv), an Employee’s Compensation shall be determined according to the following rules.
(1) Compensation shall mean basic pay (determined prior to any election by the Employee to reduce his salary under section 125 or section 401(k) or effective January 1, 2001, section 132(f)(4) of the Code), commissions, real growth premiums, account executive bonuses, internet incentives (effective January 1, 1999) and daily average for short-term disability payments, but excluding all other compensation, including without limitation overtime pay. Compensation shall also exclude severance payments and payment of any compensation made after Termination (or, except as otherwise provided, the date the Employee ceases to be covered under Section 5A.4(c)(2)(ii)(C) or Section 5A.4(c)(iv), as applicable), except that real growth payments paid within 90 days after Termination shall be considered Compensation (such payments shall be treated as being paid on the date of Termination).
(2) For the purpose of determining Compensation for any month, the following shall apply: (i) real growth premium and account executive bonuses shall be divided by twelve and spread over the twelve months prior to the month in which such premium or bonus was paid; (ii) commissions and internet incentives paid during a calendar year shall be divided by twelve and spread over the twelve months of the calendar year in which such amounts were paid; (iii) if the Employee Terminates (or ceases to be covered under the applicable formula) before December 1 of a calendar year, the commissions and internet incentives paid during the calendar year of the Employee’s Termination shall be pro-rated over the months in the calendar year before the Employee’s Termination; and (iv) if the real growth premium or account executive bonus is made during the first twelve months of employment, such amounts shall be pro-rated over the months in which the individual is employed prior to the month in which such premium or bonus was paid; and (v) if a commission or internet incentive is paid during
LA3:752821.27 11
the first calendar year in which the individual is employed, it shall be pro-rated over the months of such calendar year during which the individual is employed.
(g) For purposes of calculating service, disability or deferred vested pensions under Section 5A.4(c)(iii)(C), an Employee’s Compensation shall be determined according to the following rules.
(1) Compensation shall mean basic pay (determined prior to any election by the Employee to reduce his salary under section 125 or section 401(k) of the Code or both), overtime pay, sales incentives and short term disability pay, but excluding all other compensation. Compensation shall also exclude severance payments and payment of any compensation made after Termination (or the date the Employee ceases to be covered under Section 5A.4(c)(2)(iii)(C)).
(2) For the purpose of determining Compensation for any month, the following shall apply: (i) overtime pay and sales incentives paid during a calendar year shall be divided by twelve and spread over the twelve months of the calendar year in which such amounts were paid; (ii) if the Employee Terminates (or ceases to be covered under the applicable formula) before December 1 of a calendar year, the overtime pay and sales incentives paid during the calendar year of the Employee’s Termination shall be pro-rated over the months in the calendar year before the Employee’s Termination; and (iii) if overtime pay or sales incentives are paid during the first calendar year in which the individual is employed, they shall be pro-rated over the months of such calendar year during which the individual is employed.
(h) For purposes of calculating the Account Balance Pension in Section 5E.2, an Employee’s Compensation shall mean the amounts specified in subsection (h)(1) below and excluding amounts specified in subsection (h)(2) below.
(1) Compensation shall include the following amounts:
(A) The Management Employee’s salary, wages, fees for professional services and other amounts received (without regard to whether or not an amount is paid in cash) for personal services actually rendered in the course of employment with a Participating Company to the extent the amounts are includable in gross income, including overtime, commissions, compensation based on profits, tips, bonuses, all foreign earned income as defined in Code section 911(b) (whether or not excludable from gross income under Code section 911), and any amounts that are excluded from income under Code sections 931 or 933; and
(B) Elective deferrals (as defined in Code section 402(g)(3)) and amounts that are contributed or deferred by the Participating Company at the election of the Management Employee and that are not includable in gross income of the Management Employee by reason of Code sections 125 or 132(f).
LA3:752821.27 12
(2) Compensation shall not include the following amounts:
(A) Contributions made to a plan of deferred compensation, to the extent that, before the application of the limitations of Code section 415 to such plan, such contributions are not includable in the gross income of the Management Employee for the taxable year in which such contributions were contributed;
(B) Contributions made on behalf of a Management Employee to a simplified employee pension plan described in Code section 408(k), to the extent such contributions are not excludable in the Management Employee’s gross income;
(C) Any distributions from a plan of deferred compensation, regardless of whether such amounts are includable in the gross income of the Management Employee;
(D) Amounts realized from the exercise of a non-qualified stock option;
(E) Amounts realized when restricted stock or property held by the Management Employee becomes freely transferable or is no longer subject to a substantial risk of forfeiture, as described in Code section 83;
(F) Amounts realized from the sale, exchange, or other disposition of stock acquired under an incentive stock option;
(G) Other amounts that receive special tax benefits, including premiums for group term life insurance, to the extent that the premiums are not includable in the Management Employee’s gross income;
(H) Contributions (whether or not pursuant to a salary reduction agreement) towards the purchase of an annuity described in Code section 403(b) (whether or not such contributions are excludable from the gross income of the Management Employee);
(I) Reimbursements or other expense allowances, fringe benefits (cash and noncash), moving expenses, deferred compensation, and welfare benefits; and
(J) Except as set forth in paragraph (3) below, amounts earned while the Management Employee is not a Covered Employee or a Management Employee or while employed by a Non-Participating Company, or, except as explicitly stated elsewhere in the Plan, an Interchange Company or a Portability Company. In addition, Compensation shall not include amounts paid prior to January 1, 2001. Finally, Compensation shall not include any amount paid for
LA3:752821.27 13
any period for which Participant earns any Pension Calculation Service under any Article other than Article V-E.
(3) Compensation shall also include amounts described in paragraph (1) above that are paid in the month in which the Covered Employee Terminates or in any of the following three months.
(i) Effective November 4, 2002, this subsection (i) shall apply only to a Participant employed by each of Qwest Dex, Inc. (“Dex”) and SGN LLC (“SGN”) pursuant to the Joint Management Agreement (“Agreement”) by and among the Company, Dex, SGN and Dex Holding LLC. During the period that such Participant is so employed by both Dex and SGN (or until the Agreement is no longer in effect if earlier), such Participant’s Compensation shall be determined by treating SGN as a Participating Company.
1.10A “Compensation Credit” shall have the meaning set forth in Article V-E.
1.11 “Covered Compensation” means, with respect to a Salaried Employee, “covered compensation” within the meaning of Code Section 401(l)(5)(E).
1.12 “Covered Employee” means an Employee, except for
(i) A Leased Employee;
(ii) A non-resident alien who either (A) receives no earned income (within the meaning of Code section 911(d)(2)) from any Participating Company that constitutes income from sources within the United States (within the meaning of Code section 861(a)(3)) or (B) receives earned income from a Participating Company that constitutes income from sources within the United States, but such income is exempt from United States income tax by an income tax treaty or convention, and who was not covered by a Predecessor Plan on September 30, 1980;
(iii) any Employee or individual who agrees he shall not participate in the Plan;
(iv) any Occupational Employee who is classified as an ETC Employee;
(v) Occupational Employees employed by Communications Broadband, that is, Occupational Employees covered by the Broadband Construction Agreement between Participating Companies and the Communications Workers of America;
(vi) for the period from June 30, 2000 until January 1, 200l, any Employee who was an employee of Qwest (or its subsidiaries) immediately before the merger of U S WEST into Qwest;
LA3:752821.27 14
(vii) for periods from the date of the offer until January 1, 2001, any person given an offer of employment (or reemployment, whether the earlier Termination occurred on or after July 10, 2000) to become a Management Employee on or after July 10, 2000;
(viii) Employees who become Management Temporary Employees on or after January 1, 2001;
(ix) an Occupational Employee employed by El Paso Telephone Company; or
(x) effective for an Occupational Employee working on or after August 16, 1998, an Occupational Employee employed in a student classification.
1.12A “Cutoff Date” is defined in Section 5B.1(c)(2).
1.12B “DLS Equivalent” means a benefit having the same value as the benefit that such DLS Equivalent replaces.
(a) For purposes of the benefits earned under Articles V-A, V-B and V-D, the determination of the DLS Equivalent shall be based on the actual age of the Participant, Spouse, or Beneficiary, as applicable, on the Pension Effective Date and the DLS Factors in effect on the Pension Effective Date; the resulting amount shall not thereafter be changed, regardless of any subsequent change in the DLS Factors, even if the Participant does not elect to commence benefits on the Pension Effective Date. For example, if a Participant is eligible to start benefits prior to age 65, but elects to delay the Annuity Starting Date until age 65, the Minimum Amount (as defined in Section 5D.3) shall be calculated as of the Pension Effective Date and shall not be adjusted to reflect any change in the DLS Factors or the fact that payments commence at a later date.
(b) For purposes of the benefits earned under Article V-E, the determination of the DLS Equivalent shall be based on the actual age of the Participant, Spouse, or Beneficiary, as applicable, on the Annuity Starting Date and the DLS Factors in effect on the Annuity Starting Date; the resulting amount shall not thereafter be changed, regardless of any subsequent change in the DLS Factors.
1.12C “DLS Factors” means the actuarial equivalence factors based on the “applicable interest rate” using the annual interest rate on 30-year Treasury securities as specified by the Commissioner of Internal Revenue (“IRS Rate”) and the “applicable mortality table.”
(a) The “applicable interest rate” as of any date in a “stability period” shall be determined as of a “look-back period;” provided, however, that the “applicable interest rate” shall not exceed 9% per annum.
(1) This paragraph (1) applies to (i) all Occupational Participants other than Applicable Occupational Participants and (ii) Management Participants whose
LA3:752821.27 15
Pension Effective Date occurs before August 1, 1999. The “stability period” shall be a calendar quarter and the “look-back period” shall be the IRS Rate for the fourth month preceding the “stability period.”
(2) (A) If paragraph (1) does not apply, the “stability period” shall be a calendar month and the “look-back period” shall be the average of the IRS Rates for the first through fifth months preceding the “stability period.”
(B) Solely for determining the DLS Equivalent of the Normal Retirement Pension under Articles V-A or V-B, in either case for purposes of Section 6.5 and for determining the single-sum Actuarial Equivalent for purposes of Section 6.7, the “applicable interest rate” for Pension Effective Dates during the period August 1, 2000 (or such later date as applicable to the Applicable Occupational Participant) through July 31, 2001 shall be 5.58% or, if less, the “applicable interest rate” using the “stability period” and the “look-back period” specified in paragraph (2)(A).
(C) This paragraph (C) applies only to Participants described in paragraph (2)(A) who have earned a service pension under Sections 5A.1(a) or 5B.1(a) and whose Pension Effective Date occurs during the period August 1, 2000 (or such later date as applicable to the Applicable Occupational Participant) through July 31, 2001. Solely for determining the DLS Equivalent of the Normal Retirement Pension under Articles V-A or V-B for purposes of Section 6.5, the “applicable interest rate” for such a Participant shall be the lowest “applicable interest rate,” determined pursuant to Subsection (c), for any calendar month from August 2000 up to and including the month in which the Participant’s Pension Effective Date occurs.
(b) The “applicable mortality table” shall be the mortality table specified by the Commissioner of Internal Revenue in revenue rulings, notices, or other guidance. With respect to Annuity Starting Dates prior to December 31, 2002, the table is set forth in Revenue Ruling 95-6. With respect to Annuity Starting Dates on or after December 31, 2002 (except as set forth in the next sentence), the table is set forth in Revenue Ruling 2001-62 unless modified or superceded. With respect to the calculation of the DLS Pension in Section 5D.2(d)(1) and the Minimum Pension in Section 5D.3, if the Pension Effective Date is prior to December 31, 2002, the applicable annuity amount shall be calculated using the table set forth in Revenue Ruling 95-6, irrespective of the Annuity Starting Date.
1.13 “Demotion” or “Demoted” means a transfer to an Occupational job title or classification that has a Pension Band number that is lower than the Pension Band number related to the job title and classification from which the Employee was transferred. In the case of Sales Personnel, Demotion means a transfer to an Occupational job title or classification that has a monthly pension benefit that is lower than the monthly pension benefit of the Participant’s prior job title or classification. A Demotion does not include a transfer from an Occupational position to a Management position, or from a Management position to an Occupational position.
LA3:752821.27 16
1.14 “Determination Year” means the Plan Year.
1.15 “Disabled; Disability.”
(i) A Participant who is an Occupational Employee shall be considered to be Disabled under this Plan if the Participant has become totally disabled as a result of sickness or injury, other than, prior to January 1, 1993, by accidental injury arising out of and in the course of employment by a Participating Company. For periods on and after November 7, 1994, the Disability of an Occupational Employee who is not subject to collective bargaining shall be determined pursuant to the provisions of subsection 1.15(ii).
(ii) Effective January 1, 1997, Disability shall be defined in accordance with Appendix J for Participants covered by Appendix J.
(iii) For purposes of this Plan, the term “Disability Plan” shall include short-term or long-term disability plan (or similar plan) maintained by a Participating Company or Non-Participating Company.
1.15A “Eligible Separation” means, on and after the Separation Time, a separation from the service of a Participating Company (a “Termination”) if the separation is for any reason other than (1) transfer to another Participating Company or Non-Participating Company or (2) employment (on the next business day following separation from the service of a Participating Company) with a Portability Company if the provisions of the Mandatory Portability Agreement apply to the Participant. An individual who transfers to a Non-Participating Company will incur an Eligible Separation when he or she separates from the service of a Non-Participating Company for any reason other than a transfer as described above. For purposes of determining whether a Participant is entitled to a distribution from this Plan, if Plan assets (and liabilities) are transferred to another plan in connection with a corporate transaction, no Eligible Separation shall occur with respect to Participants whose benefits are transferred. Prior to the Separation Time, Eligible Separation shall be defined in accordance with the Plan as in effect prior to the Separation Time.
1.16 “Employee”
(i) “Employee” means any individual employed as a common law employee by any Participating Company on a full-time or part-time basis who receives compensation other than a pension, retainer, or fee under contract.
(ii) An individual shall not be an “Employee” if he meets any of the following: (1) the individual was performing services for any Participating Company under an agreement, contract, or any other arrangement pursuant to which the individual is characterized or classified by the Participating Company as an independent contractor (or an employee of an independent contractor), (2) the individual’s payments for services for any Participating Company have not been initially treated by any Participating Company as subject to wage withholding under the Code and applicable state law, (3)
LA3:752821.27 17
any individual who was not initially classified by a Participating Company as a common law employee of a Participating Company, (4) any individual who was initially classified as a Leased Employee or (5) any other individual who was leased by a Participating Company from an entity that is the individual’s employer of record. Notwithstanding paragraph (i) above, if the Company determines or agrees that the classification or treatment was incorrect and that the individual was or is in fact a common law employee, such an individual shall not be an Employee (or Covered Employee or Participant) either retroactively or prospectively; however, if the Company informs the individual in writing that he is an Employee for purposes of the Plan, he shall be an Employee with respect to service after the date specified in such writing. Notwithstanding the foregoing, if an individual files a claim with the Committee in accordance with Section 13.2 within 60 days of such initial classification, and the Committee determines that such classification is incorrect, the determination by the Committee shall be given retroactive effect.
(iii) Solely for purposes of the requirements of Code section 414(n)(3) (but only to the extent they relate to this Plan), including counting service for eligibility to participate and vesting, “Employee” shall also mean (i) any individual described in the preceding paragraph (ii) who is in fact a common law employee and (ii) Leased Employees. Notwithstanding the foregoing, if such Leased Employees constitute less than twenty percent of the Participating Companies’ non-highly compensated work force within the meaning of Code section 414(n)(5)(C)(ii), “Employee” shall not include Leased Employees covered by a plan described in Code section 414(n)(5) unless otherwise provided in the Plan.
(iv) By way of example, assume a technician is leased from an entity (or hired as an independent contractor) on May 1, 1998. The Company later determines or agrees that the individual has in fact always been a common law employee and reclassifies him as such (including subjecting him to wage withholding) on June 1, 2000; however, he continues as a technician. Solely for purposes of the requirements of Code section 414(n)(3) (but only to the extent they relate to this Plan), including counting service for eligibility to participate and vesting, this individual will be treated as an Employee on and after May 1, 1998. However, the individual shall not be an Employee (or Covered Employee or Participant) for any other purpose with respect to employment either prior or subsequent to June 1, 2000, even though other technicians of the Company are treated as Employees. The individual shall not become an Employee (or Covered Employee or Participant) unless and until the Company informs the individual in writing that he is an Employee for purposes of the Plan.
1.16A “Employee Matters Agreement” means the Employee Matters Agreement executed by Old U S WEST and USW-C, Inc. (subsequently known as U S WEST, Inc. and later merged into Qwest) in connection with the corporate split-off of USW-C, Inc. The existence of any provision in this Plan, including Appendix I, shall in no way override the rules of the Employee Matters Agreement as to the assumption of liabilities by the Media Plan nor give rise to any inference as to whether or not an individual is a Communications or Media Participant.
LA3:752821.27 18
1.17 “Employment Commencement Date” means the date on which an Employee first performs an Hour of Service for a Participating Company.
1.18 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations and rulings in effect thereunder from time to time.
1.19 “Excess Final Average Compensation” means that portion of an Employee’s Final Average Compensation that exceeds the Employee’s Covered Compensation.
1.19A “Ex-MediaOne Employees” mean Communications Participants who were employees and former employees of the Cable Companies prior to the Separation Time. The benefits earned prior to the Separation Time by Ex-MediaOne Employees are set forth in Appendix I to the Plan.
1.20 “Ex-NewVector Participant” is defined in Section 5D.8(a)(3).
1.21 “Final Average Compensation” is used to calculate benefits of a Management Participant under Article V-B and V-D, and an Occupational Participant who is a Sales Employee under Section 5A.4(c)(2)(ii), (iii) and (iv). For these purposes, Final Average Compensation means the average annual Compensation paid to an Employee during the 60 consecutive calendar months for which his Compensation was highest within the last 120 consecutive calendar months immediately preceding his Termination (or, if earlier, the date set forth in the next sentence) or the average of Compensation for such entire period if such period is less than 60 calendar months. Except as otherwise provided, for purposes of Article V-B and V-D, if a Management Participant transfers to an Occupational position without Terminating, the date of transfer shall be substituted for the date of Termination in the preceding sentence; for purposes of Section 5A.4(c)(2)(ii), (iii) and (iv), if a Sales Employee transfers to an non-Sales Employee position without Terminating, the date of transfer shall be substituted for the date of Termination in the preceding sentence. For purposes of determining Final Average Compensation, if during the last 120 consecutive month period there was any period not included in an Employees’ Pension Calculation Service, such period shall be ignored in determining the 60 consecutive month period so that any gap in consecutive months of compensation service is bridged for this purpose, provided that such period shall not be ignored for purposes of determining the last 120 consecutive period. Notwithstanding the foregoing, if the Participant Terminates and is reemployed by a Participating Company and the Participant’s benefits with respect to the two periods of employment are determined separately, then the Final Average Compensation determined with respect to the second period of employment shall not include any Compensation paid prior to the first Termination.
1.22 “Five-Percent Owner” means:
(a) With respect to a corporation, any person who owns (either directly or indirectly according to the rules of Code section 318) more than 5% of the value of the outstanding stock of the corporation or stock possessing more than 5% of the total combined voting power of all stock of the corporation.
LA3:752821.27 19
(b) With respect to a non-corporate entity, any person who owns (either directly or indirectly according to rules similar to those of Code section 318) more than 5% of the capital or profits interest in the entity.
A person shall be a Five-Percent Owner for a particular year if such person is a Five-Percent Owner at any time during such year.
1.23 “Former Affiliate” means any one or more of the following: (a) AT&T, American Information Technologies Corporation, Bell Atlantic Corporation, BellSouth Corporation, NYNEX Corporation, Pacific Telesis Group, Southwestern Bell Corporation, Old U S WEST, any subsidiary of any such company (at any time both before and after January 1, 1984) that participates in a defined benefit pension plan maintained by any such company and with respect to which such company has an interchange agreement comparable to an Interchange Agreement, and (b) Bell Communications Research, Inc. and (c) Advanced Mobile Phone Service, Inc.
1.24 “Former Affiliate Plan” or “Plan of a Former Affiliate” means any defined benefit pension plan maintained by any Former Affiliate that is comparable to the Plan or any other qualified defined benefit pension plan maintained by the Company.
1.24A “Former NewVector Participant” is defined in Section 5D.8.
1.25 “Former Participant” means a Participant who has terminated employment with all Participating Companies and is vested (based on the vesting provisions of the Plan or Pre-97 Plan at the time of Termination) in a benefit under the Plan. Immediately following the Separation Time, the only Former Participants in this Plan shall be (1) Terminated Communications Employees (as defined in the Employee Matters Agreement) and (2) Communications Employees (as defined in the Employee Matters Agreement) who terminate employment at the Separation Time and do not report for work for a Participating Company immediately following the Separation Time.
1.26 “Highly Compensated Employee” means:
(a) Any Employee who performs service for a Participating Company or a Non-Participating Company during the Determination Year and who, during the Look-Back Year received Compensation from a Participating Company or Non-Participating Company in excess of $80,000 (as adjusted by the Secretary of the Treasury) and was a member of the “top-paid group” for such year. The “top-paid group” for a Look-Back-Year shall consist of the top 20% of Employees ranked on the basis of Compensation received during the year excluding Employees described in Section 414(q)(8) of the Code and Treasury Regulations thereunder.
(b) A Five-Percent Owner at any time during the Look-Back Year or Determination Year.
1.27 “Hour of Service” means each hour for which an Employee is paid, or entitled to payment, for the performance of duties for a Participating Company.
LA3:752821.27 20
1.28 “Interchange Agreement” means an agreement among one or more Participating Companies and one or more Associated or Allied Companies or Former Affiliates that provides for the portability of benefits and mutual recognition of Term of Employment with respect to certain Employees who are employed by a Participating Company and were previously employed by an Associated or Allied Company or Former Affiliate or who are employed by an Associated or Allied Company or a Former Affiliate and were previously employed by a Participating Company. An Interchange Agreement shall be applicable for an interchange period, which shall be such period of time as is specified in the Interchange Agreement.
1.29 “Interchange Company” means a company, other than a Participating Company, that is a party to an Interchange Agreement and any subsidiary of such company (that participates in a defined benefit pension plan maintained by any such company or with respect to which such company has an interchange agreement comparable to an Interchange Agreement), but only so long as the Interchange Agreement is in force and effect. Notwithstanding any other provision of the Plan, any reference to a person employed by an Interchange Company (or any similar reference) shall be limited to employees covered by the Interchange Agreement.
1.30 “Interchange Company Pension Plan” means a defined benefit pension plan maintained by an Interchange Company that is comparable to the Plan or to any other defined benefit pension plan qualified under Code section 401(a) and maintained by the Company.
1.30A “Interest Credit” shall have the meaning set forth in Article V-E.
1.30B “Leased Employee” means any person who is not a common law employee of a Participating Company or a Non-Participating Company and who performs services for a Participating Company or a Non-Participating Company on a substantially full-time basis for a period of at least one continuous year pursuant to an agreement between the Participating Company or Non-Participating Company and another person, and such services are performed under the primary direction or control of the Participating Company or Non-Participating Company.
1.31 “Life Annuity” means a single life annuity that provides retirement payments and requires the survival of the Participant or the Participant’s beneficiary as one of the conditions for any payment or possible payment under the annuity.
1.32 “Look-Back Year” means the twelve months immediately preceding the Determination Year.
1.33 “Management Employee” means an Employee who is a management Salaried Employee, excluding, for periods prior to the Separation Time, Participants employed by the Cable Companies. Notwithstanding the foregoing or any other provision of this Plan, if an Occupational Employee is temporarily promoted to a management Salaried position, such Employee shall not be a Management Employee and shall not be eligible for any benefits under the Management Part; in lieu thereof, such Employee shall remain an Occupational Employee during such period and shall continue to earn benefits under the Occupational Part during such
LA3:752821.27 21
period, irrespective of the length of such temporary promotion. In the case of Participants temporarily promoted prior to 2001, the preceding sentence shall only apply during the first twelve months of such temporary promotion; thereafter, the person shall become a Management Employee.
1.33A “Management Part” means for periods prior to January 1, 1993, the separate U S WEST Management Pension Plan and, for periods on and after January 1, 1993, the provisions of the Plan that apply to Management Employees. However, in the case a Participant whose benefit is described in Sections 5A.4(g), 5B.4, 5D.7 or 5E.6 (that is, a Participant who transfers from occupational to management status or vice-versa), the benefit is determined in accordance with the provisions of the Management Part only to the extent such provisions state that it is calculated under the Management Part (or state that it is calculated under the Related Management Plans and the applicable Related Management Plan is the Management Part). By way of example, assume a Participant is described in Section 5D.7(a); the benefit under Section 5D.7(a)(1)(A) is not considered paid under the Management Part merely because it is described in Article V-D. However, the benefits under Section 5D.7(a)(1)(B) and Section 5D.7(a)(2)(B) are considered to be paid under the Management Part.
1.34 “Mandatory Portability Agreement” means the agreement made effective January 1, 1985 among Old U S WEST, AT&T and one or more other companies to implement certain mandatory portability legislation passed by Congress, which agreement provides for the portability of benefits and mutual recognition of Term of Employment with respect to certain Employees who are employed by certain Participating Companies and were previously employed by a Portability Company or who are employed by a Portability Company and were previously employed by certain Participating Companies. The Mandatory Portability Agreement shall be applicable for such period of time as is specified therein.
1.34A “Media Participants” mean persons who are both (1) Participants in the Plan at the Separation Time and (2) “Media Employees” or “Terminated Media Employees,” as such terms are defined in the Employee Matters Agreement.
1.34B “Media Plan” means the MediaOne Group Pension Plan and any successor plan thereto.
1.35 “Modified Disability Pension” or “Modified Disability Benefit” means the disability pension set forth in Appendix J.
1.35A “NewVector” means U S WEST NewVector Group, Inc. prior to its sale to AirTouch Communications, Inc.
1.35B “New 1997 Rules” mean the changes to the Management Part (and the other changes to the Plan that only apply to Management Participants) effective on or after January 1, 1997, including without limitation the benefits provided by Article V-D, the new early retirement date provisions in Section 5B.3(b), the new lump sum option, the new increasing annuity options, the new factors in Appendix A, and the Modified Disability Benefit.
LA3:752821.27 22
1.36 “Non-Participating Company” means any corporation or other entity that is a member of a controlled or affiliated group (within the meaning of Code sections 414(b), (c), (m) and (o)) of which the Company is a member and that does not participate in the Plan, provided that such corporation or entity shall only be a Non-Participating Company during the period it is a member of such group. Prior to the merger of U S WEST into Qwest, such companies were determined with reference to U S WEST; Qwest and its subsidiaries were not Non-Participating Companies. From the date of such merger until December 31, 2000, Qwest and any 80% or more owned entity that was a subsidiary of Qwest prior to the merger were Non-Participating Companies.
1.37 “Non-Highly Compensated Employee” means any Employee who is not a Highly Compensated Employee.
1.38 “Non-Salaried Employee” means an Employee whose position is subject to automatic wage progression or whose pay is not at a monthly or annual rate.
1.39 “Normal Retirement Age” means for all Occupational Participants and, except to the extent set forth in the next sentence, all Management Participants, the later of (i) age 65 or (ii) the earlier of the date the Participant becomes Vested or the date that is five years after the Employment Commencement Date or Reemployment Commencement Date. However, solely for purposes of Article V-E, Normal Retirement Age means the later of the date the Management Participant commences participation in Article V-E or January 1, 2001. The preceding sentence shall not apply for purposes of Articles V-A, V-B, or V-D. A Participant shall not be entitled to retire on his Normal Retirement Date if he is employed by a Participating or Non-Participating Company on such date. Subject to Section 13.9, such a Participant shall not be entitled to commence pension benefits until the first day after his Eligible Separation.
1.40 “One-Year Period of Severance” means a 12 consecutive month period of absence commencing on the Severance Date and ending on the first anniversary of that date during which the Participant did not perform an Hour of Service.
1.41 “Occupational Employee” means (a) a non-management Non-Salaried Employee who is not covered by a collective bargaining agreement or (b) an Employee who is a member of a collective bargaining unit represented by a union that has agreed to participate in this Plan. Notwithstanding the foregoing or any other provision of this Plan, if an Occupational Employee is temporarily promoted to management Salaried position, such Employee shall remain an Occupational Employee during such period and shall continue to earn benefits under the Occupational Part during such period, irrespective of the length of such temporary promotion. In the case of Participants temporarily promoted prior to 2001, the preceding sentence shall only apply during the first twelve months of such temporary promotion; thereafter, the person shall become a Management Employee.
1.41A “Occupational Part” means for periods prior to January 1, 1993, the separate U S WEST Pension Plan and shall mean, for periods on and after January 1, 1993, the provisions of this Plan that apply to Occupational Employees. However, in the case of a Participant whose benefit is described in Sections 5A.4(g), 5B.4, 5D.7 or 5E.6 (that is, a
LA3:752821.27 23
Participant who transfers from occupational to management status or vice-versa), the benefit is determined in accordance with the provisions of the Occupational Part only to the extent such provisions state that it is calculated under the Occupational Part (or state that it is calculated under the Related Occupational Plans and the applicable Related Occupational Plan is the Occupational Part). By way of example, assume a Participant is described in Section 5A.4(g)(i); the benefit under Section 5A.4(g)(i)(A)(1) is not considered paid under the Occupational Part merely because it is described in Article V-A. However, the benefits under Section 5A.4(g)(i)(A)(2) and 5A.4(g)(i)(B)(2) are considered to be paid under the Occupational Part.
1.41B “Old U S WEST” means U S WEST, Inc., a Delaware corporation, prior to the Separation Time. Effective at the Separation Time, U S WEST, Inc. was renamed MediaOne Group, Inc. On or after the Separation Time, MediaOne Group, Inc. (and its subsidiaries or related companies) shall not be Participating Companies or Non-Participating Companies.
1.41C “PBGC” means the Pension Benefit Guaranty Corporation.
1.42 “Participating Company” means any Subsidiary that, with the consent of the Plan Design Committee, participates in the Plan. Prior to the merger of U S WEST into Qwest on or about June 30, 2000, U S WEST was also a Participating Company; however, Qwest did not become a Participating Company until January 1, 2001. Similarly, no subsidiaries of Qwest owned prior to the U S WEST merger were Participating Companies prior to January 1, 2001. KPNQwest, Qwest Digital Media and Qwest Cyber.Solutions are not Participating Companies.
1.43 “Participant” means a Covered Employee who has satisfied the requirements under Article III.
1.44 [Intentionally Left Blank]
1.45 “Pension Band” means the band set forth in the table in Appendix F.
1.46 “Pension Calculation Service” shall have the meaning set forth in Article II.
1.46A “Pension Effective Date” means the day following the date of the Eligible Separation or, if earlier, the Required Beginning Date. However, in the case of a Participant who fails to return to employment at the end of a leave of absence and who has not previously been notified by a Participating Company of his Termination, or given notice to a Participating Company of his Termination, the Pension Effective Date shall be the day after the end of the leave of absence.
1.47 “Pension Factor” means the factor set forth in the Tables in Appendix G.
1.47A “Percentage Credit” shall have the meaning set forth in Section 5D.2.
LA3:752821.27 24
1.48 “Period of Service” means the period commencing on the Employee’s Employment Commencement Date or Reemployment Commencement Date and ending on the Employee’s Severance Date. For purposes of vesting and participation, an Employee’s Period of Service includes service with the Company, a Participating Company, a Non-Participating Company or, to the extent set forth in Appendix B, an Interchange Company.
1.49 “Period of Severance” means the period of time commencing on the Severance Date and ending on the date on which the Employee next performs an Hour of Service for a Participating Company.
1.50 “Plan” means the Qwest Pension Plan, formerly called the U S WEST Pension Plan.
1.51 “Plan Administrator” means the Committee.
1.52 “Plan Sponsor” means the Company.
1.53 “Plan Year” means the fiscal year of the Plan, which shall be the calendar year.
1.54 “Portability Company” means a company other than a Participating Company that is a party to the Mandatory Portability Agreement and any subsidiary or affiliate of such company identified as an interchange company in the Mandatory Portability Agreement. Notwithstanding any other provision of the Plan, any reference to a person employed by a Portability Company (or any similar reference) shall be limited to “covered employees” as defined in the Mandatory Portability Agreement.
1.55 “Portability Company Pension Plan” means a defined benefit pension plan maintained by a Portability Company that is comparable to the Plan or to any other defined benefit pension plan qualified under Code section 401(a) and maintained by the Company.
1.56 “Predecessor Plan” means the pension plan provisions of any Participating Company’s Plan for Employees’ Pensions, Disability Benefits and Death Benefits as such plan existed from time to time prior to October 1, 1980 or the Bell System Pension Plan as such plan existed from time to time prior to January 1, 1984.
1.57 “President,” “Chairman,” “Board of Directors” means the President, the Chairman of the Board of Directors, and the Board of Directors, respectively, of the Company.
1.57A “Pre-97 Management Participant” means a Participant who: (1) is an Active Occupational Participant on or after January 1, 1997 and (2) earned Pension Calculation Service under the Management Part before, but not on or after, January 1, 1997 and (3) is not an Active Participant at any time after June 30, 2001. (If a Participant commences benefits, the determination of his status with respect to benefits already accrued shall be made at the Annuity Starting Date, and shall be made by disregarding any subsequent employment.) Any reference to a Pre-97 Management Participant shall only be deemed a reference to the benefits earned by the
LA3:752821.27 25
Participant under the Management Part earned as of the last day such individual is covered under the Management Part.
1.57B “Pre-97 Plan” means the terms of the U S WEST Pension Plan, as in effect on the earlier of December 31, 1996 or the date specified, supplemented as follows.
(a) First, if the individual dies on or after January 1, 1997 and is entitled to a death benefit under Article VII hereof (or a predecessor provision under the Pre-97 Plan), the rules of Section 7.4 and Appendix L shall apply.
(b) Second, such Plan document shall be supplemented by any changes required by law to the extent that the law requires that such changes be applied to that particular individual.
(1) For example, Participants with a deferred vested pension under the terms of the Pre-97 Plan whose benefits under this Plan were not in pay status as of August 23, 1984 may elect a Qualified Joint and 50% Survivor Annuity (as set forth in Section 6.2(a)(2)) if the Participant completed at least one Hour of Service after September 1, 1974 and terminated employment before the first day of the first Plan Year beginning on or after January 1, 1976.
(2) In addition, to the extent not already provided, a Qualified Pre-Retirement Survivor Annuity (in the form payable to Former Participants as set forth in Section 5A.5 or 5B.5, as applicable) shall be paid to the surviving Spouse of the following Former Participants who die prior to the Annuity Starting Date and are married at the time of their death upon the occurrence of any one of the following:
(i) The death of a married Former Participant who had at least one Hour of Service or who was entitled to at least one hour of paid leave after August 23, 1984, who was entitled to a deferred vested pension under the Pre-97 Plan; or
(ii) The death of a married Former Participant who separated from service on or after January 1, 1976, but prior to August 23, 1984, who was entitled to receive a deferred vested pension under the Pre-97 Plan by virtue of completing 10 years of vesting service, and whose payments had not yet commenced as of August 23, 1984.
(3) Finally, except for those Former Participants who were already receiving a disability pension under Section 5B.2 of the Pre-97 Plan, the disability provisions in Section 5B.2 shall no longer be available under the Pre-97 Plan.
1.58 “Promotion” or “Promoted” means, subject to Section 5A.4(e)(i)(B), a transfer to an Occupational job title or classification that has a Pension Band number that is higher than the Pension Band number related to the job title or classification from which the Employee was transferred. In the case of Sales Personnel, Promotion means transfer to an
LA3:752821.27 26
Occupational job title or classification that has a monthly pension benefit that is greater than the monthly pension benefit of the Participant’s prior job title or classification. A Promotion does not include a transfer from an Occupational position to a Management position, or from a Management position to an Occupational position.
1.58A “Protected Participant” or “Protected Employee” means a Participant who (1) is an Active Management Participant on December 31, 2000 and (2) either (i) has twenty (20) years of Term of Employment as of December 31, 2000 or (ii) will meet all of the conditions for a Service Pension under Section 5B.1(a) on or before December 31, 2003 (other than Termination) assuming he or she continues to work for the Participating Company through that date. However, no Employee who was given an offer of employment or reemployment (whether the prior termination occurred before or after July 10, 2000), on or after July 10, 2000, shall be a Protected Participant. If a Protected Participant Terminates on or after January 1, 2001 and is subsequently reemployed as a Management or Occupational Employee with a Participating Company, such individual shall not be a Protected Participant with respect to any periods of reemployment and such Employee shall not earn any benefits under Articles V-B or V-D with respect to such periods of reemployment. Benefits earned with respect to such reemployment shall be governed by Article V-A or V-E, as applicable. A Participant is not a Protected Participant if he is either an Occupational Participant on December 31, 2000 or a participant in a Related Occupational Plan or a Related Management Plan (other than the Management Part) on December 31, 2000 or employed by a Portability Company on December 31, 2000.
1.59 “Qualified Joint and Survivor Annuity” means an annuity for the life of the Participant with a survivor annuity for the life of the Participant’s surviving spouse that is 50% of, or if the Participant so elects, 100% of, the amount of the annuity payable during the joint lives of the Participant and his Spouse, which annuity shall be the Actuarial Equivalent of a Life Annuity. Prior to July 1, 2001, only a Participant who is eligible for a service pension under Section 5A.1(a) or a disability pension under Section 5A.2(a) or a Management Participant may elect a survivor annuity that is equal to the amount payable during the joint lives of the Participant and his Spouse. A Qualified Joint and Survivor Annuity for an unmarried Participant is an annuity for the life of the Participant. See Section 6.2 for other rules.
1.60 “Qualified Pension Plan” means any defined benefit pension plan, qualified under Code section 401(a), which is or was maintained by the Company, any other Participating Company, or any other Subsidiary, any Former Affiliate, any Interchange Company or any Portability Company. For this purpose, the definition of “Subsidiary” shall be modified to substitute the phrase “more than 50%” for “80% or more.”
1.61 “Qualified Preretirement Survivor Annuity” means a survivor annuity for the life of the surviving spouse of the Participant who dies before his Annuity Starting Date.
1.61A “Qwest” means Qwest Communications International Inc. and any successor entity.
1.61B “Qwest Stock” means $0.01 par value common stock of Qwest.
LA3:752821.27 27
1.62 “Reemployment Commencement Date” means the first date, following a Period of Severance that is not required to be taken into account under this Plan, on which the Employee performs an Hour of Service for a Participating Company.
1.62A “Required Beginning Date” shall be the April 1 of a calendar year following the calendar year in which the Participant attains age 70-1/2.
1.62B “Related Management Plans” mean (1) the Management Part or (2) a Predecessor Plan as a management employee or (3) a substantially similar pension plan (as a management employee) maintained by an Interchange Company with which the Participating Companies have an Interchange Agreement or by a Portability Company with which the Participating Companies have the Mandatory Portability Agreement, if the Participant’s Pension Calculation Service under such other plan is recognized under this Plan in accordance with applicable provisions of such Interchange Agreement or the Mandatory Portability Agreement. A Participant shall be treated as covered under a Related Management Plan only during the period he earns pension calculation service under such plan and not during any other period even though he may retain benefits under such plan or be considered a participant under such plan after his employment ceases.
1.62C “Related Occupational Plans” mean (1) the Occupational Part or (2) a Predecessor Plan as an occupational employee or (3) substantially similar pension plan (as an occupational employee) maintained by an Interchange Company with which the Participating Companies have an Interchange Agreement or by a Portability Company with which the Participating Companies have the Mandatory Portability Agreement, if the Participant’s Pension Calculation Service under such other plan is recognized under this Plan in accordance with applicable provisions of such Interchange Agreement or the Mandatory Portability Agreement. A Participant shall be treated as covered under a Related Occupational Plan only during the period he earns pension calculation service under such plan and not during any other period even though he may retain benefits under such plan or be considered a participant under such plan after his employment ceases.
1.63 “Salaried Employee” means an employee whose pay is at a monthly or annual rate and whose position is not subject to automatic wage progression.
1.63A “Sales Employee” or “Sales Personnel” means an Occupational Participant not covered by the regular Pension Band formula in Section 5A.4(c)(i). As of January 1, 2001, the only Sales Personnel are Commission Directory Sales Advertising Personnel covered by Section 5A.4(c)(ii), Sales Consultants and Home Office Sales Consultants covered by Section 5A.4(c)(iii) and Dex-IBEW Commissioned Sales Employees covered by Section 5A.4(c)(iv).
1.63B “Separation Time” shall be defined in accordance with the Employee Matters Agreement.
1.64 “Severance Date” means the first to occur of (a) the date on which an Employee resigns, retires, is discharged, or dies, or (b) the first anniversary of the first date of a period in which an Employee remains absent from service (with or without pay) with a
LA3:752821.27 28
Participating Company for any reason other than resignation, retirement, or discharge, such as vacation, holiday, sickness, leave of absence or layoff; provided however, that if the Employee is absent from service (i) by reason of the pregnancy of the Employee, (ii) by reason of the birth of a child of the Employee, (iii) by reason of the placement of a child with the Employee in connection with the adoption of such child by such Employee, or (iv) for purposes of caring for such child for a period beginning immediately following such birth or placement, the Severance Date shall be the second anniversary of the first date of a period in which the Employee remains absent from service (with or without pay) with a Participating Company on account of such child care related absence. Notwithstanding the foregoing, the period between the first and second anniversaries of the first day of absence from work on account of a child care related absence is not included in Vesting Service nor treated as a Period of Severance.
1.64A “Social Security Retirement Age” means, subject to Code Section 415(b)(8), age 65 if the Participant attains age 62 before January 1, 2000 (i.e., born before January 1, 1938), age 66 if the Participant attains age 62 after December 31, 1999, but before January 1, 2017 (i.e., born after December 31, 1937, but before January 1, 1955), and age 67 if the Participant attains age 62 after December 31, 2016 (i.e., born after December 31, 1954).
1.65 “Spouse” means the individual to whom a Participant is legally married (on the earlier of the Participant’s death or Annuity Starting Date) pursuant to the laws of the state in which the Employee is domiciled at the time the determination of an individual’s status as a spouse is made. Spouse shall also include a former spouse to the extent that a qualified domestic relations order, as defined in Code section 414(p), requires such former spouse to be treated as a spouse or a surviving spouse.
1.65A “SPE Equivalent” means a service pension having the same lump sum value as the benefit that such SPE Equivalent replaces, as set forth below. This determination is relevant only for service pensions under Articles V-A or V-B. The determination of the SPE Equivalent shall be based on the actual age of the Participant or Spouse, as applicable, on the Pension Effective Date and the SPE Factors in effect on the Pension Effective Date; the resulting amount shall not thereafter be changed, regardless of any subsequent change in the SPE Factors. In all cases, the SPE Equivalent shall ignore any subsidy provided by any early retirement factors.
1.65B “SPE Factors” means the actuarial equivalence factors based on (i) a zero percent interest rate prior to age 65, and the “applicable interest rate” set forth in the definition of DLS Factors on and after age 65, and (ii) the mortality table set forth in Revenue Ruling 95-6.
1.66 “Subsidiary” means any corporation of which 80% or more of the voting stock is owned directly or indirectly by the Company and any other entity affiliated with the Company under the parent subsidiary rules set forth in Sections 414(b) or (c) of the Code.
1.66A “TOE Break” means a break in the continuity of the Participant’s Term of Employment, as set forth in Section 2.4(b).
LA3:752821.27 29
1.66B “Taxable Wage Base” means the contribution and benefit base in effect under Section 230 of the Social Security Act for each year.
1.66C “Temporary Employees” include any Employee (without respect to titles or job descriptions such as temporary work, project work, term assignment, temporary assignment etc.) who is performing an assignment which is not intended to be ongoing and which is intended to have a specified end date (by reference to a calendar end date or the project end date).
1.67 “Term of Employment” means a period of continuous employment of an Employee as provided in Article II.
1.67A “Termination” or “Terminate” or “Terminates” means a separation from the service of a Participating Company (other than a transfer to another Participating Company), whether or not the separation constitutes an Eligible Separation.
Notwithstanding the preceding sentence, the following rules apply if (and only to the extent that) the Participant’s Pension Calculation Service includes pension calculation service under a Related Occupational Plan or Related Management Plan: (i) a Termination shall not include a separation from the service of a Participating Company if the individual is employed (on the next business day following separation from the service of a Participating Company) with the Interchange Company or Portability Company that maintains the applicable Related Occupational Plan or Related Management Plan and (ii) Termination shall include a separation from the service of the Interchange Company or Portability Company that maintains the applicable Related Occupational Plan or Related Management Plan unless the Participant is employed (on the next business day following termination of employment from the Interchange Company or Portability Company) with a Participating Company (or with another Interchange Company or Portability Company, if the Participant’s Pension Calculation Service includes pension calculation service under a Related Occupational Plan or Related Management Plan maintained by the applicable Interchange Company or Portability Company). Accordingly, a Participant who leaves a Participating Company and is employed by a Portability Company the next day shall be Terminated if (y) he is not later employed by a Participating Company (because his service with the Portability Company is not counted under this Plan) or (z) he is later reemployed by a Participating Company, but his service with the Portability Company is not counted under this Plan for any reason. Similarly, a Participant who leaves a Portability Company and is employed by a Participating Company the next day shall be considered Terminated if his benefits under this Plan equal the sum of the benefit earned under the Portability Company’s plan and the benefit under this Plan (e.g. a benefit under Section 5A.4(g)(i)(A)) as opposed to a benefit under this Plan based on all service (e.g. a benefit under Section 5A.4(g)(i)(B)(2)). This paragraph shall in no way impact any Participant’s Pension Calculation Service, Term of Employment or any other service under this Plan, all of which shall be determined in accordance with Article II and Appendix B.
The immediately preceding paragraph shall not apply to a Management Employee whose Employment (or Reemployment) Commencement Date is on or after January 1, 2001 (whether or not he was previously an Employee). Accordingly, a person who becomes a
LA3:752821.27 30
Management Employee on the next business day following separation from the service of a Portability Company shall be treated as Terminated.
1.68 “Trust Agreement” means the agreement entered into between the Company or one of its Subsidiaries and the Trustee to provide for the investment and administration of the funds of the Plan (the “Trust Fund”).
1.69 “Trustee” means Boston Safe Deposit and Trust Company or any successor under the Trust Agreement.
1.70 “U S WEST” meant U S WEST, Inc., a Delaware corporation, after the Separation Time and prior to its merger into Qwest. Prior to the Separation Time, U S WEST, Inc. was named USW-C, Inc. and was a subsidiary of Old U S WEST. In connection with, and prior to, the separation, U S WEST Communications Group, Inc., a Colorado corporation, was merged with and into USW-C, Inc.
1.71 “Vested” means (i) a Participant who has completed five years of Vesting Service (to the extent set forth in Section 1.3 of Appendix I, using the definition in Section 2.38 of Appendix I for Ex-MediaOne Employees), (ii) a Participant who attains Normal Retirement Age while an Employee or (iii) a Participant who is vested pursuant to Section 14.3. However, all Account Balance benefits in Article V-E are Vested, even if the Participant is not Vested in the benefits in other Articles. In addition, Participants who are not employed by a Participating Company after the Separation Time shall not be vested unless they met the rules for vesting in effect under the Plan (or Pre-97 Plan) at the time they terminated employment.
1.72 “Vesting Service” means the periods of a Participant’s service considered in determining whether or not he is entitled to a benefit under the Plan. A Participant’s Vesting Service shall be computed as described in Article II.
1.73 “Year of Service” means, for purposes of participation and vesting for periods prior to January 1, 1990, a Plan Year during which an Employee completes at least 1,000 Hours of Service. An Employee shall be deemed to have completed 45 Hours of Service for each week in which he completes at least one Hour of Service; except that in the case of (i) any Employee who is a part-time Employee and (ii) any Employee hired for a period not exceeding three consecutive weeks and who is not employed for more than 30 days in a Plan Year, such Employee shall be deemed to have completed 10 Hours of Service for each day in which he completes at least one Hour of Service. An Employee who Terminates during a Plan Year shall be credited with a Year of Service, provided that he has completed at least 1,000 Hours of Service during the Plan Year. Years of Service with a corporation that is part of a controlled group of corporations of which the Company is a member, as determined pursuant to Code Section 414, shall be treated as Years of Service as provided in Article II. Years of Service with any company referred to in Section 2.2 shall be treated as Years of Service.
LA3:752821.27 31
ARTICLE II
SERVICE
2.1. Pension Calculation Service.
(a) Pension Calculation Service is used to determine the amount of the Participant’s benefits; however, it is not relevant for purposes of Article V-E. Except as set forth in this Section 2.1 or any other provision of this Plan, an Employee’s Pension Calculation Service shall be the same as his Term of Employment.
(b) If the Employee has incurred a one year Period of Severance, the rules of Section 2.4(a)(3) (as opposed to Section 2.4(b)) shall be applied for purposes of bridging the Employee’s Pension Calculation Service.
(c) For purposes of subsections (a) and (b), if an Employee was employed on a part-time basis at any time, the Employee’s Pension Calculation Service (but not his Term of Employment) shall be prorated based on the ratio between actual hours worked and the regular full-time hours for each position, provided that prior to January 1, 1996, if records of actual hours are not available, the ratio shall be based on scheduled hours as compared to regular full-time hours.
(d) Pension Calculation Service for an Occupational Employee shall not include any period(s) of continuous employment with respect to which the Occupational Employee accrued benefits under the Related Management Plans for so long as the amount of the pension benefit under such other plans are taken into account in computing the benefit under this Plan pursuant to Article V-A. Pension Calculation Service for a Management Employee shall not include any period(s) of continuous employment with respect to which the Management Employee accrued benefits under the Related Occupational Plans for so long as the amount of the pension benefit under such other plans are taken into account in computing the benefit under this Plan pursuant to Articles V-B or V-D.
(e) See Sections 5B.1(c)(2), 5B.6 and 5D.2(b) and (e) for limits on the amount of Pension Calculation Service for Management Employees. Except as set forth therein, these limits shall not apply for purposes of determining the Participant’s Term of Employment.
(f) An Employee shall only earn Pension Calculation Service while he is a Covered Employee.
(g) Employment with Qwest or its subsidiaries that occurred prior to the merger of U S WEST into Qwest shall not count as Pension Calculation Service. In addition, employment with Qwest (or an entity that was a subsidiary of Qwest prior to the merger of U S WEST into Qwest) during the period from the date of such merger until January 1, 2001 shall not count as Pension Calculation Service.
LA3:752821.27 32
2.2. Term of Employment.
(a) Subject to Sections 2.4 through 2.9, an Employee’s Term of Employment is a period of continuous employment of an Employee, as reflected in the Company’s official service records, in the service of one or more (i) Participating Companies, (ii) Interchange Companies (to the extent that an Interchange Agreement is applicable to the individual at the time the individual becomes an Employee or with respect to any individual who was an Employee of a Former Affiliate on December 31, 1983 and became an Employee on January 1, 1984), (iii) Portability Companies (to the extent that the Mandatory Portability Agreement is applicable to an individual at the time the individual becomes an Employee), or (iv) Former Affiliates before 1984 (but only if employment with a Participating Company commenced after the completion of such service but before January 1, 1984 with no intervening period of employment with any Former Affiliate prior to January 1, 1984). Notwithstanding the foregoing, Term of Employment shall not include any period of employment that is included in an individual’s term of employment under an Interchange Company Pension Plan or a Portability Company Pension Plan if the applicable Interchange Agreement or the Mandatory Portability Agreement is not in force and effect at the time an individual becomes employed or reemployed by a Participating Company or if such agreement does not provide for the recognition of such individual’s term of employment under the Interchange Company Pension Plan or Portability Company Pension Plan upon his employment by a Participating Company. Term of Employment shall also include (1) periods of time for which an Employee is paid but for which no duties are performed due to vacation, holiday, illness, incapacity (including short-term disability), jury duty, military duty, or leave of absence and (2) employment with Qwest Communications Broadband but only if the Employee subsequently transfers directly to a Participating Company. Term of Employment does not include any period during which the Participant receives a Disability pension, including a pension under Appendix J.
(b) The Term of Employment of an Employee who is reemployed by a Participating Company in accordance with the terms of a settlement, award or order involving either litigation, arbitration or a grievance under an applicable collective bargaining agreement, relating to the Employee’s Termination shall include, immediately upon such reemployment, the following:
(1) Any period for which back pay or a lump sum settlement award is made;
(2) Any period between the prior termination and the date of reemployment, not in excess of thirty days, if the termination was converted by the Participating Company to a suspension;
(3) Any period required by the court order or judgment, court award, or arbitration award to be included in the Term of Employment;
(4) All periods included in the Term of Employment as of the date of termination if the termination is converted to a suspension and if the period of absence
LA3:752821.27 33
was six months or less or if the court order or judgment, court award, or arbitration award requires such periods to be included.
(c) An Employee’s Term of Employment shall include any period required to be included in Term of Employment by a final order of a court of competent jurisdiction or by a settlement of a bona fide claim, provided that no duplicate service shall be granted under subsections (b) and (c).
(d) For purposes of subsections (b) and (c), the period to be included in the Term of Employment shall include the period specified in the award, order or settlement. If no period is specified, the period shall be calculated by dividing the amount of the award or payment by the Employee’s basic rate of pay in effect at the time of the Employee’s termination. For purposes of the computation, the award or payment shall include any compensation or other amount that has been offset against the award or payment pursuant to the award, order or settlement. Notwithstanding any other provision of Section 2.2(b) or (c), in no event shall the aggregate period included in the Term of Employment under those subsections exceed the actual amount of time from the date of the termination to the date of the Employee’s reemployment.
(e) Term of Employment is used to determine eligibility for a service pension or an Occupational disability pension. In general, it is not relevant for purposes of Articles V-D or V-E, although it is used to determine whether a Management Participant is a Protected Participant.
2.3. Vesting Service.
An Employee’s Vesting Service shall be equal to the number of months in the Employee’s Period of Service divided by 12.
2.4. Breaks in Service; Periods of Severance - Bridging Rules.
(a) Participation, Vesting, Pension Calculation.
(1) A Period of Severance of fewer than 12 months shall be treated as a Period of Service solely for purposes of participation and vesting; it shall not be included in Pension Calculation Service (or Term of Employment).
(2) For purposes of participation, an Employee who has not completed a 12-consecutive-month Period of Service and therefore is not a Participant, and who incurs a Period of Severance of at least twelve months, shall not receive credit for his prior Period of Service upon his reemployment by a Participating Company or a Non-Participating Company.
(3) Except as provided in Section 5C.5 or 6.7 or another provision of this Plan, for purposes of vesting and Pension Calculation Service, an Employee who incurs a Period of Severance of at least twelve months shall, upon reemployment by a Participating Company or a Non-Participating Company (and completion of the
LA3:752821.27 34
conditions below), receive credit for prior Periods of Service, but not the Period of Severance, if (i) the Employee was vested (under the terms of the plan then in effect) prior to the Period of Severance, or (ii) the Employee was not vested, the Employee completes a twelve month Period of Service upon reemployment and the number of twelve month Periods of Severance is less than five, or (iii) the Employee bridges his Term of Employment pursuant to Section 2.4(b)(2)(B). Otherwise, a Participant shall lose credit for the prior Periods of Service, as well as prior Percentage Credits under Article V-D. See Sections 5B.1(c), 5B.6 and 5D.2(b) and (e) for additional limits on the amount of Pension Calculation Service.
(b) Term of Employment; Bridging.
(1) Subject to subsection (b)(2)(A) (absence of six months or less), Section 2.7 (leaves of absence and absences while disabled), Section 2.8 (temporary layoffs) and Section 2.9 (termination with separation pay), an absence from service without pay that is longer than six months shall constitute a break in the continuity of the Term of Employment (a “TOE Break”). A Participant shall not earn any Term of Employment after a TOE Break until he returns to service with pay; however, as set forth in subsection (b)(2)(A) and Sections 2.7 through 2.9, a Participant may stop earning Term of Employment prior to a TOE Break or without incurring a TOE Break. Except as provided in paragraphs (2) and (3) below, a Participant who incurs a TOE Break and is subsequently reemployed shall not receive credit for any prior Term of Employment, even if the Participant was previously Vested.
(2) (A) If the Employee’s absence from service without pay is not longer than six months, the Employee shall not incur a TOE Break and shall be credited with all of the Term of Employment prior to his absence if the Employee returns to active service after September 30, 1980. However, the Participant shall not earn Term of Employment (or Pension Calculation Service) during the period of absence.
(B) Except as expressly set forth in Sections 5C.5 or 6.7 or another provision of this Plan, the following rules shall apply if there is a TOE Break and the Employee’s absence from service is longer than six months and the Employee had previously completed six months of continuous service at the time the absence commenced. The following rules shall not apply if the Employee did not previously complete six months of continuous service at the time the absence commenced; in that case, the prior Term of Employment shall not be bridged.
(1) Five Year Bridging. Except as provided in paragraphs (2) or (3) below, if the Employee Terminated prior to 1999, the Employee shall be credited with all of the Term of Employment prior to his absence upon the Employee’s completion of five years of continuous Term of Employment that is not interrupted by a TOE Break after the return to service. No Term of Employment (or Pension Calculation Service) shall be credited for the period of absence. By way of example, assume a
LA3:752821.27 35
Participant works 10 years, quits and is reemployed two years later. The Participant works 4-1/2 years after being reemployed, Terminates, is reemployed one month later, works another six months and quits. The Participant shall be treated as completing five years of continuous Term of Employment since the employment is only interrupted by a one month break; thus, the prior 14-1/2 years of service will be counted. (However, if the Participant had been employed 7 months later, the prior 14-1/2 years would not be counted unless the Participant works 5 years after being reemployed.) Assume instead that the Participant works 4-1/2 years, is laid off for 18 months and then returns to employment for six months and quits. Because the Participant does not incur a TOE Break pursuant to Section 2.8, the individual will be treated as completing five years of continuous Term of Employment six months after the individual returns from the layoff.
(2) Active Participants on December 15, 1998 or January 1, 1999. Effective December 15, 1998, a person who is an Active Occupational Participant on December 15, 1998 shall automatically be credited with all of the Term of Employment prior to his absence. Effective January 1, 1999, a person who is an Active Management Participant on January 1, 1999 shall automatically be credited with all of the Term of Employment prior to his absence. No Term of Employment (or Pension Calculation Service) shall be credited for the period of absence.
(3) Three Year Bridging. Effective January 1, 1999, any person who is a Covered Employee on or after January 1, 1999 (and who has not already bridged his prior Term of Employment under paragraphs (2) or (4)) shall be credited with all of the Term of Employment immediately prior to his absence upon the Employee’s completion of three years of continuous Term of Employment that is not interrupted by a TOE Break after the return to service. The foregoing rule applies irrespective of the date of Termination. However, a Covered Employee cannot bridge such earlier service under the 3 year bridging rule prior to January 1, 1999. No Term of Employment (or Pension Calculation Service) shall be credited for the period of absence.
(4) Active Participants on November 30, 1999 or January 1, 2000. Effective November 30, 1999, a person who is an Active Occupational Participant on November 30, 1999 shall automatically be credited with all of the Term of Employment prior to his absence. Effective January 1, 2000, a person who is an Active Management Participant on January 1, 2000 shall automatically be credited with all of the Term of Employment prior to his absence. No Term of Employment (or Pension Calculation Service) shall be credited for the period of absence.
LA3:752821.27 36
(5) Active Occupational Participants on future Qualified Transfers. Effective on the date of any Qualified Transfer (as defined in Section 14.2(a)) occurring in 2000 and 2001, a person who is an Active Occupational Participant on the date of such Qualified Transfer shall automatically be credited with all of the Term of Employment prior to his absence. This rule shall not apply with respect to Qualified Transfers occurring after 2001. No Term of Employment (or Pension Calculation Service) shall be credited for the period of absence.
(6) Active Management Participants on or after December 31, 2000. Effective December 31, 2000, a person who is an Active Management Participant at any time on or after December 31, 2000 shall automatically be credited with all of the Term of Employment prior to his absence. No Term of Employment (or Pension Calculation Service) shall be credited for the period of absence.
(C) If an individual is credited with a Term of Employment after a TOE Break (or without incurring a TOE Break), he shall be treated as having “bridged” his prior Term of Employment.
(3) A termination of employment from the employ of a Former Affiliate or a Portability Company shall constitute a TOE Break unless the Employee is transferred to or reemployed by a Participating Company (within six months) while covered by an Interchange Agreement or the Mandatory Portability Agreement.
2.5. Service With Members of the Controlled Group.
(a) Participating Companies. An Employee who transfers employment among Participating Companies shall receive credit for all service with the Participating Companies according to all of the rules of this Article II. Except as expressly provided in the Plan, no service with an entity shall be credited prior to the date it becomes, or after the date it ceases to be, a Participating Company.
(b) Non-Participating Companies. Service with a Non-Participating Company shall be credited under this Plan for Vesting Service and eligibility to participate only. Service with a Non-Participating Company shall not be credited under this Plan for purposes of Pension Calculation Service or Term of Employment, except as expressly provided in Article III or Section 1.3 of Appendix I. Except as expressly provided in the Plan, no service with an entity shall be credited prior to the date it becomes, or after the date it ceases to be, a Non-Participating Company.
(c) Leased Employees. Service as a Leased Employee and service described in Section 414(n)(4)(B) (in both cases whether for a Participating or Non-Participating Company) shall be credited under this Plan for Vesting Service and eligibility to participate only. Service as a Leased Employee and service described in Section 414(n)(4)(B) (in both cases
LA3:752821.27 37
whether for a Participating or Non-Participating Company) shall not be credited under this Plan for purposes of Pension Calculation Service or Term of Employment.
(d) Service Before the Separation Time. In the case of a Communications Participant (but not Media Participants), subject to Section 2.4, all service credited under the Plan immediately prior to the Separation Time shall remain credited to the Participant under this Plan on the Separation Time.
(e) (1) Media Participants and Other Persons whose Benefits are Transferred to another Plan. If a Media Participant (or a Media Employee, as defined in the Employee Matters Agreement, who has not commenced participation in the Plan as of the Separation Time) becomes an Employee after the Separation Time, he shall be entitled to participate in accordance with the terms of this Plan, but shall not be entitled to any benefits (or Pension Calculation Service, Term of Employment or Compensation) with respect to any period prior to the time he becomes an Employee; all such benefits shall be paid by the Media Plan. The rules of Sections 2.4(a) and 3.2 shall apply to an Employee described in the preceding sentence solely for purposes of vesting and eligibility to participate (not Term of Employment or Pension Calculation Service); for these two purposes, the period such person is employed by MediaOne Group and its subsidiaries and related entities after the Separation Time shall be included within the person’s Period of Severance. See also Section 5B.6(d)(6). The principles of this paragraph shall also apply to any person whose benefits were transferred to the AirTouch plan as set forth in Section 5D.8(a)(2) or any other former participant whose benefits were transferred from this Plan to the plan of another employer, provided that the entire time the person is employed by the other employer shall be included within the person’s Period of Severance. Notwithstanding the foregoing, if a Media Participant was last employed by MediaOne Group, Inc. (but not its subsidiaries or affiliates) and is covered by the Mandatory Portability Agreement, the Mandatory Portability Agreement shall supercede the foregoing provisions of this Section 2.5(e)(1).
(2) Other Former Employees of Old U S WEST. If any former employee of Old U S WEST or its 80% or more owned subsidiaries (other than a person described in subsection (e)(1) or a Communications Participant) becomes an Employee after the Separation Time, he shall be entitled to participate in accordance with the terms of this Plan. The rules of Sections 2.4 and 3.2 shall apply to an Employee described in the preceding sentence solely for purposes of vesting, Term of Employment (so that the individual is eligible to earn a service pension or Bridging Add-On, if he qualifies, with respect to the benefits earned prior to the Separation Time) and eligibility to participate. In addition, the rules of Section 2.4 shall apply for purposes of Pension Calculation Service solely (1) to those former employees who previously participated in the Plan and were not vested at the time of their Eligible Separation and (2) for purposes of calculating the Bridging Add-On if applicable. Notwithstanding the foregoing, no person, whether or not described in this subsection (e)(2), shall be entitled to Pension Calculation Service under this Plan and the Media Plan with respect to the same period of service prior to the Separation Time; if the individual becomes entitled to a vested benefit under the Media Plan (where the amount of the benefit is based on such service), prior to becoming
LA3:752821.27 38
entitled to such a vested benefit under this Plan, this Plan shall forever ignore such service even if the individual returns to employment and would otherwise be credited with such service. See also Section 5B.6(d)(5). Notwithstanding the foregoing provisions of this subsection or Section 5B.6(d), no person shall be granted credit for Pension Calculation Service or Term of Employment for periods prior to the Separation Time or become entitled to a service pension or Bridging Add-On under Section 5B.6(d), with respect to the benefits earned prior to the Separation Time unless such credit, pension or Bridging Add-On is required to be granted by ERISA.
(f) Service with Qwest prior to Merger. Effective January 1, 2001, employment with Qwest or its 80% or more owned subsidiaries that occurred prior to the merger of U S WEST into Qwest shall be credited under this Plan for Vesting Service, eligibility to participate and Term of Employment (to the extent relevant under the applicable formula) only. In addition, service with such entities (but not other companies previously acquired by such entities) shall be counted prior to the time such entity became an 80% owned subsidiary. Different rules apply regarding Pension Calculation Service; see Section 2.1(g).
(g) Service with Qwest Cyber.Solutions. Effective May 16, 2002, employment with Qwest Cyber.Solutions that occurred prior to that date shall be credited under this Plan for Vesting Service, eligibility to participate and Term of Employment (to the extent relevant under the applicable formula) only. Such service shall not count for Pension Calculation Service.
(h) Service with Telera Corporation. Effective August 6, 2001, employment with Telera Corporation prior to the date it became a Participating Company shall be credited under this Plan for Vesting Service, eligibility to participate and Term of Employment only. Such service shall not count for Pension Calculation Service.
2.6. Service with Portability and Interchange Companies.
Service with Portability and Interchange Companies shall be credited as provided in Appendix B.
2.7. Leave of Absence; Disability.
(a) A leave of absence granted under the policies and procedures approved by the Committee or by a Participating Company and a period during which a Participant receives a disability pension (including a disability pension under Appendix J) shall not constitute a TOE Break if the Participant returns to employment immediately at the end of such leave (or disability). Except in the case of a leave on account of continued disability following the expiration of a period of short-term disability benefits, all leaves of absence must be approved before the leave commences. An absence following the expiration of a period of short-term disability benefits shall be a TOE Break unless the absence was approved by the Participating Company.
(b) The Committee shall determine whether and to what extent Term of Employment credit shall be extended to unpaid leave of absence policies. Subject to subsection
LA3:752821.27 39
(c), the types of unpaid leaves of absence and associated Term of Employment credit granted by the Committee are attached hereto as Appendix K.
(c) Except for Participants on transitional or surplus transitional leaves, if the Participant fails to return to employment immediately at the end of a leave of absence or Disability, he shall be deemed to have incurred a TOE Break at the beginning of the leave or Disability; in addition, the leave period shall not be counted as Pension Calculation Service or Term of Employment and the Participant shall not be treated as an Active Participant during such period. Term of Employment does not include any period during which the Participant receives a disability pension, including a pension under Appendix J, regardless of whether the Participant returns to employment.
2.8. Temporary Layoff.
(a) Temporary layoff on account of reduction in force shall not be treated as a TOE Break. However, if the total period of absence on account of layoff is longer than six months, the individual’s Term of Employment (and Pension Calculation Service) shall not include the period of layoff. If the temporary layoff is six months or less, such period shall be included in the individual’s Term of Employment (and Pension Calculation Service). The individual shall not be considered an Active Participant or be treated as earning any Compensation during the period of layoff or temporary layoff, even if it is less than six months.
(b) A layoff shall be treated as a temporary layoff if the individual is reemployed by a Participating Company within two years. If the individual is not reemployed within two years, he shall incur a TOE Break as of the beginning of the layoff and the layoff period shall not be included as Pension Calculation Service or Term of Employment. However, for Occupational Employees whose employment terminated with Business Resources, Inc., the two-year period shall be a three-year period.
2.9. Termination with Separation Payment.
Effective June 1, 1996, Participants (i) who are Employees on or after June 1, 1996, (ii) whose employment from a Participating Company terminated on or after January 1, 1992, (iii) who are eligible for a payment under a separation plan that is associated with a reduction in force as a result of such termination, and (iv) whose period of absence immediately following such termination is two years or less shall not be treated as having a TOE Break, provided that this rule shall have no retroactive application prior to June 1, 1996. For Occupational Participants whose employment terminated with Business Resources, Inc., the two-year period shall be a three-year period. However, if the total period of absence is longer than six months, the Participant’s Term of Employment (and Pension Calculation Service) shall not include such period of absence. If it is six months or less, such period shall be included in the Employee’s Term of Employment (and Pension Calculation Service). The individual shall not be considered an Active Participant during the period of absence, even if it is less than six months.
LA3:752821.27 40
2.10. Special Rules for Incidental Employees.
Notwithstanding the foregoing rules in this Article II and Article III, the following provisions shall apply to incidental employees, but only with respect to periods prior to January 1, 1995:
(a) A Participant shall earn a year of Pension Calculation Service in each Plan Year during which a Participant completes at least 1,000 Hours of Service. An Employee shall be deemed to have completed 45 Hours of Service for each week in which he completes at least one Hour of Service.
(b) An Employee’s Vesting Service shall be equal to his Years of Service. For the period commencing January 1, 1995 and ending on December 31, 1995, the Vesting Service of an Employee who is classified as an incidental employee shall be the greater of the number of months in the Employee’s Period of Service divided by 12 or the Employee’s Years of Service.
(c) An Employee shall incur a Break in Service during (i) a Plan Year in which he or she is credited with fewer than 501 Hours of Service or (ii) a Plan Year in which he or she is absent from service without pay other than absence while receiving disability benefits, leave of absence, or a temporary layoff (but only to the extent set forth in Sections 2.7 and 2.8). An absence from service while in the employ of a Former Affiliate or a Portability Company shall constitute a break in service unless the Employee is transferred to or reemployed by a Participating Company while covered by an Interchange Agreement or the Mandatory Portability Agreement. An Employee will not incur a Break in Service and will not receive credit for a Year of Service if he or she receives credit for 501 or more but fewer than 1,000 Hours of Service during a Plan Year or other applicable computation period.
(d) For purposes of vesting and Pension Calculation Service, an Employee who has completed fewer than five Years of Service, Terminates, incurs a Break in Service and is subsequently re-employed shall receive credit for service prior to the Break in Service if (a) he or she completes one Year of Service and (b) the number of one-year Breaks in Service is less than five. An Employee who has completed five or more Years of Service, Terminates, incurs a Break in Service and is subsequently re-employed shall receive credit for all service prior to the Break in Service upon (i) the completion of one Year of Service and (ii) resumption of participation in the Plan pursuant to Section 3.2. Notwithstanding the foregoing, an Employee who had completed at least six months of service prior to the Break in Service shall receive credit for all service prior to the Break in Service upon being credited with an additional Term of Employment of at least five continuous years (that is not interrupted by a TOE Break) after returning to service.
(e) For purposes of this Section 2.10, “Hours of Service” shall be defined in accordance with Appendix I, except that:
(1) Only hours with a Participating Company (and, for purposes of participation and vesting, a Non-Participating Company) shall be counted.
LA3:752821.27 41
(2) The rules in the last paragraph of the definition of Hours of Service in Appendix I (dealing with maternity leave etc.) shall apply for purposes of determining whether a one-year Break in Service has occurred.
(f) Participation. For Employees classified as incidental employees, each Covered Employee who is at least age 21 shall become a Participant upon the day he or she has completed (1) a twelve consecutive month period of employment, commencing on the date the Covered Employee first performs an Hour of Service for the Company or another Participating Company on initial employment or latest reemployment, during which he or she shall have completed 1,000 or more Hours of Service, or (2) if (1) is not completed, one Year of Service with the Company or another Participating Company. The first Year of Service used for this purpose shall include the first anniversary of the date on which the Covered Employee first performs an Hour of Service for the Company or another Participating Company.
(g) Reemployment. An Employee who has satisfied the service requirements of Section 3.1, has a Break in Service and is subsequently reemployed in the incidental classification shall resume participation as of the date he or she is a Covered Employee, upon the first to occur of (1) the completion of at least 1,000 Hours of Service during a twelve consecutive month period commencing on the date the Employee first performs an Hour of Service upon reemployment or (2) the completion of one Year of Service. An Employee who has a Period of Service of less than one year and a Period of Severance of less than one year and who is reemployed shall become a Participant on the first to occur of the later of the Employee’s Reemployment Commencement Date or the date that the Period of Service and the Period of Severance equal one year if he is then a Covered Employee. The Employee’s Years of Vesting Service, Term of Employment, and Pension Calculation Service shall be calculated pursuant to Article II. An Employee who has not satisfied the age and service requirements of Section 3.1, has a Break in Service and is subsequently reemployed shall participate as of the day he or she satisfies the requirements of Section 3.1. The Employee’s service for all purposes of the Plan shall be calculated pursuant to Article II.
2.11. Military Service.
Notwithstanding any provision of this Plan to the contrary, benefits and service credit with respect to qualified military service will be provided in accordance with Section 414(u) of the Code.
ARTICLE III
PARTICIPATION
3.1. Participation - Required Service.
(a) Subject to Section 2.10(f) (which provides different rules for incidental employees prior to January 1, 1995), each Covered Employee shall become a Participant on the
LA3:752821.27 42
later of the date he or she becomes a Covered Employee and has completed a one-year Period of Service. Subsections (b), (c) and (d) and Sections 3.3 through 3.8 set forth certain additional rules that describe when Pre-97 Plan participation commenced for Communications Participants.
(b) Effective March 18, 1987, a Covered Employee who satisfies the requirements of subsection 3.1(a) shall become a Participant without regard to the Covered Employee’s age. A Covered Employee who was on the payroll on March 18, 1987 and who becomes a Participant shall receive credit for service, based on the rules of Article II, after the Participant’s 65th birthday.
(c) Effective January 1, 1994, a Covered Employee who moved to a Participating Company from Bell Communications Research, Inc. (“Bellcore”), on a Rotational Assignment, did not participate in this Plan, but continued to participate in the defined benefit plan maintained by Bellcore. For purposes of this subsection (c), the term “Rotational Assignment” shall mean the temporary assignment of a Bellcore or Interchange Company employee to a Participating Company with the expected return to the transfer company, but only if the assignment began on or after January 1, 1994 and on or before December 31, 1996.
(d) Effective January 1, 1994, a Participant who moved from a Participating Company to Bellcore or an Interchange Company on a Rotational Assignment at the request of the Participating Company continued to participate in this Plan. An Employee who moved to Bellcore at the request of the Participating Company on a Rotational Assignment was credited with service performed for, and Compensation paid by, Bellcore under the terms of this Plan for all purposes of this Plan. A Participant who died after having moved to Bellcore at the request of a Participating Company on a Rotational Assignment shall be treated as having been employed by a Participating Company at the time of death for purposes of the Sickness and Accidental Death benefits under Article VII below. Service performed for, and wages paid by, Bellcore shall be treated as having been performed for and paid by a Participating Company for purposes of determining eligibility for and the amount of benefits under Article VII. For purposes of this subsection (d), the term “Rotational Assignment” means the temporary assignment of a Participating Company Employee to Bellcore or an Interchange Company with the expected return to the transfer company, but only if the assignment began on or after January 1, 1994 and on or before December 31, 1996.
3.2. Re-employment After Break in Service or Period of Severance.
Subject to Section 2.10(g) (which provides different rules for incidental employees prior to January 1, 1995), an Employee who has become a Participant, separates from service and then is reemployed by a Participating Company shall become a Participant again on his Reemployment Commencement Date if he or she is a Covered Employee. An Employee who has a Period of Service of less than one year and a Period of Severance of less than one year and who is reemployed shall become a Participant on the later to occur of the Employee’s Reemployment Commencement Date or the date that the Period of Service and the Period of Severance equal one year if he or she is then a Covered Employee. An Employee who has a Period of Severance of one year or more and a Period of Service of less than one year shall
LA3:752821.27 43
become a Participant on the date he or she completes a one-year Period of Service after his Reemployment Commencement Date and is a Covered Employee.
Notwithstanding the foregoing or any provision of this Plan to the contrary, any former Employee or Participant who incurred a Termination (before or after July 10, 2000) and is later given an offer of employment on or after July 10, 2000 to become a Management Employee shall not be eligible to participate in Article V-B or V-D of this Plan or earn any benefits under said Articles with respect to any period of reemployment; such person may earn benefits under Article V-E on and after the later of January 1, 2001 and the Reemployment Commencement Date.
3.3. Transfer to Time Warner Communications.
Effective August 4, 1993, an individual who is an employee in the service of a Participating Company, and whose particular skills are necessary to directly support the joint venture efforts and who, prior to September 1, 1997, directly transferred employment to Time Warner Communications (Time Warner) pursuant to the Company and Time Warner initiated transfer that has been pre-arranged between the Company and Time Warner, shall continue to participate in this Plan if the Participant does not choose to voluntarily retire from the Company. Any interruption in active employment with Time Warner will be treated as a break in continuity of service under the terms of this Plan, except that the policies of Time Warner shall apply for purposes of determining whether a Participant has a leave of absence or is temporarily laid off. For purposes of determining whether a leave of absence or temporary layoff results in a break in the continuity of service, the terms of this Plan shall apply. Any such person who is still employed by Time Warner at the Separation Time shall be a Media Participant.
3.4. Transfer to U S WEST Interactive Video Enterprises, Inc..
An individual who, as of February 24, 1994, was an Employee in the service of a Participating Company and who directly transferred employment to U S WEST Interactive Video Enterprises, Inc. (IVE) on or before April 1, 1994, continued to participate in the Plan while employed at IVE on the same basis as if IVE were a Participating Company. This provision no longer applies after the date IVE ceased operation in 1996.
3.5. Employees Transferred to the Company from GTE.
Effective July 1, 1995, for purposes of determining eligibility for participation, vesting and eligibility for a service or disability pension, the Plan credited the service previously credited by GTE (including service bridged as of July 1, 1995) of each Employee transferred to the Company from GTE in July 1995. Such service shall not be included as Pension Calculation Service, nor shall it apply for purposes of eligibility for the death benefit.
3.6. Participation - U S WEST Cellular Technical Services.
U S WEST Cellular Technical Services became a Participating Company effective August 1, 1990. Effective March 17, 1995, Employees of U S WEST Cellular Technical
LA3:752821.27 44
Services who, as of February 1, 1995, were employed by a Participating Company, were granted credit for all service at U S WEST Cellular Technical Services prior to August 1, 1990, for purposes of Term of Employment, participation and vesting.
3.7. Participation - U S WEST Paging.
U S WEST Paging became a Participating Company effective January 1, 1993. Employees were granted credit for all service at U S WEST Paging prior to January 1, 1993, for purposes of Term of Employment, participation and vesting.
3.8. Participation - MediaOne of Delaware, Inc..
MediaOne of Delaware, Inc. (formerly Continental Cablevision, Inc.) became a Participating Company effective January 1, 1997 for purposes of Appendix I; except as explicitly stated otherwise in the Plan as in effect before the Separation Time, MediaOne of Delaware, Inc. and the other Cable Companies were not Participating Companies for any other purpose under the Plan. Appendix I describes the benefits applicable to Ex-MediaOne Employees. Notwithstanding any provision of the Plan to the contrary, except as expressly set forth in the Plan, Articles II, III (except this Section 3.8), V and VII, Section 11.5 and the other Appendices of this Plan (excluding Appendices A, C, and J) shall not apply to benefits earned under Appendix I by Ex-MediaOne Employees. In addition, notwithstanding any provision in Article II to the contrary, except as provided in Section 1.3 of Appendix I, a Participant under this Plan shall not earn any Pension Calculation Service or Term of Employment while the Participant was employed by the Cable Companies.
Effective on and after the Separation Time, the Cable Companies shall not be Participating Companies or Non-Participating Companies.
ARTICLE IV
CONTRIBUTIONS
4.1. Employer Contributions.
Each Participating Company shall pay to the Trustee such sums as shall be determined actuarially necessary to fund the benefits for its Participants and their Beneficiaries in accordance with a funding method and policy to be established by the Company.
4.2. Participant Contributions.
No contributions, including direct rollover contributions or rollover contributions, shall be accepted from any Participant.
LA3:752821.27 45
ARTICLE V
OVERVIEW OF ARTICLES V-A THROUGH V-E
5.1. Overview.
The Plan contains different formulas applicable to different groups of employees. This Article V briefly outlines the different formulas and their application. The provisions of Articles V-A through V-E will in all events control over any statement in this Article V (other than Section 5.1(h)). Any reference in this Plan to Article V shall be deemed to include a reference to Articles V-A through V-E.
(a) Occupational Employees participate in the Occupational Part of the Plan. Benefits accrued under the Occupational Part are set forth in Article V-A. Section 5A.4(g), Section 5B.4, Section 5D.7 and Section 5E.6 set forth various rules relating to individuals who transfer between the Management Part and Occupational Part.
(b) Article V-B contains a grandfathered benefit formula, sometimes referred to as the Old Management Formula (OMF), that applied to all Management Employees in the Plan before 1997. As set forth in Section 5B.1(c)(2), benefits cease to accrue under this formula at the Participant’s Cutoff Date (which differs depending on the status of the Participant). In general, Participants participating in Article V-B receive the greater of the benefits under Article V-B or Article V-D. After December 31, 2000, Article V-B applies only to Protected Participants (excluding Protected Participants who have Terminated after 1996 and before 2001), provided that Article V-B benefits of Participants who met the Rule of 55, are not Protected Participants and have not Terminated after 1996 and before 2001 may be increased by changes in the Final Average Compensation and Covered Compensation until their first Termination after December 31, 2000.
(c) Effective as of January 1, 1997, the Plan was amended to add a defined lump sum (DLS) benefit formula for Management Participants employed after that date. See Article V-D. As set forth in Section 5D.1(c)(2), benefits cease to accrue under this formula at the Participant’s Cessation Date. After December 31, 2000, this formula applies only to Protected Participants, provided that Article V-D benefits of Active Participants on January 1, 2001 who are not Protected Participants and have not been reemployed pursuant to an offer of reemployment made on or after July 10, 2000 may be increased by changes in the Final Average Compensation and Taxable Wage Base until their first Termination after December 31, 2000.
(d) Effective as of January 1, 2001, the Plan was amended to add a new Account Balance formula (ABF) in Article V-E. This new formula applies to all Management Participants (other than Protected Participants) employed after that date. In addition, if a Protected Participant Terminates after 2000 and is reemployed, Article V-E will apply to periods of reemployment. In general, these Participants, as well as other Participants who are not Protected Participants, will receive a benefit equal to the sum of the Article V-E benefit plus the greater of the benefit under Article V-B or V-D, if applicable.
LA3:752821.27 46
(e) Article V-C provides rules of general application.
(f) Certain Participants also have a benefit attributable to the merger of the U S WEST Profit Sharing Retirement Plan into the Plan. See Appendix E.
(g) Appendix I contains two other benefit formulas that applied to MediaOne Employees prior to the Separation Time. Except for benefits, if any, accrued prior to Separation Time, these formulas no longer apply.
(h) Notwithstanding any rule in the Plan to the contrary, Articles V-B, V-D and V-E shall not apply to Management Participants who were employees of El Paso County Telephone Company (“EPCTC”) on July 1, 2000. Their benefits are set forth in Appendix N. In addition, Occupational Employees of EPCTC shall not participate in the Plan, even if hired after July 1, 2000.
ARTICLE V-A
PENSIONS FOR OCCUPATIONAL EMPLOYEES
This Article V-A applies only to Occupational Employees. All references in this Article V-A to “Participant” or “Employee” shall include only Occupational Employees.
5A.1. Service Pensions.
(a) Eligibility. Each Participant who separates from the service of a Participating Company (or, if applicable, a Non-Participating Company) in an Eligible Separation and who satisfies any one of the following minimum age and service requirements shall be entitled to a service pension:
(1) attainment of at least age 65 and completion of a ten-year Term of Employment;
(2) attainment of age 60 and completion of a fifteen-year Term of Employment;
(3) attainment of age 55 and completion of a twenty-year Term of Employment;
(4) attainment of age 50 and completion of a twenty-five year Term of Employment; or
(5) completion of a thirty-year Term of Employment.
(b) Effective Date and Duration. Payment of the service pension shall be effective on the day following the day of the Participant’s Eligible Separation pursuant to Section
LA3:752821.27 47
5A.1(a). The general form of a service pension shall be payable for the life of the Participant, except as provided in Section 5C.3; as set forth in Article VI, Participants may elect alternative forms.
(c) Amount. Subject to subsection (d), the standard benefit payable as a service pension shall be a pension for the life of the Participant payable in monthly installments, the monthly amount of which shall be calculated as provided in Section 5A.4 below. Except as provided by the Plan provisions addressing reemployment, the amount shall not be recomputed as of any date after the date of the Participant’s Termination (even if he transfers to a Non-Participating Company the next day) nor shall the amount be recomputed on account of any amendments to the Plan after the date the Participant Terminates from a Participating Company (even if he transfers to a Non-Participating Company the next day).
(d) Adjustment for Early Retirement. The amount determined according to subsection 5A.1(c) for each Participant who receives a service pension (other than a Participant who retires with thirty or more Years of Service or who receives a service pension after becoming Disabled) shall be reduced by one-half percent for each month by which his age (in terms of completed years and months) at the time of the Annuity Starting Date is less than 55.
(e) Reemployment. This subsection (e) applies only if the Participant remains employed on or after January 1, 2001; otherwise, the rules in the Plan in effect prior to the January 1, 2001 restatement apply.
(1) Subsequent Service Pension. (A) This paragraph (1) applies to a Participant had earned a deferred vested pension or a service pension at the time he previously Terminated, does not commence a pension, is reemployed by a Participating Company and meets the conditions for a service pension at the time he or she subsequently incurs an Eligible Separation. Paragraph (1) also applies to a Participant described in the preceding sentence except for the fact the Participant is reemployed prior to January 1, 2001 and previously commenced a pension under the Plan in the form of an annuity. If the Participant’s Reemployment Commencement Date is after December 31, 2000, and the Participant previously commenced benefits, see paragraph (3) below; if the Participant is reemployed by a Participating Company before January 1, 2001, and the Participant previously took a lump sum, see paragraph (2) below.
(B) If paragraph (1) applies, the benefits earned under this Article V-A shall be paid as a service pension at the time of the second Eligible Separation. For this purpose, the Term of Employment earned during the subsequent reemployment and, to the extent set forth in Section 2.4(b)(2), during the initial period of employment shall be considered for purposes of determining whether the individual meets the conditions for a service pension. Except as provided in (C) below, whether or not the Participant previously commenced benefits, such service pension shall be calculated as a single amount, based upon all Pension Calculation Service and applicable compensation at the subsequent Eligible Separation.
LA3:752821.27 48
(C) Notwithstanding the foregoing, the promotion and demotion rules set forth in Sections 5A.4(e) and (f) also apply. In general, those rules will be applied as if the period from the date of Eligible Separation until the Reemployment Commencement Date is ignored for all purposes; thus the Participant will not receive Pension Calculation Service for that period. If those rules provide the entire benefit is not based on the Pension Band or applicable compensation or Pension Band rate in effect at the time of the second Eligible Separation, two separate service pensions shall be calculated, one for each period of employment in a manner provided in Sections 5A.4(e) and (f).
(2) Reemployment Before 2001 if Previous Lump Sum. If the Participant is reemployed by a Participating Company before 2001 previously received a lump sum of the benefits earned through the date of the first Eligible Separation, the foregoing rules shall not apply unless the Participant is eligible to repay and repays the lump sum in accordance with Section 5C.5 or Section 6.7, as applicable. If the lump sum cannot be, or is not, repaid, only an additional deferred vested pension or service pension, as applicable, shall be paid, which shall be calculated without regard to Pension Calculation Service and compensation earned prior to reemployment. If the Participant is described in paragraph (4) below, an additional Bridging Add-On benefit will be paid.
(3) Reemployment After 2000 if Participant previously commenced benefits. If a Participant’s Reemployment Commencement Date is after December 31, 2000, and the Participant previously commenced benefits and earned a service pension with respect to either period of employment (or both), then the Participant’s benefit shall be equal to the sum of:
(A) the deferred vested pension or service pension, as applicable, that had previously commenced under this Article V-A. Notwithstanding any other provision of the Plan, such benefit shall not be increased for any reason, including without limitation to reflect any additional service or compensation earned during reemployment, any increases in the monthly benefit rate after the earlier Eligible Separation, or the Participant’s new job title or classification or any new Pension Band as a result of reemployment (in addition, for purposes of this paragraph (A), the determination of whether the Participant is entitled to a service pension shall be made at the time of the first Termination and shall ignore Term of Employment earned after reemployment); and
(B) the deferred vested pension or service pension, as applicable, earned under Article V-A with respect to the period of reemployment, ignoring Pension Calculation Service, compensation earned prior to reemployment and, if applicable, the Pension Band for the job title and classification that the Participant previously held (for purposes of this paragraph (B), the Term of Employment earned during the subsequent reemployment and, to the extent set forth in Section 2.4(b)(2), during the initial period of employment shall be considered for purposes of determining whether the individual meets the
LA3:752821.27 49
conditions for a service pension with respect to benefits earned after reemployment); and
(C) if applicable, a Bridging Add-On, as set forth in paragraph (4) below.
If the Participant previously commenced the earlier benefits as an annuity, such benefits shall be paid in the same form and amount throughout the period of reemployment and thereafter. Participants may not buy back any benefits that previously commenced.
(4) Bridging Add-On. This paragraph applies to a Participant described in the preceding paragraphs (2) or (3) who was entitled to a deferred vested pension (but not a service pension) at the time he previously incurred a Termination, previously commenced benefits, and meets the conditions for a service pension at the time he or she incurs an Eligible Separation following reemployment. (For this purpose, the Term of Employment earned during the subsequent reemployment and, to the extent set forth in Section 2.4(b)(2), during the initial period of employment shall be considered for purposes of determining whether the individual meets the conditions for a service pension.) In that case, benefits shall be paid in accordance with the provisions of Section 5A.1(e)(2) or (3), as applicable, except that the Participant may be entitled to a “Bridging Add-On.” The Bridging Add-On shall commence at the same time as the benefits earned during reemployment commence (the “Second Starting Date”). Whether paid as a lump sum or annuity, the Bridging Add-On shall be calculated based on the monthly benefit rate in effect on the date of the Participant’s previous Termination and, if applicable, the Pension Band number for the job title and classification that the Participant held at that time; all other increases thereafter shall be ignored for this purpose.
If the Bridging Add-On is paid in the form of an annuity, the amount of the Bridging Add-On (the “Bridging Add-On Annuity Amount”) shall be treated as a service pension and shall be the excess of A over B, if any; where
A equals the amount of service pension that would be payable on the Second Starting Date, assuming the Participant had not previously commenced benefits and ignoring benefits and Pension Calculation Service earned during reemployment, and
B equals the amount of the pension that would be payable on the Second Starting Date, assuming the Participant had not previously commenced benefits, had not returned to employment, and was not eligible for a service pension.
If the Bridging Add-On is paid in the form of a lump sum, the amount of the Bridging Add-On shall not equal the DLS Equivalent of the Bridging Add-On Annuity Amount; instead it shall equal the Bridging Add-On Lump Sum Amount, which shall equal the excess of X over Y, if any; where
LA3:752821.27 50
X equals the SPE Equivalent (based on SPE Factors in effect on the Second Starting Date) of a pension, payable to the Participant at age 65, equal to the benefit earned at the prior Termination (ignoring benefits earned during reemployment) if such amount were payable at age 65, provided that such amount shall not be less than the DLS Equivalent (based on DLS Factors in effect on the Second Starting Date) of such a pension payable at age 65; and
Y equals the greater of A or B; where A equals the DLS Equivalent (based on DLS Factors in effect on the Second Starting Date) of a pension payable to the Participant at age 65, equal to the benefit earned at the prior Termination (ignoring benefits earned during reemployment) if such amount were payable at age 65. B equals the amount of the lump sum that was paid (or would have been paid had the Participant elected a lump sum benefit on the Pension Effective Date) with respect to the benefits earned as of the first Termination.
The calculations of both X and Y shall ignore any subsidy provided by any early retirement factors. The Bridging Add-On shall be paid at the same time and in the same form that benefits earned during reemployment are paid. The pension earned at the time of the first Termination shall be payable in the same form as it previously commenced.
(5) Notwithstanding the foregoing paragraph (4), no former participant whose benefits were transferred from this Plan to the plan of another employer shall be entitled to a Bridging Add-On or any other benefit under paragraph (4) or otherwise with respect to any benefits earned as of the first Termination, even if the individual returns to employment with a Participating Company and would otherwise receive such a benefit.
(6) Reemployment After 2000 Without Commencing Earlier Benefits and Without Subsequent Service Pension. This paragraph applies to a Participant who qualified for a service pension at the time he previously terminated, but did not commence benefits, has a Reemployment Commencement Date after December 31, 2000, and does did not bridge his earlier Term of Employment as set forth in Section 2.4(b)(2). In this case, two separate benefits under this Article V-A shall be paid upon subsequent Eligible Separation. The benefit for the earlier period of employment shall be a service pension, based on the benefit earned under this Article V-A as of the date of the Participant’s previous Termination. Notwithstanding any other provision of the Plan, such benefit shall not be increased for any reason, including without limitation, to reflect any additional service or compensation earned during reemployment, any increases in the monthly benefit rate after the earlier Eligible Separation, or the Participant’s new job title or classification or any new Pension Band as a result thereof. The benefit for the second period of employment shall be paid as a deferred vested pension based on the benefit earned under Article V-A with respect to the period of reemployment, ignoring Pension Calculation Service, compensation earned prior to reemployment and, if applicable, the Pension Band for the job title and classification that the Participant previously held.
LA3:752821.27 51
(7) Availability of Lump Sums. These rules depend upon when the Participant’s first Eligible Separation occurred.
(A) If the Participant’s first Eligible Separation occurred at a time when the Participant was an Applicable Occupational Participant, a lump sum is not available with respect to any Accrued Benefits earned during the first period of employment if, even if the Participant did not previously commence benefits and even if the Participant’s benefit is calculated as an aggregate benefit. However, if the Accrued Benefit earned during the first period of employment is increased under the applicable reemployment rules (for example, to apply a new Pension Band, a higher band rate, and/or as a result of earning a service pension or Bridging Add-On with respect to earlier benefit, but not including any increase due to additional Pension Calculation Service), the excess of the entire Accrued Benefit over the Accrued Benefit earned during the first period of employment (calculated without regard to such increases) may be paid as a lump sum.
(B) If the first Eligible Separation occurred at a time when the Participant was not an Applicable Occupational Participant, then, subject to Section 6.5, a lump sum is available with respect to all benefits payable upon the second Eligible Separation if the Participant did not previously commence benefits. In contrast, if such a Participant previously commenced benefits, no lump sum is available with respect to the benefits earned during the first period of employment unless the Participant qualifies for a service pension upon reemployment (in which case the entire benefit may be paid as a lump sum).
(8) Notwithstanding the foregoing, in the case of a Participant who terminates on or after October 12, 2000 as an Applicable Occupational Participant and commences benefits prior to the Reemployment Commencement Date, the rules in subsection (e)(3) through (e)(6) shall apply instead of subsections (e)(1) and (e)(2).
5A.2. Disability Pension.
(a) Eligibility. A Participant whose Term of Employment is 15 years or more, who has become Disabled and who Terminates with the Participating Company on account of the Disability, shall be entitled to a disability pension. However, if the Participant is also eligible for a service pension, the Participant shall receive a service pension pursuant to Section 5A.1 instead of a disability pension. Subject to Section 5A.2(d), a disability pension shall continue so long as the Participant remains Disabled. If the Participant returns to service with a Participating Company, the period during which the Participant was separated from service shall be treated as a leave of absence and not as a break in the continuity service for any purpose of the Plan. If a Participant who is receiving a disability pension is employed by an Interchange Company or Portability Company, the disability pension payments shall cease.
(b) Effective Date and Duration. Disability pension payments shall be effective on the day following the date the Participant terminates service on account of Disability
LA3:752821.27 52
and shall continue until the earlier of the date the Participant is no longer Disabled or attains Normal Retirement Age, subject to Section 5A.2(d).
(c) Amount. The amount of a disability pension shall be calculated as provided in Section 5A.4 below. Disability pension payments shall not be reduced on account of commencement prior to the Participant’s 55th birthday.
(d) Conversion of Disability Pension to Service Pension. A Participant who became Disabled prior to January 1, 2002 who later attains Normal Retirement Age while receiving a disability pension shall be granted a service pension upon attainment of Normal Retirement Age in the same amount (and in the same form previously elected) as the disability pension, and the disability pension shall be discontinued. For disability pensions commencing on or after August 13, 1995, the service pension shall be reduced by $1.00 monthly to account for the period in which the Participant received the disability pension payments. Participants who became Disabled on or after January 1, 2002 shall not be entitled to a service pension once they reach Normal Retirement Age (instead such persons shall be entitled to a deferred vested pension under Section 5A.3).
(e) Payment. All disability pensions commencing before January 1, 1996 shall be paid out of the general operating funds of the Participating Company that employed the Participant when he became Disabled. Disability pensions that commence on or after January 1, 1996 shall be paid from the Trust Fund. Disability pensions that commence on and after January 1, 1996 and before January 1, 2002 may elect any form of benefit available to Occupational Participants with respect to disability pensions. However, notwithstanding any provision of Article VI or the Plan to the contrary, disability pensions that commence on and after January 1, 2002 shall automatically be paid as set forth in subsection (c) above; a Participant may not elect any other form of benefit; including without limitation a life annuity or qualified joint and survivor annuity.
5A.3. Termination of Employment - Deferred Vested Pension - Vesting Rule.
(a) Eligibility for Deferred Vested Pension; Vesting Rule. A Participant shall be eligible for a deferred vested pension if he (1) is Vested; (2) separates from service with a Participating Company (or, if applicable, a Non-Participating Company) in an Eligible Separation, (3) is not eligible for a service pension under Section 5A.1(a), and (4) is not eligible for a disability pension under Section 5A.2(a) due to becoming Disabled prior to January 1, 2002. (A Participant who qualifies for a disability pension due to becoming Disabled on or after January 1, 2002 is eligible for a deferred vested pension.) A Participant who is eligible only for a deferred vested pension shall not be considered a “pensioner” or a “retired employee.”
(b) Effective Date and Duration. Deferred vested pension payments shall be effective on the later of (1) the date the Participant attains Normal Retirement Age or (2) the day following the date of his Eligible Separation. Except as described in the next sentence, a Participant who is eligible for a deferred vested pension and whose Term of Employment is fifteen or more years may make a written election to have his deferred vested pension commence before the time specified in the preceding sentence as follows:
LA3:752821.27 53
(A) If the Term of Employment is 15 or more years, but less than 20 years, the Participant may elect to have payments commence on or after his 60th birthday.
(B) If the Term of Employment is 20 or more years, but less than 25 years, the Participant may elect to have payments commence on or after his 55th birthday.
(C) If the Term of Employment is 25 or more years, the Participant may elect to have payments commence on or after his 50th birthday.
However, an Applicable Occupational Participant who is eligible for a deferred vested pension may make a written election to have his deferred vested pension commence before the time specified in the preceding sentence at any time on or after the Pension Effective Date. See also Section 5C.7(g) for rules for Management Participants with prior Occupational Part benefits.
Unless the Participant elects a lump sum, if the Participant’s Annuity Starting Date is prior to attainment of age 65, the deferred vested pension otherwise payable at Normal Retirement Age shall be reduced by the factors set forth in Appendix C (or, for Eligible Separations occurring prior to July 1, 2001 if the Participant elects a Qualified Joint and Survivor Annuity, Appendix D). Once made, an election to have a deferred vested pension paid early in reduced amounts shall be irrevocable. The general form of a deferred vested pension shall be payable for the life of the Participant, except as provided in Section 5C.3; as set forth in Article VI, Participants may elect alternative forms.
(c) Amount. Subject to subsection (b), the amount shall be determined in the same manner as the service pension is calculated under the rules in Section 5A.1(c) as in effect on the date the Participant Terminates from a Participating Company. Except as provided by the Plan provisions addressing reemployment, the amount shall not be recomputed as of any date after the date of the Participant’s Termination (even if he transfers to a Non-Participating Company the next day) nor shall the amount be recomputed on account of any amendments to the Plan after the date the Participant Terminates from a Participating Company (even if he transfers to a Non-Participating Company the next day).
(d) Notice of Eligibility for Deferred Vested Pension. The Committee shall notify each Vested Participant who incurs an Eligible Separation of his eligibility for a deferred vested pension by mailing, within a reasonable time after his leaving, a notice to his last known address as shown on the Participating Company’s records. It shall be the responsibility of each person eligible to receive a deferred vested pension to file written request therefor with the Committee not earlier than 90 days prior to the Annuity Starting Date. Except for months after normal retirement age, no deferred vested pension payment shall be made for any month prior to the month in which the Committee receives such written request.
(e) Reemployment. This subsection (e) applies only if the Participant remains employed on or after January 1, 2001; otherwise, the rules in the Plan in effect prior to the January 1, 2001 restatement apply.
LA3:752821.27 54
(1) General Rule. This paragraph applies if a Participant was eligible for a deferred vested pension at the time he previously incurred an Eligible Separation, is reemployed by a Participating Company, did not previously commence benefits, and does not meet the conditions for a service pension at the time he or she subsequently incurs an Eligible Separation. In this case, the benefits earned under this Article V-A shall be paid as a deferred vested pension at the time of the second Eligible Separation as follows.
(A) If the Participant bridges his or her Term of Employment during the second period of employment, then subject to the promotion and demotion rules set forth in Section 5A.4(e) and (f), such deferred vested pension shall be calculated as a single amount, based upon all Pension Calculation Service and applicable compensation at the subsequent Eligible Separation. In general, the promotion and demotion rules will be applied as if the period from the date of Eligible Separation until the Reemployment Commencement Date is ignored for all purposes; thus the Participant will not receive Pension Calculation Service for that period. If those rules provide that the entire benefit is not based on the band rate in effect at the time of the second Eligible Separation, two separate deferred vested pensions shall be calculated, one for each period of employment in a manner provided by Sections 5A.4(e) and (f).
(B) If the Participant does not bridge his or her Term of Employment, then the benefit for the earlier period of employment shall be a deferred vested pension, based on the benefit earned under this Article V-A as of the date of the Participant’s previous Termination, which benefit shall not be increased for any reason, including without limitation to reflect any additional service or compensation earned during reemployment, any increases in the monthly benefit rate after the earlier Eligible Separation, or the Participant’s new job title or classification or any new Pension Band as a result thereof. The benefit for the second period of employment shall be a deferred vested pension based on the benefit earned under Article V-A with respect to the period of reemployment, ignoring Pension Calculation Service, compensation earned prior to reemployment and, if applicable, the Pension Band for the job title and classification that the Participant previously held.
(2) Reemployment After 2001 if Participant previously commenced benefits. If a Participant was eligible for a deferred vested pension at the time he previously incurred an Eligible Separation, commences benefits (in a lump sum or annuity), is reemployed by a Participating Company after 2000 and does not meet the conditions for a service pension at the time he or she subsequently incurs an Eligible Separation, benefits shall be paid in accordance with the provisions of Section 5A.1(e)(3)(A) and (B), except that the benefits described therein shall each be paid as a deferred vested pension and shall be calculated separately as provided therein; the amount in Section 5A.1(e)(3)(A) shall not be adjusted to reflect any increases in the benefit rate or the Pension Band.
LA3:752821.27 55
(3) Availability of Lump Sums. Lump sums are available to the extent permitted by Section 5A.1(e)(7).
(4) Notwithstanding the foregoing, in the case of a Participant who terminates on or after October 12, 2000 as an Applicable Occupational Participant and commences benefits prior to the Reemployment Commencement Date, the rules in subsection (e)(2) shall apply instead of subsection (e)(1).
5A.4. Pension Amounts.
(a) Pension Bands. Except as otherwise provided in this Article V-A, each Participant shall be assigned a Pension Band number in accordance with the applicable collective bargaining agreement. If the maximum basic rate of pay of a newly created, upgraded or reclassified job title falls exactly between two existing job titles, the newly created, upgraded or job title shall be assigned to the pension band number relating to the job title with the higher maximum basic rate of pay.
(b) Pension Calculation. Except as otherwise provided in this Section 5A.4, the monthly pension benefit shall be equal to the sum of the Basic Monthly Pension Benefit and the Supplemental Monthly Pension Benefit.
(c) Basic Monthly Pension Benefit.
(i) General Rule. Subject to the various Plan rules addressing reemployment and Promotions and Demotions, the Basic Monthly Pension Benefit for a Participant, other than a Participant described in subparagraphs (ii)-(iv) below, shall be equal to the dollar amount set forth in the Monthly Benefit Table set forth in Appendix F for the Pension Band number that has been assigned to the Participant multiplied by the Participant’s Pension Calculation Service. Unless the Plan expressly specifies otherwise in the Plan rules addressing reemployment (and notwithstanding any Plan provision stating that the monthly pension is based on the monthly benefit as in effect from time to time), the dollar amount in Appendix F applicable to any period of service shall be determined no later than the date of the Participant’s Termination with respect to that period of service.
(ii) Special Rule: Commission Directory Advertising Sales Employees. This subparagraph (ii) applies to Directory Advertising Consultants - Telephone, Directory Advertising Consultants – Premise, Account Executives and Area Directory Advertising Consultants who are covered by the Dex-CWA collective bargaining agreement (collectively, referred to as “Commission Directory Advertising Sales Employees”). Prior to January 1, 1999, it also applied to Commission Directory Advertising Sales Employees who were covered by the Dex-IBEW collective bargaining agreement. This subparagraph (ii) sets forth the Basic Monthly Pension Benefit for such Participants.
LA3:752821.27 56
(A) For benefit calculations with respect to Terminations (or the date the Participant ceased to be a Commission Directory Advertising Sales Employee, if earlier) that occurred on or before October 5, 1992, the Basic Monthly Pension Benefit for a Participant who is a Commission Directory Advertising Salesperson shall be determined as follows:
(I) Determine average monthly commission pay for the applicable commission period before the applicable determination date (set forth in Appendix G, Table II). For this purpose, “commission pay” includes commissions, bonus payments, and daily average pay for periods during which sickness disability benefits are received. All such amounts must have been received before the applicable determination date.
(II) Convert average monthly commission pay determined under subparagraph (I) into a monthly pension factor (using the Table set forth in Appendix G, Table I).
(III) Multiply the monthly pension factor determined in subparagraph (II) above by Pension Calculation Service.
(IV) Multiply the monthly benefit amount for Pension Band 103 (set forth in Appendix F) by Pension Calculation Service.
(V) Add the amounts determined under subparagraphs (III) and (IV) to obtain the monthly pension benefit.
For purposes of this subparagraph 5A.4(c)(ii)(A), commissions paid during the applicable commission period are used in calculating the Basic Monthly Pension Benefit.
A separate computation pursuant to (I) through (V) above shall be performed for each “applicable commission period” and “determination date” before the Participant’s actual retirement date. With respect to each separate computation, Pension Calculation Service shall be determined as if the Participant’s retirement date is the earlier of Participant’s actual date of retirement or the last retirement date for the determination date and the related applicable computation period. For example, a computation for the 01-01-86 through 12-31-90 applicable commission period and the 01-01-91 determination date will include Pension Calculation Service through the earlier of the Participant’s actual retirement date or 12-31-91. Accordingly, if the Participant actually retired on 07-15-92, a computation for the 01-01-86 through 12-31-90 applicable commission period and the 01-01-91 determination date will include Pension Calculation Service through 12-31-91. The calculation shall use the Pension Band amount in effect on the last date for which Pension Calculation service is credited.
LA3:752821.27 57
The Participant’s Basic Monthly Pension Benefit shall be the highest monthly pension benefit produced by the separate computations described in the preceding paragraph.
(B) For Terminations (or the date the Participant ceased to be a Commission Directory Advertising Sales Employee, if earlier) that occur after October 5, 1992 and prior to August 19, 2001, the Basic Monthly Pension Benefit is equal to the greater of (I) “average monthly earnings” for the final five calendar years preceding the calendar year in which Termination occurs converted into the Pension Factor (set forth on Table III of Appendix G) times Pension Calculation Service or (II) the monthly pension benefit calculated under subparagraph 5A.4(c)(ii)(A) above. “Average monthly earnings” means base pay, including bonuses, commissions, internet incentives (effective January 1, 1999) and short-term disability pay for such five calendar years divided by sixty, except that in the case where there are not sixty months’ pay from the date of hire through the end of the calendar year preceding the date of Termination, the average monthly earnings shall be based on the number of months for which eligible pay is included. Notwithstanding the foregoing, if the Participant is has no earnings prior to January 1 of the year in which Termination occurs and vests under Section 14.4 due to a Code Section 420 transfer, the Participant’s benefit shall be based solely on the formula in Section 5A.4(c)(i); the Participant shall be assigned to Pension Band number 112 for this purpose.
(C) For Terminations (or the date the Participant ceased to be a Commission Directory Advertising Sales Employee, if earlier) that occur on or after August 19, 2001, the Basic Monthly Pension Benefit is equal to the greater of (I) Final Average Compensation, as defined in Section 1.21(b), converted into the Pension Factor (set forth on Table IV of Appendix G) times Pension Calculation Service or (II) the Basic Monthly Pension Benefit calculated under subparagraph 5A.4(c)(ii)(A) above.
(D) For purposes of (A), (B) and (C) above, Pension Calculation Service, commission pay, average monthly earnings and Final Average Compensation earned after the Participant ceases to be a Commission Directory Advertising Sales Employee shall be ignored. See also Sections 5A.4(e)(iii) and 5A.4(f)(iii).
(iii) Special Rules: Sales Consultants.
(A) This subparagraph (iii) applies to Qwest Corporation (formerly U S WEST Communications) Sales Consultants who Terminate on or after January 1, 1996 and Home Office Sales Consultants who Terminate on or after August 16, 1998. This subparagraph (iii) sets forth the Basic Monthly Pension Benefit for such Participants. Notwithstanding the foregoing, the Basic Monthly Pension Benefit for a Home Office Sales Consultant shall not be less
LA3:752821.27 58
than the amounts earned under Section 5A.4(c)(i) (based on Pension Band Number 109) calculated as if the Participant Terminated on August 15, 1998.
(B) For Participants described in this subparagraph (iii) who Terminate (or cease to be Sales Consultants, if earlier) prior to January 1, 2001, the Basic Monthly Pension Benefit is equal to the applicable Pension Factor times Pension Calculation Service. The Pension Factor is determined by converting the “average monthly earnings” (for the five calendar years preceding the calendar year in which Termination occurs) into the Pension Factor set forth in Table III of Appendix G. “Average monthly earnings” means base pay, overtime pay, sales incentives, and short term disability pay for such five calendar years divided by sixty, except that in the case where there are not sixty months’ pay from the date of hire through the date of Termination, the average monthly earnings shall be based on the number of months for which eligible pay is included.
(C) For Participants described in this subparagraph (iii) who Terminate (or cease to be Sales Consultants, if earlier) on or after January 1, 2001, the Basic Monthly Pension Benefit is equal to the applicable Pension Factor times Pension Calculation Service. The Pension Factor is determined by converting the Participant’s Final Average Compensation, as defined in Section 1.21(b), into the Pension Factor set forth in Table III of Appendix G or Table IV of Appendix G, depending upon whether the Participant Terminated (or ceased to be a Sales Consultant, if earlier) prior to, as opposed to on or after, August 19, 2001).
(D) For purposes of (B) and (C) above, Pension Calculation Service, average monthly earnings and Final Average Compensation after the Participant ceases to be a Sales Consultant shall be ignored. See also Sections 5A.4(e)(iii) and 5A.4(f)(iii).
(E) Notwithstanding the foregoing, effective August 19, 2001, in the case of Participants described in this subparagraph (iii) who are compensated by the CWA for two hundred eight (208) hours or more, on average, in the five years preceding their Termination, the Basic Monthly Pension Benefit shall not be less than the dollar amount set forth in Appendix F for Pension Band number 112 multiplied by the Participant’s Pension Calculation Service.
(iv) Dex-IBEW Commissioned Sales Employees.
(A) This subparagraph (iv) applies to Occupational Employees covered by the Dex-IBEW collective bargaining agreements in the following job titles who Terminate on or after December 31, 1998: Directory Advertising Consultants, Directory Advertising Consultant-Telephone, Account Executives, or Area Directory Advertising Consultant. Such persons are referred to as “Dex-IBEW Commissioned Sales Employees.” However, this subparagraph (iv) does not apply to any other job category, including without limitation Account
LA3:752821.27 59
Representatives. This subparagraph (iv) sets forth the Basic Monthly Pension Benefit for such Participants. However, the Basic Monthly Pension Benefit for such a Participant shall not be less than the amounts earned under Section 5A.4(c)(ii) plus the amounts earned under Section 5A.4(d), in each case calculated as if the Participant Terminated on December 31, 1998, provided that for purposes of computing “average monthly earnings” under Section 5A.4(c)(ii)(B), earnings in 1998 shall be taken into account.
(B) Effective May 5, 2002, for Participants whose Eligible Separation (or, if earlier, the date the Participant ceased to be a Dex-IBEW Commissioned Sales Employee) is on or after May 5, 2002, the Basic Monthly Pension Benefit for a Participant covered by this subparagraph (iv) is equal to 1.40 percent of Final Average Compensation multiplied by Pension Calculation Service. For this purpose, Pension Calculation Service and Final Average Compensation earned after the Participant ceases to be a Dex-IBEW Commissioned Sales Employee shall be ignored. See also Sections 5A.4(e)(iii) and 5A.4(f)(iii).
(C) The rate is 1.3% for Participants whose Eligible Separation (or, if earlier, the date the Participant ceased to be a Dex-IBEW Commissioned Sales Employee) was on or after January 1, 2001 and prior to May 5, 2002. For Participants whose Eligible Separation (if earlier, the date the Participant ceased to be a Dex-IBEW Commissioned Sales Employee) is prior to January 1, 2001, the rate is 1.25%.
(d) Supplemental Monthly Pension Benefit. (i) A Participant’s Supplemental Monthly Pension Benefit shall be equal to the product of (A) the average annual amount, if any, of differentials and other special payments, as set forth below, paid to the Participant during the latest 36-month period (effective May 1, 1993, the latest three calendar years) preceding the date as of which the Participant’s benefit under the Occupational Part is determined, (B) 0.001, and (C) the Participant’s Pension Calculation Service. The Supplemental Monthly Pension Benefit shall not be reduced for part-time service. The differentials and other special payments that are includible in the calculation of the Supplemental Monthly Pension Benefit are the following:
In charge allowances;
Extra payments for a temporary assignment or temporary promotion to higher graded or supervisor positions, but only if (1) made during the first 12 months of such assignment or promotion (payments after such 12 month period are excluded) and (2) such payments are made during the last 3 calendar years preceding the date as of which benefits are determined. The condition in clause (1) of the preceding sentence shall not apply to temporary promotions on or after January 1, 2001 to a Management position;
LA3:752821.27 60
Evening, night and daily differential payments to all Employees, including operating room Employees, whose work tours fall wholly or partly within the stated differential period;
Subject to the following paragraph (ii), job differential and apprentice differential;
Earnings above base wages under the terms of the leveraged compensation plan for purposes of calculating the Supplemental Monthly Pension Benefit for the following: Employees covered by the Customer Sales and Service Incentive Plan and, for periods before August 16, 1998, Home Office Sales Consultants;
Performance bonus (previously referred to as conversion/penetration bonus) paid to Account Representatives covered by Dex-CWA or Dex-IBEW collective bargaining agreements; and
Effective July 1, 1999, payments under the Company’s Enhanced Compensation Plan.
(ii) Notwithstanding any other provision of this subsection 5A.4(d), the following job differential payments shall not be included in any calculation of a supplemental monthly pension benefit under this subsection 5A.4(d): (A) job differential payments that have been included for purposes of a Participant’s assignment to a Pension Band number or that were eliminated and included as part of base wages either in accordance with or as a result of collective bargaining agreements with one or more unions and (B) job differential payments received by an employee prior to a Promotion if the Participant has been in the job title and classification to which he was Promoted for eighteen months or more.
(iii) For purposes of calculating supplemental payments pursuant to this Section 5A.4(d), differential pay where a Covered Employee is temporarily promoted to management is equal to the excess of pay for the management position over pay for the Covered Employee’s regular position. Pay for the management position shall be equal to “Compensation” as defined in the Plan (based on the formula that would apply if such person had been permanently transferred to Management status). Pay for the Covered Employee’s regular position shall include base pay, daily average pay, commissions, and merit bonuses.
(e) Promotions. This Section 5A.4(e) addresses Promotions from one Occupational position to another. It does not address transfers to a Management position.
(i) General Rule.
(A) If a Participant is Promoted within the 18 month period preceding the date the Participant Terminates, the basic monthly pension benefit of such Participant shall equal the sum of (1) the basic monthly pension benefit determined, for all years and months of service prior to such promotion, on the basis of the monthly benefit of the lower Pension Band number for the old job title and classification in effect as of the Participant’s date of Termination, plus
LA3:752821.27 61
(2) the basic monthly pension benefit determined, for all Pension Calculation Service in the new job title and classification, on the basis of the monthly benefit of the higher Pension Band number for the new job title and classification.
(B) For purposes of pension calculations under this Section 5A.4, a promotion (to another Occupational position) that has been designated by the Participating Company that employs the Participant as a temporary promotion will be considered as a Promotion only on or after the first anniversary of such temporary promotion or transfer and will be treated as a Promotion for purposes of pension calculations from and after such anniversary date.
(ii) Prior Demotion. If a Participant who is Promoted was previously demoted, the basic monthly pension benefit for such employee shall be determined according to subparagraph (A) or (B).
(A) If the Participant has completed an 18 consecutive month period in the job title and classification to which promoted, the basic monthly pension benefit for the Participant shall equal the greater of (1) the basic monthly pension benefit determined, for all Pension Calculation Service, on the basis of the monthly benefit, as in effect from time to time (but not after the date of Termination), of the Pension Band number related to the job title and classification to which the Participant was Promoted, or (2) the basic monthly pension benefit determined, for all Pension Calculation Service, on the basis of the monthly benefit, as in effect on the date of the Demotion, of the Pension Band number related to the job title and classification from which the Participant was demoted; or
(B) If the Participant has not completed an 18 consecutive month period in the job title and classification to which promoted, the basic monthly pension benefit for the Participant shall equal the sum of (1) the greater of (A) the basic monthly pension benefit determined, for all Pension Calculation Service prior to the Promotion, on the basis of the monthly benefit, as in effect from time to time (but not after the date of Termination), of the Pension Band number related to the job title and classification to which the Participant was Demoted, or (B) the basic monthly pension benefit determined, for all Pension Calculation Service prior to the Promotion, on the basis of the monthly benefit, as in effect on the date of the Demotion, of the Pension Band number related to the job title and classification from which the Participant was Demoted, plus (2) the basic monthly pension benefit determined, for all Pension Calculation Service in the job title and classification to which Promoted, on the basis of the monthly benefit, as in effect from time to time (but not after the date of Termination), of the Pension Band number related to the job title and classification to which the Participant was promoted or transferred.
LA3:752821.27 62
(iii) Special Rules for Sales Personnel.
(A) If a Participant who is a Sales Employee is Promoted to a position covered by the regular Pension Band formula and the Participant has completed an 18 consecutive month period in the new job title and classification, the basic monthly pension benefit for the Participant shall be determined under subsection 5A.4(c)(i) on the basis of the monthly benefit of the Pension Band number for the new job title and classification for all Pension Calculation Service. If the Participant has not completed an 18 consecutive month period in the new job title and classification, the basic monthly pension benefit of the Participant shall equal the sum of (1) the basic monthly pension benefit determined in accordance with the rules of subsection 5A.4(c)(ii)-(iv), as applicable, for all Pension Calculation Service prior to the Promotion, including only compensation prior to the Promotion, plus (2) the basic monthly pension benefit under subsection 5A.4(c)(i), determined for all Pension Calculation Service in the new job title and classification, on the basis of the monthly benefit of the Pension Band number for the new job title and classification. If, within an 18 month period prior to a date as of which the Participant’s pension benefit is determined, the Participant is Promoted, and is thereafter again Promoted, one or more times, the Participant’s basic monthly pension benefit shall equal the sum of (1) the basic monthly pension benefit, determined in accordance with the provisions of subsection 5A.4(c)(ii)-(iv), as applicable, for all Pension Calculation Service and compensation, in each case prior to the initial Promotion, plus (2) the basic monthly pension benefit determined under subsection 5A.4(c)(i), for all Pension Calculation Service in each new job title and classification to which the Participant was Promoted during such period, on the basis of the applicable monthly benefit of the Pension Band number.
(B) If a Participant who is covered by the regular Pension Band formula is Promoted to a Sales Personnel position and the Participant has completed an 18 consecutive month period in the Sales Personnel classification, the basic monthly pension benefit for the Participant shall be determined in accordance with the rules of subsection 5A.4(c)(ii)-(iv), as applicable, for all Pension Calculation Service and compensation. If the Participant has not completed an 18 consecutive month period in the Sales Personnel classification, the basic monthly pension benefit of the Participant shall equal the sum of (1) the basic monthly pension benefit determined in accordance with the rules of subsection 5A.4(c)(i) for all Pension Calculation Service prior to the Promotion, on the basis of the monthly benefit of the Pension Band number for the old job title and classification in effect as of the Participant’s date of Termination, plus (2) the basic monthly pension benefit, determined in accordance with the rules of subsection 5A.4(c)(ii)-(iv), as applicable, for all Pension Calculation Service in the Sales Personnel classification (but not service earned under the prior classification) and including all compensation (including compensation prior to the Promotion).
LA3:752821.27 63
(f) Demotions.
(i) General Rule. If a Participant is Demoted, the basic monthly pension benefit for the Participant shall be the greater of (1) the monthly pension benefit determined, for all Pension Calculation Service, on the basis of the monthly benefit, as in effect on the date of the Demotion, of the Pension Band number for the job title and classification from which the Participant was Demoted, or (2) the monthly pension benefit determined, for all Pension Calculation Service, on the basis of the monthly benefit, as in effect from time to time (but not after the date of Termination), of the Pension Band number for the job title and classification to which the Participant was Demoted.
(ii) Prior Promotion. If a Participant who is Demoted was previously Promoted, within an 18 month period preceding the Demotion, the basic monthly pension benefit for the Participant shall be determined in accordance with subsection 5A.4(f)(ii)(A) or (B) below.
(A) If the Pension Band number for the job title and classification to which the Participant was Demoted is the same as or lower than the Pension Band number for the job title and classification from which the Participant was previously Promoted, the basic monthly pension benefit for the Participant shall equal the sum of (1) the greater of (A) the basic monthly pension benefit determined, for all Pension Calculation Service prior to the previous Promotion and all Pension Calculation Service subsequent to the Demotion, on the basis of the monthly benefit, as in effect on the date of the Demotion, of the Pension Band number for the job title and classification from which the Participant was Promoted or (B) the basic monthly pension benefit determined, for all such Pension Calculation Service described in the preceding clause (A), on the basis of the monthly benefit, as in effect from time to time (but not after the date of Termination), of the Pension Band number for the job title and classification to which the Participant was Demoted, plus (2) the greater of (A) the basic monthly pension benefit determined, for all Pension Calculation Service from the date of the Promotion to the date of the Demotion, on the basis of the monthly benefit, as in effect on the date of the Demotion, of the Pension Band number for the job title and classification to which the Participant was Promoted or (B) the basic monthly pension benefit determined, for all such Pension Calculation Service, on the basis of the monthly benefit, as in effect from time to time (but not after the date of Termination), of the Pension Band number for the job title and classification to which the Participant was Demoted.
(B) If the Pension Band number for the job title and classification to which the Participant was Demoted is higher than the Pension Band number for the job title and classification from which the Participant was previously Promoted, the basic monthly pension benefit for such employee shall be determined as provided below.
LA3:752821.27 64
(1) If the Participant has completed an 18 consecutive month period after the initial Promotion, the basic monthly pension benefit for the Participant shall equal the sum of (1) the basic monthly pension benefit determined, for all Pension Calculation Service prior to such previous Promotion and all Pension Calculation Service after such Demotion, on the basis of the monthly benefit, as in effect from time to time (but not after the date of Termination), of the Pension Band number for the job title and classification to which the Participant was Demoted, plus (2) the greater of (A) the basic monthly pension benefit determined, for all Pension Calculation Service from the date of such Promotion to the date of such Demotion, on the basis of the monthly benefit, as in effect on the date of such Demotion, of the Pension Band number for the job title and classification from which the Participant was Demoted or (B) the basic monthly pension benefit determined, for all such Pension Calculation Service, on the basis of the monthly benefit, as in effect from time to time (but not after the date of Termination), of the Pension Band number for the job title and classification to which the Participant was Demoted.
(2) If the Participant has not completed an 18 consecutive month period after the previous Promotion, the basic monthly pension benefit for the Participant shall equal the sum of (1) the basic monthly pension benefit determined, for all Pension Calculation Service prior to such previous Promotion, on the basis of the monthly benefit, as in effect from time to time (but not after the date of Termination), of the Pension Band number for the job title and classification from which the Participant was Promoted, (2) the greater of (A) the basic monthly pension benefit determined, for all Pension Calculation Service from the date of such Promotion to the date of such Demotion, on the basis of the monthly benefit, as in effect on the date of the Demotion, of the Pension Band number for the job title and classification to which the Participant was Promoted or (B) the basic monthly pension benefit determined, for all such Pension Calculation Service, on the basis of the monthly benefit, as in effect from time to time (but not after the date of Termination), of the Pension Band number for the job title and classification to which the Participant was demoted or transferred, plus (3) the basic monthly pension benefit determined, for all Pension Calculation Service after such Demotion, on the basis of the monthly benefit, as in effect from time to time (but not after the date of Termination), of the Pension Band number for the job title and classification to which the Participant was demoted.
(iii) Special Rules for Sales Personnel.
(A) If a Participant who is a Sales Employee is Demoted to a position covered by the regular Pension Band formula, the basic monthly pension benefit for the Participant shall equal the greater of:
LA3:752821.27 65
(1) the sum of (A) the greater of (I) the basic monthly pension benefit, as of the date of such Demotion, determined, for all Pension Calculation Service prior to the Demotion, and including only compensation prior to such Demotion, in accordance with the provisions of subsection 5A.4(c)(ii)-(iv), as applicable, or (II) the basic monthly pension benefit determined under subsection 5A.4(c)(i), for all such Pension Calculation Service prior to the Demotion, on the basis of the monthly pension benefit, as in effect from time to time (but not after the date of Termination), of the Pension Band number for the job title and classification to which the Participant was Demoted, plus (B) the basic monthly pension benefit determined under subsection 5A.4(c)(i), for all Pension Calculation Service in such new job title and classification, on the basis of the monthly benefit of the Pension Band number for such new job title and classification;
(2) the monthly pension benefit under subsection 5A.4(c)(i) of the Pension Band for the new job title and classification times all Pension Calculation Service, or
(3) the monthly pension benefit under subsection 5A.4(c)(i) of Pension Band 103 times all Pension Calculation Service.
(B) If a Participant who is covered by the regular Pension Band formula is Demoted to a Sales Personnel position, the basic monthly pension benefit for the Participant shall equal the greater of:
(1) the basic monthly pension benefit determined under subsection 5A.4(c)(i), for all Pension Calculation Service, on the basis of the monthly pension benefit, as in effect on the date of the Demotion, of the Pension Band number for the job title and classification from which the Participant was Demoted; or
(2) the monthly pension benefit determined, in accordance with the provisions of subsection 5A.4(c)(ii)-(iv), as applicable, for all Pension Calculation Service and all compensation, including compensation prior to the Demotion.
However, solely for purposes of this Section 5A.4(f)(iii), the following rule will apply to Sales Consultants described in Section 5A.4(c)(iii) who were formerly in Pension Band 112 and were selected for the Sales Consultant title through transformation staffing. In this case, the Sales Consultant will be guaranteed Pension Band 112 protection for 18 months from the time he or she either reported to the Sales Consultant position or began receiving the daily differential and/or time and title for the Sales Consultant. If the employee voluntarily leaves the Sales Consultant position during this 18 month period, the Pension Band 112 protection will cease, and the foregoing rules of Section 5A.4(f)(iii)(A) shall apply.
LA3:752821.27 66
(iv) Special Rule for Certain Demotions. Notwithstanding any other provision of this subsection 5A.4(f), if a Participant, after becoming eligible for a service pension under Section 5A.1, is Demoted on or after October 1, 1980 on account of the imposition of permanent medical work restrictions or on account of a force surplus situation, the basic monthly pension benefit for such a Participant who retires on or after August 7, 1983, shall be the greater of: (A) the sum of (i) the monthly pension benefit determined, for all Pension Calculation Service up to the fifth anniversary of such Demotion on the basis of the monthly benefit, as in effect from time to time (but not after the date of Termination), of the Pension Band number or, for retirements after October 5, 1992, the pension factor for the job title and classification from which the Participant was Demoted, plus (ii) the greater of: (1) the monthly pension benefit determined, for all Pension Calculation Service from such fifth anniversary to the date of the Participant’s retirement, on the basis of the monthly benefit, as in effect on the date of such Demotion, of the Pension Band number or, for retirements after October 5, 1992, the pension factor for the job title and classification from which the Participant was demoted; or (2) the monthly pension benefit determined, for all Pension Calculation Service from such fifth anniversary to the date of the Participant’s retirement on the basis of the monthly benefit, as in effect from time to time (but not after the date of Termination), of the Pension Band number for the job title and classification to which the Participant was Demoted; or (B) the monthly pension benefit determined for all Pension Calculation Service on the basis of the monthly benefit, as in effect from time to time (but not after the date of Termination), of the Pension Band for the job title and classification to which the Participant was Demoted.
(g) Coverage Under Management Part and Certain Other Pension Plans. Paragraphs (i) and (iv) below are modified by paragraph (v) for all Participants who become Occupational Employees on or after January 1, 2001.
(i) Management to Occupational.
(A) In the case of a Participant who was previously covered under the Related Management Plans, and was never previously covered by the Related Occupational Plans, the monthly pension benefit for the Participant shall equal the sum of (1) the pension benefit determined for pension calculation service earned while covered under the Related Management Plans, in accordance with the provisions of the Related Management Plans as in effect on the last date the Participant was covered by the Related Management Plans (based on compensation earned through such date), plus (2) the pension benefit determined for Pension Calculation Service earned while the Participant was covered by this Occupational Part, in accordance with the provisions of this Occupational Part.
(B) Upon completion of three years of continuous employment under this Occupational Part as an Occupational Employee, the Participant shall receive the greater of (1) the pension benefit determined pursuant to the preceding paragraph (A), or (2) the pension benefit determined solely in accordance with the provisions of the Occupational Part for all pension calculation service under the
LA3:752821.27 67
Related Management Plans and all Pension Calculation Service while covered by this Occupational Part. This paragraph (B) applies only if the Participant became covered by the Occupational Part prior to January 1, 2001; otherwise, pursuant to (v)(C) below, benefits shall be determined exclusively under paragraph (A) above.
(ii) Occupational to Occupational. If a Participant’s Term of Employment under this Plan includes any period of employment, in accordance with the provisions of an applicable Interchange Agreement or the Mandatory Portability Agreement, under a plan maintained by a Former Affiliate or by a Portability Company, that is substantially similar to this Plan, the monthly pension benefit of the Participant shall equal the greater of:
(1) the sum of (A) the pension benefit determined for all pension calculation service under such other plan, in accordance with the provisions of such other plan as in effect on the last date the Participant was covered by such other plan, plus (B) the pension benefit determined, for all Pension Calculation Service while the Participant was covered by this Occupational Part, in accordance with the provisions of this Occupational Part, or
(2) the pension benefit determined, for all pension calculation service under such other plan and all Pension Calculation Service while such employee was covered by this Occupational Part, in accordance with the provisions of this Occupational Part.
This paragraph (ii) does not apply if the earlier employment was earned under the Occupational Part.
(iii) Paragraphs (i), (ii), and (iv) shall be subject to Appendix B and the following provisions:
(A) For purposes of determining the term of employment or the pension calculation service, as applicable, under any other plan, there shall be counted only such term of employment or pension calculation service, as applicable, under such other plan, as of the last date the Participant was covered by such other plan, which would have been counted by such other plan had the Participant been covered by such other plan during the period the Participant is covered by this Occupational Part.
(B) Paragraphs (i), (ii) and (iv) shall be applied by ignoring all service and compensation earned while covered by a Related Management Plan or Related Occupational Plan if the Participant previously took a lump sum from such plan unless the Participant satisfies the rules set forth in such plan for the repayment or other treatment of such previous lump sum, in accordance with Section 2.6(c) of Appendix B. However, no repayments are permitted with respect to prior lump sums from this Plan.
LA3:752821.27 68
(C) To the extent the Participant is entitled to a benefit determined under the provisions of this Occupational Part that is based on service under Related Management Plans or other Related Occupational Plans, such benefit shall be calculated by assuming the Participant had the identical work history (in terms of terminations and breaks in service), but earned such other service (at the same time it was actually earned) under this Occupational Part.
(D) Any benefit calculated under this subsection (g) shall not apply until the Participant commences benefits with respect to benefits earned under this Occupational Part; in addition, no retroactive adjustment shall be made. By way of example, assume a former Management Employee Terminates in 1995, is rehired as an Occupational Employee in 1997 and again Terminates in June 2003. This Participant shall be entitled to a benefit under Section 5A.4 (g)(i)(B) beginning June 2003; no retroactive adjustment will be made to the benefits received, if any, under the Management Part prior to June 2003. Subject to Sections 5C.7 and 6.6, for Eligible Separations prior to July 1, 2001, any benefits earned under the Occupational Part pursuant to this subsection (g) (including any adjustments with respect to service earned prior to becoming an Occupational Employee) may only be paid in a form allowed under the Occupational Part.
(E) Notwithstanding the foregoing, in accordance with and subject to Section 2.4(b) of Appendix B, this subsection (g) shall not apply to any Participant who previously commenced benefits unless the Participant bridges his or her Term of Employment in accordance with Section 2.4(b) of this Plan.
(F) If the Participant has series of periods of employment as a management and occupational employee which are not described, then the Participant’s benefit shall be determined by the Committee based on the principles set forth in this Section 5A.4 and in Sections 5B.4, 5D.7 and 5E.6.
(G) (1) Because the pre-retirement death benefits under the Occupational Part and Management Part for a particular Participant may be payable at different times or forms and provide different subsidies, a Participant (or after the Participant’s death, the Participant’s surviving spouse but only if the spouse is the sole primary Beneficiary) who is entitled to a pre-retirement death benefit may elect, with spousal consent, to receive the various death benefits available under any one set (and only one set) of the alternative benefits available to that Participant under this subsection. Notwithstanding the foregoing, the obligation to file such an election shall rest solely with the Participant; neither the Participating Company nor the Committee shall be under any obligation to identify Participants who are eligible to make such an election or to provide a Participant with an election form unless the Participant requests a form. Neither the Participant nor the spouse may select death benefits from different sets of the alternative benefits available to that Participant. Such election may be made regardless of which set of alternative benefits
LA3:752821.27 69
provides an actuarially greater set of death benefits or pension benefits. If (i) the Participant does not make such an election, (ii) the Participant named a primary Beneficiary other than his surviving spouse, and (iii) the spouse consented to the waiver of the Qualified Pre-Retirement Survivor Annuity, then the Participant shall be deemed to have elected that set of benefits that provides the named Beneficiary with the greatest possible death benefit.
(2) By way of example, assume an Active Participant is described in subsection (g)(i)(B) and dies prior to the time the lump sum was available with respect to the Occupational benefits. The Beneficiary may elect either the various death benefits under subsection (g)(i)(B)(1) or the death benefits under subsection (g)(i)(B)(2), regardless of which set of death benefits is greater or which alternative provides a greater pension benefit. Accordingly, if the Beneficiary wants to elect a lump sum death benefit, the Beneficiary must elect a lump sum benefit with respect to the death benefit under subsection (g)(i)(A)(1) and, if the Participant is married on the date of death, a Qualified Pre-Retirement Survivor Annuity on the death benefit under subsection (g)(i)(A)(2), even if the pension (or death) benefit under subsection (g)(i)(A) is smaller than the pension (or death) benefit under subsection (g)(i)(B)(2). (Spousal consent is needed to make this election.) The Beneficiary cannot elect a lump sum benefit with respect to the death benefit under subsection (g)(i)(A)(1) and a Qualified Pre-Retirement Survivor Annuity on the excess of the benefit under subsection (g)(i)(B)(2) over the benefit under subsection (g)(i)(A)(1) (or on the excess of the benefit under subsection (g)(i)(B)(2) over the benefit under subsection (g)(i)(B)(1)).
(H) See Sections 5C.7 and 6.6(a) for special rules regarding the New 97 Rules and benefit payment options.
(iv) Occupational to Management to Occupational. In the case of a Participant who
(1) was previously covered under the Related Occupational Plans,
(2) then became covered under the Related Management Plans, and
(3) then becomes covered by this Occupational Part,
the monthly pension benefit for such employee shall be determined in accordance with subsection (A) or (B) below, subject, in all cases, to paragraph (v) below.
LA3:752821.27 70
(A) If, at the time the Participant becomes covered by this Occupational Part, the Participant’s monthly pension benefit is determined solely in accordance with the provisions of the Related Management Plans under which the Participant was covered, the monthly pension benefit for the Participant shall be determined in accordance with the provisions of subsection 5A.4(g)(i)(B), above, provided that the requirement of three years of continuous service after again becoming an Occupational Employee shall not apply under Section 5A.4(g)(i)(B). However, pursuant to (v)(C) below, if the Participant becomes covered by the Occupational Part on or after January 1, 2001, benefits shall be determined exclusively under paragraph (g)(i)(A) above.
(B) If, at the time the Participant becomes covered by this Occupational Part, the Participant’s monthly pension benefit is determined in accordance with both the provisions of the Related Management Plans and the Related Occupational Plans, the monthly pension benefit for the Participant shall be determined in accordance with subparagraph (1) or (2) below, and in a manner consistent with subsection 5A.4(g)(iii) above and 5A.4(g)(v) below. Any applicable Supplemental Monthly Pension Benefit determined in accordance with subsection 5A.4(d) shall be added to any pension amount determined in accordance with this subparagraph (B).
(1) If the Pension Band number for the job title and classification that the Participant holds immediately after becoming covered by this Occupational Part is the same or lower than the Pension Band number for the job title and classification that the Participant previously held immediately before becoming covered by the Related Management Plans, the basic monthly pension benefit for the Participant shall equal the sum of
(i) subject to subsection (g)(v)(B), the basic monthly pension benefit determined, for all pension calculation service earned while covered under the Related Occupational Plans and this Occupational Part (and excluding service earned under the Related Management Plans), on the basis of the greater of the following monthly benefit: (X) the monthly benefit in effect under the applicable Related Occupational Plan on the date the Participant previously ceased to be covered under the Related Occupational Plan, of the Pension Band number for the job title and classification that the Participant held at the time he previously ceased to be covered under the Related Occupational Plan, or (Y) the monthly benefit, as in effect from time to time under this Occupational Part (but not after the date of Termination), of the Pension Band number for the job title and classification that the Participant holds immediately after becoming covered by this Occupational Part, plus
LA3:752821.27 71
(ii) the basic monthly pension benefit determined, for all pension calculation service earned while covered under the Related Management Plans, on the basis of the greater of the following monthly benefits: (X) the monthly benefit, as in effect on the date the Participant ceased to be covered under the Related Management Plans (including, if applicable, final average compensation at that time), determined in accordance with the provisions of the Related Management Plans, or (Y) the monthly benefit, as in effect from time to time under this Occupational Part (but not after the date of Termination), of the Pension Band number for the job title and classification that the Participant holds immediately after becoming covered by this Occupational Part, provided that clause (Y) applies only if the Participant became covered by the Occupational Part prior to January 1, 2001 (otherwise, pursuant to (v) below, benefits shall be determined exclusively under clause (X) above.
(2) If the Pension Band number for the job title and classification that the Participant holds immediately after becoming covered by this Occupational Part is higher than the Pension Band number related to the job title and classification that the Participant previously held immediately before becoming covered by the Related Management Plans, the basic monthly pension benefit for the Participant shall be determined in accordance with subparagraphs (A) or (B) below.
(A) If the Participant has completed an 18 consecutive month period after becoming covered by the Related Management Plans, the basic monthly pension benefit for the Participant shall equal the sum of:
(i) subject to subsection (g)(v)(B), the monthly pension benefit determined, for all pension calculation service earned while covered under the Related Occupational Plans and this Occupational Part (and excluding service under the Related Management Plans), on the basis of the monthly benefit, as in effect from time to time under this Occupational Part (but not after the date of Termination), of the Pension Band number for the job title and classification that the Participant holds immediately after becoming covered by this Occupational Part, plus
(ii) the amount described in clause (ii) of subparagraph (1) above [that is, the basic monthly pension benefit determined, for all pension calculation service earned while covered under the Related Management Plans,
LA3:752821.27 72
on the basis of the greater of the following monthly benefits: (X) the monthly benefit, as in effect on the date the Participant ceased to be covered under the Related Management Plans (including, if applicable, final average compensation at that time), determined in accordance with the provisions of the Related Management Plans, or (Y) the monthly benefit, as in effect from time to time under this Occupational Part (but not after the date of Termination), of the Pension Band number for the job title and classification that the Participant holds immediately after becoming covered by this Occupational Part, provided clause (Y) applies only if the Participant became covered by the Occupational Part prior to January 1, 2001(otherwise, pursuant to (v) below, benefits shall be determined exclusively under clause (X) above)].
(B) If the Participant has not completed an 18 consecutive month period after becoming covered by the Related Management Plans, the basic monthly pension benefit for such employee shall equal the sum of:
(i) subject to subsection (g)(v)(B), the monthly pension benefit determined, for all pension calculation service earned while covered under the Related Occupational Plans prior to becoming covered by the Related Management Plans, on the basis of the monthly benefit, as in effect under the Applicable Related Occupational Plan on the date the Participant previously ceased to be covered by such Related Occupational Plan (except that if the Related Occupational Plan was the Occupational Part, the calculation may be on the basis of the monthly benefit, as in effect from time to time under Occupational Part, but not after the date of Termination), of the Pension Band number for the job title and classification that the Participant held at the time the Participant previously ceased to be covered under the Related Occupational Plans; plus
(ii) the amount described in clause (ii) of subparagraph (1) above [that is, the basic monthly pension benefit determined, for all pension calculation service earned while covered under the Related Management Plans, on the basis of the greater of the following monthly benefits: (X) the monthly benefit, as in effect on the date the Participant ceased to be covered under the Related Management Plans (including, if applicable, final average
LA3:752821.27 73
compensation at that time), determined in accordance with the provisions of the Related Management Plans, or (Y) subject to subsection (j), the monthly benefit, as in effect from time to time under this Occupational Part (but not after the date of Termination), of the Pension Band number for the job title and classification that the Participant holds immediately after becoming covered by this Occupational Part, provided clause (Y) applies only if the Participant became covered by the Occupational Part prior to January 1, 2001(otherwise, pursuant to (v) below, benefits shall be determined exclusively under clause (X) above)]; plus
(iii) the monthly pension benefit determined, for all Pension Calculation Service earned after becoming covered again by this Occupational Part, on the basis of the monthly benefit, as in effect from time to time under this Occupational Part (but not after the date of Termination), of the Pension Band number for the job title and classification that the Participant holds immediately after becoming covered again by this Occupational Part.
(v) Rules Effective January 1, 2001. Notwithstanding the foregoing provisions of this subsection (g), this paragraph (v) applies to Occupational Employees (whether or not they were previously an Employee), (1) whose Employment (or Reemployment) Commencement Date is on or after January 1, 2001 and who were previously covered under the Occupational Part, or the Related Management Plans, including the Management Part or (2) who transfer from the Management Part to the Occupational Part on or after January 1, 2001. In contrast, if the Participant previously participated in a Related Occupational Plan, other than the Occupational Part, prior to becoming a Participant in the Occupational Part, then the monthly pension benefits under the Related Occupational Plan shall be determined in accordance with (g)(ii)-(iv) above. In addition, this paragraph (v) shall not reduce the benefits previously earned under this Section 5A.4(g) or another provision as a result of reemployment or transfers prior to January 1, 2001; in that case, paragraph (v) shall apply to benefits earned after reemployment and, except as set forth in this paragraph (v), the benefits previously earned shall not be increased (or recalculated) under the rules in 5A.4(g)(i)-(iv) or any other section by virtue of the later reemployment.
(A) First, if the Participant is described in (g)(iv) and the Participant previously participated in the Occupational Part and commenced benefits hereunder prior to again becoming an Active Participant in the Occupational Part, then the monthly pension benefit for the Participant shall equal the sum of (i) the pension benefit that previously commenced (that is, subject to Section 5E.6(e)(1), the benefit determined for service earned while covered under the Occupational Part, in accordance with the provisions of the Occupational Part as in effect on the last date the Participant was covered by the Occupational Part),
LA3:752821.27 74
plus (ii) the pension benefit determined for the service earned while the Participant was covered by this Article V-A, in accordance with the provisions of this Article V-A. Accordingly, the benefits previously earned by the Participant under the Occupational Part prior to the date of any earlier termination of employment shall not be increased to reflect either (1) any subsequent increases in the Occupational monthly benefit rate or (2) the Participant’s new job title or classification or any new Pension Band number as a result of such new job title or classification. In contrast, if the Participant did not previously commence benefits, the rules of (g)(iv) shall continue to apply.
(B) Second, notwithstanding any other provision of this Plan, if such a person was previously covered by a Related Management Plan (including the Management Part), the monthly pension benefit for the Participant with respect to service earned while covered under the Related Management Plan shall be determined solely in accordance with the provisions of the Related Management Plan as in effect on the last date the Participant was covered by the Related Management Plans (based on compensation earned through such date). Accordingly, the following provisions of this subsection (g) shall not apply: (g)(i)(B); (g)(iv)(B)(1)(ii)(Y); (g)(iv)(B)(2)(A)(ii)(Y); and (g)(iv)(B)(2)(B)(ii)(Y). In addition, if the person is described in (g)(iv)(A), then the benefit shall be determined in accordance with the provisions of subsection (g)(i)(A), even if the person has three years of continuous service after again becoming an Occupational Employee.
(C) To the extent applicable, the principles set forth in Section 5A.4(g)(iii) shall apply for purposes of this subsection (v) as well.
(h) Additional Promotions or Demotions. If a Participant has a series of Promotions, Demotions, or a series of changes in employment status between coverage under this Occupational Part and coverage under the Related Occupational Plans or Related Management Plans and any such series is not specifically described in subsections 5A.4(e) through 5A.4(g), the basic monthly pension benefit for such Participant shall be determined in a manner consistent with the provisions of subsections 5A.4(e) through 5A.4(g).
(i) Coverage Under Predecessor Plan. The pension benefit of a Participant who had accrued pension benefits under a Predecessor Plan, prior to April 1, 1981, the first day of the month following the month in which the Internal Revenue Service issued an initial determination letter that the Bell System Pension Plan and the Bell System Pension Trust are qualified under Section 401(a) and 501(a), respectively, of the Internal Revenue Code, shall be the greater of:
(i) the sum of (1) the pension benefit determined, for all Pension Calculation Service prior to October 1, 1980, in accordance with the terms of the Predecessor Plan in effect prior to such date, plus (2) the benefit determined, for all service from October 1, 1980 to December 31, 1983, respectively, in accordance with the terms of the Bell System Pension Plan, plus (3) the benefit determined, for all Pension
LA3:752821.27 75
Calculation Service under this Plan, in accordance with the provisions of this Plan, as in effect from time to time (but not after the date of Termination); or
(ii) the sum of (1) the pension benefit determined, for all Pension Calculation Service prior to April 1, 1981, in accordance with the provisions of the Bell System Pension Plan, as in effect immediately prior to such date plus (2) the benefit determined, for all Pension Calculation Service on or after April 1, 1981, in accordance with the provisions of the Bell System Pension Plan (through but not after December 31, 1983) or this Plan, as in effect from time to time on or after April 1, 1981 (but not after the date of Termination); or
(iii) the pension benefit determined, for all Pension Calculation Service under both this Plan and any Predecessor Plan, under the provisions of this Plan, as in effect from time to time on or after January 1, 1984 (but not after the date of Termination).
(j) Certain Periods of Absence. If a Participant has a period of 24 or more consecutive months leave of absence from active employment (without Terminating) during which the Participant does not receive Pension Calculation Service of more than three months (500 hours prior to January 1, 1997), the basic monthly pension benefit for the Participant shall be determined in accordance with this subsection.
(i) If the Participant has completed an 18 consecutive month period of active service following the period of absence, the basic monthly pension benefit for the Participant shall be determined in accordance with the provisions of Article V-A based on all the Participant’s Pension Calculation Service and, subject to subsections (e), (f) and (g), the monthly benefit rate in effect on the date the Participant subsequently Terminates after the period of reemployment.
(ii) If the Participant has not completed an 18 consecutive month period of active service following the period of absence, the basic monthly pension benefit for the Participant shall equal the greater of (A) the sum of (1) the basic monthly pension benefit for the Participant as of the date such non-credited period commenced for all Pension Calculation Service prior to such non-credited period (and, subject to subsections (e), (f) and (g), based on the monthly benefit rate in effect on such date), plus (2) the basic monthly pension benefit determined, for all Pension Calculation Service after the Participant returned to active service, in accordance with the provisions of Article V-A, or (B) the basic monthly pension benefit determined, for all Pension Calculation Service, on the basis of the monthly benefit as in effect from time to time (but not after the date of Termination), of Pension Band number 101.
(k) Pension Benefits Under Other Plans. The benefit under this Article V-A with respect to a Participant (1) shall not duplicate the Participant’s benefit, if any, under the Management Part and (2) shall be reduced by the benefit, if any, under an Interchange Company Pension Plan or a Portability Company Pension Plan to the extent that the benefit from the Interchange Company Pension Plan or Portability Company Pension Plan is based upon any
LA3:752821.27 76
pension calculation service that is recognized as Pension Calculation Service under this Plan. For purposes of ensuring benefits are not duplicated or are appropriately reduced, the appropriate adjustments shall be made to the normal retirement pension regardless of the time the Participant commenced benefits; the remaining normal retirement pension shall be appropriately adjusted to reflect early commencement of benefits and the form of benefits elected.
(l) To the extent set forth in an Appendix to this Plan, each Applicable Occupational Participant whose Eligible Separation occurs prior to the ninetieth (90) day prior to the expiration of the applicable collective bargaining agreement (including any extensions) shall be entitled to an enhanced retirement pension or Extra Payment in the amounts set forth in the applicable Appendix if said Applicable Occupational Participant meets all of the terms and conditions for such pension or Extra Payment as set forth in the applicable Appendix. Said benefits shall be payable in accordance with the terms of the applicable Appendix and shall be subject to all other limitations set forth in the Plan including the overall limit on benefits in Section 5C.2. Whether or not the Participant is otherwise vested in the benefits under this Plan, if the Applicable Occupational Participant meets all of the terms and conditions for an enhanced retirement pension or Extra Payments under the Appendix, he shall be 100% Vested in such additional benefit under the Appendix.
5A.5. Qualified Preretirement Survivor Annuities.
(a) Eligibility. A Qualified Preretirement Survivor Annuity shall be paid to the surviving Spouse of the following Active and Former Participants who die prior to the Annuity Starting Date and are married at the time of their deaths upon the occurrence of any one of the following:
(1) The death of an Active Participant who is credited with at least five Years of Vesting Service or is otherwise Vested; or
(2) The death of a Former Participant who had at least one Hour of Service or who was entitled to at least one hour of paid leave after August 23, 1984, who was entitled to a deferred vested pension.
(b) Amount and Effective Date of Payments For Eligible Separations Before July 1, 2001. With respect to Occupational Participants whose Eligible Separation occurs prior to July 1, 2001 (except Occupational Participants whose Eligible Separation occurs after they became Applicable Occupational Participants), the Qualified Preretirement Survivor Annuity shall be calculated and paid as follows:
(1) If the Active Participant had a Term of Employment of at least 15 years or was eligible for a service pension, the surviving spouse shall receive a survivor annuity, effective immediately upon the Active Participant’s death, equal to 45% of the standard benefit that would have been payable had the Active Participant terminated employment on the date of his death, survived until age 65 and began to receive payments at age 65.
LA3:752821.27 77
(2) If the Active Participant had a Term of Employment of less than 15 years and is Vested (unless the Participant is described in clause (1)), the surviving spouse shall receive a survivor annuity, effective at the time when the Active Participant would have attained age 65, equal to 45% of the standard benefit that would have been payable had the Active Participant terminated employment on the date of his death, survived until age 65 and began to receive payments at age 65.
(3) If a vested Former Participant separated from the service of a Participating Company, and the Former Participant has a surviving spouse, the surviving spouse shall receive a survivor annuity, effective on the date on which the Former Participant would have reached the Applicable Age (or, if such person had reached the Applicable Age on or prior to the date of his death, beginning as of the date of death), in the amount that would have been payable to the surviving spouse had the Former Participant begun to receive a deferred vested pension in the form of a Qualified Joint and 50% Survivor Annuity upon reaching the Applicable Age (or if the Former Participant had reached the Applicable Age on or prior to his death, on the date of his death) and immediately died. For this purpose, the Applicable Age is
Years of Term of Employment Applicable Age Fewer than 15 Normal Retirement Age 15 but fewer than 20 60 20 but fewer than 25 55
25 or more 50
(c) Amount and Effective Date of Payments For Eligible Separations After July 1, 2001. This subsection (c) applies to Occupational Participants whose Eligible Separation occurs after July 1, 2001. (It also applies to (i) Occupational Participants whose Eligible Separation is on or after October 12, 2000 if they are Applicable Occupational Participants at the time of the Eligible Separation), and (ii) the Occupational Part benefits described in Section 5C.7(g)(2). The Qualified Preretirement Survivor Annuity shall be calculated and paid as follows:
(1) In the case of the death of an Active Participant or a Former Participant who dies within 60 days after his or her Eligible Separation, if the Spouse consents to a distribution within 60 days after notification of an entitlement to a death benefit, such Survivor Annuity shall be a monthly life annuity, commencing upon the death of the Participant and continuing for the life of the surviving Spouse, which is equal to the greatest of the following:
(A) the amount the surviving Spouse would have received under Article V-A, if the Participant had commenced receiving benefits under a Qualified Joint and 50% Survivor Annuity on the day before his death; or
LA3:752821.27 78
(B) an amount equal to 45% of the standard benefit that would have been payable under Article V-A had the Active Participant Terminated on the date of his death, survived until age 65 and began to receive payments at age 65. This clause (B) shall not apply to the Spouse of a Former Participant. In addition, in the case of an Applicable Occupational Participant who dies prior to July 1, 2001, this clause (B) shall not apply unless the Participant had 15 years or more of TOE or was eligible for a service pension.
(2) If the Spouse is not described in paragraph (1), payment of a Survivor Annuity shall commence as of the day following the day the Spouse elects (in writing) to receive the Survivor Annuity but not later than the date on which the deceased Active Participant or Former Participant would have attained age 65. The amount of the benefit shall be the greater of (A) if applicable, the amount described in Section 5A.5(c)(1)(B) (without any adjustment to reflect later payment), or (B) the amount the Surviving Spouse would have received under Article V-A if the Active Participant or Former Participant had Terminated on the earlier of the date of his death or the actual Termination, survived until the date the Survivor Annuity commenced, retired with a Qualified Joint and 50% Survivor Annuity on such date and died on the day after such date.
(d) Payment of the Survivor Annuity shall be made as soon as practicable after the date as of which it commences as set forth in subsection (b) or (c) above; the first payment shall include any payments not made which were due on and after the date as of which it commenced.
(e) No Benefit Payable. Unless the Participant satisfies the conditions of Section 5A.5(a), no pre-retirement death benefit shall be made to the surviving spouse of a Former Participant who was eligible for a deferred vested pension. In addition, if a Participant or Former Participant dies before the Annuity Starting Date and does not have five years of Vesting Service (and is not otherwise Vested) or is not survived by a surviving Spouse, no pre-retirement death benefit shall be payable.
ARTICLE V-B
GRANDFATHERED PENSIONS FOR MANAGEMENT EMPLOYEES
This Article V-B applies only to Management Employees whose Employment Commencement Date was before January 1, 1997. All references in this Article V-B to “Participant” or “Employee” shall include only such Management Employees.
In addition to their rights under the following sections of this Article V-B, certain Active Management Participants in the Plan on or after January 1, 1997 who would otherwise be eligible for a benefit under Article V-B, may also become eligible for a new defined lump sum
LA3:752821.27 79
benefit (“DLS Benefit”) set forth in Article V-D and/or the new Account Balance Formula (“ABF”) benefit in Article V-E.
5B.1. Service Pensions.
(a) Eligibility. Subject to Section 5B.6, each Participant who separates from the service of a Participating Company (or, if applicable, a Non-Participating Company) in an Eligible Separation and who satisfies any one of the following minimum age and service requirements at the time of such Eligible Separation shall be entitled to a service pension:
(1) attainment of at least age 65 and completion of a ten-year Term of Employment;
(2) attainment of age 60 and completion of a fifteen-year Term of Employment;
(3) attainment of age 55 and completion of a twenty-year Term of Employment;
(4) attainment of age 50 and completion of a twenty-five year Term of Employment; or
(5) completion of a thirty-year Term of Employment.
If the Participant does not meet the foregoing conditions at the time of the Participant’s Eligible Separation, but is reemployed and meets them at the time of a subsequent Eligible Separation, Sections 5B.1(e) and 5B.6(d) may apply.
(b) Effective Date and Duration. Payment of the service pension shall be effective on the day following the day of the Participant’s Eligible Separation pursuant to Section 5B.1(a). The general form of a service pension shall be payable for the life of the Participant, except as provided in Section 5C.3; as set forth in Article VI, Participants may elect alternative forms.
(c) (1) Amount. The standard benefit payable as a service pension shall be a pension for the life of the Participant payable in monthly installments, the monthly amount of which shall be one-twelfth of the following amount:
(A) The sum of 1.25 percent of Final Average Compensation not in excess of Covered Compensation and 1.50 percent of Excess Final Average Compensation, multiplied by
(B) The Participant’s Pension Calculation Service up to a maximum of 35 years, plus
(C) 1.25 percent of Final Average Compensation multiplied by Pension Calculation Service in excess of 35 years.
LA3:752821.27 80
(2) Cutoff of Article V-B Benefits. Notwithstanding any provision of the Plan to the contrary, the amount in Section 5B.1(c)(1) (and the Accrued Benefit earned under this Article V-B) shall be calculated as if the Participant Terminated on the Cutoff Date (as defined below) and was never reemployed by a Participating Company. Accordingly, even if the Participant is a Covered Employee after the Cutoff Date, the calculation of the amount under this Section 5B.1(c) shall be made solely with reference to the Participant’s Pension Calculation Service, Final Average Compensation, Covered Compensation, and Excess Final Average Compensation, as such items existed on the Cutoff Date. Subject to Section 5D.8 (with respect to Ex-NewVector Participants and Former NewVector Participants), the Cutoff Date shall be:
(A) the Participant’s first Termination that occurs after December 31, 1996, in the case of an Active Participant on January 1, 1997 who satisfies the Rule of 55 (as set forth in paragraph (3)). Notwithstanding the foregoing, the following rules shall apply to Participants (other than Protected Participants) described in this clause (A) who have not Terminated before January 1, 2001: (i) no such Participant shall earn any Pension Calculation Service under this Article V-B after December 31, 2000 and (ii) such Participant’s benefits under this Article V-B shall be adjusted to reflect increases, if any, in Final Average Compensation or Covered Compensation after December 31, 2000 until the Participant’s first Termination thereafter. In all cases, if any Participant (whether or not the Participant is a Protected Participant) Terminates after December 31, 1996 (before or after January 1, 2001), the Participant’s Cutoff Date shall be the date of such first Termination; accordingly, such Participant shall not earn any additional benefits or Pension Calculation Service under this Article V-B, and the Participant’s benefits previously earned shall not be increased as a result of Final Average Compensation or Covered Compensation earned during any subsequent reemployment;
(B) December 31, 1996, in the case of any other Active Participant on January 1, 1997; and
(C) the time of the Participant’s last Termination prior to December 31, 1996, in the case of any Participant who is not an Active Participant on January 1, 1997 or who is a Disabled Participant on January 1, 1997.
(3) A Participant will be deemed to satisfy the Rule of 55 if (A) the Participant is an Active Participant on January 1, 1997 and (B) the sum of the numbers representing his or her age and Term of Employment (each number being rounded up to the next integer) equals 55 or more as of January 1, 1997. For purposes of clause (B), any period of Term of Employment prior to January 1, 1997 that has not been credited on January 1, 1997 shall be counted if the Participant ultimately bridges his prior Term of Employment pursuant to Section 2.4(b)(2)(B) prior to the Participant’s first Termination occurring after January 1, 1997. (However, no additional period of Term of Employment after January 1, 1997 shall be counted.) If the Participant does not satisfy the Rule of 55
LA3:752821.27 81
at the time of such Termination, the Participant shall never meet the Rule of 55 even if he or she later bridges his prior Term of Employment pursuant to Section 2.4(b)(2)(B) upon subsequent reemployment.
(4) For purposes of calculating Pension Calculation Service as of the Cutoff Date, subject to Section 2.4(a)(3), any period of Pension Calculation Service prior to the Cutoff Date that has not been credited on the Cutoff Date shall be counted if the Participant ultimately bridges his prior Term of Employment pursuant to Section 2.4(b)(2)(B) at any time thereafter. However, no additional period of Pension Calculation Service after the Cutoff Date shall be counted.
(d) Adjustment for Retirement Before Age 55.
(1) The amount determined according to Section 5B.1(c) for each Participant who receives a service pension shall be reduced by one-half percent for each month by which his age (in terms of completed years and months) at the time of the Annuity Starting Date is less than 55, except that the amount determined according to Section 5B.1(c) for each Participant who retires with a Term of Employment of thirty or more years shall be reduced by one-quarter percent for each month by which his age (in terms of completed years and months) at the time of the Annuity Starting Date is less than 55.
(2) The factor of 1.50 percent as set forth in subsection (c)(1)(A) above and reduced in subsection (d)(1) above shall be further reduced, if necessary, to the factors set forth in the following table, interpolated by months. This reduction shall apply for any Participant who retires with a service pension prior to attainment of age 48 and 4 months and with a Term of Employment of thirty or more years.
Age Factor
49 1.230% 48 1.182% 47 1.132% 46 1.083% 45 1.034%
(e) Reemployment.
(1) This paragraph applies if a Participant had earned a deferred vested pension or a service pension at the time he previously Terminated, is reemployed by a Participating Company before January 1, 1997 and meets the conditions for a service pension at the time he or she subsequently incurs an Eligible Separation. In this case, the benefits earned under this Article V-B shall be paid as a service pension at the time of the second Eligible Separation. For this purpose, the Term of Employment earned during the subsequent reemployment and, to the extent set forth in Section 2.4(b)(2), during the initial period of employment shall be considered for purposes of determining whether the
LA3:752821.27 82
individual meets the conditions for a service pension. Whether or not the Participant previously commenced benefits, such service pension shall be calculated as a single amount, based upon all Pension Calculation Service as of the Cutoff Date and the Final Average Compensation as of the Cutoff Date; such amount shall be appropriately adjusted to reflect any earlier payments made.
(2) This paragraph applies if a Participant commenced a service pension at the time he previously incurred an Eligible Separation, is reemployed by a Participating Company before January 1, 1997 and did not bridge his earlier Term of Employment as set forth in Section 2.4(b)(2). In this case, two separate benefits under this Article V-B shall be paid upon subsequent Eligible Separation. The service pension earned at the time of the first Eligible Separation shall be resumed in the same form previously elected; it shall not be adjusted to reflect any additional service or compensation earned during reemployment or to reflect a later recommencement date. An additional deferred vested pension shall be paid, which shall be calculated without regard to Pension Calculation Service and Final Average Compensation earned prior to reemployment.
(3) If the Participant previously received a lump sum of the benefits earned through the date of the first Eligible Separation, the foregoing rules shall not apply unless the Participant repays the lump sum in accordance with Section 5C.5 or 6.7, as applicable. If the lump sum is not repaid, only an additional deferred vested pension or service pension, as applicable, shall be paid, which shall be calculated without regard to Pension Calculation Service and Final Average Compensation earned prior to reemployment.
5B.2. Disability Pension.
(a) No disability pension shall be paid under this Article V-B to any Participant who becomes Disabled on or after January 1, 1997. This rule applies to every Participant including without limitation a Former NewVector Participant, a Pre-97 Management Participant or an Occupational Participant with Management Part service before January 1, 1997, but not on or after such date.
(b) Eligible Participants may be eligible to receive a disability pension under Section 5D.4. If applicable, disabled Participants may also be eligible for a pension pursuant to Section 5B.1 or Section 5B.3.
5B.3. Termination of Employment - Deferred Vested Pension - Vesting Rule.
(a) Eligibility for Deferred Vested Pension. A Participant (1) who is Vested; (2) who separates from service with a Participating Company (or, if applicable, a Non-Participating Company) in an Eligible Separation and (3) who is not eligible for a service pension under Section 5B.1(a) shall be eligible for a deferred vested pension. Notwithstanding the foregoing, a Participant who participated in any Predecessor Plan may elect to apply the rules of any such Predecessor Plan to determine his eligibility for a deferred vested pension. A
LA3:752821.27 83
Participant who is eligible only for a deferred vested pension shall not be considered a “pensioner” or a “retired employee.”
(b) Effective Date and Duration. Subject to Section 6.1(d), a Participant (other than a Pre-97 Management Participant described in the next sentence) who is eligible for a deferred vested pension may elect to have his deferred vested pension commence at any time on or after the Pension Effective Date. In the case of a Pre-97 Management Participant (unless such a Participant becomes an Applicable Occupational Participant), deferred vested pension payments shall be effective on the later of (1) the date the Participant attains Normal Retirement Age or (2) the day following the date of his Eligible Separation. A Pre-97 Management Participant who is eligible for a deferred vested pension and whose Term of Employment is fifteen or more years may elect to have his deferred vested pension commence before the time specified in the preceding sentence as follows:
(A) If the Term of Employment is 15 or more years, but less than 20 years, the Participant may elect to have payments commence on or after his 60th birthday.
(B) If the Term of Employment is 20 or more years, but less than 25 years, the Participant may elect to have payments commence on or after his 55th birthday.
(C) If the Term of Employment is 25 or more years, the Participant may elect to have payments commence on or after his 50th birthday.
In all cases, if the Participant’s Annuity Starting Date is prior to attainment of age 65, the deferred vested pension otherwise payable shall be multiplied by the factors set forth in Appendix C. Once made, an election to have a deferred vested pension paid early in reduced amounts shall be irrevocable. The general form of a deferred vested pension shall be payable for the life of the Participant, except as provided in Section 5C.3; as set forth in Article VI, Participants may elect alternative forms.
(c) Amount. Subject to subsection (b), the amount shall be determined in the same manner as the service pension is calculated under the rules in Section 5B.1(c) as in effect on the date of the Participant’s Eligible Separation.
(d) Notice of Eligibility for Deferred Vested Pension. The Committee shall notify each Vested Participant who incurs an Eligible Separation of his eligibility for a deferred vested pension by mailing, within a reasonable time after his leaving, a notice to his last known address as shown on the Participating Company’s records. It shall be the responsibility of each person eligible to receive a deferred vested pension to file written request therefor with the Committee no earlier than 90 days prior to the Annuity Starting Date. Except for months after normal retirement age or as set forth in Section 6.2(b)(3), no deferred vested pension payment shall be made for any month prior to the month in which the Committee receives such written request.
LA3:752821.27 84
(e) Reemployment. This subsection applies if a Participant was eligible for a deferred vested pension at the time he previously incurred an Eligible Separation, is reemployed by a Participating Company before January 1, 1997, did not previously commence benefits, and does not meet the conditions for a service pension at the time he or she subsequently incurs an Eligible Separation. In this case, the benefits earned under this Article V-B shall be paid as a deferred vested pension at the time of the second Eligible Separation. Such deferred vested pension shall be calculated as a single amount, based upon all Pension Calculation Service and Final Average Compensation as of the Cutoff Date.
5B.4. Coordination With Other Plans.
(a) Section 5D.7 contains special rules for Participants who become covered by the Management Part and who were previously covered under the Related Occupational Plans or the Related Management Plans. Section 5A.4(g) contains special rules for Participants who were covered by the Management Part and who become covered under the Occupational Part. This section explains how Article V-B applies under those sections.
(b) Subject to subsection (e), the Participant shall be entitled to a benefit under this Article V-B for any pension calculation service earned prior to the Cutoff Date under a Related Management Plan or Related Occupational Plan if such Participant becomes entitled, pursuant to Sections 5A.4(g) or 5D.7, to a benefit under the provisions of the Management Part with respect to such service. However, such a Participant shall only be entitled to a benefit under this Article V-B for pension calculation service on or after January 1, 1997 if the Participant meets the Rule of 55. For this purpose, the Participant shall be considered an Active Participant on January 1, 1997 if (1) such Participant was either an Active Occupational Participant on January 1, 1997 or an active participant in a Related Occupational Plan or Related Management Plan on January 1, 1997 who is employed by a Portability Company on January 1, 1997 and (2) the Participant’s benefit under the Management Part is based on such January service. Notwithstanding the foregoing or any other provision to the contrary in the Plan, even if the Participant meets the Rule of 55, the calculation of a pension under this Article V-B that is based on service under a Related Occupational Plan or Related Management Plan shall be calculated solely with reference to the service prior to the Cutoff Date. Accordingly, in the case of an active participant at a Portability Company who meets the Rule of 55 and who commences employment with a Participating Company on or after January 1, 1997, the calculation of the benefit under this Article V-B shall not include any service earned after the Participant’s Employment Commencement Date unless such Employment Commencement Date is the next business day after the Participant terminated employment with the applicable Portability Company.
(c) The benefit earned under this Article V-B in the case of a Participant described in Section 5D.7 or 5A.4(g) shall be subject to all of the limitations and rules of application set forth in this Article, including without limitation Sections 5B.1(c) and 5B.6.
(d) To the extent the Participant is entitled to a benefit determined under the provisions of this Management Part that is based on service under Related Occupational Plans or other Related Management Plans, such benefit shall be calculated by assuming the Participant
LA3:752821.27 85
had the identical work history (in terms of terminations and breaks in service), but earned such other service (at the same time it was actually earned) under this Management Part.
(e) Except as set forth in the next sentence, Section 5B.4(a), (b), (c) and (d) shall not apply to (1) any person whose Employment (or Reemployment) Commencement Date is on or after January 1, 2001, whether or not he was previously a Management Employee, or (2) any person who transfers from the Occupational Part to the Management Part on or after January 1, 2001. See Section 5E.6. However, Section 5B.4 shall apply to benefits earned as a result of reemployment or transfers prior to January 1, 2001; in that case, Section 5E.6 shall apply to benefits earned after the post-2000 reemployment or transfer date and, except as set forth in Section 5E.6(b)(1), the benefits previously earned shall not be increased (or recalculated) under the rules in Sections 5A.4(g), 5B.4 or 5D.7 or any other section by virtue of the later reemployment.
5B.5. Death of a Participant before Commencement of Benefits.
(a) Eligibility. Subsections (a) and (b) apply only to (1) Former NewVector Participants, (2) the benefits under the Management Part of each Pre-97 Management Participant (unless such a Participant becomes an Applicable Occupational Participant) and (3) Management Former Participants not employed after 1996. A Qualified Preretirement Survivor Annuity shall be paid to the surviving Spouse of the following Active and Former Participants described in the preceding sentence who die prior to the Annuity Starting Date and are married at the time of their deaths upon the occurrence of any one of the following:
(1) The death of a married Active Participant who is credited with at least five Years of Vesting Service or is otherwise Vested; or
(2) The death of a married Former Participant who had at least one Hour of Service or who was entitled to at least one hour of paid leave after August 23, 1984, who was entitled to a deferred vested pension.
If a Participant or Former Participant dies before the Annuity Starting Date and does not have five years of Vesting Service (and is not otherwise Vested) or is not survived by a surviving Spouse, no pre-retirement death benefit shall be payable.
(b) Amount and Effective Date of Payments. The Qualified Preretirement Survivor Annuity payable to a surviving Spouse described in subsection (a) shall be in an amount and shall be effective at the following times:
(1) If the Active Participant had a Term of Employment of at least 15 years, the surviving spouse shall receive a survivor annuity, effective immediately upon the Active Participant’s death, equal to the greater of (A) 45% of the standard benefit that would have been payable had the Active Participant Terminated on the date of his death, survived until age 65 and began to receive payments at age 65 or (B) the amount the surviving Spouse would have received if the Participant had commenced receiving benefits under a Qualified Joint and 50% Survivor Annuity on the day before his death.
LA3:752821.27 86
(2) If the Active Participant had a Term of Employment of less than 15 years and is Vested, the surviving spouse shall receive a survivor annuity, effective at the time when the Active Participant would have attained age 65, in the amount that would have been payable had the Active Participant Terminated employment on the date of his death, survived until age 65, began to receive a deferred vested pension in the form of a Qualified Joint and 50% Survivor Annuity at age 65 and immediately died.
(3) If a vested Former Participant separated from the service of a Participating Company, and the Former Participant has a surviving spouse, the surviving spouse shall receive a survivor annuity, effective on the date on which the Former Participant would have reached the Applicable Age (or, if such person had reached the Applicable Age on or prior to the date of his death, beginning as of the date of death), in the amount that would have been payable had the Former Participant begun to receive a deferred vested pension in the form of a Qualified Joint and 50% Survivor Annuity upon reaching the Applicable Age (or if the Former Participant had reached the Applicable Age on or prior to his death, on the date of his death) and immediately died. For this purpose, the Applicable Age is
Years of Term of Employment Applicable Age 5 but fewer than 15 65 15 but fewer than 20 60 20 but fewer than 25 55 25 or more 50
(c) Other Management Participants. See Section 5D.5(b) for rules applicable to Management Participants not described in subsection (a).
5B.6. Application of Article V-B.
(a) General. Except as otherwise provided, (1) this Article V-B applies only to an Employee who both is employed by a Participating Company before January 1, 1997 and is covered by Article V-D and (2) subject to Article V-E, such a Participant’s benefit shall be the greater of the benefit under Article V-B (until the Cutoff Date) or the benefit under Article V-D (until the Cessation Date), appropriately adjusted to reflect any earlier payments made.
(b) Cessation of Article V-B. Notwithstanding any other rules in this Plan to the contrary, the following rules shall apply:
(1) No Participant shall earn any benefits under this Article V-B on or after the Participant’s Cutoff Date, as defined in Section 5B.1(c)(2).
(2) Subject to Section 5B.4, any person who first becomes an Employee on or after January 1, 1997 shall not become eligible to participate in this Article V-B and shall not earn any Pension Calculation Service, Final Average Compensation, Excess Final Average Compensation, or benefits under this Article V-B.
LA3:752821.27 87
(3) Notwithstanding any other provision of this Plan, subject to Section 5B.4, any person employed by a Participating Company before 1997 who is not an Active Participant on January 1, 1997 (even if he is an employee of a Non-Participating Company on January 1, 1997) shall not participate in this Article V-B on or after January 1, 1997. If such Participant is reemployed by a Participating Company after 1996, such person’s benefit under this Plan shall be the sum of (1) the Vested Accrued Benefit under this Article V-B as of the time of the Participant’s Termination prior to 1997, except that the Participant may elect a lump sum (based on the DLS Factors in effect on the Pension Effective Date following the period of reemployment) unless the Participant previously commenced payments (in which case such benefits shall recommence in the same form previously paid) and (2) the Vested benefits earned under Article V-D and/or Article V-E, as applicable, with respect to the period of reemployment.
(c) (1) This subsection (c) addresses Participants who Terminate (including a Termination as a result of becoming disabled) after 1996 and are reemployed by a Participating Company and incur an Eligible Separation. See also Section 5D.2(e) and (h).
(2) If the Participant incurred an Eligible Separation prior to being reemployed by a Participating Company and was Vested at that time (or the Participant is described in Section 5D.2(h) and was Vested at the time of the transfer back to a Participating Company), the benefit under this Plan upon the Eligible Separation following the period of reemployment shall generally be equal to (A) any remaining unpaid Accrued Benefit earned as of the date of the first Termination that occurs on or after January 1, 1997, which shall be the greater of the benefits earned under Article V-B as of the Cutoff Date or the benefits earned under Article V-D as of such first Termination (plus, if applicable, any Article V-E benefits earned by a non-Protected Participant prior to a Termination occurring after 2000), and which may not be paid in a lump sum (unless the Participant is described in Section 5D.2(h)), plus (B) his benefits earned pursuant to Article V-D (if the offer of reemployment occurs prior to July 10, 2000) and/or Article V-E, as applicable, with respect to the period of reemployment. If the Participant previously commenced the benefits described in clause (A) as an annuity, such benefits shall be paid in the same form and amount throughout the period of reemployment and thereafter. Participants may not buy back any benefits that previously commenced.
(3) If the Participant incurred an Eligible Separation prior to being reemployed by a Participating Company and was not Vested at that time (or the Participant is described in Section 5D.2(h) and was not Vested at the time of the transfer back to a Participating Company), and subsequently vests, and his prior period of Pension Calculation Service is counted pursuant to Section 2.4(a)(3), his benefits upon Eligible Separation following the period of reemployment shall be determined in accordance with Section 5B.6(a) and the Participant may elect a lump sum (based on the DLS Factors in effect on the Pension Effective Date following the period of reemployment). If the prior
LA3:752821.27 88
Pension Calculation Service is not counted, no benefits shall be paid under this Article V-B.
(d) (1) This subsection applies if a Participant was eligible for a deferred vested pension (but not a service pension) at the time he previously incurred a Termination (whether before or after January 1, 1997), is reemployed by a Participating Company after January 1, 1997 and meets the conditions for a service pension at the time he or she incurs an Eligible Separation following reemployment. For this purpose, the Term of Employment earned during the subsequent reemployment and, to the extent set forth in Section 2.4(b)(2), during the initial period of employment shall be considered for purposes of determining whether the individual meets the conditions for a service pension.
(2) This paragraph applies if the first Termination occurred before 1997 and the Participant is reemployed after 1996, unless the Participant previously commenced to receive the benefits earned through the first Termination. The benefits earned under this Article V-B shall be paid as a service pension on or after the Pension Effective Date. Such service pension shall be paid at the same time, and in the same form, that benefits earned after reemployment are paid. Subsection (b)(3) shall also apply to the Participant.
(3) This paragraph applies if the first Termination occurred after 1997, unless the Participant previously commenced to receive the benefits earned through the first Termination. The benefits earned under this Article V-B shall be paid as a service pension on or after the Pension Effective Date. Subsection (c) shall also apply to the Participant; for this purpose, the service pension as of the Cutoff Date shall be compared with the benefits earned under Article V-D as of the first Termination. Such benefits shall be paid at the same time, and in the same form, that benefits earned after the Cutoff Date are paid. Notwithstanding the preceding sentence, unless the Participant’s second Eligible Separation is on or after January 1, 2002, the Participant cannot elect a lump sum with respect to the entire service pension. If such a Participant elects a lump sum, (A) that portion of the actual pension payable that equals the greater of the deferred vested pension earned under this Article as of the Cutoff Date (but payable on the Annuity Starting Date) or the benefits earned under Article V-D as of the first Termination (but payable on the Annuity Starting Date) shall be paid as an annuity in the form elected by the Participant and (B) the Participant shall receive a lump sum equal to the Bridging Add-On Lump Sum described in paragraph (4) below.
(4) This paragraph (4) applies if the Participant previously commenced to receive the benefits earned through the first Termination (whether or not it occurred before or after January 1, 1997). In this case, the Participant may be entitled to a “Bridging Add-On.” The Bridging Add-On shall commence at the same time as the benefits earned during reemployment commence (the “Second Starting Date”). If the Bridging Add-On is paid in the form of an annuity, the amount of the Bridging Add-On (the “Bridging Add-On Annuity Amount”) shall be treated as a service pension and shall be the excess of A over B, if any; where
LA3:752821.27 89
A equals the amount of service pension that would be payable on the Second Starting Date, assuming the Participant had not previously commenced benefits and ignoring Pension Calculation Service and compensation earned after the Cutoff Date, and
B equals the amount of the pension that would be payable under Section 5B.6(b) or (c) (including amounts earned under Article V-D if Section 5B.6(c) applies), as applicable, on the Second Starting Date, assuming the Participant had not previously commenced benefits, had not returned to employment, and was not eligible for a service pension.
If the Bridging Add-On is paid in the form of a lump sum, the amount of the Bridging Add-On shall not equal the DLS Equivalent of the Bridging Add-On Annuity Amount; instead it shall equal the Bridging Add-On Lump Sum Amount, which shall equal the excess of X over Y, if any; where
X equals the SPE Equivalent (based on SPE Factors in effect on the Second Starting Date) of a pension under Article V-B, payable to the Participant at age 65, equal to the amount described in A of the preceding sentence (if such amount were payable at age 65 instead of the Second Starting Date), provided that such amount shall not be less than the DLS Equivalent (based on DLS Factors in effect on the Second Starting Date) of such a pension payable at age 65; and
Y equals the greater of A or B; where A equals the DLS Equivalent (based on DLS Factors in effect on the Second Starting Date) of a pension under Article V-B or V-D, as applicable payable to the Participant at age 65, equal to the amount that would be described in B of the preceding sentence (if such amount were payable at age 65 instead of the Second Starting Date). B equals the amount of the lump sum that was paid (or would have been paid had the Participant elected a lump sum benefit on the Pension Effective Date) with respect to the benefits earned as of the first Termination.
The calculations of both X and Y shall ignore any subsidy provided by any early retirement factors. The Bridging Add-On shall be paid at the same time and in the same form that benefits earned during reemployment are paid. The pension earned at the time of the first Termination shall be payable in the same form as it previously commenced.
(5) Notwithstanding the foregoing provisions of Section 5B.6(d), no person shall be entitled to a Bridging Add-On (or any other benefit under this Section 5B.6(d) or otherwise) and any comparable benefit under the Media Plan with respect to the same period of service prior to the Separation Time; if the individual becomes entitled to such a benefit under the Media Plan (where the benefit is based on such service) prior to becoming entitled to such a benefit under this Plan, this Plan shall no longer permit the individual to receive such a benefit even if the individual returns to employment with a Participating Company and would otherwise receive such a benefit.
LA3:752821.27 90
(6) Notwithstanding the foregoing provisions of this Section 5B.6(d) (including paragraph (5) above), neither a Media Participant, a person whose benefits were transferred to the AirTouch plan as set forth in Section 5D.8(a)(2) nor any other former participant whose benefits were transferred from this Plan to the plan of another employer shall be entitled to a Bridging Add-on or any other benefit under this Section 5B.6(d) or otherwise with respect to any benefits earned prior to the Separation Time, even if the individual returns to employment with a Participating Company and would otherwise receive such a benefit.
(7) If a Participant has more than two Terminations, then the Participant’s benefits shall be determined by the Committee based upon the principles set forth in this subsection (d).
(e) This subsection applies if a Participant is employed on January 1, 1997, had commenced a pension prior to 1997 and does not bridge his earlier Term of Employment as set forth in Section 2.4(b)(2). In this case, the Participant shall receive (1) the pension earned under this Article V-B at the time of the first Termination (payable in the same form it previously commenced), plus (2) subject to subsection (c) above, the greater of the benefit earned under this Article V-B (without regard to the benefit described in the preceding clause (1)) as of the Cutoff Date or the benefit under Article V-D (as of the Cessation Date), plus (3) if applicable, the benefit under Article V-E. See Section 5D.2(b)(2)(C).
(f) This Section 5B.6 does not apply to Pre-97 Management Participants or an Occupational Participant with Management Part service before January 1, 1997, but not on or after such date.
ARTICLE V-C
GENERAL PENSION PROVISIONS
This Article V-C includes provisions that apply to both Occupational Employees and Management Employees. All references to “Participant” or “Employee” shall include both Occupational and Management Employees.
5C.1. Retroactive Pension Benefits.
If the monthly pension benefit for any Participant is not determinable by the Annuity Starting Date, on the date benefits actually commence a lump-sum payment equal to the value of the monthly pension benefits that should have been made between the Annuity Starting Date and the actual commencement date shall be paid to such Participant. The lump sum payment shall be calculated using the interest rate used by the Pension Benefit Guaranty Corporation for immediate annuities for each full year and partial year during which the payment was delayed.
LA3:752821.27 91
5C.2. Maximum Annual Benefit.
(a) (1) In no event shall the annual benefit from the Trust Fund under the Plan and from the assets of any other defined benefit pension plan maintained by a Participating Company (adjusted downward to the Qualified Joint and Survivor Annuity amount if such benefit is in effect), plus the Participant’s annual benefit under any other Qualified Pension Plan, exceed the lesser of (i) 100% of the Participant’s average compensation for the three consecutive calendar years of his highest compensation during the Participant’s active participation in the Plan or (ii) $90,000, increased by the Adjustment Factor. Effective January 1 of each year following the year in which the Participant retired or otherwise terminated employment, the compensation limit described in the preceding sentence shall be adjusted by multiplying the limit (determined as of the date the Participant separated from service) by a fraction, the numerator of which is the $90,000 dollar amount as adjusted by the Secretary of the Treasury as of such January 1 and the denominator of which is the $90,000 dollar amount as adjusted by the Secretary of the Treasury for the calendar year in which the Participant separated from service. Notwithstanding the foregoing, in the case of all current and former participants (with benefits limited by section 415(b)) who have an accrued benefit under the Plan immediately prior to the January 1, 2002 (other than an accrued benefit resulting from a benefit increase solely as a result of the increases in limitations under section 415(b)) (“Affected Participants”), the $90,000 limit in this paragraph shall be increased to $160,000, as adjusted by the Adjustment Factor, effective January 1, 2002.
(2) Notwithstanding the foregoing, (A) no increases to either limit in subsection (a)(1) shall apply to any Participant who elects a lump sum benefit under this Plan, (B) with respect to any Participant who elects a lump sum or annual installments under the Company’s Nonqualified Plan or the excess plan described in Section 5C.2(h) (or its predecessor), no such increases shall apply on or after the date of the Participant’s Eligible Separation and (C) with respect to any Participant who receives a lump sum under the Company’s Nonqualified Plan as a result of a change in control (as defined in the Nonqualified Plan), no such increases shall apply on or after the earlier of the change in control or the date of the Participant’s Eligible Separation. In addition, if any Participant elects a combination lump sum annuity option set forth in Section 6.5(b), no increases shall apply with respect to the portion of the benefit paid as a lump sum.
(3) For purposes of applying the foregoing limitations, benefits payable in any form other than straight life annuity (or Qualified Joint and Survivor Annuity) with no ancillary benefits shall be adjusted, as provided by Treasury Regulations, so that such benefits are the Actuarial Equivalent of a straight life annuity. To determine actuarial equivalence, subject to Revenue Ruling 98-1, the adjustment is the greater of (x) an adjustment based on 5% (except that the interest rate shall be the rate specified in Section 417(e)(3) of the Code with respect to a form of benefits subject to Section 417(e)(3)) and the mortality table specified in Section 415(b)(2)(E) or (y) the factors specified in the Plan to adjust the applicable form of benefit. For purposes of adjusting a lump sum benefit, if the Plan does not contain an immediate lump sum factor,
LA3:752821.27 92
the amount in (y) shall be calculated by deriving an immediate lump sum factor based on the deferred lump sum factor assumptions in the Plan.
(4) For purposes of applying the foregoing limitations, the following benefits shall not be taken into account:
(A) any ancillary benefit which is not directly related to retirement income benefits, including without limitation any death benefits paid pursuant to Article VII (other than the benefits paid at retirement pursuant to Section 7.3(c)) and the Modified Disability Pension.
(B) any Qualified Pre-Retirement Survivor Annuity, and
(C) any other benefit not required under Section 415(b)(2) of the Code and Regulations thereunder to be taken into account for purposes of the limitation in Section 415(b)(1) of the Code.
(b) (1) If the benefit of the Participant commences before the Participant’s Social Security Retirement Age but on or after age 62, the dollar limit in subsection (a)(1)(ii) will be determined as follows:
(A) If a Participant’s Social Security Retirement Age is 65, the dollar limit for benefits commencing on or after age 62 is determined by reducing the dollar limit by 5/9 of 1% for each month by which benefits commence before the month in which the Participant attains age 65.
(B) If a Participant’s Social Security Retirement Age is greater than 65, the dollar limit for benefits commencing on or after age 62 is determined by reducing the dollar limit by 5/9 of 1% for each of the first 36 months and 5/12 of 1% for each of the additional months (up to 24 months) by which benefits commence before the month of the Participant’s Social Security Retirement Age.
(C) Effective January 1, 2002 for Affected Participants, no adjustment (other than that set forth in subsection (a)(3)) will be made to the dollar limit for Participants whose benefit commences on or after age 62 and on or before attainment of age 65.
(2) If the Participant’s benefit commences before age 62, the Defined Benefit Dollar Limit will be the Actuarial Equivalent of an annual benefit beginning at age 62, as determined in (b)(1) above, reduced for each month by which benefits commence before the month in which the Participant attains age 62. Effective January 1, 2002 for Affected Participants, the limit shall be the amount determined under subsection (a), reduced for each month by which benefits commence before the month in which the Participant attains age 62. To determine actuarial equivalence, subject to Revenue Ruling 98-1, the adjustment is the greater of (x) an adjustment based on 5% and the mortality table specified in Section 415(b)(2)(E) or (y) the early retirement factors specified in the
LA3:752821.27 93
Plan that are applicable to the Participant’s benefit. Any decrease in the dollar limit determined in accordance with clause (x) of this paragraph (2) shall not reflect the mortality decrement to the extent that benefits will not be forfeited upon the death of the Participant.
(3) If the Participant’s benefit commences after the Participant’s Social Security Retirement Age, the dollar limitation shall be adjusted so that it is the Actuarial Equivalent of an annual benefit of such dollar limit beginning at the Participant’s Social Security Retirement Age. Effective January 1, 2002 for Affected Participants, the foregoing rule shall not apply; instead if the Participant’s benefit commences after the Participant’s attainment of age 65, the dollar limitation shall be adjusted so that it is the Actuarial Equivalent of an annual benefit of such dollar limit beginning at age 65. To determine actuarial equivalence, subject to Revenue Ruling 98-1, the adjustment is the lesser of (x) an adjustment based on 5% and the mortality table specified in Section 415(b)(2)(E) or (y) the late retirement factors specified in the Plan that are applicable to the Participant’s benefit. Any increase in the dollar limit determined in accordance with clause (x) of this paragraph (3) shall not reflect the mortality decrement to the extent that benefits will not be forfeited upon the death of the Participant.
(4) Effective for Annuity Starting Dates on or after December 31, 2002, for purposes of subsection (a)(3) and subsection (b), the mortality table specified in Section 415(b)(2)(E) is the table set forth in Revenue Ruling 2001-62 unless modified or superceded.
(c) Notwithstanding the foregoing subsections (a) and (b), the Accrued Benefit of an individual who was a Participant in this Plan or another defined benefit plan maintained by a Participating Company, Portability Company, Interchange Company, or Former Affiliate, before September 30, 1983 shall not be less than the Participant’s accrued benefit under all such defined benefit plans as of September 30, 1983. The preceding sentence shall apply only if all such defined benefit plans met the requirements of Code section 415, as in effect on July 1, 1982, for all limitation years beginning before September 30, 1983.
(d) If the Participant has fewer than 10 years of participation in the Plan, the dollar Limit is reduced by one-tenth for each year of participation (or part thereof) less than 10. If the Participant has fewer than 10 years of service with a Participating or Non-Participating Company, the compensation limit is reduced by one-tenth for each year of service (or part thereof) less than 10. The adjustments of this section shall be applied in the denominator of the Defined Benefit Fraction based upon years of service. Years of service shall include future years occurring before the Participant’s Normal Retirement Date occurs. Such future years shall include the year that contains the date the Participant reaches his Normal Retirement Date, only if it can be reasonably anticipated that the Participant will receive a year of service for that year.
(e) The limitation in subsection (d) shall be subject to the provisions of Section 2004(d)(2) of ERISA and shall not apply to a Participant who has not at any time been a Participant in any qualified defined contribution plan maintained by a Participating Company,
LA3:752821.27 94
Portability Company, Interchange Company, or Former Affiliate and whose annual benefit under this Plan and under any other qualified defined benefit plans maintained by a Participating Company does not exceed $1,000 multiplied by the number of years of the Participant’s Vesting Service, not to exceed ten years.
(f) For years beginning before January 1, 2000, if a Participant participates in this Plan (or any other defined benefit plan maintained by a Participating or Non-Participating Company) and in any other defined contribution plan maintained by a Participating or Non-Participating Company, the sum of the Participant’s defined benefit fraction and the Participant’s defined contribution fraction shall not exceed 1.0 for any limitation year. The limitation year shall be the Plan Year. If any reduction is necessary to reduce the sum of the fractions to 1.0, the Accrued Benefit under this Plan shall first be reduced.
Defined Benefit Fraction: A fraction, the numerator of which is the sum of the Participant’s projected annual benefits under all defined benefit plans (whether or not terminated) maintained by a Participating Company, Interchange Company, Portability Company or Former Affiliate, and the denominator of which is the lesser of (i) 125% of the dollar limitation in effect for the limitation year under Code section 415(b)(1)(A) or (ii) 140% of the Participant’s average compensation for the three consecutive calendar years of his highest compensation during the Participant’s active participation in the Plan.
Notwithstanding the above, if the Participant was a Participant in a plan in existence on July 1, 1982, the denominator of the defined benefit fraction will not be less than 125% of the sum of the annual benefits under all of the defined benefit plans of a Participating Company, Interchange Company, Portability Company or Former Affiliate, which the Participant had accrued as of the later of September, 1983 or the end of the last limitation year beginning before January 1, 1983. The preceding sentence shall apply only if the defined benefit plans individually and in the aggregate satisfy the requirements of section 415 as in effect at the end of the 1982 limitation year.
Defined Contribution Fraction: A fraction, the numerator of which is the sum of the annual additions to the Participant’s accounts under all the defined contribution plans (whether or not terminated) maintained by a Participating Company, Interchange Company, Portability Company or Former Affiliate for the current and all prior limitation years (including the annual additions attributable to the Participant’s non-deductible Employee contributions to this and all other defined benefit plans (whether or not terminated) maintained by a Participating Company, Interchange Company, Portability Company or Former Affiliate, and the denominator of which is the sum of the maximum aggregate amounts for the current and all prior limitation Years of Service with a Participating Company, Interchange Company, Portability Company or Former Affiliate, (regardless of whether a defined contribution plan was maintained by a Participating Company, Interchange Company, Portability Company or Former Affiliate). For this purpose annual addition shall mean the amount allocated to a Participant’s account during the limitation year as a result of: employer contributions, employee contributions, forfeitures, and amounts described in Code sections 415(l)(i) and 419A(d)(2). Annual additions for limitation years beginning before January 1, 1987, shall not be recomputed to treat all Employee contributions as annual additions. For any limitation year, the maximum aggregate amount is the
LA3:752821.27 95
lesser of 125% of the dollar limitation in effect under Code section 415(c)(1)(A) or 35% of the Participant’s compensation for such year.
If the Employee was a Participant in one or more defined contribution plans maintained by a Participating Company, Interchange Company, Portability Company or Former Affiliate that satisfied the applicable requirements of Code section 415, the numerator of the defined contribution fraction shall be adjusted if the sum of the defined contribution fraction and the defined benefit fraction would otherwise exceed 1.0 under the terms of the Plan. An amount equal to the product of (i) the excess of the sum of the fractions over 1.0 times (ii) the denominator of the defined contribution fraction shall be permanently subtracted from the numerator of the defined contribution fraction. The adjustment shall be calculated using the fractions as they would be computed as of the later of September 30, 1983 or the end of the last limitation year beginning before January 1, 1983. The adjustment shall also be made if at the end of the last limitation year beginning before January 1, 1984, the sum of the fractions exceeds 1.0 because of accruals or additions that were made before the limitations of this Section 5C.3 became effective as to any plans of a Participating Company, Interchange Company, Portability Company or Former Affiliate in existence on July 1, 1982.
In addition, the foregoing limitations of this subsection (f) shall continue to apply on and after January 1, 2000 with respect to (1) any Participant who elected a lump sum benefit under this Plan prior to 2000 and (2) any Participant who elected a lump sum or annual installments under the Company’s Nonqualified Plan or the excess plan described in Section 5C.2(h) (or its predecessor) prior to 2000. Accordingly, the benefits payable under this Plan for such Participants shall be determined by applying the terms of this subsection (f) on and after January 1, 2000. In addition, the foregoing limits shall continue to apply on or after January 1, 2000 with respect to that portion of the benefit paid as a lump sum in the case of any Participant who elected a combination lump sum benefit under Section 6.5 prior to 2000.
(g) If the Current Accrued Benefit of an individual who is a Participant as of January 1, 1987 exceeds the benefit limitations under Section 415(b) of the Code, then for purposes of Section 415(b) and (e) of the Code, the limitation of Section 415(b)(1)(A) of the Code with respect to such individual shall be equal to such Current Accrued Benefit. For purposes of this section, “Current Accrued Benefit” shall mean a Participant’s accrued benefit under the Plan, determined as if the Participant had separate from service as of December 31, 1987, expressed as annual benefit within the meaning of Section 415(b)(2) of the Code. The amount of a Participant’s Current Accrued Benefit shall be determined by disregarding any change in the limits provided in Section 415 of the Code to the extent such change is made inapplicable to the prior accrued benefit of a Participant.
(h) If the Participant is not covered by the Company’s Nonqualified Plan, the portion, if any, of any pension or survivor annuity or lump sum in excess of the limit set forth in this Section 5C.2 shall be paid by the Participating Company that last employed the Participant directly to the Participant or beneficiary entitled thereto in the same form and at the same time as benefits are paid under this Plan. Such amounts shall be charged to its operating expense accounts when and as paid. This subsection (h) is intended to be an “excess plan,” as defined in Section 3(36) of ERISA, that is a separable part of this Plan.
LA3:752821.27 96
5C.3. Reemployment - Suspension of Benefits.
(a) New Rules for All Participants Reemployed after December 31, 2000. In the case of any Participant who Terminates (before or after 2000), commences benefits and has a Reemployment Commencement Date after December 31, 2000, no benefits that previously commenced (under either the Occupational or Management Part) shall be withheld, irrespective of the person’s status at the prior Termination or the Reemployment Commencement Date. (In addition, no benefits that previously commenced shall be withheld if the Participant Terminated on or after October 12, 2000 and was an Applicable Occupational Participant on that date). Unless expressly provided otherwise, upon the Participant’s subsequent Eligible Separation, the benefit for the period of reemployment shall be calculated by ignoring all service and Compensation earned prior to the Reemployment Commencement Date. Subject to Appendix B (the Mandatory Portability Agreement), this subsection (a) shall not apply to a Participant receiving benefits under this Plan who becomes a management or occupational employee of a Portability Company.
(b) Suspension for Reemployment before 2001.
(1) After Attaining Normal Retirement Age. Benefits of a Participant in pay status shall be suspended if the recipient is re-employed prior to 2001 (and the Reemployment Commencement Date is after attaining age 65) by a Participating, Interchange, or Portability Company as an employee at a rate of employment of at least 40 Hours of Service in a calendar month in service described in Section 203(a)(3)(B) of ERISA. The actuarial value of benefits that commence later than Normal Retirement Age shall be computed without regard to amounts that are suspended under the preceding sentence.
(2) Before Attaining Normal Retirement Age. Benefits of a Participant in pay status shall be suspended if the recipient is re-employed (prior to 2001) prior to attaining Normal Retirement Age by a Participating, Interchange or Portability Company. However, a suspension pursuant to this subsection 5C.3(b)(2) shall not affect a Participant’s entitlement to normal retirement benefits payable at Normal Retirement Age or the actuarial equivalent thereof.
(3) Notwithstanding paragraphs (1) and (2), effective August 3, 1995, the benefits of recipients reemployed as an incidental employee shall not be suspended while the individual is retained on the payroll in that classification.
(4) Notwithstanding paragraphs (1) and (2), effective January 1, 1998, the benefits of persons described in Section 1.12(iv) shall not be suspended during the period such individual is retained on the payroll in that classification.
(5) Notwithstanding paragraphs (1) and (2), in the case of a Participant who Terminates as a Management Participant, who is reemployed by a Participating Company as a Management Employee (excluding individuals reemployed by NewVector prior to the sale of NewVector) and whose Reemployment Commencement Date is after
LA3:752821.27 97
1996 (and before 2001), no benefits that previously commenced shall be withheld. Upon the Participant’s subsequent Eligible Separation, the benefit for the period of reemployment shall be calculated by ignoring all Pension Calculation Service and Percentage Credits under Article V-D, and Compensation earned prior to the Reemployment Commencement Date. This paragraph (5) shall not apply to (i) a Participant receiving benefits under the Management Part who becomes an Occupational Employee or a management or occupational employee of a Portability Company, (ii) a Participant receiving benefits under the Occupational Part who becomes a Management Employee or (iii) a Pre-97 Management Participant.
(c) Adjustment for Suspended Deferred Vested Pensions. The pension benefit of an individual who previously left the service of a Participating Company with a deferred vested pension and who returns to the service of a Participating Company or any Interchange Company or Portability Company and has a suspended pension shall be adjusted for the period of suspension of benefits in accordance with the following formula:
A = B x C x D E
Where
A = adjusted benefit;
B = reduction factor at age of initial early commencement of pension payments in accordance with the table set forth in Appendix C or Appendix D, as applicable;
C = accrued benefit at initial early commencement of pension payments;
D = reduction factor at age of final commencement of pension payments with respect to which pension is being computed in accordance with the table set forth in Appendix C or Appendix D, as applicable; and
E = reduction factor at age of reemployment in accordance with the table set forth in Appendix C or Appendix D, as applicable.
The adjusted benefit determined in accordance with the formula above shall be added to the amount of any benefit accrued during the period of reemployment and such sum shall equal the individual’s total pension benefit to be paid subsequent to the individual’s final termination from service date. This subsection (c) shall not apply to benefits under Articles V-D or V-E, or any benefits that were not suspended.
(d) Resumption of Payment. If benefit payments have been suspended, payments shall resume no later than the first day of the third calendar month in which the recipient ceases to be employed in service described in Section 203(a)(3)(B) of ERISA. The initial payment upon resumption shall include (1) the payment scheduled to be made in the calendar month when payments resume and (2) any amounts withheld during the period between
LA3:752821.27 98
the cessation of service described in Section 203(a)(3)(B) of ERISA and the resumption of payments.
(e) Notification. No payment shall be withheld pursuant to subsection (b) unless the Plan Administrator notifies the recipient by personal delivery or first class mail during the first calendar month or payroll period in which the Plan withholds payments that benefits are suspended. The notification shall contain a description of the specific reasons why benefit payments are being suspended, a description of the Plan provisions relating to the suspension of payments, a copy of such provisions and a statement that the applicable Department of Labor regulations may be found in Section 2530.203-3 of the Code of Federal Regulations. The notice shall also inform the recipient of the Plan’s procedures for affording a review of the suspension of benefits. Requests for such reviews may be considered in accordance with the claims procedure adopted by the Plan pursuant to Section 503 of ERISA and applicable regulations.
(f) Amounts Suspended.
(1) Life Annuities: In the case of benefits payable periodically on a monthly basis for as long as a life (or lives) continues, such as a straight life annuity or a Qualified Joint and Survivor Annuity, the amount suspended shall be an amount equal to the monthly benefit payment.
(2) Other Benefit Forms: In the case of a benefit payable in a form other than the form described in Section 5C.3(f)(1) above, the amount suspended shall be an amount of the portion of the benefit payment for a calendar month in which the recipient is employed in service described in Section 203(a)(3)(B) of ERISA, equal to the lesser of:
(A) the amount of benefits that would have been payable to the recipient if he had been receiving monthly benefits under the Plan since actual retirement based on a single life annuity commencing at actual retirement age; or
(B) the actual amount paid or scheduled to be paid to the recipient for such month. Payments that are scheduled to be paid less frequently than monthly may be converted to monthly payments for purposes of the preceding sentence.
(g) Employment After Normal Retirement Age. Notwithstanding the foregoing provisions of this Section 5C.3, the benefit payable to a Participant continues in employment with a Participating or Non-Participating Company after his Normal Retirement Date, will be permanently withheld for any calendar month during which the Employee completes at least 40 Hours of Service in ERISA Section 203(a)(3)(B) service. The benefit permanently withheld will be the actual amount scheduled to be paid for the calendar month in which the foregoing conditions for suspension are met.
LA3:752821.27 99
5C.4. No Reduction in Amount of Pension.
In no event shall the total monthly pension benefit of any Employee payable under Article V-A or V-B, determined as of any time, be less than the total monthly pension benefit of such Employee determined as of the end of any Plan Year (but based on Covered Compensation in the year of Termination) after the Participant could immediately commence benefits under the Plan if he terminated employment. See Sections 5D.2(g) and 5E.2(h) for applicable rules under Articles V-D and V-E.
5C.5. Buy-Backs.
(a) This subsection applies to a Participant who terminated employment under the 1990 early retirement window program, who received his benefit under the Plan in a lump sum, and who is subsequently re-employed by a Participating Company as a Management Employee or Occupational Employee. Except as provided below, such a Participant may repay the amount of such distribution, together with interest at the rate specified in Code section 411(c)(2)(C), compounded annually, from the date of the distribution to the date of the repayment, to the Trustee no later than twelve months after the date the Participant was re-employed. Upon such repayment, the Participant’s entire Accrued Benefit shall be restored and all of his pre- and post-break service shall be counted, subject to the limitations described in Articles II, V-B and V-D, provided that the Participant’s prior Term of Employment shall only be counted if it is bridged as set forth in Section 2.4(b)(2). If repayment is not made, (x) the Participant’s pre-break service shall be counted for participation and vesting if required under Articles II and III and (y) the Participant’s pre-break Accrued Benefit, Pension Calculation Service and Term of Employment shall be ignored even if the Participant meets the conditions for bridging Term of Employment set forth in Section 2.4(b)(2). Effective January 1, 1997, a Participant who received a distribution may not repay such amount if the Reemployment Commencement Date is after 1996. Such a Participant’s pre-Break Term of Employment (but not his Pension Calculation Service) shall be counted if the Participant subsequently bridges his Term of Employment as set forth in Section 2.4(b)(2).
(b) A Participant who has received a distribution of his benefit under this Plan in a lump sum (including a lump sum under Article V-D and/or V-E) and who becomes employed by a Portability Company may repay the amount of such distribution (if the hiring Portability Company’s defined benefit plan requires repayment), together with interest at the rate specified in Code section 411(c)(2)(C), compounded annually, from the date of the distribution to the date of the repayment, to the Trustee of this Plan no later than twelve months after the later of the date the Participant was employed by the Portability Company or the date the Participant is determined to be covered by the Portability Agreement and is advised of the right to repay, or, if applicable, the date established by the hiring company’s plan. Upon such repayment, the Participant’s Accrued Benefit will be restored. The liability for the Accrued Benefit, together with the assets attributable to the Accrued Benefit, shall be transferred by the Trustee of this Plan to the Trustee for the hiring company’s defined benefit plan. If the hiring Portability Company has adopted an offset provision, repayment will not be permitted.
LA3:752821.27 100
(c) Subject to subsection (b), a Management Participant or Applicable Occupational Participant who has received a distribution of his benefit in a lump sum (or combination lump sum) under Section 6.5 may not repay such amount to the Plan, even if he later becomes an Employee. Upon reemployment, such a Participant’s pre-Break Accrued Benefit and service shall be ignored, provided that (1) the Participant’s pre-Break service shall be counted for participation and vesting if required under Articles II and III and (2) the Participant’s pre-Break Term of Employment (but not his Pension Calculation Service) shall be counted if the Participant subsequently bridges his Term of Employment as set forth in Section 2.4(b)(2).
(d) See Section 6.7 for rules regarding buy-backs of distributions of $5,000 ($3,500, if the Participant Terminated prior to 1999) or less.
5C.6. Benefit Increases.
(a) Effective January 1, 1996, benefit increases shall apply in accordance with the schedule set forth in Appendix H to the following: (i) the service or disability pension benefits of all Participants whose Pension Effective Date is prior to January 1, 1996, and (ii) the benefits payable to the surviving Spouse or other contingent annuitant of a Participant described in (i), with the increase being in the amount set forth in Appendix H that corresponds to the month that includes the respective Participant’s Pension Effective Date. This increase also is applicable to the alternate payees of such pension benefits in accordance with a “qualified domestic relations order” (“QDRO”) (as defined in Code section 414(p)) that provides for (i) a division of the Participant’s benefit between the Participant and the alternate payee, unless the QDRO specifically provides that the alternate payee shall not receive any pension increase, or (ii) a sharing of the Participant’s benefit between the Participant and the alternate payee, if the QDRO specifically provides that the alternate payee shall receive any pension increase.
(b) Effective January 1, 2000, a minimum $500/month pension shall be paid to the following: (i) the service pension benefits of all Participants whose Annuity Starting Date is on or before January 1, 2000, except that such minimum shall not apply to any Participant to whom Article V-D applies, as set forth in Section 5D.1 (even if the benefit in Article V-B is greater than the benefit in Article V-D) and (ii) the benefits payable to the surviving Spouse or other contingent annuitant of a Participant described in clause (i). This $500/month pension shall apply regardless of the form of benefit elected by a Participant (unless the Participant elected a lump sum) and shall not be reduced to reflect the cost of any such option. Notwithstanding the foregoing, the minimum benefit payable to such a surviving Spouse of a Participant who elected a Qualified Joint and Survivor Annuity with a 50% survivor annuity shall be $250/month, rather than $500/month. No additional benefits shall be paid pursuant to this subsection if the Participant’s or survivor’s benefits exceed $500/month (or $250/month, as applicable). In the case of a Participant (or survivor) for whom a QDRO is in effect, no additional benefits shall be paid pursuant to this subsection if the Participant’s or survivor’s benefits would exceed $500/month (or $250/month, as applicable) if the QDRO were not in effect; if such annuity would be less than $500/month, then the Participant and alternate payee shall be entitled to share in the increase pursuant to the terms of the applicable QDRO, provided that the aggregate monthly amount payable to both parties shall not exceed $500/month.
LA3:752821.27 101
5C.7. Application of New 1997 Rules; Pre-97 Plan.
(a) Notwithstanding any provision of the Plan to the contrary, except as provided in this Section 5C.7 and Section 5D.1(b), the New 1997 Rules shall not apply to (1) Pre-97 Management Participants or any other Participant who is not employed as an Active Management Participant on or after January 1, 1997 (unless the Eligible Separation is on or after July l, 2001), and (2) Former NewVector Participants. In addition, the New 1997 Rules shall only apply to the extent benefits are determined under the Management Part; they shall not apply to any benefits determined under the Occupational Part. Notwithstanding the preceding sentences, (1) the new factors set forth in Appendix A shall apply to Former NewVector Participants who Terminated after 1996 and to benefits determined under the Management Part (but not the Occupational Part) of Pre-97 Management Participants, (2) the Modified Disability Pension is available to Former NewVector Participants who qualified for such a Disability Pension after 1996, and (3) effective for Participants whose Eligible Separation is on or after July 1, 2001 (or the date they become Applicable Occupational Participants, if applicable), to the extent expressly set forth in the Plan, certain of the New 1997 Rules (but not Article V-D or the Modified Disability Pension) were made available to all Participants or all Applicable Occupational Participants; see subsections (c) and (g) below. See also Section 6.6(a).
(b) By way of example, assume a Participant has ten years of Pension Calculation Service under the Occupational Part and then two years of Pension Calculation Service under the Management Part, and terminated in 1999. The Participant’s benefit is described in Section 5D.7(a)(1). The Participant may elect a lump sum immediately upon his Eligible Separation with respect to the benefits described in Section 5D.7(a)(1)(B); the New 1997 Rules apply to such portion of the benefit. However, with respect to the benefits described in Section 5D.7(a)(1)(A), the New 1997 Rules do not apply. Thus, with respect to that portion (1) the Participant shall not be entitled to a benefit until he attains age 65, (2) a lump sum is not available, (3) the benefit forms shall be limited to those available Occupational Participants in 1999, calculated using the factors applicable to Occupational Participants in 1999 (these forms are generally set forth in Sections 6.1, 6.2(a)(1) and (2) and 6.3), and (4) if such Participant dies before commencing benefits, such benefits shall be paid as a Qualified Pre-Retirement Survivor Annuity under Section 5A.5(b).
(c) (1) The benefits under the Management Part of each Pre-97 Management Participant shall be determined under the terms of the Pre-97 Plan as in effect upon the date they ceased to be covered under the Management Part; except as provided in subsection (a) and the following two sentences, the New 1997 Rules shall not apply to such a Participant. See Section 6.6(a). However, a Pre-97 Management Participant who becomes an Applicable Occupational Participant may elect a lump sum or early retirement with respect to his Management Part benefit (as well as his Occupational Part benefit); such person is also entitled to the death benefits in Section 5D.5(g) with respect to his Management Part benefits. In addition, the new non-suspension rules in Section 5C.3(a) shall apply to a Pre-97 Management Participant reemployed on or after January 1, 2001 with respect to his Management Part benefit (as well as his Occupational Part benefit).
LA3:752821.27 102
(2) In the case of a Participant who would be a Pre-97 Management Employee except that he has Occupational Part service after June 30, 2001, all of the distributions options available under the Management Part (but not Article V-D or the Modified Disability Pension or Article V-E) shall apply to the Participant’s Management Part benefit. See also Section 5D.5(g) for rules regarding death benefits.
(d) Former Participants (Management or Occupational) who are both Communications Participants and are not employed by the Company after December 31, 1996 shall be entitled to receive only such benefits and rights to benefits as were provided under the terms of the Pre-97 Plan as in effect upon their Termination and shall not be entitled to any benefits under this Plan or the New Rules. In general, and subject to the preceding sentence, Management Former Participants (including Management Former NewVector Participants) not employed after 1996 (1) are not entitled to any benefits under Article V-D, (2) may only elect benefit forms available under the Pre-97 Plan and such benefit forms are subject to the actuarial adjustments set forth in the Plan at that time, (3) are entitled to pre-retirement death benefits set forth in Section 5B.5, and (4) may only elect a Deferred Vested Pension at age 65.
(e) In general, Former Participants who are Communications Participants whose Eligible Separation occurred after 1996 and before the Separation Time shall be entitled to receive only such benefits and rights to benefits as were provided under the Plan prior to the restatement effective as of the Separation Time. Subject to the preceding sentence, such Former Participants (other than Management Former NewVector Participants) are generally entitled to the same benefits set forth in the restatement of this Plan as of the Separation Time (without regard to subsequent amendments). In general, Management Former NewVector Participants whose Eligible Separation occurred after 1996 and before the Separation Time (1) are not entitled to any benefits under Article V-D, (2) may only elect benefits available prior to 1997 (but such benefit forms are subject to the actuarial adjustments set forth in Appendix A), (3) are only entitled to the pre-retirement death benefits set forth in Section 5B.5, and (4) may only elect a Deferred Vested Pension at age 65. In addition, such Participants’ benefits under Article V-B are calculated without regard to Sections 5B.1(c)(2) - (4) and 5B.6.
(f) (1) Former Occupational Participants not employed after January 1, 2001 shall be entitled to receive only such benefits and rights to benefits as were provided under the terms of the Plan as in effect prior to the January 1, 2001 Plan restatement. In general, and subject to the preceding sentence, such Former Participants (A) may not elect the benefit options set forth in Sections 6.4 and 6.5, (B) may only elect benefit forms available under the Plan prior to 2001 and such benefit forms are subject to the actuarial adjustments set forth in the Plan at that time (these forms are generally set forth in Sections 6.1, 6.2(a)(1) and (2) and 6.3), (C) are only entitled to pre-retirement death benefits set forth in Section 5A.5(b), and (D) may only elect a Deferred Vested Pension at age 65. The foregoing rules shall also apply to the Occupational Part benefits of a Management Participant with prior Occupational service who is not an Active Participant at any time after June 30, 2001.
(2) In the case of a Management Participant with prior Occupational service who is an Active Participant on or after July 1, 2001, the new benefit options set
LA3:752821.27 103
forth in Section 6.4 and 6.5, the new benefit options in Section 6.2(a)(5), the Appendix A factors made available July 1, 2001, the right to retire early and the new death benefit rules in Section 5A.5(c) shall apply to the Participant’s Occupational Part benefits.
5C.8. No Benefits for Non-Vested Participants.
Except for the death benefits described in Article VII, the benefits payable under the Plan under any Article with respect to a Participant who incurs an Eligible Separation for any reason before he has become Vested in the benefits under that Article shall be zero.
ARTICLE V-D
PENSION FOR MANAGEMENT EMPLOYEES - DEFINED LUMP SUM PENSION
5D.1. Application.
(a) General. Subject to subsection (c) below, this Article V-D applies only to Management Participants (1) who perform duties as Active Management Participants on or after January 1, 1997 and became Active Management Participants before 2001, or (2) who involuntarily leave a Participating Company as Active Management Participants on or after August 2, 1996 and before January 1, 1997 because of a plan by such Participating Company to reduce its workforce or (3) who involuntarily leave a Participating Company as Active Management Participants on or after June 3, 1996 and on or before August 1, 1996 because of a plan by such Participating Company to reduce its workforce, but only if they elected a buy-out of their 60 day transition period. Unless indicated otherwise, all references in this Article V-D to “Participant” or “Employee” shall include only Management Covered Employees. Subject to Section 5B.6, if such an Employee is also covered by Article V-B, his benefit up until the Cessation Date shall be the greater of the benefit under Article V-D or the benefit under Article V-B (as of the Cutoff Date). This Article V-D shall not apply to Former NewVector Participants (including those who terminate after 1996) or Pre-97 Management Participants.
(b) Special Rule for Certain Participants Terminating in 1996. Various sections in this Article V-D, and in other Articles, contain provisions regarding Participants who Terminate and are later reemployed by a Participating Company. These provisions generally provide different rules for Participants who Terminate before 1997 and Participants who Terminate after 1996. Solely for purposes of these various provisions, Participants described in clauses (2) or (3) of subsection (a) above shall be treated as Terminating after 1996, rather than during 1996, so that they will be subject to the rules applicable to Participants who Terminate after 1996. The preceding sentence shall not provide these Participants with any additional service or compensation after the actual date of Termination.
(c) Cessation of Article V-D. Notwithstanding any other rules in this Plan to the contrary, the following rules shall apply:
LA3:752821.27 104
(1) No Participant shall earn any benefits under this Article V-D on or after the Participant’s Cessation Date, as defined in Section 5D.2(c)(2).
(2) No person who first becomes an Employee (or Management Employee) on or after January 1, 2001 or is given an offer of employment, on or after July 10, 2000, to become an Employee shall become eligible to participate in this Article V-D or earn any Pension Calculation Service, Percentage Credits, Final Average Compensation or benefits under this Article V-D.
(3) Notwithstanding any other provision of this Plan, any person employed by a Participating Company before 2001 who is not an Active Management Participant on January 1, 2001 (even if he is an Occupational Participant or an employee of a Non-Participating Company or Portability Company on January 1, 2001) shall not participate in this Article V-D on or after January 1, 2001. In addition, any person employed by a Participating Company who Terminated (before or after July 10, 2000) and is given an offer of employment, on or after July 10, 2000, to become an Employee shall not participate in this Article V-D with respect to such period of reemployment; moreover, such person shall not earn any benefits under this Plan with respect to any period of reemployment occurring prior to January 1, 2001. If a Management Participant described in this paragraph (3) is reemployed by a Participating Company, such person’s benefit under this Plan shall be the sum of (1) the Vested Accrued Benefit under this Article V-D, if any, as of the time of the Participant’s earlier Termination (or, if applicable, the benefits under Article V-B, if greater), and (2) the Vested benefits earned under Article V-E with respect to the period of reemployment (but not prior to January 1, 2001).
5D.2. DLS Pension.
(a) Eligibility. Subject to Section 5D.1, each Vested Participant who incurs an Eligible Separation may become entitled to a DLS Pension. The amount of the DLS Pension shall be based on the Participant’s aggregate Percentage Credits and Final Average Compensation as of the date of the Termination and the DLS Factors in effect on the Pension Effective Date.
(b) Calculation of the Aggregate Percentage Credits.
(1) General. Except as provided below, a Participant’s aggregate Percentage Credits shall equal the sum of the Percentage Credits credited for each calendar month the Participant earns Pension Calculation Service. The Percentage Credit for each calendar month of Pension Calculation Service shall be based on the Participant’s age on the last day of the calendar month as follows:
Monthly Age Percentage Credit Under 30 1/6 % 30-34 1/3 %
LA3:752821.27 105
35-39 1/2 % 40-44 2/3 % 45-49 1 % 50-54 1-1/3 % 55 & older 1-1/2 %
By way of example, if a Participant’s employment with a Participating Company commenced in the month when he attained age 40 and Terminated in the month before the month in which he attained age 60, his aggregate Percentage Credits would total 270%, assuming the Participant earned Pension Calculation Service for each month of employment.
(2) Initial Credits as of January 1, 1997. With respect to the period ending December 31, 1996, a Participant’s initial Percentage Credits shall be based on his Pension Calculation Service as of December 31, 1996. However, except as provided in subsection (f), the Participant shall not receive any initial Percentage Credits unless he is an Active Participant on January 1, 1997.
(A) For this purpose, a Participant’s hire date shall be adjusted to reflect any periods, which are not counted as Pension Calculation Service and the initial Percentage Credits shall be calculated with regard to the Participant’s age during this period. For example, a Participant with a Pension Calculation Service (as of December 31, 1996) of four years, eight months and 15 days shall be treated as if hired on April 16, 1992, even if these are not the Participant’s actual dates of employment because multiple periods of employment have been combined.
(B) For this purpose, any Pension Calculation Service that has been disregarded under any Plan provision shall not be counted. For example, if a Participant previously received a lump sum, the Participant shall not receive any Percentage Credits with respect to that employment unless he repays the lump sum in accordance with the provisions of the Plan. Section 2.4(a)(3) shall be applied by counting prior service described therein that has not been credited as of December 31, 1996 only if the Participant ultimately bridges his pre-1997 service pursuant to Section 2.4(b).
(C) This paragraph applies if a Participant commenced a pension prior to 1997, is subsequently reemployed by a Participating Company before January 1, 1997 and does not bridge his earlier Term of Employment as set forth in Section 2.4(b)(2). In this case, notwithstanding any other provision of this Plan, the Participant shall not receive any Percentage Credits with respect to the Pension Calculation Service earned at the time of the first Eligible Separation. See also 5B.6(e).
(D) A Participant shall receive the full credit provided under subsection (b)(1) for any calendar month (or part thereof) included in his Pension
LA3:752821.27 106
Calculation Service. However, if a calendar month included in a Participant’s Pension Calculation Service was one in which the Participant was only employed on a part-time basis, the Percentage Credit shall be prorated by applying the principles in Section 2.1(c).
(3) Percentage Credits Commencing January 1, 1997. Commencing January 1, 1997, a Participant shall receive a full Percentage Credit for any calendar month (or part thereof) included in his Pension Calculation Service. In the case of a Participant who only works on a part-time basis during a calendar month, the Percentage Credit shall be prorated by applying the principles in Section 2.1(c). A Participant shall not earn a Percentage Credit for a month if such month was, or is subsequently, ignored pursuant to Section 2.4.
(4) Not Employed on January 1, 1997. Notwithstanding any other provision of this Plan, except as provided in subsection (f), any person who Terminated prior to 1997 (including a Termination as a result of becoming disabled), was not an Active Participant on January 1, 1997 (even if he is an employee of a Non-Participating Company on January 1, 1997) and becomes an Employee on or after January 2, 1997 shall not receive any Percentage Credits under Section 5D.2(b)(2) or with respect to any period prior to reemployment.
(5) Cessation of Percentage Credits. Notwithstanding the foregoing, except for Protected Participants, no Participant shall earn any Percentage Credits or Pension Calculation Service under this Article V-D after December 31, 2000 (or any earlier Cessation Date). In addition, Protected Participants shall not earn any Percentage Credits or Pension Calculation Service under this Article V-D after their first Termination on or after December 31, 2000. See Section 5D.2(c)(2) below.
(c) Calculation of the Defined Lump Sum.
(1) Amount. The Defined Lump Sum as of the date that the Participant incurs an Eligible Separation shall equal the sum of (1) his aggregate Percentage Credits times the Participant’s Final Average Compensation and (2) 25% of his aggregate Percentage Credits times the amount equal to the excess of the Participant’s Final Average Compensation over 50% of the Taxable Wage Base in effect on January 1 of the year in which the Termination occurs. Such amount shall be determined as of the date of the Participant’s Termination (whether it is concurrent with or prior to the Eligible Separation). Notwithstanding the foregoing, the amount of the Defined Lump Sum shall not be less than the amount of the Defined Lump Sum that would be paid if the Participant had Terminated on the last day of any prior Plan Year; provided that this amount shall be calculated based on the Taxable Wage Base in effect on January 1 of the year in which the Termination occurs.
(2) Cessation of Article V-D Benefits. Notwithstanding any provision of the Plan to the contrary, the amount in Section 5D.2(c)(1) (and the Accrued Benefit earned under this Article V-D) shall be calculated as if the Participant Terminated on the
LA3:752821.27 107
Cessation Date (as defined below) and was never reemployed by a Participating Company. Accordingly, even if the Participant is a Covered Employee after the Cessation Date, the calculation of the amount under this Section 5D.1(c) shall be made solely with reference to the Participant’s Pension Calculation Service, Percentage Credits, Final Average Compensation, and Taxable Wage Base, as such items existed on the Cessation Date. The Cessation Date shall be
(A) the Participant’s first Termination that occurs after December 31, 2000, in the case of an Active Participant on January 1, 2001 (excluding those described in (B) below). Notwithstanding the foregoing, the following rules shall apply to Participants (other than Protected Participants) described in this clause (A): (i) no such Participant shall earn any Percentage Credits or Pension Calculation Service under this Article V-D after December 31, 2000, (ii) such Participant’s benefits under this Article V-D (excluding any benefits earned prior to an earlier Termination) shall be adjusted to reflect increases, if any, in Final Average Compensation and/or the Taxable Wage Base after December 31, 2000 until the Participant’s first Termination thereafter, and (iii) a Participant shall receive the benefits set forth in Section 5D.2(i) or (j) if he so qualifies. In all cases, if any Participant (whether or not the Participant is a Protected Participant) Terminates after December 31, 2000, the Participant’s Cessation Date shall be the date of such first Termination; accordingly, such Participant shall not earn any additional benefits or Percentage Credits or Pension Calculation Service under this Article V-D, and the Participant’s benefits previously earned shall not be increased as a result of Final Average Compensation earned during any subsequent reemployment;
(B) the time of the Participant’s previous Termination, in the case of those who Terminated (before or after July 10, 2000) who are given offers of reemployment on or after July 10, 2000; or
(C) the time of the Participant’s last Termination prior to December 31, 2000, in the case of any Participant not described in (B) above who is not an Active Participant on January 1, 2001 or any Participant who is receiving MDPP payments on January 1, 2001.
(d) (1) Amount of the DLS Pension. The amount of the DLS Pension to which a Vested Participant is entitled as of the date of the Eligible Separation shall be the monthly amount payable as a single Life Annuity commencing at age 65 (or, if later, the later of age 65 or the Pension Effective Date, but not later than the Required Beginning Date) that is the DLS Equivalent (as set forth in Section 1.12B(a)(1)) of the Defined Lump Sum calculated in subsection (c) above. Such amount shall be considered earned as of the date of the Participant’s Termination notwithstanding the fact that such amount shall not be calculated until the date of the Participant’s Eligible Separation. The general form of a deferred vested pension shall be a life annuity for the life of the Participant, except as provided in Section 5C.3; as set forth in Article VI, Participants may elect alternative forms.
LA3:752821.27 108
(2) Notwithstanding the foregoing, the amount of the DLS Pension shall not be less than the amount of the DLS Pension that would be paid based on the DLS Equivalent using (i) the DLS Factors in effect for the Participant’s Pension Effective Date using the “stability period” and the “lookback period” specified in Subsection 1.12C(a)(1), (ii) the aggregate Percentage Credits and Final Average Compensation earned through July 31, 1999 and (iii) the Taxable Wage Base in effect on July 31, 1999. For purposes of calculating this minimum DLS Pension, Section 1.12C(a)(2) shall not apply.
(e) Treatment of Reemployed Participants.
(1) This subsection (e) addresses Participants who Terminate after 1996 (including a Termination as a result of becoming disabled or a Termination described in Section 5D.1(b))), incur an Eligible Separation (either concurrent with or subsequent to the Termination) and are later reemployed by a Participating Company and incur another Eligible Separation.
(2) If the Participant was Vested at the time of the prior Eligible Separation, any previously unpaid benefit earned under this Article V-D with respect to such prior period of employment shall remain as a frozen annuity; the Participant may not elect a lump sum with respect to such annuity. Participants may not buy back any benefits that previously commenced. Upon reemployment, notwithstanding Section 2.4, the Participant shall not be credited with any Percentage Credits earned with respect to such prior employment.
(3) If the Participant was not Vested at the time of prior Eligible Separation and is rehired before a sixty consecutive month Period of Severance has been incurred or the prior Pension Calculation Service is subsequently counted pursuant to Section 2.4(a)(3), then the Participant shall be credited with the Percentage Credits and Final Average Compensation earned with respect to such prior employment. If the Participant is rehired after 2000 (or given an offer of reemployment on or after July 10, 2000), no additional Percentage Credits or Final Average Compensation shall be credited with respect to the period of reemployment. In addition, if the Participant subsequently becomes Vested, the Participant’s DLS Normal Pension payable upon the subsequent Eligible Separation shall not be less than the DLS Normal Pension earned at the time of the first Eligible Separation (based upon the Percentage Credits and Final Average Compensation earned at the time of the first Termination, and DLS Factors in effect at the first Pension Effective Date).
(4) Notwithstanding any provision of this Article V-D to the contrary, if a Participant (including a Protected Participant) Terminates on or after January 1, 2001 and is subsequently reemployed by a Participating Company, his benefits with respect to all periods of reemployment shall be determined in accordance with Article V-E, rather than Article V-D. In addition, no Participant shall earn any benefits under this Article V-D after his Cessation Date. See Sections 5D.1(c) and 5D.2(c)(2).
LA3:752821.27 109
(f) Service under Related Occupational Plan or Related Management Plan.
(1) A Participant who becomes a Management Employee prior to January 1, 2001 shall be entitled to Percentage Credits for any prior pension calculation service prior to the Cessation Date under a Related Occupational Plan or a Related Management Plan if such Participant becomes entitled, pursuant to Section 5D.7, to a benefit under the provisions of the Management Part with respect to such service. However, such a Participant shall only be entitled to Percentage Credits for such pension calculation service prior to January 1, 1997 if (1) the Participant was a participant in a Related Management Plan or a Related Occupational Plan on January 1, 1997 who is employed by a Portability Company on January 1, 1997 or the Participant was an Active Occupational Participant on January 1, 1997 and (2) the Participant’s benefit under the Management Part is based on such January service. For purposes of calculating the Percentage Credits prior to 1997, if any, the provisions of subsection (b)(2) shall apply, except that subsection (b)(2)(A) shall not apply. For purposes of calculating the benefit under Article V-D attributable to the prior service, the principles of Section 5D.2(e) shall apply; accordingly, except as provided in the next sentence, a frozen DLS Normal Pension shall be calculated based solely on the Percentage Credits and Final Average Compensation earned at the time of the Participant’s Termination from the Portability Company and the DLS Factors in effect on the day following such Termination, and the Participant may not elect a lump sum with respect to such benefit. However, the preceding sentence shall not apply in the case of a Participant who does not Terminate before becoming a Participant in this Management Part (for example, (i) an Occupational Employee who becomes a Management Employee without incurring a Termination or (ii) a Participant who becomes an Employee of a Participating Company on the business day following the business day the individual terminated employment at the applicable Portability Company (or Interchange Company)); in that case, the Percentage Credits earned before becoming a Participant in this Management Part shall be aggregated with the Percentage Credits and Final Average Compensation earned after becoming a Participant in the Management Part and the Participant may elect a lump sum on the entire benefit.
(2) Section 5D.2(f)(1) shall not apply to any person described in Section 5D.1(c)(2). See Section 5E.6.
(g) Tax Qualification Rules. Section 411(a)(9) and 411(d)(6) of the Code shall be implemented by: (1) ensuring that the Defined Lump Sum is not decreased in accordance with the rules set forth in subsection (c), and (2) ensuring that the DLS Pension calculated at the Eligible Separation is not decreased. Because the DLS Pension computed in Section 5D.2(d) shall not be calculated until an Eligible Separation, the Plan shall not prohibit the DLS Pension from being less than an amount equal to the Defined Lump Sum at the end of an earlier Plan Year converted to a single Life Annuity by using the DLS Factors in effect on the end of such earlier Plan Year.
(h) Rules For Transfers To Non-Participating Companies. This subsection addresses the treatment of Participants who Terminate after 1996 by transferring to a Non-
LA3:752821.27 110
Participating Company that is not a Cable Company and subsequently transfer back to a Participating Company, in each case without incurring an Eligible Separation. (If the Participant incurs an Eligible Separation either at the time of the initial Termination or at the time the individual Terminates employment with the Non-Participating Company, the rules of subsection (e), rather than this subsection (h), shall apply.) Subject to Section 5D.2(c), when the Participant subsequently incurs an Eligible Separation from the Participating Company, his Defined Lump Sum shall equal (1) if the Participant was Vested when he first Terminated, the sum of the Defined Lump Sum calculated as of the first Termination (based on Percentage Credits and Final Average Compensation as of such first Termination) plus the Defined Lump Sum earned with respect to the second period of employment with the Participating Company (disregarding Percentage Credits and Final Average Compensation with respect to the first period of employment with the Participating Company) or (2) if the Participant was not Vested when he first Terminated, the Defined Lump Sum calculated based on his aggregate Percentage Credits and Final Average Compensation earned during both periods of employment with the Participating Companies. Regardless of whether clause (1) or (2) of the preceding sentence applies, the DLS Pension with respect to such a Participant shall be calculated as the DLS Equivalent (based on the DLS Factors in effect on the date following the Participant’s Eligible Separation) of the aggregate Defined Lump Sum described in the preceding sentence.
(i) In addition, each Participant who is formally notified, during the period from August 11, 2000 up to and including June 30, 2001, that they will be involuntarily terminated from employment (or that they are eligible under the Voluntary Termination Program) shall be entitled to an additional Defined Lump Sum, an Extra Payment or other benefits, in the amounts set forth in Appendix M, if the Participant meets all of the terms and conditions for such respective benefits as set forth in Appendix M. Said amounts shall be added to the amount otherwise payable under Section 5D.2(c) and shall be payable in accordance with the terms of Articles V-D and VI and shall be subject to all other limitations set forth in the Plan including the overall limit on benefits in Section 5C.2. Whether or not the Participant is otherwise vested in the benefits under this Plan, if the Participant meets all of the terms and conditions for an additional Defined Lump Sum or Extra Payment, respectively, he shall be 100% Vested in such additional Defined Lump Sum amount or Extra Payment, but not the benefits set forth in Section 3.3 of Appendix M. Notwithstanding the foregoing or any other provision of the Plan, if the Participant benefit under this Plan is the greater of the benefit under Article V-B and the benefit under Article V-D, and the Article V-B benefit is greater than the benefit otherwise payable under Article V-D (without regard to the additional Defined Lump Sum or Extra Payment), then the Participant shall be entitled to the benefits under Article V-B plus the additional Defined Lump Sum or Extra Payment, but not any other benefits under this Article V-D.
(j) In addition, each Participant who is formally notified on or between July 1, 2001 and June 30, 2003, that they will be involuntarily terminated from employment shall be entitled to an additional Defined Lump Sum and other benefits, in the amounts set forth in Appendix S, if (1) the Participant meets all of the terms and conditions for such respective benefits as set forth in Appendix S and (2) the Participant’s termination of employment occurs on or before his Cessation Date. Said amounts shall be added to the amount otherwise payable
LA3:752821.27 111
under Section 5D.2(c) and shall be payable in accordance with the terms of Articles V-D and VI and shall be subject to all other limitations set forth in the Plan including the overall limit on benefits in Section 5C.2. Whether or not the Participant is otherwise vested in the benefits under this Plan, if the Participant meets all of the terms and conditions for an additional Defined Lump Sum, he shall be 100% Vested in such additional Defined Lump Sum amount. Notwithstanding the foregoing or any other provision of the Plan, if the Participant’s benefit under this Plan is the greater of the benefit under Article V-B and the benefit under Article V-D, and the Article V-B benefit is greater than the benefit otherwise payable under Article V-D (without regard to this subsection (j)), then the Participant shall be entitled to the benefits under Article V-B plus the additional Appendix S benefits, but not any other benefits under this Article V-D.
5D.3. Adjustment for Retirement Before Age 65.
Subject to Section 6.1(d), a Vested Participant may elect to have his DLS Pension commence at any time on or after the Pension Effective Date. The amount of the DLS Pension for any Participant whose Annuity Starting Date is prior to attainment of age 65 shall be equal to the greater of (a) the DLS Pension calculated in Section 5D.2(d), multiplied by the factors in Appendix C, or (b) the Minimum Amount. Regardless of when the Participant commences benefits, the Minimum Amount is a single-Life Annuity commencing on the Pension Effective Date that is the DLS Equivalent of the Defined Lump Sum calculated in Section 5D.2(c).
D.4. Disability Benefit.
A Participant who Terminates on account of disability on or after January 1, 1997 may be eligible to receive a Modified Disability Pension, as set forth in Appendix J, in addition to other benefits provided under this Article V-D.
5D.5. Death of a Participant before Commencement of Benefits.
Subject to Section 206(d) of ERISA, the following rules shall apply in the case of a Vested Active Participant or a Vested Former Participant who dies before his Annuity Starting Date:
(a) Normal Death Benefit. If a Vested Active Participant dies prior to the Annuity Starting Date, his Beneficiary shall be entitled to a lump sum death benefit equal to the Defined Lump Sum in Section 5D.2(c). In lieu thereof, the Beneficiary may elect, within 60 days after notification that the Beneficiary is entitled to a death benefit, to receive a single life annuity (for the Beneficiary’s life) commencing on the Pension Effective Date that is the DLS Equivalent of such lump sum. If no election is made, a lump sum shall be paid. These death benefits shall not be paid to a Beneficiary of a Former Participant, unless the Former Participant is Vested and dies before the end of the 60-day period beginning on his Eligible Separation. Except as provided by subsection (c) or (d), these death benefits shall not be paid if the Participant (or Former Participant, if applicable) is married at the time of his death.
(b) Qualified Preretirement Survivor Annuity. Except as provided in subsection (c) or (d) below, if a Vested Active Participant or Vested Former Participant dies
LA3:752821.27 112
prior to the Annuity Starting Date and is married at the time of his death, a death benefit in the form of a Qualified Preretirement Survivor Annuity, as described below, shall be payable to such surviving Spouse.
(1) In the case of the death of an Active Participant or a Former Participant who dies within 60 days after his or her Eligible Separation, if the Spouse consents to a distribution within 60 days after notification of an entitlement to a death benefit, such Survivor Annuity shall be a monthly life annuity for the life of the surviving Spouse, which is equal to the greatest of the following:
(A) a single life annuity (for the Spouse’s life) commencing on the Pension Effective Date that is the DLS Equivalent of the lump sum set forth in subsection (a). This clause (A) shall not apply to a surviving Spouse of a Former Participant, unless the Former Participant dies before the end of the 60-day period beginning on his Eligible Separation;
(B) the amount the surviving Spouse would have received under this Article V-D, if the Participant had commenced receiving benefits under a Qualified Joint and 50% Survivor Annuity on the day before his death;
(C) if applicable and subject to Section 5B.1 and 5B.6, the amount the surviving Spouse would have received under Article V-B, if the Participant had commenced receiving benefits under a Qualified Joint and 50% Survivor Annuity on the day before his death; or
(D) if applicable and subject to Section 5B.1 and 5B.6, an amount equal to 45% of the standard benefit that would have been payable under Article V-B had the Active Participant Terminated on the date of his death, survived until age 65 and began to receive payments at age 65. This clause (D) shall not apply to the Spouse of a Former Participant.
(2) If the Spouse is not described in paragraph (1), payment of a Survivor Annuity shall commence as of the day following the day the Spouse elects (in writing) to receive the Survivor Annuity but not later than the date on which the deceased Active Participant or Former Participant would have attained age 65 (unless the Participant dies after attainment of age 65, in which case the benefit shall commence as soon as practicable after such death). The amount of the benefit shall be the greater of (A) to the extent applicable, the greater of the amount described in Section 5D.6(b)(1)(A) or (D) (without any adjustment to reflect later payment), or (B) the greater of the amount the Surviving Spouse would have received under Article V-B or V-D if the Active Participant or Former Participant had Terminated on the earlier on the date of his death or the actual Termination, survived until the date the Survivor Annuity commenced, retired with a Qualified Joint and 50% Survivor Annuity on such date and died on the day after such date.
LA3:752821.27 113
(3) Payment of the Survivor Annuity shall be made as soon as practicable after the date as of which it commences; the first payment shall include any payments not made which were due on and after the date as of which it commenced.
(c) Waiver.
(1) After receipt of the explanation described below, a Participant (but not a Former Participant) and the surviving Spouse may waive the Survivor Annuity by a written election, in which event the death benefits specified in subsection (a) shall be paid to the Participant’s Beneficiary. Such election must be in writing and must meet the conditions applicable to spousal consents set forth in Section 6.2(b) (except that such consent need not specify the form of benefits). Revocation of a prior waiver may be made by a Participant without the consent of the surviving Spouse at any time before the Participant’s death. However, any new waiver or change of Beneficiaries will require a new spousal consent. Except as provided above, any surviving Spouse’s consent shall be irrevocable.
(2) During the “applicable period” (as defined below), the Plan shall send each Participant an explanation of the Survivor Annuity, including the terms and conditions and consequences of a waiver of the Survivor Annuity. Such explanation shall contain information similar to the explanation required under Section 6.2(b)(4). The applicable period means whichever of the following periods ends last: (A) the period beginning with January 1 of the Plan Year in which the Participant attains age 32 and ending with the December 31 of the Plan Year in which the Participant attains age 34 and (B) the period commencing one year before and ending one year after the individual becomes a Participant.
(3) Any waiver shall be null and void sixty days after the Participant incurs an Eligible Separation for any reason other than death. Accordingly, if a Former Participant dies more than sixty days after his Eligible Separation, the only potential death benefit is the benefit payable under subsection (b)(1)(B) or (b)(1)(C).
(4) Any waiver by a surviving Spouse made prior to the first day of the Plan Year in which the Participant attains age 35 shall cease to be valid on the first day of such Plan Year. In addition, no such waiver will be valid unless such Participant was provided with an explanation described above (without regard to the requirement that it be provided during the applicable period) prior to the execution of such waiver.
(d) Special Spousal Waiver. A surviving Spouse of an Active Participant entitled to a Survivor Annuity may elect not to receive such Survivor Annuity and instead elect to receive the lump sum death benefit specified in subsection (a). The surviving Spouse of a Former Participant entitled to a Survivor Annuity shall not be entitled to elect a lump sum hereunder unless the Former Participant dies before the end of the 60-day period beginning on his Eligible Separation. In order to make such an election, the surviving Spouse must give notice to the Plan on a form meeting the spousal consent requirements set forth in Section 6.2(c)(1). Notwithstanding any provision of the Plan to the contrary, no such notice shall be valid and no
LA3:752821.27 114
lump sum may be elected unless the surviving Spouse consents, within 60 days after the notification from a Participating Company that the surviving Spouse is entitled to a death benefit, payable as an immediate lump sum distribution. Any purported election of a lump sum after such date shall be null and void.
(e) Not Vested. If an Active Participant or Former Participant dies before the Annuity Starting Date and is not Vested, no pre-retirement death benefit shall be payable.
(f) Beneficiaries.
(1) Designating Beneficiaries. A Participant may designate a beneficiary or beneficiaries to receive any benefits that may become payable under the Plan on account of his death prior to his Annuity Starting Date and which under the Plan may be paid to a beneficiary other than his Spouse, and may change or revoke any prior designation of beneficiary or beneficiaries by filing with the Committee a written designation of beneficiary signed by him. No such designation shall be effective unless filed with the Committee prior to the death of the Participant. The last such designation shall govern the designation of beneficiary. Each such designation shall be made upon a form furnished by or otherwise acceptable to the Committee. If no beneficiary has been properly designated, or if no designated beneficiary survives the Participant, the death benefits, if any, payable to the beneficiary of the deceased Participant shall be paid to the Participant’s surviving spouse. If there is no surviving spouse, the estate (which shall include the Participant’s probate estate or living trust) shall be the beneficiary, provided that in any case where there is no such personal representative of the Participant’s estate duly appointed and acting in that capacity within 90 days after the Participant’s death (or such extended period as the Committee determines is reasonably necessary to allow such personal representative to be appointed, but not to exceed 180 days after the Participant’s death), such benefits shall be payable in the following order:
(A) the Participant’s issue;
(B) the Participant’s parents;
(C) the issue of the Participant’s parents; or
(D) such person as may be chosen in the discretion of the Committee.
A category of Beneficiary described in one of the four clauses set forth above shall only be eligible to receive a benefit if no person described in a preceding clause is alive at the time of death. If the issue described in clauses (A) and (B) are of different degrees of kinship to the Participant, the rules of intestate succession then in existence under the Colorado Probate Code shall determine the amount to be taken by each Beneficiary. As a condition to such payment, the Committee may require such receipts, releases, indemnity agreements, proofs and other documents, which it may deem necessary or desirable.
LA3:752821.27 115
(2) Disclaimers. Any individual or legal entity that is a beneficiary may disclaim all or any portion of his interest in the Plan, provided that the disclaimer satisfies the requirements of Code section 2518(b) and applicable state law. The legal guardian of a minor or legally incompetent person may disclaim for such person. The personal representative (or the individual or legal entity acting in the capacity of the personal representative according to applicable state law) may disclaim on behalf of a beneficiary who has died. The amount disclaimed shall be distributed as if the disclaimant had predeceased the individual whose death caused the disclaimant to become a beneficiary.
(3) Simultaneous Death. In the event of the occurrence of the death of the Participant and his Beneficiary (and/or contingent beneficiary, if applicable) at the same time (as recorded on the death certificates), the Participant shall be deemed to have survived his beneficiary.
(g) Former NewVector Participants, Pre-97 Management Participants and Applicable Occupational Participants with Management Service before 1997. The foregoing subsections (a) through (f) shall not apply to Former NewVector Participants or, subject to the next sentence, Pre-97 Management Participants. However, if an Applicable Occupational Participant has Management Part service before, but not after, January 1, 1997 (irrespective of his date of Eligible Separation), then Section 5D.5(b) shall apply to the Management Part benefit under Article V-B of such a Participant; provided that (1) no death benefits are payable under Article V-D (thus, Sections 5D.5(b)(1)(A) and (B) shall not apply), (2) section 5D.5(c), (d) and (f) shall not apply, and (3) if the Participant dies prior to July 1, 2001, then section 5D.5(b)(1)(D) shall not apply unless the Participant has 15 years or more of TOE or was eligible for a service pension.
5D.6. Transfers to or from Cable Companies.
Appendix I describes the benefits of a Participant who transferred from a Participating Company to the Cable Companies prior to the Separation Time.
5D.7. Coordination With Other Plans.
Subsections (a), (b) and (c) do not apply to Participants who become Management Employees on or after January 1, 2001. See subsection (e).
(a) Occupational to Management.
(1) In the case of a Participant who was previously covered under the Related Occupational Plans and was never previously covered by the Related Management Plans, the monthly pension benefit for the Participant shall equal the sum of (A) the pension benefit determined for pension calculation service earned while covered under the Related Occupational Plans, in accordance with the provisions of the Related Occupational Plans as in effect on the last date the Participant was covered by the Related Occupational Plans and based on the monthly benefit rate in effect under the Related
LA3:752821.27 116
Occupational Plan at that time (except that, if the Related Occupational Plan was the Occupational Part, it shall be calculated, if applicable, on the basis of the monthly benefit in effect under such Occupational Part at the time of the Participant’s Termination as a Management Employee) for the Pension Band number for the occupational job title and classification held on the last day the Participant was covered by the Related Occupational Plan, plus (B) the pension benefit determined for the Pension Calculation Service earned while the Participant was covered by this Management Part, in accordance with the provisions of this Management Part.
(2) Upon completion of three years of continuous employment as a Management Employee under this Management Part, the Participant shall receive the greater of (A) the pension benefit determined pursuant to the preceding paragraph (1), or (B) the pension benefit determined solely in accordance with the provisions of the Management Part for all pension calculation service (and compensation) earned while covered under the Related Occupational Plans and all Pension Calculation Service (and Compensation) earned while covered under this Management Part.
(b) Management to Management. If the Mandatory Portability Agreement or an Interchange Agreement includes a Participant’s service performed while covered by a plan substantially similar to this Plan maintained by a Former Affiliate or a Portability Company (an “Affiliate Plan”) in the Participant’s Term of Employment, the Participant’s benefit shall be equal to the greater of:
(1) the sum of (i) the benefit calculated under the Affiliate Plan as in effect on the last day the Participant was covered by the Affiliate Plan based on pension calculation service performed while covered by the Affiliate Plan and (ii) the benefit calculated under this Management Part based on Pension Calculation Service performed while covered by this Management Part, or
(2) the pension benefit determined solely in accordance with the provisions of the Management Part for all pension calculation service (and compensation) earned while covered under the Affiliate Plans and all Pension Calculation Service (and Compensation) earned while covered under this Management Part.
(c) Management to Occupational to Management. This subsection (c) addresses a Participant who was previously covered by the Related Management Plans, then became covered by the Related Occupational Plans and then becomes covered by this Management Part.
(1) (A) If the Participant does not complete at least three years of continuous service as a Management Employee after becoming covered under the Management Part, the Participant’s monthly benefit shall equal the sum of (x) the pension benefit determined for pension calculation service earned while covered under the Related Management Plans prior to being covered by the Related Occupational Plans, in accordance with the provisions of such Related Management Plans as in effect on the last date the Participant was covered by
LA3:752821.27 117
such Related Management Plans (based on compensation earned through such date), plus (y) the pension benefit determined for pension calculation service earned while covered under the Related Occupational Plans, in accordance with the provisions of the Related Occupational Plans as in effect on the last date the Participant was covered by the Related Occupational Plans and based on the monthly benefit rate in effect under the Related Occupational Plan at that time (except that, if the Related Occupational Plan was the Occupational Part, such benefit shall be calculated, if applicable, on the basis of the monthly benefit in effect under such Occupational Part at the time of the Participant’s Termination as a Management Employee) for the Pension Band number for the occupational job title and classification held on the last day the Participant was covered by the Related Occupational Plan plus (z) the pension benefit determined solely in accordance with the provisions of the Management Part based on Pension Calculation Service and Compensation earned after becoming covered again by this Management Part.
(B) Notwithstanding the foregoing, if the Participant completed three years of continuous employment under the Related Occupational Plans, the sum of the amounts described in clauses (x) and (y) of the preceding paragraph (A) shall not be less than the pension benefit determined for pension calculation service earned while covered under the Related Management Plans (prior to becoming covered by the Related Occupational Plans) and while covered under the Related Occupational Plans, in accordance with the provisions of the Related Occupational Plans as in effect on the last date the Participant was covered by the Related Occupational Plans and based on the monthly benefit rate in effect under the Related Occupational Plan at that time (except that, if the Related Occupational Plan was the Occupational Part, such benefit shall be calculated, if applicable, on the basis of the monthly benefit in effect under such Occupational Part at the time of the Participant’s Termination as a Management Employee) for the Pension Band number for the occupational job title and classification held on the last day the Participant was covered by the Related Occupational Plan. The preceding sentence shall also apply in the event the Participant has two separate periods of service under the Related Occupational Plans which are separated by a period of service under a Related Management Plan provided that in that case the amount in the preceding sentence shall be calculated by taking into account the principles set forth in Section 5A.4(g)(iv).
(2) If the Participant completes three years or more of continuous employment as a Management Employee after again becoming covered under the Management Part, the benefit shall equal the greater of (y) the pension benefit determined solely in accordance with the provisions of this Management Part based on both the pension calculation service (and compensation) earned under the Related Occupational Plans and the Related Management Plans and the Pension Calculation Service (and Compensation) earned while covered under this Management Part, or (z) the benefit described in paragraph (1) above.
LA3:752821.27 118
(d) Subsections (a), (b) and (c) shall be subject to Section 5D.2(f), Appendix B and the following provisions.
(1) The benefit under this Section 5D.7 with respect to a Participant (i) shall not duplicate the Participant’s benefit, if any, under the Plan and (ii) shall be reduced by the benefit, if any, under an Affiliate Plan or an Interchange Company Pension Plan or a Portability Company Pension Plan to the extent that the benefit from the Interchange Company Pension Plan or Portability Company Pension Plan is based upon any pension calculation service that is recognized as Pension Calculation Service under this Plan. For purposes of ensuring benefits are not duplicated or are appropriately reduced, the appropriate adjustments shall be made to the normal retirement pension regardless of the time the Participant commenced benefits; the remaining normal retirement pension shall be appropriately adjusted to reflect early commencement of benefits and the appropriate form of benefits elected.
(2) Subsections (a), (b) and (c) shall be applied by ignoring all pension calculation service and compensation earned while covered by a Related Management Plan or Related Occupational Plan if the Participant previously took a lump sum from such plan unless the Participant satisfies the rules set forth in such plan for the repayment or other treatment of such previous lump sum, in accordance with Section 2.6(c) of Appendix B.
(3) For purposes of determining the term of employment or the pension calculation service, as applicable, under any other plan for purposes of this subsection, there shall be counted only such term of employment or pension calculation service, as applicable, under such other plan, as of the last date the Participant was covered by such other plan, which would have been counted by such other plan had the Participant been covered by such other plan during the period the Participant is covered by this Management Part.
(4) To the extent the Participant is entitled to a benefit determined under the provisions of this Management Part that is based on service under Related Occupational Plans or other Related Management Plans, such benefit shall be calculated by assuming the Participant had the identical work history (in terms of terminations and breaks in service), but earned such other service (at the same time it was actually earned) under this Management Part. Such benefit shall also be subject to Section 5D.2(f). By way of example, assume a Participant works as a management employee under a Related Management Plan from 1980 through 1990, then from 1992 to 1994 as a occupational employee under a Related Occupational Plan, and then works as a Management Participant under the Management Part from 1996 – 2000. Such Participant’s benefit is described in Section 5D.7(c)(2). For purposes of clause (y) of that paragraph, the rules of Section 5D.2(f) shall apply so that the Participant shall be entitled to three separately calculated DLS Pensions (each based on Percentage Credits and the Final Average Compensation earned at the time of the applicable Termination and the DLS Factors in effect on the following day) as opposed to a single DLS Normal Pension based on all Percentage Credits and the Final Average Compensation earned under this Management
LA3:752821.27 119
Part.
(5) Any benefit calculated under this Section 5D.7 shall not apply until the Participant commences benefits with respect to benefits earned under this Management Part; in addition, no retroactive adjustment shall be made. By way of example, assume a former Occupational Employee Terminates in 1995, is rehired as a Management Employee in 1997 and Terminates again in June 2000. This Participant shall be entitled to a benefit under Section 5D.7(a)(2)(B) beginning June 2000; no retroactive adjustment will be made to the benefits received, if any, under the Occupational Part prior to June 2000. Subject to Sections 5C.7 and 6.6, for Eligible Separations prior to July 1, 2001, (A) any benefits earned under the Management Part pursuant to this Section 5D.7 (including any adjustments with respect to service earned prior to becoming a Management Employee) may only be paid in a form allowed under the Management Part and (B) any benefits earned under the Occupational Part may only be paid in a form allowed under the Occupational Part.
(6) Notwithstanding the foregoing, as set forth and subject to Section 2.4(b) of Appendix B, this Section 5D.7 shall not apply to any Participant who previously commenced benefits unless the Participant bridges his or her Term of Employment in accordance with Section 2.4(b) of this Plan.
(7) If the Participant has series of periods of employment as a management and occupational employee which are not described above, then the Participant’s benefit shall be determined by the Committee based on the principles set forth in this Section 5D.7 and in Sections 5A.4(g)(iv) and 5B.4. In addition, the benefit set forth in Section 5D.7(c)(2) shall only apply through the end of last period during which the Participant completes at least three years of continuous service as a Management Employee. For example, assume a Participant works three years as a Management Employee, two years as an Occupational Employee, three years as Management Employee, one year as an Occupational Employee and another year as a Management Employee. The principles of Section 5D.7(c)(2) shall apply to provide a Management Part benefit with respect to the first eight years of employment, but shall not be applied to give the Participant a ten year Management Part benefit because the Participant did not complete at least three years of continuous service as a Management Employee during his last period of employment as a Management Employee.
(8) (A) Because the pre-retirement death benefits under the Occupational Part and Management Part for a particular Participant may be payable at different times or forms and provide different subsidies, a Participant (or after the Participant’s death, the Participant’s surviving spouse but only if the spouse is the sole primary Beneficiary) who is entitled to a pre-retirement death benefit may elect, with spousal consent, to receive the various death benefits available under any one set (and only one set) of the alternative benefits available to that Participant under this subsection. Notwithstanding the foregoing, the obligation to file such an election shall rest solely with the Participant; neither the Participating Company nor the Committee shall be under any obligation to
LA3:752821.27 120
identify Participants who are eligible to make such an election or to provide a Participant with an election form unless the Participant requests a form. Neither the Participant nor the spouse may select death benefits from different sets of the alternative benefits available to that Participant. Such election may be made regardless of which set of alternative benefits provides an actuarially greater set of death benefits or pension benefits. If (i) the Participant does not make such an election, (ii) the Participant named a primary Beneficiary other than his surviving spouse, and (iii) the spouse consented to the waiver of the Qualified Pre-Retirement Survivor Annuity, then the Participant shall be deemed to have elected that set of benefits that provides the named Beneficiary with the greatest possible death benefit.
(B) By way of example, assume an Active Participant is described in Section 5D.7(a)(2) and dies prior to the time a lump sum is available with respect to Occupational benefits. The Participant may elect either the various death benefits under Section 5D.7(a)(2)(A) or the death benefits under Section 5D.7(a)(2)(B), regardless of which set of death benefits is greater or which alternative provides a greater pension benefit. Assume the Beneficiary wants to elect a lump sum death benefit. The Beneficiary may elect either (i) a lump sum benefit with respect to the death benefit under Section 5D.7(a)(2)(B) or (ii) a lump sum benefit with respect to the death benefit under Section 5D.7(a)(1)(B) and, if the Participant is married on the date of death, a Qualified Pre-Retirement Survivor Annuity on the death benefit under Section 5D.7(a)(1)(A). (Spousal consent is needed to make either election.) Even if the pension (or death) benefit under Section 5D.7(a)(2)(B) is smaller than the pension (or death) benefit under Section 5D.7(a)(2)(A), the Beneficiary cannot elect a lump sum benefit with respect to the death benefit under Section 5D.7(a)(2)(B) and a Qualified Pre-Retirement Survivor Annuity on the excess of the benefit under Section 5D.7(a)(2)(A) over the benefit under Section 5D.7(a)(2)(B).
(9) See Section 5D.2(f) for special rules regarding the benefits under Article V-D for Participants described in this Section 5D.7. See Section 5B.4 for special rules regarding the benefits under Article V-B for Participants described in this Section 5D.7. See Sections 5C.7 and 6.6(a) for special rules regarding the New 97 Rules and benefit payment options.
(e) Except as set forth in the next sentence, Section 5D.7(a), (b), (c) and (d) shall not apply to (1) any person whose Employment (or Reemployment) Commencement Date is on or after January 1, 2001, whether or not he was previously a Management Employee or (2) any person who transfers from the Occupational Part to the Management Part on or after January 1, 2001. See Section 5E.6. However, Section 5D.7 shall apply to benefits earned as a result of reemployment or transfers prior to January 1, 2001; in that case, Section 5E.6 shall apply to benefits earned after the post-2000 reemployment or transfer date and, except as set forth in Section 5E.6(b)(1), the benefits previously earned shall not be increased (or recalculated) under the rules in Sections 5A.4(g), 5B.4 or 5D.7 or any other section by virtue of the later reemployment.
LA3:752821.27 121
5D.8. Ex-NewVector Participants and Former NewVector Participants.
(a) (1) Prior to the Separation Time, NewVector was a Participating Company in Article V-B, but not Article V-D; thus, Management Participants employed by NewVector did not earn benefits under Article V-D. During 1998 prior to the Separation Time, Old U S WEST sold NewVector to AirTouch Communications, Inc.
(2) As set forth in Section 10.4(c), the liabilities under the Plan attributable to Participants employed by NewVector at the time of the sale are transferred from this Plan to, and assumed by, a plan maintained by AirTouch.
(3) Prior to the Separation Time, certain NewVector employees transferred employment to (or Terminated and were later hired by) entities that were part of the controlled group of U S WEST after the Separation Time. All such persons who are both (i) Management Employees immediately after the Separation Time and (ii) Communications Participants, shall be referred to as Ex-NewVector Employees. Subject to and in accordance with the provisions of the Employee Matters Agreement, the liabilities with respect to these Ex-NewVector Employees are retained by this Plan. See subsections (b) and (c) below.
(4) Subject to and in accordance with the Employee Matters Agreement, persons who meet all of the following conditions are Communications Participants: (i) they were Former Participants at the time of the sale of NewVector, (ii) they were Employees of NewVector at the time they incurred an Eligible Separation and (iii) they were not reemployed by Old U S WEST or a Participating Company prior to the Separation Time. Such persons are referred to as Former NewVector Participants. See Sections 5C.7(d) and (e) for rules with respect to Former NewVector Participants.
(b) This subsection (b) applies to an Ex-NewVector Management Participant who transferred from NewVector to another Participating Company (and remained a Management Participant on the date of transfer). For this purpose, a Participant shall only be deemed to “transfer” if he reports to work at the Participating Company on the business day next following the business day he left NewVector. Except as set forth in this subsection (b), an Ex-NewVector Participant to whom this subsection (b) applies shall be treated the same as any other Management Participant. Accordingly, notwithstanding Sections 5B.6(a) and (b), his benefit shall be the greater of the benefit under Article V-B (as of the Cutoff Date) or the benefit under Article V-D (as of the Cessation Date), properly adjusted to reflect any earlier payments made. For this purpose, NewVector shall be deemed a Participating Company in Article V-D with the result that the Participant shall receive Percentage Credits for the period employed by NewVector, and if the person is an Active Management Participant on January 1, 1997, for periods prior to that date in accordance with the provisions of this Article V-D. For purposes of Section 5B.1(c)(2), if the individual is not an Active Participant on January 1, 1997 or does not otherwise satisfy the Rule of 55 on that date, the Cutoff Date shall be the date the individual ceases to be employed by NewVector, rather than December 31, 1996.
LA3:752821.27 122
(c) This subsection (c) applies to an Ex-NewVector Participant who Terminates and is subsequently reemployed under the Management Part by a Participating Company other than NewVector, but who is not described in subsection (b) because he did not transfer to another Participating Company. The benefits of such individual shall be determined in accordance with the rules in Section 5B.6(b), except that the individual may earn Accrued Benefits under Article V-B until the time the individual ceased to be employed by NewVector. Such individual will not receive any Percentage Credits under Article V-D for any period prior to the date he ceases to be employed by NewVector (or for any period prior to January 1, 1997).
(d) For purposes of subsections (a) and (b) above, (1) Sections 5B.6(c) - (e) and Section 5D.2(b)(2)(C) shall be applied by substituting the date the individual ceased to work for NewVector for January 1, 1997 and (2) the Committee shall have complete and full discretion to apply any provision of the Plan in a manner consistent with the clause (1) and subsections (b) and (c).
ARTICLE V-E
PENSION FOR MANAGEMENT EMPLOYEES-ACCOUNT BALANCE PENSION
5E.1. Application.
(a) General. This Article V-E applies only to Management Participants who both (1) perform duties as an Active Management Participant on or after January 1, 2001 and (2) are not Protected Participants. However, if a Protected Participant Terminates on or after January 1, 2001 and is subsequently reemployed with a Participating Company as a Management Employee, such individual shall not be a Protected Participant with respect to any periods of reemployment and his benefits earned with respect to such reemployment shall be governed by Article V-E. Unless indicated otherwise, all references in this Article V-E to “Participant” or “Employee” shall include only Management Covered Employees who are not Protected Participants.
(b) If a Participant (including a Protected Participant) previously earned benefits under Article V-B and/or Article V-D, his benefit shall generally be the sum of (1) the benefit under this Article V-E plus (2) subject to Articles V-B and V-D, the greater of the benefits earned under Article V-B and Article V-D.
(c) This Article V-E shall not apply to (1) Management Participants who Terminate prior to January 1, 2001 and are not reemployed thereafter or (2) to Protected Participants who Terminate after 2000 and are not reemployed thereafter.
LA3:752821.27 123
5E.2 Account Balance Pension.
(a) Eligibility. Each Vested Participant who incurs an Eligible Separation shall become entitled to an Account Balance Pension. The amount of the Pension shall be based on the Participant’s Account Balance and the DLS Factors in effect on the Annuity Starting Date.
(b) Summary of Calculations of the Account Balance Pension. This paragraph (b) provides a summary of the calculation of the Participant’s Account Balance Pension and is therefore subject to all remaining terms of the Plan. A Participant's Account Balance as of the Annuity Starting Date is equal to the sum of the Compensation Credits and Interest Credits credited to the Participant’s Account as set forth in paragraphs (c) and (d) below. The Interest Credits consist of both Regular Interest Credits based on the Treasury Rate and, if applicable, certain Additional Credits based on the excess, if any, of the Cumulative Qwest Stock Rate (since the applicable Compensation Credit was made) in excess over the cumulative Interest Credits previously received. No Participant will receive an initial balance on January 1, 2001 or any other date. The Pension is calculated by converting the Participant’s Account Balance on the Participant’s Annuity Starting Date into an annuity pursuant to paragraph (e) below.
(c) Compensation Credits.
(1) Commencing January 1, 2001, each Management Covered Participant who receives Compensation during a Plan Year shall receive a Compensation Credit on the Allocation Date for that Plan Year. No Compensation Credits shall be made for Plan Years prior to 2001 and no Compensation Credits shall be made based on any compensation earned prior to 2001. If the Participant incurs an Eligible Separation during a Plan Year and his Annuity Starting Date (or Commencement Date) occurs prior to the Allocation Date for that Plan Year, then the Compensation Credit shall be made on the day before the Annuity Starting Date or Commencement Date; otherwise, the Compensation Credit shall be made on the Allocation Date. Except as set forth in subsections (c)(1) or (c)(3), no other Participant shall receive a Compensation Credit.
(2) The amount of the Compensation Credit for a Plan Year is 3% of the Compensation paid to the Management Employee during the Plan Year. For this purpose, Compensation is defined in Section 1.10(h).
(3) A Participant who does not receive Compensation during any portion of a Plan Year shall not receive a Compensation Credit with respect to that portion. Notwithstanding the foregoing, Participants on Military Leave shall receive Compensation Credits to the extent required by law.
(4) A Compensation Credit shall be credited only on the Allocation Date and may be defeated by an amendment or termination of the Plan occurring at any time prior to that day.
(5) This paragraph (5) applies to Participants (i) who earned benefits under Article V-E in 2001, (2) remain employed by the Company on January 1, 2002,
LA3:752821.27 124
and (3) whose Compensation (as defined in Section 1.1(h)) exceeded $170,000. Such Participants shall receive an additional Compensation Credit on January 1, 2002 equal to 3% of the excess of the Participant’s Compensation (as defined in Section 1.1(h), and not to exceed $200,000) over $170,000. For purposes of determining Interest Credits and other amounts with respect to this credit, the credit shall be considered made on December 31, 2001.
(d) Interest Credits.
(1) Frequency. The Participant’s Account shall be credited with Regular Interest Credits (in an amount set forth in paragraph (2) below) beginning on the first day after the Allocation Date on which the Participant receives a Compensation Credit to his Account. Regular Interest Credits shall continue to be made each subsequent day until (i) in the case of a Participant who commences an Account Balance Pension (including a lump sum), the day immediately preceding the Annuity Starting Date, and (ii) in the case of a death benefit, the day immediately preceding the Commencement Date of such benefit. To the extent set forth in paragraph (3) below, the Account may also be credited with an additional Interest Credit (“Additional Credits”) on each Special Allocation Date occurring prior to the Participant’s Annuity Starting Date or Commencement Date, as applicable. The Special Allocation Dates shall be each Allocation Date up to and including the Termination Date (as defined in (3)(G) below) and the Termination Date (if such day is not an Allocation Date). No Regular Interest Credits or Additional Credits shall be made on or after the Annuity Starting Date or Commencement Date, as applicable.
(2) Regular Interest Credits. The amount of such Interest Credit on each day shall be the Account Balance on the immediately preceding Allocation Date (which balance excludes Compensation Credits and Interest Credits (including Regular Interest Credits and any Additional Credits, including any Additional Credit made on the Termination Date) made for the current Plan Year) multiplied by 1/365 of the Treasury Rate in effect for the Plan Year. By way of example, if the Treasury Rate is 7.3% and the Account Balance is $1000 on December 31, 2001, each day during 2002 the Interest Credit shall be $.20 [$1000 x .073 x1/365]; no Interest Credits shall be made on Interest Credits during the year in question. The Treasury Rate for the Plan Year is the average of the annual interest rates on 30-year Treasury securities as specified by the Commissioner of Internal Revenue for the first through fifth months preceding such Plan Year.
(3) (A) (i) Additional Credits. Subject to the remainder of this paragraph (d)(3), an additional Interest Credit (“Additional Credit”) may be made on each Special Allocation Date in the amount set forth in paragraph (d)(3)(A)(ii). No Additional Credit shall be made on any other day. The purpose of this Additional Credit is to provide the Participant, on each Special Allocation Date, with a minimum Account Balance with respect to each Compensation Credit as if it had earned the cumulative rate of appreciation of the Qwest Stock Price (as defined in (B)(i) below) since the Allocation Date as of which that Compensation Credit was made.
LA3:752821.27 125
Subject to (B)(i) below, such minimum Account Balance shall be referred to as the “Hypothetical Balance.” If the rate of appreciation of the Qwest Stock Price for a single Plan Year is less than the Treasury Rate for that Plan Year, then no Additional Credit shall be made that year.
(ii) On each Special Allocation Date occurring prior to the Annuity Starting Date or Commencement Date, as applicable, an Additional Credit, if any, shall be calculated separately for each Compensation Credit previously made to the Participant’s Account, provided that no such credit shall be made with respect to the Compensation Credit, if any, made on that Special Allocation Date. The amount of such Additional Credit, if any, with respect to a particular Compensation Credit equals the excess, if any, of the Hypothetical Balance (as defined in (B)(i) below) with respect to that particular Compensation Credit over the Actual Balance (as defined in (B)(ii) below) with respect to that particular Compensation Credit.
(B) (i) Subject to (F) below, with respect to a particular Compensation Credit, the Hypothetical Balance on a Special Allocation Date is equal to that Compensation Credit multiplied by the sum of the Cumulative Qwest Stock Rate plus one. The Cumulative Qwest Stock Rate is (a) the ratio of the Qwest Stock Price on the Special Allocation Date divided by the Qwest Stock Price on the Allocation Date on which the particular Compensation Credit was made, minus (b) one. Subject to (F) below, the Qwest Stock Price shall be the average of the closing price on the New York Stock Exchange (or if not traded on the NYSE, the other principal stock exchange, the Nasdaq National Market or other market on which the Qwest Stock is traded), over the ten consecutive trading days ending on the Special Allocation Date or Allocation Date in question.
(ii) With respect to a particular Compensation Credit, the Actual Balance on a Special Allocation Date equals the sum of that Compensation Credit plus the aggregate Interest Credits that have already been made with respect to that particular Compensation Credit, including without limitation all previous Additional Credits and the Regular Interest Credits made for the current Plan Year up through and including the Special Allocation Date.
(C) Example. By way of example, assume the Qwest Stock Prices for December 31, 2001 through 2004 are $50, $54, $55.08 and $61.69, respectively, and that the applicable Treasury Rates for 2002 through 2004 are 6%, 6% and 5%, respectively. Also assume the Participant remains a Covered Employee during this entire period.
Interest Credits with respect to 2001 Compensation Credit. Assume that the Participant receives a Compensation Credit of $1,800 in 2001. In
LA3:752821.27 126
this situation, the Participant shall receive Regular Interest Credits of $108 [$1,800 x 6%] during 2002. Thus, the Actual Balance on December 31, 2002 is $1,908. On December 31, 2002, the Additional Credit equals $36, which equals the Hypothetical Balance of $1,944 [$1,800 x ($54/$50] minus the Actual Balance. Thus, the Account Balance with respect to the 2001 Compensation Credit is now $1,944.
In 2003, the Participant shall receive Regular Interest Credits of $116.64 [$1,944 x 6%] with respect to the 2001 Compensation Credit. Thus, the Actual Balance on December 31, 2003 with respect to the 2001 Compensation Credit is $2,060.64. On that date, no Additional Credit is made because the Hypothetical Balance of $1,982.88 [$1,800 x ($55.08/$50)] does not exceed this Actual Balance.2
In 2004, the Participant shall receive Regular Interest Credits of $103.03 [$2,060.64 x 5%] with respect to the 2001 Compensation Credit. Thus, the Actual Balance on December 31, 2004 with respect to the 2001 Compensation Credit is $2,163.67. On that date, an Additional Credit is made because the Hypothetical Balance of $2,220.84 [$1,800 x ($61.69/$50)] exceeds this Actual Balance. The Additional Credit is $57.17, the difference between such amounts. Thus, the new Account Balance with respect to the 2001 Compensation Credit is $2,220.84.
Interest Credits with respect to 2002 Compensation Credit. Assume the Participant also received a $1,800 Compensation Credit at the end of 2002. In 2003, the Participant shall receive Regular Interest Credits of $108 [$1,800 x 6%] with respect to the 2002 Compensation Credit. Thus, the Actual Balance with respect to the 2002 Compensation Credit is $1,908 on December 31, 2003. On that date, no Additional Credit is made because the Hypothetical Balance of $1,836 [$1,800 x ($55.08/$54)] does not exceed this Actual Balance.
In 2004, the Participant shall receive Regular Interest Credits of $95.40 [$1,908 x 5%] with respect to the 2002 Compensation Credit. Thus, the Actual Balance on December 31, 2004 with respect to the 2002 Compensation Credit is now $2,003.40. On that date, an Additional Credit is made because the Hypothetical Balance of $2,056.33 [$1,800 x ($61.69/$54)] exceeds this Actual Balance. The Additional Credit is $52.93, the difference between such amounts. The new Account Balance with respect to the 2002 Compensation Credit is $2,056.33.
2 The rate of appreciation of the Qwest Stock Price for 2003 is $55.08/$54, or 2%. Because this rate is less than the Treasury Rate for 2003, no Additional Credit is made in 2003 for this Compensation Credit or any other one.
LA3:752821.27 127
Interest Credits with respect to 2003 Compensation Credit. Assume the Participant also received a $1,950 Compensation Credit at the end of 2003. In 2004, the Participant shall receive Regular Interest Credits of $97.50 [$1,950 x 5%] with respect to the 2003 Compensation Credit. Thus, the Actual Balance on December 31, 2004 with respect to the 2003 Compensation Credit is now $2,047.50. On that date, an Additional Credit is made because the Hypothetical Balance of $2,184.01 [$1,950 x ($61.69/$55.08)] exceeds this Actual Balance. The Additional Credit is $136.51, the difference between such amounts. The new Account Balance with respect to the 2003 Compensation Credit is $2,184.01.
(D) Because the Additional Credits are computed separately for each Compensation Credit, an Additional Credit may be made with respect to one or more Compensation Credits even though no Additional Credits are made with respect to other Compensation Credits. For example, assume the Qwest Stock Prices for 2001 through 2003 are $50, $45 and $55, respectively, and that the applicable Treasury Rates for 2002 and 2003 are 6% and 7%. No Additional Credit will be made for 2002 because the Qwest Stock Price declined that year. The 2002 Compensation Credit shall receive an Additional Credit at the end of 2003 to reflect the fact that the rate of appreciation of the Qwest Stock Price for 2003 (from $45 to $55) exceeds the 7% Treasury Rate. However, the 2001 Compensation Credit will not receive an Additional Credit because the Cumulative Qwest Stock Rate (from $50 to $55) does not exceed the aggregate 6% and 7% Interest Credits previously earned for 2002 and 2003 with respect to the 2001 Compensation Credit. Similarly, the Additional Credit amount may differ as a percentage of the applicable Compensation Credit.
(E) The Committee may elect to account for the Additional Credit in any other way that results in the same amount of such Additional Credit. For example, if the rate of appreciation of the Qwest Stock Price exceeds the Treasury Rate each year, there is no necessity to maintain separate accounting for each Compensation Credit since the aggregate Additional Credit each year equals the difference between such rates multiplied by the prior year-end Account Balance. Separate accounting is needed for Compensation Credits made in the first year the Treasury Rate exceeds such rate of appreciation; in that case, the Committee may separately account for that Compensation Credit (and subsequent Compensation Credits), but aggregate earlier ones. Similarly, if the Hypothetical Balance exceeds the Actual Balance for every Compensation Credit on any Special Allocation Date, then the Committee may aggregate the Compensation Credits and start accounting from that day forward (ignoring prior Interest Credits and the prior rate of appreciation of the Qwest Stock Price).
(F) If any of the following events listed in this paragraph (F) occur and the Committee, in its discretion, determines that the event equitably requires an adjustment in the Hypothetical Balance, Actual Balance, the Qwest Stock Price and/or Cumulative Qwest Stock Return, then the Committee shall
LA3:752821.27 128
make such adjustments. In general, such adjustments shall be consistent with those taken under the Qwest Equity Incentive Plan (or any successor plan). Such adjustments by the Committee shall be effective for all purposes of the Plan and shall be final and binding. The events are as follows:
(i) Qwest shall at any time increase or decrease the number of its outstanding shares of Qwest Stock or change in any way the rights and privileges of such shares by means of the payment of a stock dividend or any other distribution upon such shares payable in Qwest Stock, or through a stock split, subdivision, consolidation, combination, reclassification or recapitalization involving the Qwest Stock; or
(ii) Qwest shall at any time distribute with respect to the Qwest Stock assets or securities of persons other than Qwest; or
(iii) Qwest shall at any time grant to the holders of Qwest Stock rights to subscribe pro rata for additional shares thereof or for any other securities of Qwest; or
(iv) there shall be any other change in the number or kind of outstanding shares of Qwest Stock or of any stock or other securities into which the Qwest Stock shall be changed or for which it shall have been exchanged.
(G) A Termination Event shall mean the earlier of December 31, 2004 or one of the following events:
(i) the merger or consolidation of Qwest (which for purposes of this paragraph (G) includes Participating and Non-participating Companies) with or into another corporation or of another corporation with and into Qwest or other reorganization (other than a reorganization under the United States Bankruptcy Code) of, or involving, Qwest; or
(ii) the sale or conveyance of the property of Qwest as an entirety or substantially as an entirety (other than a sale or conveyance in which the Qwest continues as holding company of an entity or entities that conduct the business or business formerly conducted by Qwest); or
(iii) the dissolution or liquidation of Qwest; or
(iv) any individual, entity, or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the 1934 Act), other than Anschutz Company, the Anschutz Corporation, any entity or organization controlled by Philip F. Anschutz (collectively, the “Anschutz Entities”) or a trustee or other fiduciary holding securities under an employee benefit plan of the
LA3:752821.27 129
Company and its affiliates, acquires beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934) of fifty percent (50%) or more of either (A) the then-outstanding shares of Qwest Stock or (B) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors; or
(v) at any time during any period of three consecutive years (not including any period prior to January 1, 2001), individuals who at the beginning of such period constitute the Board (and any new director whose election or whose nomination for election by the Board or the Company’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for an reason to constitute a majority thereof; or
(vi) any other event requiring the termination of the Qwest Equity Incentive Plan (without regard to a notice requirement) or any change in control as defined in the Qwest Equity Incentive Plan; or
(vii) any changes in the financial or tax accounting rules applicable to this Plan occur which, in the sole judgment of the Committee, may have a material adverse effect on the reported earnings, assets or liabilities of Qwest.
(e) Amount. The amount of the Participant’s monthly Account Balance Pension shall be the monthly amount payable as a Single-Life Annuity commencing on the Participant’s Annuity Starting Date that is the DLS Equivalent (based on the DLS Factors in effect on the Annuity Starting Date) of the Account Balance on the Annuity Starting Date. As set forth in Article VI, Participants may elect alternative forms.
(f) Treatment of Reemployed Participants. This subsection (f) addresses Participants who Terminate after 2000 (including a Termination as a result of becoming disabled), incur an Eligible Separation (either concurrent with or subsequent to the Termination) and are later reemployed by a Participating Company and incur another Eligible Separation. Any unpaid annuity that previously commenced under this Article V-E (or any other Article) with respect to such prior period of employment shall remain as a frozen annuity; the Participant may not elect a lump sum with respect to such annuity. Participants may not buy back any benefits that previously commenced. Upon reemployment, if the Participant previously commenced distributions, the Participant shall not be credited with any Account Balance earned with respect to such prior employment. If the Participant did not previously commence benefits, the Participant’s prior Account (together with Interest Credits since the prior Eligible Separation) shall remain intact and continue to earn Interest Credits until the Annuity Starting Date.
LA3:752821.27 130
(g) Compensation under Related Occupational Plan or Related Management Plan. A Participant shall not be entitled to an Account Balance for any prior compensation under a Related Occupational Plan or a Related Management Plan.
(h) Tax Qualification Rules. Section 411(a)(9) and 411(d)(6) of the Code shall be implemented by ensuring that the Account Balance Pension calculated at the Annuity Starting Date is not decreased. Because the benefit shall not be calculated until the Annuity Starting Date, the Plan shall not prohibit the benefit from being less than an amount equal to the Account at the end of an earlier Plan Year converted to a Single Life Annuity payable at that time by using the DLS Factors in effect on the end of such earlier Plan Year.
(i) Rules For Transfers To Non-Participating Companies. This subsection addresses the treatment of Participants who Terminate after 2000 by transferring to a Non-Participating Company and subsequently transfer back to a Participating Company, in each case without incurring an Eligible Separation. (If the Participant incurs an Eligible Separation either at the time of the initial Termination or at the time the individual Terminates employment with the Non-Participating Company, the rules of subsection (f), rather than this subsection (i), shall apply.) The Participant shall continue to earn Interest Credits, but not Compensation Credits, while the Participant works for a Non-Participating Company. He may not elect a distribution until he incurs an Eligible Separation.
(j) Additional Defined Lump Sum. In addition, each Participant who is formally notified on or between July 1, 2001 and June 30, 2002, that they will be involuntarily terminated from employment shall be entitled to an additional Defined Lump Sum and other benefits, if any, in the amounts set forth in Appendix S, if the Participant meets all of the terms and conditions for such respective benefits as set forth in Appendix S. Said amounts shall be payable in addition to the benefits set forth in this Article V-E, shall be payable in accordance with the terms of Articles V-D and VI and shall be subject to all other limitations set forth in the Plan including the overall limit on benefits in Section 5C.2. Notwithstanding the foregoing or any other provision of the Plan, if the Participant is entitled to an Appendix S benefit pursuant to Section 5D.2(j), then no benefit is payable pursuant to this Section. In no event shall any person be entitled to Appendix S benefits under both this Section and Section 5D.2(j).
5E.3. Late Retirement.
A Participant who continues employment with a Participating or Non-Participating Company past his Normal Retirement Date shall be treated as having elected late retirement. Subject to Section 6.1(d), such a Vested Participant may elect to have his Account Balance Pension commence at any time on or after the Pension Effective Date. The Late Retirement Benefit of a Participant shall equal the amount determined as under Section 5E.2(e), taking into account Compensation Credits and Interest Credits through the Participant’s Late Retirement Date.
LA3:752821.27 131
5E.4. Disability Benefit.
A Participant who Terminates on account of disability on or after January 1, 2001 may be eligible to receive a Modified Disability Pension, as set forth in Appendix J, in addition to other benefits provided under this Article V-E. Notwithstanding the foregoing or any other provision of the Plan, if the Participant is entitled to an Appendix J benefit pursuant to Section 5D.4, then no benefit is payable pursuant to this Section. In no event shall any person be entitled to benefits under both this Section and Section 5D.4
5E.5. Death of a Participant before Commencement of Benefits.
Subject to Section 206(d) of ERISA, the following rules shall apply in the case of a Vested Active Participant or a Vested Former Participant who dies before his Annuity Starting Date:
(a) Normal Death Benefit. If a Vested Active Participant dies prior to the Annuity Starting Date, his Beneficiary shall be entitled to a lump sum death benefit equal to the Account balance in Section 5E.2. In lieu thereof, the Beneficiary may elect, within 60 days after notification from a Participating Company that the Beneficiary is entitled to a death benefit, to receive a single life annuity (for the Beneficiary’s life) commencing on the Pension Effective Date that is the DLS Equivalent of the Account balance calculated in Section 5E.2. If no election is made, a lump sum shall be paid. Except as provided by subsection (c) or (d), these death benefits shall not be paid if the Participant (or Former Participant, if applicable) is married at the time of his death. These benefits shall not be paid to a Beneficiary of a Former Participant, unless the Former Participant dies before the end of the 60-day period beginning on his Eligible Separation.
(b) Qualified Preretirement Survivor Annuity. Except as provided in subsection (c) or (d) below, if a Vested Participant dies prior to the Annuity Starting Date and is married at the time of his death, a death benefit in the form of a Qualified Preretirement Survivor Annuity, as described below, shall be payable to such surviving Spouse.
(1) In the case of the death of an Active Participant or a Former Participant who dies within 60 days after his or her Eligible Separation, if the Spouse consents to a distribution within 60 days after notification of an entitlement to a death benefit, such Survivor Annuity shall be a monthly life annuity for the life of the surviving Spouse which is equal to the greater of:
(A) a single life annuity (for the Spouse’s life) commencing on the Pension Effective Date that is the DLS Equivalent of the Account Balance calculated in Section 5E.2 on the Pension Effective Date. This clause (A) shall not apply to a surviving Spouse of a Former Participant, unless (i) the Former Participant dies before the end of the 60-day period beginning on his Eligible Separation; or
LA3:752821.27 132
(B) the amount the surviving Spouse would have received under this Article V-E, if the Participant had commenced receiving benefits under a Qualified Joint and 50% Survivor Annuity on the day before his death.
(2) If the Spouse is not described in paragraph (1), payment of a Survivor Annuity shall commence as of the day following the day the Spouse elects (in writing) to receive the Survivor Annuity but not later than the date on which the deceased Active Participant or Former Participant would have attained age 65 (unless the Participant dies after attainment of age 65, in which case the benefit shall commence as soon as practicable after such death). Such date is the Commencement Date. The amount of the benefit shall be the greater of (A) the amount described in Section 5D.6(b)(1)(A) (without any adjustment for later payment), or (B) the amount the Surviving Spouse would have received under Article V-E if the Active Participant or Former Participant had Terminated on the earlier on the date of his death or the actual Termination, survived until the date the Survivor Annuity commenced, retired with a Qualified Joint and 50% Survivor Annuity on such date and died on the day after such date.
(3) Payment of the Survivor Annuity shall be made as soon as practicable after the date as of which it commences; the first payment shall include any payments not made which were due on and after the date as of which it commenced.
(c) Waiver.
(1) After receipt of the explanation described below, a Participant (but not a Former Participant) and the surviving Spouse may waive the Survivor Annuity by a written election, in which event the death benefits specified in subsection (a) shall be paid to the Participant’s Beneficiary. Such election must be in writing and must meet the conditions applicable to spousal consents set forth in Section 6.2(b) (except that such consent need not specify the form of benefits). Revocation of a prior waiver may be made by a Participant without the consent of the surviving Spouse at any time before the Participant’s death. However, any new waiver or change of Beneficiaries will require a new spousal consent. Except as provided above, any surviving Spouse’s consent shall be irrevocable.
(2) During the “applicable period” (as defined below), the Plan shall send each Participant an explanation of the Survivor Annuity, including the terms and conditions and consequences of a waiver of the Survivor Annuity. Such explanation shall contain information similar to the explanation required under Section 6.2(b)(4). The applicable period means whichever of the following periods ends last: (A) the period beginning with January 1 of the Plan Year in which the Participant attains age 32 and ending with the December 31 of the Plan Year in which the Participant attains age 34 and (B) the period commencing one year before and ending one year after the individual becomes a Participant.
LA3:752821.27 133
(3) Any waiver shall be null and void sixty days after the Participant incurs an Eligible Separation for any reason other than death. Accordingly, if a Former Participant dies more than sixty days after his Eligible Separation, the only potential death benefit is the benefit payable under subsection (b)(1)(B).
(4) Any waiver by a surviving Spouse made prior to the first day of the Plan Year in which the Participant attains age 35 shall cease to be valid on the first day of such Plan Year. In addition, no such waiver will be valid unless such Participant was provided with an explanation described above (without regard to the requirement that it be provided during the applicable period) prior to the execution of such waiver.
(d) Special Spousal Waiver. A surviving Spouse of a Participant entitled to a Survivor Annuity may elect not to receive such Survivor Annuity and instead elect to receive the lump sum death benefit specified in subsection (a). The surviving Spouse of a Former Participant entitled to a Survivor Annuity shall not be entitled to elect a lump sum hereunder unless the Former Participant dies before the end of the 60-day period beginning on his Eligible Separation. In order to make such an election, the surviving Spouse must give notice to the Plan on a form meeting the spousal consent requirements set forth in Section 6.2(c)(1). Notwithstanding any provision of the Plan to the contrary, no such notice shall be valid and no lump sum may be elected unless the surviving Spouse consents, within 60 days after the notification from a Participating Company that the surviving Spouse is entitled to a death benefit, to an immediate lump sum distribution. Any purported election of a lump sum after such date shall be null and void.
(e) Designation of Beneficiary. A Participant may designate a beneficiary or beneficiaries to receive any benefits that may become payable under this Article V-E of the Plan on account of his death prior to his Annuity Starting Date. If the Participant is entitled to any benefits under Article V-D, the beneficiary entitled to any benefits under Article V-E must be the same beneficiary selected under Article V-D. In all cases, all of the rules set forth in Section 5D.5(f) apply for this purpose.
5E.6. Coordination With Other Plans.
(a) This Section contains special rules for Management Participants, whether or not they were previously Employees (1) whose Employment (or Reemployment) Commencement Date is on or after January 1, 2001 and who were previously covered under the Related Occupational Plans, including the Occupational Part, or the Related Management Plans, including the Management Part (collectively, “Other Plans”) or (2) who transfer from the Occupational Part to the Management Part on or after January 1, 2001. However, this Section 5E.6 shall not reduce the benefits previously earned under Sections 5A.4(g), 5B.4 or 5D.7 as a result of reemployment or transfers prior to January 1, 2001; in that case, this Section 5E.6 shall apply to benefits earned after the post-2000 reemployment or transfer date and, except as set forth in (b)(1) below, the benefits previously earned shall not be increased (or recalculated) under the rules in Sections 5A.4(g), 5B.4 or 5D.7 or any other section by virtue of the later reemployment.
LA3:752821.27 134
(b) If this Section 5E.6 applies to a Participant, the monthly pension benefit for the Participant shall equal the sum of (A) the pension benefit determined for service earned while covered under the Other Plans, in accordance with the provisions of the Other Plans as in effect on the last date the Participant was covered by the Other Plans, plus (B) the pension benefit determined for the service earned while the Participant was covered by this Article V-E, in accordance with the provisions of this Article V-E. Except as provided in paragraphs (1) and (2) below, the benefits previously earned by the Participant under any Related Occupational Plan, including the Occupational Part, prior to any termination of employment shall not be increased to reflect any subsequent increases in the Occupational monthly benefit rate on or after the date of such termination.
(1) Notwithstanding the foregoing, if the Participant was previously covered by the Occupational Part (but not any other Related Occupational Plan) and transferred to the Management Part without a Termination, the benefits under such Occupational Part shall be calculated, if applicable, on the basis of the monthly benefit in effect under the Occupational Part at the time of the Participant’s Termination as a Management Employee for the Pension Band number for the occupational job title and classification held on the last day the Participant was covered by the Occupational Part.
(2) This paragraph (2) applies if the Participant was previously covered by the Occupational Part (but not any other Related Occupational Plan), Terminated but did not commence benefits hereunder prior to becoming employed under the Management Part, and bridges his or her Term of Employment while later reemployed as a Management Participant. In that case, the benefits under such Occupational Part shall be calculated, if applicable, on the basis of the monthly benefit in effect under the Occupational Part at the time of the Participant’s Termination as a Management Employee for the Pension Band number for the occupational job title and classification held on the last day the Participant was covered by the Occupational Part.
(c) Such a Participant shall not be entitled to any benefits under Articles V-B or V-D, except for any benefits previously earned under those provisions prior to becoming a Management Participant on or after January 1, 2001.
(d) Such a Participant shall not be entitled to any benefit under this Article V-E for any compensation or service covered under Other Plans.
(e) To the extent applicable, the principles set forth in Section 5D.7(d) shall apply for purposes of this Section as well.
ARTICLE VI
FORMS OF PAYMENT
6.1. Standard Form of Benefit Payment.
LA3:752821.27 135
(a) Subject to Section 6.2, the standard form of benefit payment shall be a Life Annuity payable in monthly installments for the life of the Participant. The last payment shall be made on the first day of the month following the month in which the Participant dies (in arrears for the prior month).
(b) Except for lump sum cash-outs of $5,000 ($3,500, if the Participant Terminated prior to 1999) or less, payment shall not commence until the Participant has attained age 65 unless the Participant consents in writing to the payment. Such consent shall be evidenced by the claim for benefits described in Section 6.2(c). Except as set forth in Sections 6.2(b)(3), 6.2(c) or 13.9, the Participant may not elect an Annuity Starting Date that precedes the filing of a claim for benefits. Except as set forth in Section 13.9, the Annuity Starting Date shall not precede the day following the Participant’s Eligible Separation.
(c) In the case of the Life Annuity described in this Section 6.1 and any other annuity form of benefit provided under this Article VI, (1) the first payment shall be made as of the Annuity Starting Date (such payment to be prorated if the Annuity Starting Date is not the first day of a calendar month) and (2) each monthly payment shall be paid in arrears on the first day of the next calendar month (or as soon as practicable thereafter).
(d) Subject to Sections 6.1(b) and 6.7, a Management Participant (other than a Pre-97 Management Participant, excluding one who becomes an Applicable Occupational Participant) or an Applicable Occupational Participant whose Eligible Separation occurs prior to age 65 may elect an Annuity Starting Date on any date on or after his Pension Effective Date, but not later than attainment of age 65. The Annuity Starting Date of a Management Participant whose Eligible Separation occurs on or after attainment of age 65 (or his Normal Retirement Age, if later) shall be the earlier of the Pension Effective Date or Required Beginning Date; he cannot defer commencement of his benefits. All such elections shall be made in such manner, and in accordance with all rules, prescribed by the Employee Benefits Committee.
6.2. Qualified Joint and Survivor Annuities.
(a) Eligibility and Conditions. Unless the Participant elects with the consent of the Participant’s Spouse, if any, as provided in (c) of this section, not to receive benefits in a Qualified Joint and Survivor Annuity, benefits will be paid in a Qualified Joint and Survivor Annuity as follows:
(1) Occupational Participants Eligible for Service Pensions and Disability Pensions whose Eligible Separation occurs prior to July 1, 2001. Subject to subsection (a)(5), Occupational Participants who are eligible for service pensions under 5A.1 or for disability pensions under 5A.2(a) shall receive a Qualified Joint and Survivor Annuity with a survivor annuity equal to 50% or, if the Participant so elects, 100% of the amount payable during the joint lives of the Participant and his Spouse. If the Participant elects the 100% survivor option, the standard benefit shall be reduced by 20% to reflect the cost of the survivor benefit. If the Participant elects the 50% survivor option, the standard benefit shall be reduced by 10% to reflect the cost of the survivor benefit. If the Participant’s Spouse predeceases the Participant on or after the Annuity Starting Date, the
LA3:752821.27 136
amount payable during the remainder of the Participant’s life shall be increased by an amount equal to the cost of the survivor benefit calculated as of the date the Participant’s pension first became payable (that is, without regard to any cost of living increases). The first recalculated payment shall be made on the first day of the month following the month in which the Participant’s Spouse died (in arrears for the month the death occurred). After the Annuity Starting Date, except as provided by law, the Participant’s election is irrevocable, whether or not the Participant and the Spouse are divorced after the Annuity Starting Date and whether or not the Spouse remarries after the Annuity Starting Date (following a divorce or the Participant’s death).
(2) Occupational Participants Eligible for Deferred Vested Pensions whose Eligible Separation occurs prior to July 1, 2001. Subject to subsection (a)(5), Occupational Employees who are eligible for deferred vested pensions shall receive a Qualified Joint and Survivor Annuity with a survivor annuity equal to 50% of the amount payable during the joint lives of the Participant and his Spouse. If the Participant elects to have payments commence at Normal Retirement Age, the standard benefit shall be reduced by 15% to reflect the cost of the survivor benefit; if payments commence earlier, see Exhibit D for the applicable factor. If the Participant’s Spouse predeceases the Participant on or after the Annuity Starting Date, the amount payable during the remainder of the Participant’s life shall not be increased.
(3) Pre-97 Management Participants. This paragraph (3) applies to the benefits under the Management Part of each Pre-97 Management Participant. Subject to subsection (a)(5), such Participants who are eligible for service pensions under 5B.1 shall receive a Qualified Joint and Survivor Annuity in accordance with the provisions of Section 6.2(a)(1). Such Participants who are eligible for deferred vested pensions under 5B.3 shall receive a Qualified Joint and Survivor Annuity in accordance with the provisions of Section 6.2(a)(2). Notwithstanding the foregoing, the amount of the benefit shall be the based on the Actuarial Equivalent factors, rather than the factor in Section 6.2(a)(1) or (2).
(4) Management Participants After 1996. Subject to Section 6.6(a), each Participant who is an Active Management Participant on or after January 1, 1997 and whose Eligible Separation is prior to July 1, 2000 (excluding Former NewVector Participants) shall receive a Qualified Joint and Survivor Annuity in accordance with the provisions of Section 6.2(a)(5) but only with respect to his Management Part benefit. Any Occupational Part benefits are paid pursuant to paragraphs (1) and (2) above.
(5) All Participants whose Eligible Separation occurs on or after July 1, 2001. Each Participant who is an Active Participant on or after July 1, 2001 shall receive a Qualified Joint and Survivor Annuity with a survivor annuity equal to 50% or, if the Participant so elects, 100% of the amount payable during the joint lives of the Participant and his Spouse. The amount of the benefit shall be the Actuarial Equivalent of the standard benefit commencing on the Annuity Starting Date. If the Participant’s Spouse predeceases the Participant on or after the Annuity Starting Date, the amount payable during the remainder of the Participant’s life shall be increased by an amount
LA3:752821.27 137
equal to the cost of the survivor benefit calculated as of the date the Participant’s pension first became payable (that is, without regard to any cost of living increases). The first recalculated payment shall be made on the first day of the month following the month in which the Participant’s Spouse died (in arrears for the month the death occurred). After the Annuity Starting Date, except as provided by law, the Participant’s election is irrevocable, whether or not the Participant and the Spouse are divorced after the Annuity Starting Date and whether or not the Spouse remarries after the Annuity Starting Date (following a divorce or the Participant’s death).
(6) Single Participants. Participants that do not have a Spouse on their Annuity Starting Date shall receive a Qualified Joint and Survivor Annuity which shall be a Life Annuity described in Section 6.1 without any survivor benefit.
(b) Election Not to Take Joint and Survivor Annuity Form.
(1) In General. Each Participant may elect, at any time during the election period described in Section 6.2(b)(3), not to receive a Qualified Joint and Survivor Annuity. The election shall be in writing and clearly indicate that the Participant is electing to receive his benefits under the Plan in a form other than that of a Qualified Joint and Survivor Annuity.
(2) Consent of Spouse. An election under Section 6.2(b)(1) above shall not be effective unless the Participant’s Spouse consents in writing to the election, the Spouse’s signature is witnessed by a notary public, the Spouse’s consent acknowledges the effect of the election, and the consent shall be filed with the Committee at the same time that the Participant’s election under Section 6.2(b)(1) is filed with the Committee. The Spouse’s consent must specify the form of benefits to be paid and any Beneficiary or contingent Beneficiary. The form of benefits and any Beneficiary or contingent Beneficiary may be changed only if the spouse consents to such change in the manner provided in this Section. However, to the extent provided by the Committee, the form of benefits, Beneficiary and contingent Beneficiary may be changed without the subsequent spousal consent if (1) the original consent acknowledged the right of the spouse to limit consent to a specific Beneficiary and form of benefits, and (2) the original consent expressly permits changes to the form of benefits and Beneficiaries without any requirement of further spousal consent. The Spouse’s consent may not be revoked. If the Spouse fails to consent, benefits shall be paid as a Qualified Joint and 50% Survivor Annuity. If a spousal consent is not filed together with the Participant’s election, the election shall take effect nevertheless if it is established to the satisfaction of the Committee that the Participant is not married, the Participant’s Spouse cannot be located, or that other circumstances prescribed in the Treasury Regulations exist. Any spousal consent or establishment that spousal consent cannot be obtained shall be effective only with respect to such Spouse. Notwithstanding the foregoing, spousal consent shall not be required if the Participant elects an increasing Qualified Joint and Survivor Annuity (50% or 100%) under Section 6.4.
LA3:752821.27 138
(3) Election Period. The Participant shall have an election period which shall be a period beginning 90 days before the Annuity Starting Date and ending on the later of (x) the Annuity Starting Date, (y) the end of the 60 day period commencing on the Participant’s Pension Effective Date or (z) the end of the 30 (or 60) day period described below. The Committee shall notify the Participant and the Participant’s Spouse, if any, of the material features, and an explanation, of the Qualified Joint and Survivor Annuity and other optional forms of benefit. The notice shall be provided no more than 90 days before the Annuity Starting Date. If the notice is provided after the date which is 30 days before the Annuity Starting Date, the election period shall be extended until the 30th day after the notice is provided, provided that (i) this rule shall not apply if the Annuity Starting Date is not the Pension Effective Date unless the claim for benefits set forth in subsection (c) is made prior to the Annuity Starting Date and (ii) if the Participant requests additional notices, the 30-day shall not be extended beyond the expiration of the original 30-day period. However, the 30-day notice requirements in the preceding sentence will not apply if the Participant, after having received the written explanation, affirmatively elects a form of distribution and the spouse consents to that form of distribution (if necessary), provided that:
(A) The plan administrator provides information to the Participant clearly indicating that the Participant has a right to at least 30 days to consider whether to waive the Qualified Joint and Survivor Annuity and consent to a different form of distribution.
(B) The Participant is permitted to revoke an affirmative distribution election at any time prior to the expiration of the 7-day period that begins the day after the explanation is given to the Participant.
(C) Distribution in accordance with the affirmative election does not commence before the expiration of the 7-day period that begins the day after the explanation is provided to the Participant.
In the case of Participants whose Pension Effective Date is on or after August 1, 2002, the foregoing clause (z) shall be applied by providing a 60 day period instead of a 30 day period.
(4) Information to be Provided by Committee.
(i) The notice described in paragraph (3) above shall contain the following information, as applicable to the Plan, written in non-technical language:
(A) A general description or explanation of the terms and conditions of the Qualified Joint and Survivor Annuity; the Participant’s right to make, and the effect of, an election to waive the Qualified Joint and Survivor Annuity form of benefit; the right of the Participant’s Spouse to consent to the election to waive the Qualified Joint
LA3:752821.27 139
and Survivor Annuity; the right to revoke an election to waive; and the effect of such a revocation; and the circumstances in which a Qualified Joint and Survivor Annuity will be provided if the Participant does not elect or if the Spouse does not consent to the Participant’s waiver; and
(B) A general explanation of the relative financial effect on a Participant’s annuity of the election. (Various methods may be used to explain such relative financial effect, including information as to the benefits the Participant would receive under the Qualified Joint and Survivor Annuity stated as an arithmetic or percentage reduction from a single life annuity; a table showing the difference between a straight life annuity and a Qualified Joint and Survivor Annuity in terms of a reduction in dollar amounts or a table showing a percentage reduction from the straight life annuity.) The notice and explanation required by this Section 6.2(b)(4)(i) must also inform the Participants of the availability of the additional information specified in Section 6.2(b)(4)(iii) and how they may obtain such information.
(ii) The method or methods used to provide the information may be by mail, personal delivery or a method that is reasonably calculated to reach the attention of a Participant on or about the time of the election period and to continue to reach the attention of such Participant during the election period applicable to the Participant for which the information is being provided (as, for example, by permanent posting, repeated publication, etc.).
(iii) The Committee must furnish to a particular Participant, upon a timely written request, a written explanation in non-technical language of the terms and conditions of the Qualified Joint and Survivor Annuity and the financial effect upon the particular Participant’s annuity of making any election under this paragraph. Such financial effect shall be given in terms of dollars per annuity payment. The Committee need not comply with more than one such request made by a particular Participant. This explanation must be personally delivered or mailed (first class mail, postage prepaid) to the Participant within 30 days from the date of the Participant’s written request.
(5) Revocability of Election. Any election by a Participant (but not a Spouse) made under this Section 6.2 may be revoked in writing at any time until the date set forth in Section 6.2(b)(3)(B), and after such election has been revoked, another election under this paragraph may be made at any time during the election period specified in Section 6.2(b)(3). Any Participant who makes an election (whether it is the first election, or a new election after a revocation) after the date set forth in Section 6.2(b)(3)(B) may not revoke the election, even if the election period specified in Section 6.2(b)(3) has not expired.
LA3:752821.27 140
(c) Additional Plan Provisions.
(1) Claim for Benefits. As a condition precedent to the payment of benefits prior to attainment of age 65, a Participant must express in writing to the Committee the form in which he prefers benefits to be paid and provide all the information reasonably necessary for the payment of such benefits. However, if a Participant files a claim for benefits with the Committee and provides the Committee with all the information necessary for the payment of benefits but does not indicate a preference as to the form for the payment of benefits, benefits must be paid in the form of a Qualified Joint and Survivor Annuity (with a 50% survivor annuity) unless such Participant has made an effective election not to receive benefits in such form. If a Participant incurs an Eligible Separation prior to his Normal Retirement Age and does not file a claim for benefits prior to his age 65, (i) his Annuity Starting Date shall be his age 65, (ii) the Participant’s election period under Section 6.2(b)(3) shall be the 30 day period after the notice referred to in Section 6.2(b)(3) is provided, and (iii) benefits shall commence as soon as practicable after such 30 day period (whether or not the Participant responds to the notice), retroactive to age 65 (without interest).
(2) Effect of Participant’s Death on an Election or Revocation of Election. The effect of an election or a revocation of an election timely made under Section 6.2(b) shall not be altered by the death of the Participant on or after the Annuity Starting Date. If a Participant dies prior to the Annuity Starting Date, the election shall be void, except that if the Participant elected a Qualified Joint and Survivor Annuity (with a 100% survivor annuity), the Qualified Preretirement Survivor Annuity shall be calculated by assuming the Participant elected a Qualified Joint and Survivor Annuity (with a 100% survivor annuity, instead of a 50% survivor annuity).
(d) Effective Date and Duration. The monthly benefit to the Participant shall commence in accordance with Section 6.1(c) and shall terminate with the payment due on the first day of the month (in arrears for the prior month) following the month in which his death occurs (unless the Participant’s Spouse survives the Participant, in which case, payment shall terminate with the payment due on the first day of the month (in arrears for the prior month) in which his death occurs). If the Spouse survives the Participant, the monthly surviving Spouse’s benefit shall be payable to the Spouse for life, commencing on the first day of the month following the Participant’s death (in arrears for the prior month) and ending on the first day of the month following the Spouse’s death (in arrears for the prior month).
6.3. Life Annuity With Ten Years Certain.
Effective July 1, 2001, this Section 6.3 applies to any Participant whose Eligible Separation occurs on or after that date. Prior to July 1, 2001, this Section 6.3 applies to (i) each Occupational Participant who is eligible for a service pension under Section 5A.1(a) or a disability pension under Section 5A.2(a), (ii) the benefits under the Management Part of each Pre-97 Management Participant who is eligible for a service pension under Section 5B.1(a), and (iii) subject to Section 6.6(a), each Participant who is an Active Management Participant on or after January 1, 1997 (excluding Former NewVector Participants).
LA3:752821.27 141
Subject to Section 6.2, each such Participant may elect a Life Annuity with ten years certain, with each such monthly payment to be reduced pursuant to subsection (d), providing payment as follows:
(a) To the retired Participant: A monthly retirement income, reduced as set forth in subsection (d) below, the first monthly payment thereof being payable as set forth in Section 6.1(c) and terminating with the payment due on the first day of the month (in arrears for the prior month) following the month in which his death occurs (unless subsection (b) applies, in which case payments shall terminate with the payment due on the first day of the month (in arrears for the prior month) in which his death occurs).
(b) If the retired Participant dies prior to the tenth anniversary of the first day of the calendar month coinciding with or next following the Annuity Starting Date (that is, payment of 120 full monthly payments), to the contingent annuitant designated by the Participant at the time he elects this option: A monthly retirement income, reduced as set forth in subsection (d) below, the first monthly payment thereof being payable on the first day of the month following (and in arrears for) the calendar month in which the death of the Participant occurs, and terminating with the monthly payment due on the tenth anniversary of the first day of the calendar month coinciding with or next following the Annuity Starting Date (in arrears for the prior month), that is, the 120th full monthly payment under this Section. If the Participant fails to designate a contingent annuitant or the contingent annuitant is not living on such first day of the month, the single sum Actuarial Equivalent of the remaining benefits shall be paid to the Participant’s estate. If the contingent annuitant begins to receive payments, but dies before the 120th full monthly payment is made under this Section, payments will continue to the contingent annuitant’s estate, or, if elected by the personal representative, the single sum Actuarial Equivalent of the remaining benefit shall be paid to the contingent annuitant’s estate.
(c) The Participant can change the contingent annuitant at any time, but only if the spousal consent authorized such changes.
(d) Amount. For Participants whose Eligible Separation occurs on or after July 1, 2001, the benefit shall be the Actuarial Equivalent of the standard benefit. Prior to July 1, 2001, (1) in the case of an Occupational Participant who is eligible for a service pension under Section 5A.1(a) or a disability pension under Section 5A.2(a), each monthly payment shall be 95% of the standard form of benefit commencing on the Annuity Starting Date and (2) subject to Section 6.6(a), in the case of a Participant who is an Active Management Participant on or after January 1, 1997 and Pre-97 Management Participants, the benefit shall be the Actuarial Equivalent of the standard benefit.
6.4. Increasing Annuity Options.
Effective July 1, 2001, any Participant whose Eligible Separation occurs on or after that date may elect to receive a Life Annuity or a Qualified Joint and Survivor Annuity (with either a 50% or 100% survivor option) that is identical to the form of payments set forth in Section 6.1 or Section 6.2, respectively, except as set forth below. (Prior to July 1, 2001, subject to Section 6.6, this Section 6.4 applied solely to Participants who were Active Management
LA3:752821.27 142
Participants on or after January 1, 1997, excluding Pre-97 Management Participants). Beginning on each annual anniversary date of the first day of the calendar month a full monthly pension was first paid (even if such payment was a partial monthly payment because the Annuity Starting Date was not the first day of a calendar month), the amount of the benefit shall be increased by 2% without regard to applicable Treasury Regulations under Code Section 401(a)(9). If an increasing Qualified Joint and Survivor Annuity is elected and the Participant’s Spouse predeceases the Participant, the amount payable during the remainder of the Participant’s life shall be equal to the amount that would be payable if the Participant had initially elected to receive benefits in the form of the increasing life annuity set forth in this Section. If the Participant elects an increasing annuity option, the amount of the Life Annuity or Qualified Joint and Survivor Annuity payable shall be the Actuarial Equivalent of the standard benefit commencing on the Annuity Starting Date. Spousal consent under Section 6.2(b) shall only be required if the Participant elects an increasing single Life Annuity; it is not required to elect an increasing Qualified Joint and Survivor Annuity.
6.5. Lump Sum Options.
(a) (1) Except as otherwise provided by the Plan and subject to Sections 6.2 and 6.6(a), each Participant who is an Active Management Participant on or after January 1, 1997 (excluding Pre-97 Management Participants, unless they become Applicable Occupational Participants) may elect a lump sum benefit. To the extent applicable and subject to the various rules of coordination in Article V-B, V-D and V-E, the amount of the lump sum shall be the sum of (i) the greater of the Defined Lump Sum under Section 5D.2(c) or, if applicable, the DLS Equivalent of the Normal Retirement Pension under Article V-B payable to the Participant at age 65 (ignoring any subsidy provided by any early retirement factors) plus (ii) the Account Balance under Article V-E. Notwithstanding the foregoing, if a Management Employee is eligible for a service pension under Section 5B.1(a), the lump sum under clause (i) of the preceding sentence shall not be less than the SPE Equivalent of the Normal Retirement Pension under Article V-B. In addition, the minimum lump sum payable to a Management Employee shall not be less than the DLS Equivalent of the minimum DLS Pension set forth in Section 5D.2(d)(2) using the DLS Factors in effect for the Participant’s Pension Effective Date using the “stability period” and the “lookback period” specified in Subsection 1.12C(a)(1); for purposes of calculating the minimum lump sum, Section 1.12C(a)(2) shall not apply.
(2) Except as otherwise provided by the Plan and subject to Section 6.2 and Section 6.5(c), each Applicable Occupational Participant may elect a lump sum benefit, provided that no disability pensions under Section 5A.2 may be paid in the form of a lump sum. The amount of the lump sum shall be the DLS Equivalent of the Normal Retirement Pension under Article V-A payable to the Participant at age 65. Such DLS Equivalent value shall ignore any subsidy provided by any early retirement factors. Notwithstanding the foregoing, if the Applicable Occupational Participant is eligible for a service pension under Section 5A.1(a), the lump sum payable under Article V-A (but not Appendices O through R or T or any other Appendix providing benefits set forth in
LA3:752821.27 143
Section 5A.4(l)) shall not be less than SPE Equivalent of the Normal Retirement Pension under Article V-A.
(b) Subject to Section 6.2, each Management Participant and each Applicable Occupational Participant who is entitled to elect a lump sum under subsection (a) may elect any annuity benefit (as set forth in Sections 6.1 through 6.4) with respect to a portion (in $100 increments) of his benefits and a lump sum (as set forth in subsection (a)) with respect to the remaining portion, provided that the minimum monthly annuity amount elected must be at least $100. The lump sum portion shall be calculated by the multiplying lump sum amount described in subsection (a) by the excess of 100% over the percentage elected as an annuity. The Participant may elect a delayed Annuity Starting Date with respect to the portion of the benefit payable as an annuity, but not the portion of the benefit payable as a lump sum.
(c) Notwithstanding subsection (a) or (b), in the case of an Eligible Separation occurring after 1996, a lump sum may only be elected if the Participant consents, during the sixty day period commencing on the Participant’s Pension Effective Date (or, if later, the end of the period referred to in Section 6.2(b)(3)(z) with respect to the first notice sent to the Participant pursuant to Section 6.2(b)(3) describing the Participant’s benefits payable at the Pension Effective Date), to an immediate lump sum distribution. Any purported election of a lump sum after such date shall be null and void.
In the case of a Vested Participant who (i) has an Eligible Separation, (ii) is later rehired and earns additional benefits hereunder, and (iii) incurs another Eligible Separation before January 1, 2002, the Participant shall not be entitled to elect a lump sum upon his subsequent Eligible Separation with respect to accrued benefits earned at the time of earlier Eligible Separation. There are two exceptions. First, see Section 5B.6(b) for special rules permitting lump sums with respect to benefits earned by a Management Participant prior to an Eligible Separation occurring before 1997 if the Participant is rehired. Second, see Section 5A.1(e)(7) for special rules permitting lump sums with respect to benefits earned by an Occupational Participant prior to an Eligible Separation occurring while the Participant was not an Applicable Occupational Participant.
(d) Notwithstanding the foregoing provisions of this Section 6.5, a Management Participant who would be a Pre-97 Management Participant except for the fact he becomes a Management Participant after 1996 may not elect a lump sum (or partial lump sum) with respect to his Management Part benefit earned before 1996 unless such individual remains an Active Management Participant for at least 30 consecutive days after 1996. This rule shall not apply after June 30, 2001 or to any Participant who becomes an Applicable Occupational Participant on or after October 12, 2000.
(e) Except as set forth in Appendix B, neither lump sums nor partial lump sums paid pursuant to this Section 6.5 may be repaid to the Plan at any time.
LA3:752821.27 144
6.6. Limitations on Form Elected.
(a) Except as set forth in Sections 6.5(a)(2) and 6.5(b), with respect to Eligible Separations occurring prior to July 1, 2001, the benefit options set forth in Sections 6.4 and 6.5 are only available under the Management Part and only to Participants who are Active Management Participants on or after January 1, 1997 (excluding Former NewVector Participants and Pre-97 Management Participants). See also Sections 5C.7 and 5D.8. For Eligible Separations occurring prior to July 1, 2001, the benefit forms in Sections 6.2 and 6.3 are calculated based on different actuarial assumptions depending on whether they are paid under the Management Part or Occupational Part.
(1) This paragraph (1) describes how these rules apply if an Active Management Participant on or after January 1, 1997 whose Eligible Separation occurs prior to July 1, 2001 is described in Section 5A.4(g), 5B.4 or 5D.7 (that is, a Participant who transfers from occupational to management status or vice-versa). In this case, the maximum benefit that may be elected by such a Participant under Sections 6.4 or 6.5 is the benefit determined in accordance with the provisions of the Management Part irrespective of whether the benefit under the Management Part is the largest benefit payable to the Participant; the actuarial adjustments in Appendix A shall apply for purposes of converting such benefit into any optional form (other than a lump sum). The Participant may elect any form of annuity otherwise available to an Occupational Participant (based on the assumptions applicable to Occupational Participants, as opposed to the Appendix A assumptions) with respect to the remaining portion of the benefit; subject to Section 6.5(a)(2), he may not elect a lump sum (or an increasing annuity option) with respect to such portion.
(2) By way of example, assume an Active Management Participant on or after January 1, 1997 is described in Section 5D.7(c)(2) and the largest benefit is the benefit described in clause (z) of that paragraph. The benefit under clause (z) is not considered paid under the Management Part merely because it is described in Article V-D. The maximum benefit payable as a lump sum (or an increasing annuity) is the benefit described in clause (y) of that paragraph; thus, the amount in clause (y) may be paid in a lump sum (or an increasing annuity) and the excess of the annuity described in clause (z) over clause (y) may be paid in any form of annuity available to an Occupational Participant (based on the assumptions applicable to Occupational Participants).
(3) Similarly, except as set forth in Section 5C.7(c)(1), a Pre-97 Management Participant may not elect a lump sum (or an increasing annuity option) with respect to his or her Occupational Part or Management Part benefits.
(b) Notwithstanding any other provision of this Plan to the contrary, no `prohibited payment’ shall be made during any period in which the Plan has a “liquidity shortfall,” as defined in Section 302(e)(5) of ERISA. For this purpose, a `prohibited payment’ means (i) any lump sum or other payment in excess of the monthly amount paid as a single life annuity (plus social security supplements described in Section 204(b)(1)(G) of ERISA) to a Participant or Beneficiary whose Annuity Starting Date occurs during the period the Plan has a
LA3:752821.27 145
liquidity shortfall, (ii) any payment for the purchase of an irrevocable commitment from an insurer to pay benefits and (iii) any other payments specified by the Secretary of the Treasury.
6.7. Cash-Outs of $5,000 or Less.
(a) Notwithstanding any provision of this Plan, if the single sum Actuarial Equivalent of (i) a Participant’s vested Accrued Benefit (payable at age 65 or Eligible Separation, if later) or (ii) the preretirement death benefit payable to a surviving Spouse (or, if applicable, a Beneficiary) of a Participant or Former Participant who dies before his Annuity Starting Date is $5,000 ($3,500, if the Participant Terminated prior to 1999) or less, the Committee shall direct the Trustee to pay the Participant, surviving Spouse or Beneficiary, as applicable, such single sum Actuarial Equivalent in a cash lump sum immediately after the Eligible Separation. For purposes of this Section, if such amount is zero, he will be deemed to have received a distribution of such vested amount.
(b) (1) This paragraph applies to a Participant deemed to receive a distribution of zero dollars. This paragraph also applies to a Participant whose Reemployment Commencement Date is prior to January 1, 2001 if he was (w) except as set forth in subsection (b)(4), an Occupational Participant who was described in subsection (a) who is subsequently reemployed as an Occupational Employee or a Management Employee, (x) a Pre-97 Management Participant described in subsection (a) subsequently reemployed as an Occupational or Management Participant, or (y) a Management Participant described in subsection (a) whose Reemployment Commencement Date is prior to 1997. Such a Participant may repay the amount of such prior distribution, together with interest at the rate specified in Code section 411(c)(2)(C), compounded annually, from the date of the distribution to the date of the repayment, to the Trustee no later than twelve months after the date the Participant was reemployed. If the Participant was deemed to have received a distribution of zero dollars, he shall be deemed to have repaid such amount if he is reemployed prior to incurring a five year Period of Severance or bridges his Term of Employment pursuant to Section 2.4(b)(2)(B). Upon such repayment, the Participant’s entire Accrued Benefit shall be restored and all of his pre- and post-break service shall be counted, subject to the limitations described in Articles II, V-B and V-D, provided that the Participant’s prior Term of Employment shall only be counted if it is bridged as set forth in Section 2.4(b)(2). If repayment is not made, (x) the Participant’s pre-break service shall be counted for participation and vesting if required under Articles II and III and (y) the Participant’s pre-break Accrued Benefit, Pension Calculation Service and Term of Employment shall be ignored even if the Participant meets the conditions for bridging Term of Employment set forth in Section 2.4(b)(2).
(2) Effective January 1, 1997, repayment shall not be permitted in the case of a Management Participant described in subsection (a) whose Reemployment Commencement Date is after 1996 who is subsequently reemployed as an Occupational Employee or a Management Employee. The preceding sentence does not apply to a Participant whose Reemployment Commencement Date is prior to January 1, 2001 if he was a Pre-97 Management Participant, a Management Participant deemed to receive a
LA3:752821.27 146
distribution of zero dollars, or a Management Participant reemployed by NewVector prior to the sale of NewVector. If repayment is not permitted, such a Participant’s pre-Break Accrued Benefit and service shall be ignored, provided that (1) the Participant’s pre-Break service shall be counted for participation and vesting if required under Articles II and III and (2) the Participant’s pre-Break Term of Employment (but not his Pension Calculation Service) shall be counted if the Participant subsequently bridges his Term of Employment as set forth in Section 2.4(b)(2).
(3) This paragraph describes certain rules applicable to Participants employed by NewVector prior to its sale. Notwithstanding paragraphs (1) and (2) above, paragraph (1) shall apply to (i) a Participant employed by NewVector at the time of Termination who is reemployed by NewVector or reemployed as a Occupational Employee or (ii) any Participant reemployed by NewVector prior to its sale. Paragraph (2) shall apply to a NewVector Employee reemployed as a Management Employee (unless he is reemployed by NewVector).
(4) Effective January 1, 2001, except for Participants deemed to receive a distribution of zero dollars, repayment of the lump sum shall not be permitted in the case of any Participant described in subsection (a) whose Reemployment Commencement Date is after 2000 who is subsequently reemployed as an Occupational Employee or a Management Employee. In addition, repayment is not permitted in the case of a Participant who Terminated as an Applicable Occupational Participant between October 12, 2000 and December 31, 2000 who received a distribution described in subsection (a) and is reemployed prior to 2001. If repayment is not permitted, the rules in subsection (b)(2) apply.
6.8. Direct Rollover Election.
(a) A Participant, an alternate payee who is the Spouse or former Spouse of the Participant, or a surviving Spouse of a deceased Participant (collectively, the “distributee”) may direct the Trustee to pay all or any portion of his “eligible rollover distribution” to an “eligible retirement plan” in a “direct rollover.” Within a reasonable period of time before an eligible rollover distribution, the Committee shall inform the distributee of this direct rollover option, the appropriate withholding rules, other rollover options, the options regarding income taxation, and any other information required by Code section 402(f).
(b) An eligible rollover distribution is any distribution other than (i) distributions required under Code section 401(a)(9), (ii) distributions of amounts that have already been subject to federal income tax, (iii) installment payments in a series of substantially equal payments made at least annually and (A) made over a specified period of ten or more years, (B) made for the life or life expectancy of the distributee, or (C) made for the joint life or joint life expectancy of the distributee and his designated beneficiary, (iv) a distribution to satisfy the limits of Code section 415 or 402(g), or (vi) any other actual or deemed distribution specified in the regulations issued under Code section 402(c).
LA3:752821.27 147
(c) For a Participant or an Alternate Payee who is the Spouse or former Spouse of the Participant, an eligible retirement plan is an individual retirement account or annuity described in Code section 408(a) or 408(b), an annuity plan described in Code section 403(a), or the qualified trust of a defined contribution plan that accepts eligible rollover distributions. For distributions after 2001, 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. Prior to 2002, for a surviving Spouse of a deceased Participant, an eligible retirement plan is limited to an individual retirement account or annuity; thereafter, the definition applicable for Participants also applies to spouses.
A direct rollover is a payment by the Trustee to the eligible retirement plan specified by the distributee.
ARTICLE VII
DEATH BENEFITS
7.1. Accidental Death Benefits.
(a) If an Active Participant dies solely as a result of accidental injury arising out of and in the course of employment by a Participating Company (“Accidental Injury”), a death benefit shall be paid to his Beneficiary (as defined in Section 7.4) in an amount equal to the greater of (i) three years’ Wages (as defined in Section 7.9), but not more than $50,000 or (ii) 12 months’ Wages. In addition to the Accidental Death Benefit, the necessary expenses of the burial of the deceased Participant, not exceeding $500, shall be paid to the Employee’s Beneficiary.
(b) For purposes of this Section 7.1, accidental injuries shall be considered to arise out of and in the course of employment by a Participating Company only where the injury has resulted solely from accident during and in direct connection with the performance of duties to which the Active Participant is assigned pursuant to his position with a Participating Company, or which he is directed to perform by proper authority, or in voluntarily protecting a Participating Company’s property or interests. An Accidental Death Benefit shall not be paid unless the Participant’s Beneficiary presents to the Committee evidence that establishes (in the sole determination of the Committee) the cause and circumstances of the Accidental Injury and that the Accidental Injury was the sole cause of the Active Participant’s death. An Accidental Death Benefit shall not be paid in any case if the Participant’s injury occurs while the Participant is on a transitional or surplus transitional leave of absence, even if such Participant has not yet been terminated from employment.
LA3:752821.27 148
(c) The Company may maintain certain special accidental death policies issued by insurance companies to pay additional accidental death benefits equal to the excess, if any, of three years’ Wages over the benefit paid under subsection (a). To the extent that such an accidental death benefit is not paid by a Special Accidental Death Policy acquired by the Company for reasons associated with death occurring as a result of terrorism and warfare, the benefit that would have been paid shall be paid from the operating expense account of the Participating Company that employed the Active Participant at the time of death.
7.2. Sickness Death Benefit.
If an Active Participant dies on or after August 10, 1980, for reasons other than Accidental Injury as defined in Section 7.1 (“Sickness”), a Sickness Death Benefit equal to twelve months’ Wages shall be paid to the Active Participant’s Beneficiary.
7.3. Death After Retirement.
(a) If a Former Participant dies while such person is receiving (i) a service pension under Section 5A.1(a) or 5B.1(a), (ii) a pension under Article V-D if the Former Participant satisfied the conditions for a service pension in Section 5B.1(a) (even if the Participant was not eligible for a service pension because of Section 5B.6), (iii) a disability pension under Section 5A.2 or 5B.2, (iv) payments under a long term disability policy of a Participating Company or (v) a Modified Disability Pension (referred to in this Article VII as a “Pensioner”) and the Pensioner is survived by a Beneficiary who satisfies the requirements of Section 7.4, the Committee shall authorize a Death Benefit to be paid to the Beneficiary of the Pensioner. The amount shall be equal to twelve months’ Wages (assuming the Pensioner had died on the day he ceased to be a Covered Employee of a Participating Company); provided, however, that (x) in the case of a Pensioner who retired after the last day of the month in which his 65th birthday occurred and whose pension was effective during the period from January 2, 1979, through August 10, 1980, the Death Benefit shall not exceed twelve months’ Wages (assuming the Pensioner had died on the last day of the month in which his 65th birthday occurred) and (y) in the case of a Pensioner who retired under a Predecessor Plan prior to September 30, 1963, the Death Benefit shall be reduced by 10% of such amount for each full year that has elapsed since his retirement.
(b) If the Pensioner described in subsection (a) is survived by a Beneficiary who satisfies the requirements of Section 7.4(b), the Death Benefit payable under this Section 7.3 shall not be less than the annual pension paid to the Pensioner.
(c) Special Rules for Certain Participants Eligible for a Service Pension who elect a Lump Sum. If a Participant is described in Section 7.3(a)(i) or (ii) except for the fact the Participant elects a lump sum (or a partial lump sum) benefit at his retirement, then the lump sum paid to the Participant shall be increased by the DLS Equivalent of the Death Benefit described in Section 7.3(a). For this purpose only, the DLS Equivalent shall include an assumption that the Participant will be survived by a Beneficiary; such factors are set forth in Appendix L. This increase shall not be paid if the Participant is described in Section 7.3(a)(iii), (iv) or (v), unless he is also described in Section 7.3(a)(i) or (ii). If such an increase is paid, no other Death Benefit
LA3:752821.27 149
shall be payable pursuant to this Article VII at any time, including the Participant’s death or at the time of any subsequent termination if the Participant is reemployed.
(d) Except as provided below, no Death Benefit shall be payable (1) upon the death of an individual receiving a survivor annuity, (2) upon the death of a Former Participant not described in subsection (a), or (3) upon the death of a Former Participant after the cessation of payments under a long term disability policy of a Participating Company or a Modified Disability Pension, unless the Former Participant is described in clauses (i) - (iii) of subsection (a). However, if a Participant with a 15-year Term of Employment (i) became Disabled by reason of accident or sickness while a Covered Employee, (ii) commences Modified Disability Pension payments and continues to receive such payments until age 65, (iii) did not receive the special benefit under Section 7.3(c), and (iv) dies beyond age 65, the Death Benefit described in subsection (a) shall be payable to a Beneficiary. The amount of the Death Benefit, if any, shall not exceed the amount that could have been paid if the disabled person had died on the day he ceased to be a Covered Employee of a Participating Company.
7.4. Beneficiaries.
(a) General. The persons who may be Beneficiaries of payments under this Article VII on the death of a Participant are limited to the Participant’s Spouse and the dependent children and other dependent relatives, as set forth in Appendix L. The amount to be paid in each case and the Beneficiary or Beneficiaries, and the share that each Beneficiary shall receive shall be determined by the Committee, subject to the provisions of Article VII and Appendix L.
(b) Mandatory Beneficiaries. The Participant’s (1) “eligible surviving Spouse,” (2) “eligible dependant children,” or (3) “eligible dependent parent,” as each of those terms is defined in Appendix L, shall receive the Death Benefit provided for in this Article VII. If there is more than one eligible Beneficiary under this subsection 7.4(b), the Death Benefit for any one or more of such Beneficiaries shall be paid in accordance with the procedures outlined in Appendix L.
(c) Other Beneficiaries. If there is no Beneficiary described in Section 7.4(b), payments under this Article VII shall be paid to other eligible dependent relatives, as set forth in, and in accordance with, Appendix L. If there are no such persons, except as provided in subsection (d) below, no benefits will be paid.
(d) Payment of Final Expenses. Upon the death of a Pensioner, if there is no Beneficiary under this Article VII, the Committee may authorize such payments as may be required to defray the necessary expenses incident to the death of the Employee or Pensioner together with, in the case of Sickness, the necessary expenses, up to $500, of his burial.
7.5. Method of Payment.
(a) Payment on Death of Employee or Pensioner. The benefits under this Article VII shall be paid in a lump sum.
LA3:752821.27 150
(b) Payment on Death of Beneficiary. If a Beneficiary who is entitled to receive payments under this Article VII dies before payment is made (but after the death of the Participant), the amount shall be payable to any remaining Beneficiary or Beneficiaries pursuant to Section 7.4, or, if there are no such Beneficiaries, to the estate of the deceased Beneficiary.
7.6. Death After Termination of Employment.
Except as provided in Section 7.3, a Death Benefit shall not be payable in the case of any person who dies after he has ceased to be a Covered Employee of a Participating Company.
7.7. Claims.
All claims for Death Benefits must be made within one year of the death on which the claim is based. If notice of the existence of a Spouse, child or other dependent relative of a deceased Participant or Pensioner shall not be given to the Committee within one year after the Participant’s or Pensioner’s death, the Committee shall not be required to recognize any claim made by or on behalf of any such person.
7.8. Charging of Payments.
All benefits set forth in this Article VII shall be paid from the Trust Fund except as follows: (a) death benefits payable under this Article with respect to disability Pensioners if the disability pension was effective prior to January 1, 1996 and (b) the benefits described in Section 7.1(c). The amounts payable pursuant to this Article VII that are not paid from the Trust Fund shall be a charge to the operating expense accounts of the Participating Company that last employed the individual in respect to whom the benefits are due, when and as paid.
7.9. Definition of Wages.
“Wages” for the purpose of this Article VII shall mean remuneration for service (not including overtime), computed at the Participant’s rate of pay at the date of death, provided that differentials, lump sum payments in the nature of merit or performance awards and commissions shall be includible only when such award has an effective date within the twelve-month period preceding the Participant’s death. If more than one of the same kind of award is paid within the twelve-month period, only the higher award shall be includible. “Wages” shall not include amounts paid after the date of the Participant’s death. If the Participant normally serves a Participating Company on less than a full time basis, benefits in case of death shall be computed on the basis of the time constituting the Participant’s normal service under his contract of hiring, except that benefits in case of the accidental death of any employee who was in the service of a Participating Company on December 31, 1980 and remains in such service continuously thereafter, shall be computed on the basis of full time service (not including overtime). If the Participant was receiving disability benefits within the 12 months preceding the date of death, the Participant’s basic wage rate, excluding differentials or other premium payments but including basic wage rate increases whose effective date fall within the period of absence for disability, shall be included in “Wages.”
LA3:752821.27 151
Notwithstanding the foregoing, Wages shall be based on the last twelve months of employment as a Covered Employee preceding March 1, 1993, subject to the limit under Section 401(a)(17) of the Code in effect in 1993, that is, $235,840.
7.10. Waiver of Death Benefit.
No death benefit shall be payable under the provisions of Sections 7.2 or 7.3 of this Article VII with respect to
(a) any Participant who is or was a member of a group of Participants designated by the Board of Directors of a Participating Company as eligible to waive such benefit, or
(b) any Participant who was a member, prior to January 1, 1984, of a group of Participants designated by any Former Affiliate or, if the Participant’s Term of Employment with an Interchange Company is recognized under this Plan in accordance with an Interchange Agreement, Bell Communications Research, Inc. as eligible to waive the death benefit under the comparable provisions of a Predecessor Plan or the plan maintained by any Former Affiliate or Bell Communications Research, Inc.
if such employee has waived such benefit under this Plan, such Predecessor Plan or under the plan maintained by a Former Affiliate or Bell Communications Research, Inc. However, such death benefit shall be payable with respect to a Participant who waived the benefit if the Board of Directors of the Participating Company by which such Employee was last employed or the Board of Directors of such Former Affiliate or such other company referred to in this Section 7.10 and by which such Employee was previously employed has authorized the revocation of such waivers. For purposes of this Section 7.10, Bell Communications Research, Inc. shall not be considered as a Former Affiliate.
7.11. Termination of Death Benefits.
Notwithstanding any other provision of this Article VII, effective February 28, 1993, the provisions of this Article VII shall not apply to individuals first hired on or after March 1, 1993. The survivors of any individual first hired on or after March 1, 1993 shall not be entitled to any benefits under this Article VII. Individuals who have a Term of Employment that includes any period prior to March 1, 1993, including individuals who are re-employed on or after March 1, 1993 and whose Term of Employment is bridged so that it includes periods before March 1, 1993, shall be entitled to a frozen benefit under this Article VII as of February 28, 1993. For purposes of calculating the frozen benefit, “Wages” under Section 7.9 shall be based on the last twelve months of employment as a Covered Employee preceding March 1, 1993, subject to the limit under Section 401(a)(17) of the Code in effect in 1993. This Article VII shall not apply to any individuals hired by the Cable Companies.
LA3:752821.27 152
ARTICLE VIII
NAMED FIDUCIARIES - ALLOCATION OF RESPONSIBILITIES
8.1. No Joint Fiduciary Responsibilities.
The Participating Companies, named fiduciaries and other persons designated in the Plan or Trust Agreement shall have only the responsibilities specifically allocated to them herein or in the Trust Agreement or in their appointment.
All allocations of responsibilities under this Article VIII or otherwise, to Participating Companies, named fiduciaries or other persons are intended to be mutually exclusive, and there shall be no sharing of fiduciary or non-fiduciary responsibilities.
Whenever one named fiduciary is required by the Plan, Trust Agreement, or appointment to follow the directions of another named fiduciary, the two named fiduciaries shall not be deemed to have been assigned a shared responsibility, but the giving of directions shall be the only responsibility of the named fiduciary, and the responsibility of the named fiduciary receiving those directions shall be to follow them insofar as such instructions are on their face proper under applicable law.
In addition, the Company may allocate responsibility for the operation and administration of the Plan in accordance with its terms.
8.2. The Participating Companies.
Each Participating Company shall be responsible for: (i) making its respective contributions hereunder and (ii) keeping accurate records with respect to its Employees and their Compensation and furnishing such data to the Committee.
8.3. The Company.
(a) Acting in its capacity as Plan Sponsor and not as a fiduciary, the Company or its delegate shall be responsible for:
(i) Amendment or termination of the Plan pursuant to the terms of Article XI herein;
(ii) Subject to Section 8.8(c), appointment of any third party service providers and vendors to the Plan other than fiduciaries;
(iii) Appointment and removal of the members of the Committee and Plan Design Committee; and
(iv) Establishing a funding policy pursuant to Section 4.1.
LA3:752821.27 153
(b) The Company shall also be responsible for exercise of the Plan Administrator’s duties in the absence of the Committee.
8.4. The Committee.
The Company or its delegate shall appoint an Employee Benefits Committee (the “Committee”) consisting of at least one person, but not more than seven persons. The Committee shall be a named fiduciary of the Plan. The members of the Committee shall hold office at the pleasure of the Company or its delegate, and shall serve without compensation. The Committee shall comply with the provisions of ERISA pertaining to the powers and responsibilities of administrators and named fiduciaries.
8.5. Plan Design Committee.
The Company or its delegate shall appoint the Plan Design Committee. The Plan Design Committee shall not be a fiduciary of the Plan. The Plan Design Committee may make determinations with respect to Plan design matters, including authorization to amend the Plan pursuant to section 11.4. The members of the Plan Design Committee shall hold office at the pleasure of the Company or its delegate, and shall serve without compensation.
8.6. Delegation.
The Committee and QAM (as defined in Section 8.8(b)), and any other named fiduciaries may delegate any of their responsibilities to other persons to carry out specified responsibilities, except as may be limited or prohibited by the Code or ERISA. Such delegates may be employees of the Company or any Participating or Non-Participating Companies or outside parties.
8.7. The Trustee.
The Trustee shall be responsible for: (a) the investment of the Trust Fund to the extent and in the manner provided in the Trust Agreement; (b) the custody and preservation of Trust assets delivered to it; and (c) for making such payments from the Trust Fund as the Committee and QAM shall direct.
8.8. Allocation of Fiduciary Responsibilities.
(a) The Committee shall be the Plan Administrator and shall have all power and authority necessary for that purpose, including, but not by way of limitation, the full discretion and power to construe and interpret the Plan, to make factual determinations, to determine the eligibility, status and rights of all persons under the Plan and in general to decide (and/or settle) any dispute. The Committee shall direct the Trustee concerning all non-investment related distributions from the Trust Fund, in accordance with the provisions of the Plan and Trust Agreement, and shall have such other powers in the administration of the Trust Fund as may be conferred upon them by the Trust Agreement. The Committee shall maintain all Plan records except to the extent responsibility is delegated to others to maintain records of the
LA3:752821.27 154
Trust Fund. The Committee shall have the discretion and authority to determine conclusively for all parties all questions arising in the administration of the Plan, and any decision of the Committee shall not be subject to further review. The Committee shall also be responsible for approving reimbursement of expenses of the Company and its subsidiaries, other than QAM.
(b) Qwest Asset Management Company (“QAM”) shall be the named fiduciary for all purposes of the management and investment of Plan assets. Such powers of QAM shall include, without limitation, the appointment and removal of trustees, investment managers and other investment-related service providers; authority to enter into trust agreements and amendments thereto, investment management agreements and other investment-related agreements; responsibility for monitoring performance of all investment-related service providers; approving processes and policies for payment of investment-related Plan expenses, and the authority to determine asset allocation ranges and general investment strategies for Plan assets. QAM shall have all power and authority necessary for these purposes.
(c) With regard to their respective functions, the Committee’s and QAM’s authority shall include the following:
(1) the selection of agents and fiduciaries to operate and administer the Plan and Trust;
(2) the selection of agents and other providers of services to the Plan;
(3) the periodic review of the performance of such agents, service providers, managers, and fiduciaries;
(4) certifying to the Trustee the names and specimen signatures of the members of the Committee or QAM (or their delegates) acting from time to time;
(5) approving expenses; and
(6) establishing compensation arrangements for other fiduciaries, agents and service providers.
8.9. Organization of the Committees.
(a) The Committee shall elect a chairman and appoint a Secretary. The Committee may adopt such by-laws and rules of procedures as it deems desirable for the conduct of its affairs and for the administration of the Plan.
(b) The Plan Design Committee may adopt by-laws and rules of procedures as it deems desirable.
(c) The Committee may appoint agents (who need not be members of the Committee) to whom it may delegate such powers as it deems appropriate. No writing is necessary to effect such appointment.
LA3:752821.27 155
(d) Each committee may make its determinations with or without meetings. Each committee may authorize one or more of its members or agents to sign instructions, notices and determinations on its behalf. The action of a majority of a committee shall constitute the action of that committee.
8.10. Plan Expenses.
The expenses of the Committee shall be borne by the Company. Notwithstanding the preceding sentence, all expenses of any party lawfully payable from the assets of the Plan shall be paid from such assets except to the extent the Company or its delegate determines otherwise.
8.11. Agent for Process.
The General Counsel of the Company shall be the agent of the Plan for service of all legal process.
8.12. Effective Date
The foregoing provisions of this Article VIII are effective October 24, 2002. Prior to that date, the provisions previously in the Plan shall apply.
ARTICLE IX
TRUST AGREEMENT - INVESTMENTS
9.1. Trust Agreement.
The Trust Agreement provides for the holding, investment and administration of the funds of the Plan. The Trust Agreement shall be part of the Plan and is incorporated into the Plan by this reference, and the rights and duties of any person under the Plan shall be subject to all terms and provisions of the Trust Agreement.
9.2. Expenses of Trust.
All taxes upon or in respect of the Trust and all expenses of administering the Trust shall be paid by the Trustee out of the trust assets, to the extent not paid by a Participating Company.
LA3:752821.27 156
ARTICLE X
PARTICIPATING COMPANIES
10.1. Adoption of Plan.
Any corporation, whether or not presently existing, which is or shall become a Subsidiary of the Company after the date this Plan is adopted may, with the consent of the Plan Design Committee, become a party to the Plan and Trust by adopting the Plan and Trust for its Employees or by being designated by the Company or Plan Design Committee to participate in the Plan.
10.2. Agency of the Company.
Each Participating Company by becoming a party to the Plan constitutes the Company as its agent with authority to act for it in all transactions in which the Company believes such agency will facilitate the administration of the Plan, including but not limited to the authority to amend and terminate the Plan.
10.3. Disaffiliation and Withdrawal From Plan.
(a) Unless the Plan Sponsor or its delegate (in its sole discretion) determines otherwise, (1) any Participating Company that has adopted the Plan and that thereafter ceases for any reason to be a Subsidiary of the Company shall forthwith cease to be a party to the Plan or (2) the Plan Sponsor shall transfer sponsorship of the Plan to such disaffiliating Participating Company effective on or before the time of the disaffiliation. If sponsorship is transferred pursuant to clause (2) of the preceding sentence, the Plan Sponsor (and the Participating Companies that remain Subsidiaries of the Plan Sponsor) shall cease to be parties to the Plan at the time of the disaffiliation and shall be considered to be the disaffiliated Participating Companies for purposes of Sections 10.4 and 10.5.
(b) Any Participating Company may, by resolution of its board of directors and written notice thereof to the Company, provide from and after the end of any Plan Year for the discontinuance of Plan participation by such Participating Company and its Employees.
10.4. Effect of Disaffiliation or Withdrawal.
(a) If, in connection with the disaffiliation or withdrawal, the disaffiliating or withdrawing Participating Company shall by resolution of its board of directors adopt a pension plan, the Plan Sponsor or its delegate may (in its sole discretion) direct the Trustee to transfer to the trustee of the new plan assets having at least sufficient value, as determined by the actuaries for this Plan, to comply with Section 11.6 of this Plan (or Section 11.5, but only if it is applicable). Notwithstanding any provision of this Plan to the contrary, such amount shall be determined without regard to any surplus assets held in the Plan or any provisions of the Plan providing for possible additional benefit accruals on Plan termination or in the case of certain events following a “Change in Control.” Such payment shall operate as a complete discharge of
LA3:752821.27 157
the Trustee, and of the Company and all Participating Companies except the disaffiliating or withdrawing Participating Company (to the extent the Plan imposes obligations on such entities), of all obligations under this Plan to Employees of the disaffiliating or withdrawing Participating Company and to their beneficiaries. In addition, the Plan Sponsor or its delegate (in its sole discretion) may provide for a transfer of some or all of the surplus assets to the new plan. If such a transfer is effected, then, as to Employees of such Participating Company, no Plan termination shall be held to have occurred and the new plan shall, as to such Employees, be deemed a continuation of this Plan.
(b) Notwithstanding subsection (a), (1) no asset transfer shall be made with respect to Occupational Participants unless the provisions of the new plan applicable to Occupational Participants are substantially identical to those provisions of this Plan applicable to Occupational Participants (“Occupational Provisions”) and (2) unless the company that acquires the disaffiliated Participating Company refuses, an asset transfer must be made with respect to Occupational Participants if the provisions of the new plan applicable to Occupational Participants are substantially identical to the Occupational Provisions. The provisions of the new plan applicable to Occupational Participants shall not be deemed substantially identical to the Occupational Provisions if they provide lower pension benefits, or slower vesting, than the Occupational Provisions of this Plan and nothing in this subsection shall authorize the divesting of any vested portion of any Employee’s Accrued Benefit. The Company or its delegate shall, in its sole discretion, determine whether the provisions of the new plan applicable to Occupational Participants are “substantially identical” to the Occupational Provisions.
(c) In accordance with and subject to the terms of the merger agreement (and any related agreements) among U S WEST, certain Subsidiaries thereof, and AirTouch Communications, Inc., all liabilities under this Plan to or relating to those Participants who are NewVector Employees at the time of the merger whose employment is transferred to AirTouch Communications, Inc. are transferred to a pension plan sponsored by AirTouch Communications, Inc. or its affiliates (the “AirTouch Plan”). All such NewVector Participants shall be 100% Vested at the time of the merger. In addition, this Plan shall transfer assets to the AirTouch Plan as set forth in such merger agreement (or any related agreements); such payment shall operate as a complete discharge of the Trustee, U S WEST (now Qwest) and its Subsidiaries, of all liabilities and all obligations of this Plan for persons whose liabilities are transferred to the AirTouch Plan.
(d) In accordance with Sections 10.3 and 10.4(a), Old U S WEST transfers sponsorship of the Plan to U S WEST immediately prior to the Separation Time. In accordance with and subject to the terms of the Employee Matters Agreement between U S WEST and Old U S WEST, all liabilities under this Plan to or relating to “Media Employees” or “Terminated Media Employees” as such terms are defined in the Employee Matters Agreement are transferred to the Media Plan sponsored by MediaOne Group, Inc. (or its affiliates) after the Separation Time. In addition, this Plan shall transfer assets to the Media Plan in the amount set forth in the Employee Matters Agreement; such payment shall operate as a complete discharge of the Trustee, U S WEST (now Qwest) and its subsidiaries of all liabilities and obligations under this Plan to Media Employees and Terminated Media Employees. See Section 2.5(e) for additional rules if a Media Participant becomes an Employee after the Separation Time.
LA3:752821.27 158
10.5. Vesting Upon Disaffiliation or Withdrawal.
In the event of disaffiliation or withdrawal, if Occupational Participants are affected and assets are not transferred to a new plan in accordance with the provisions of Section 10.4, such event shall be treated as a partial termination of the Plan with respect to the Occupational Participants who are Employees of the disaffiliating or withdrawing Participating Company and all such Occupational Participants shall be 100% vested in their Accrued Benefits as of the date of such disaffiliation or withdrawal. In that event, the Trustee shall allocate and distribute assets held in the Trust Fund for the benefit of Participants who are or were Occupational Employees of the disaffiliating or withdrawing Participating Company among such Participants in the manner and order of preference specified in Section 11.2 and no assets of the Trust Fund beyond those necessary to provide for such Accrued Benefit shall be made available to or allocated to such Participants, but rather such assets shall remain as a part of the Trust Fund, subject to all of the provisions of this Plan, including the provisions of Article XII.
ARTICLE XI
TERMINATION AND AMENDMENT
11.1. Termination of Plan.
(a) The Board may terminate the Plan. In addition, the Plan Design Committee, with the consent of the Chairman of the Board (or, at any time when there is no Chairman of the Board, the President) and subject to the approval of the Board of Directors (or without such approval in the case of changes that, in the opinion of the Plan Design Committee, are required by federal or state statutes applicable to the Company or any other Participating Company or authorized or made desirable by such statutes) may terminate the Plan. Upon termination or partial termination, the Accrued Benefits of all affected Participants shall become fully vested and shall be distributed among them and their beneficiaries as provided in Section 11.2.
(b) The Participating Companies expect to continue the Plan indefinitely, but the continuance of the Plan and the payment of contributions are not assumed as contractual obligations. Any Participating Company may withdraw from the Plan as to its Employees at any time by resolution of the Participating Company’s Board of Directors. Upon withdrawal by any Participating Company, Sections 10.4 and 10.5 shall apply.
11.2. Distribution on Plan Termination.
(a) Assets then held in the Trust Fund for the affected Participants and their beneficiaries shall be allocated, after payment of expenses, as required by Section 4044 of ERISA.
LA3:752821.27 159
(b) If there is any remaining balance in the Trust Fund after making provision deemed adequate for the full amount of the pensions hereinbefore specified as payable in case of termination of the Plan, such balance shall be applied, as permitted by ERISA, as follows, with proper adjustment for the portion of any benefit already provided for under a prior allocation or this Section 11.2:
(i) To make adequate provision for the payment of the full amounts of the service pensions previously granted to retired employees (including the full amounts payable to designated annuitants of retired employees) and deferred vested pensions to former employees if such employees, such annuitants or former employees are on the pension roll as of the termination date; for the payment of the full amounts which may be payable in the future to designated annuitants of employees who have retired and who are on the pension roll as of the termination date; for the payment of the full amounts of the service pensions or deferred vested pensions which employees, as of the termination date, have then become entitled to receive upon terminating service, such pensions to start upon the employee’s retirement or separation from active service, including the payment of the full amounts which may be payable to designated annuitants of such employees, following the death of such employees after their retirement or separation from service, such amounts to be computed in accordance with the provisions of Article V on the basis of the pensions to which such eligible employees have become entitled as of the termination date; and for the payment of the full amounts payable in accordance with the provisions of Articles V and VI to the surviving spouses of employees if such employees die while in active service, such amounts to be computed in accordance with the provisions of Articles V on the basis of the pensions to which such employees have become entitled as of the termination date.
(ii) To make provision for the payment of death benefits attributable to deaths occurring prior to the date of termination which would have been payable from the Trust Fund, and for the payment, upon the deaths of retired employees who are on the pension roll as of the date of termination and of employees eligible as of that date for retirement, of death benefits which would have been payable from the Trust Fund, had the Plan not been so terminated.
(iii) To make provision, to the extent permitted by the balance, if any, remaining in the Trust Fund after the foregoing provisions shall have been made, for the payment of deferred vested pensions starting at age sixty-five and continuing until the death of the former employee, computed as hereinafter specified, to all former employees who left the service of a Participating Company after May 31, 1969 and before September 30, 1971 and at the time of termination of their employment were eligible for retirement on service pension with the approval of the Committee under any Predecessor Plan, but not at their own request. If the remaining balance in the Trust Fund shall be insufficient, in the judgment of the Company, to provide the full amount of the computed deferred vested pensions to employees in this group, the amount of the pension payment from the Trust Fund to each person in the group shall be reduced pro rata.
LA3:752821.27 160
(iv) To make provision, to the extent permitted by the balance, if any, remaining in the Trust Fund after the foregoing provisions shall have been made, for the payment of deferred vested pensions starting at age sixty-five and continuing until the death of the former employee, computed as hereinafter specified, to all employees who, as of the termination date, were not eligible for retirement on service pension but had reached the age of forty years and whose term of employment was fifteen or more years and all former employees who left the service of a Participating Company after May 31, 1969 at a time when they had reached the age of forty years and whose term of employment was fifteen or more years but who were not eligible for retirement on service pension with the approval of the Committee under this Plan or any Predecessor Plan. If the remaining balance in the Trust Fund shall be insufficient, in the judgment of the Company, to provide the full amount of the computed deferred vested pensions to employees in this group, the amount of pension payment from the Trust Fund to each person in the group shall be reduced pro rata.
(v) To make provision, to the extent permitted by the balance, if any, remaining in the Trust Fund after the foregoing provisions shall have been made, for the payment of deferred vested pensions starting at age sixty-five and continuing until the death of the former employee, computed as hereinafter specified, to all employees who, as of the termination date, were not eligible for retirement on service pension but whose calendar years of service after age eighteen were ten or more and all former employees who left the service of a Participating Company after January 1, 1976 at a time when their calendar years of service after age eighteen were ten or more but who were not eligible for retirement on service pension. If the remaining balance in the Trust Fund shall be insufficient in the judgment of the Company, to provide the full amount of the computed deferred pensions to employees in this group, the amount of pension payment from the Trust Fund to each person in the group shall be reduced pro rata.
(vi) To make provision, to the extent permitted by the balance, if any, remaining in the Trust Fund after the foregoing provisions shall have been made, for the payment of deferred pensions starting at age sixty-five and continuing until the death of the former employee, computed as hereinafter specified, to all employees not referred to in the preceding paragraphs who are participants in this Plan and whose calendar years of service after age eighteen were five or more years on the termination date. If the remaining balance in the Trust Fund shall be insufficient, in the judgment of the Company, to provide the full amount of the computed deferred pensions to employees in this group, the amount of the pension to each employee in the group shall be reduced pro rata.
(vii) If there is any remaining balance in the Trust Fund after making provision deemed adequate for the full amount of the pensions hereinbefore specified as payable in case of termination of the Plan, such balance shall be applied solely for pension purposes in an equitable manner consistent with the purposes of the Plan.
The deferred vested pensions, specified in this Section 11.2 as payable to Employees who have not yet reached normal retirement age and who have not yet become
LA3:752821.27 161
eligible as of the termination date for retirement with a service pension, and to Former Employees shall be computed, without allowance for any payment upon the death of the Employee, in accordance with the provisions of Article V except that, subject to Code Section 411(d)(6), the Term of Employment and Pension Calculation Service used in the computation shall end as of the date of termination of the Plan, the Final Average Compensation or average monthly earnings, if applicable, used in the computation shall in every case be based on the applicable five consecutive year period prior to the date of termination of the Plan, or termination of employment if earlier during which the employee was paid the highest rate of wages and any provisions relating to minimum pensions shall not apply. Subject to Code Section 411(d)(6), the payment of such deferred vested pension shall not be contingent upon the Participant’s being in the service of a Participating Company after the termination of the Plan. In all cases such deferred vested pensions shall be computed on the basis of the Participant’s age and Term of Employment, as of the termination date as shown by the records of the Participating Company which last employed such individual. The Company reserves the right to make provision out of the Trust Fund for any or all pensions specified in this paragraph through the purchase of annuities from an insurance company or in such other manner as the Company may determine. In the case of all pensions for which provision is made through the purchase of annuities from an insurance company, the delivery of an annuity contract to each person to who such pensions are payable shall serve to absolve the Company, any other Participating Company and the Trust Fund from any further obligations for the payment of such pensions. In the case of all pensions for which provision is not made through the purchase of annuities from an insurance company, the Company’s judgment as to the adequacy of the alternative provision made shall be final. If such alternative provision made, as of the termination date, for deferred vested pensions to persons not then on the pension roll or eligible to receive a pension at their own request should thereafter at any time appear, in the judgment of the Company, to be inadequate or more than sufficient to continue the payment of the amounts previously estimated to be payable, the remaining payments on all such pensions shall be adjusted pro rata in accordance with the remaining provision available.
(c) The benefits to be provided by the allocations outlined above in this section shall be fully vested and nonforfeitable as of the date of such termination of the Plan for distribution to the persons entitled thereto, and distribution may be accomplished through the continuance of the Trust Fund, or the creation of a new trust fund for that purpose, or by purchase of nontransferable annuity contracts, or by a combination thereof.
11.3. Restrictions on Distributions to Certain Participants.
(a) Restriction on Benefits. Upon termination of the Plan, the benefits for each Highly Compensated Employee and former Highly Compensated Employee shall be limited to a benefit that is not discriminatory under Code section 401(a)(4).
(b) Restrictions on Distributions. The annual payments to a member of the Highly Compensated Group (as defined in subsection (c) below) shall be restricted to an amount equal to the payments that would be made under a single life annuity that is the Actuarial Equivalent of the individual’s Accrued Benefit and other benefits under the Plan. However, the restrictions of this subsection (b) shall not apply if
LA3:752821.27 162
(i) after payment to a member of the Highly Compensated Group of all benefits (as defined in subsection (d) below), the value of Plan assets equals or exceeds 110% of the value of current liabilities (as defined in Code section 412(1)(7)), or
(ii) the value of the benefits (as defined in subsection (d) below) for a member of the Highly Compensated Group is less than one percent of the value of current liabilities.
(c) Highly Compensated Group. The restrictions in subsection (b) apply to Highly Compensated Employees and former Highly Compensated Employees (the “Highly Compensated Group”). If there are more than twenty-five individuals in the Highly Compensated Group in any Plan Year, the Highly Compensated Group for that Plan Year shall consist of only the twenty-five individuals with the greatest compensation for that Plan Year.
(d) Benefit Defined. For this purpose, the term “benefit” includes loans in excess of Code section 72(p)(2)(A), any periodic income, any withdrawal values payable to a living Participant, and any death benefits not provided for by insurance on the Participant’s life.
11.4. Amendment by the Company.
The Company expects this Plan to be permanent, but as future conditions cannot be foreseen it reserves the right to amend the Plan at any time, without prior notice to anyone. The Plan may be amended by a writing approved by the Company’s Board of Directors and signed on behalf of the Company by an officer of the Company duly authorized by the Board of Directors. The Plan may also be amended in writing by the Plan Design Committee or other persons(s)to the extent authority to amend the Plan has been delegated to the Plan Design Committee or such person(s) by the Board of Directors. Each amendment shall be effective on such date as the Company or its delegee may determine. No amendment or modification that affects the rights, powers, privileges, immunities or obligations of the Trustee may be made without the consent of the Trustee. Amendments may modify the rights and interests of Employees who are Participants in the Plan at the time thereof as well as future Participants but amendments may not diminish the accrued benefit (as defined in Section 411(d)(6) of the Code) of any Participant as of the effective date of such amendment.
11.5. Limitation on Reversions.
(a) Notwithstanding any other provisions of this Plan, the provisions of this Section 11.5 shall apply.
(b) If a “Change in Control” (as defined in 11.5(g)) occurs and the Plan is terminated prior to the fifth anniversary of such Change in Control, no Plan assets shall directly or indirectly revert to the Company or any other Participating Company, and any “Excess Assets” (as defined in subsection 11.5(f)) shall be used solely and exclusively for pension purposes in an equitable and non-discriminatory manner. For purposes of the preceding sentence, the use of Excess Assets to fund previously accrued post-retirement medical and life insurance benefits for Plan participants shall not be deemed a direct or indirect reversion to the
LA3:752821.27 163
Company or any other Participating Company to the extent that such use is otherwise permitted by law.
(c) Upon the occurrence of a Change in Control, the following provisions shall be applicable for the period commencing on the date on which a Change in Control occurs and ending on the earlier of the fifth anniversary of such date or the date on which the Plan does not have “Excess Assets” (the “Change in Control Period”):
(i) the Plan shall not be extended to any additional class of employees of the Company if the effect of such extension would be to substantially reduce the level of the Plan’s Excess Assets;
(ii) the aggregate rate at which monthly pension benefits are accrued under the Plan shall not be reduced and the assumptions for determining actuarial equivalencies under the Plan shall not be changed in a manner to reduce such rate by any amendment of the Plan; and
(iii) prior to any merger or consolidation of the Plan with any other plan, or transfer of assets or liabilities to any other plan other than pursuant to an Interchange Agreement, pension benefits shall be increased in an equitable and non-discriminatory manner to the extent required to eliminate any Excess Assets.
(d) The assets of the Pension Fund shall not be transferred to any successor trustee (whether by spinoff, merger, consolidation, transfer of assets, or otherwise) or to any other funding vehicle unless the trustee is a corporate trustee that has trust assets in excess of ten billion dollars and such successor trustee specifically agrees in writing to comply with the provisions of this Section 11.5.
(e) The provisions of this Section 11.5 may not be amended during a Change in Control Period without the written consent of a majority of both (1) the Plan Participants who were actively employed by all Participating Companies immediately prior to the Change in Control, and (2) the Plan Participants who are actively employed by all Participating Companies at the date of such amendment. A Participant shall not be deemed to have consented to any amendments affecting this 11.5 unless actual written consent is received by the Company.
(f) If the Plan is terminated, “Excess Assets” shall mean the excess of the fair market value of Plan assets over the present value of all Plan liabilities with respect to Participants and their beneficiaries and the satisfaction of all expenses of the Plan, determined on a termination basis, using the assumptions used by the Pension Benefit Guaranty Corporation to value benefits under pension plans terminating on that date. For any other purpose, the term “Excess Assets” as of any date mans the excess of the fair market value of Plan assets over the lesser of (1) the present value of all Plan liabilities with respect to Participants and their beneficiaries and the satisfaction of all expenses of the Plan, determined on a termination basis, using the assumptions used by the Pension Benefit Guaranty Corporation to value benefits under pension plans terminating on that date, or (2) the present value of all Plan liabilities with respect to Participants and their beneficiaries and the satisfaction of all expenses to the Plan, determined
LA3:752821.27 164
on the basis of assumptions (as certified by the enrolled Actuary of the Plan who was the enrolled Actuary immediately prior to the Change in Control) in effect on that date for purposes of determining actuarial equivalencies under the Plan.
(g) For purposes of this Section 11.5, a “Change in Control” shall be deemed to have occurred if a change in the beneficial ownership of the Company’s voting stock or a change in the composition of the Company’s Board of Directors is the result of any of the following:
(i) any “person” (as such term is used in sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934) is or becomes a beneficial owner of (or otherwise has the authority to vote), directly or indirectly, stock representing 20% or more of the total voting power of the Company’s then outstanding stock, unless through a transaction arranged by, or consummated with the prior approval of the Board of Directors of the Company;
(ii) if a tender offer (for which a filing has been made with the Securities and Exchange Commission which purports to comply with the requirements of section 14(d) of the Securities Exchange Act of 1934 and the corresponding Securities and Exchange Commission rules) is made for the stock of the Company, which has not been arranged by or consummated with the prior approval of the Board of Directors of the Company, then upon the first to occur: either (i) any time during the offer when the person (using the definition in (g)(i) above) making the offer owns or has accepted for payment stock of the Company with 20% or more of the total voting power of the Company’s voting stock, or (ii) three business days before the offer is to terminate unless the offer is withdrawn first if the person making the offer could own, by the terms of the offer plus any shares owned by this person, stock with 50% or more of the total voting power of the Company’s stock when the offer terminates; or
(iii) any period of two consecutive calendar years during which there shall cease to be a majority of the Board of Directors comprised as follows: individuals who at the beginning of such period constitute the Board of Directors and any new director(s) whose election by the Board of Directors or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved. Notwithstanding the foregoing, a Change in Control shall not occur under this clause (iii) as a result of a merger, consolidation or share exchange in which the Company is not the surviving corporation; and
(iv) upon the occurrence of either (i), (ii) or (iii) of this Section 11.5, the Company shall give written notice to the Trustee of such event.
The various transactions contemplated by the Agreement and Plan of Merger dated as of July 18, 1999 by and between Qwest Communications International Inc. and U S WEST, Inc. shall not be treated as a Change in Control for purposes of this Section 11.5(g).
LA3:752821.27 165
11.6. Plan Merger or Consolidation.
In the case of any merger or consolidation with, or transfer of any assets or liabilities to, any other plan, each Participant in this Plan must be entitled to receive (if the surviving plan is then terminated) a benefit immediately after the merger, consolidation, or transfer that is equal to or greater than the benefit he or she would have been entitled to receive immediately before such merger, consolidation, or transfer (if this Plan had terminated). Any such merger or consolidation with, or transfer of any assets or liabilities to, any other plan shall be to a plan qualified under Code section 401(a) and shall be subject to the approval of the Plan Design Committee or its designee. In the event of a transfer of Plan assets pursuant to this Section, any corresponding benefit liabilities shall also be transferred.
At the discretion of the Company or Plan Design Committee, the Plan shall accept assets transferred directly from a plan qualified under Code section 401(a).
ARTICLE XII
TOP-HEAVY PROVISIONS
12.1. Application of Top-Heavy Provisions.
The provisions of this Article XII shall be applicable only if the Plan becomes “top-heavy” as defined below for any Plan Year beginning after December 31, 1983. If the Plan becomes “top-heavy” as of the determination date for a Plan Year, the provisions of this Article shall apply to the Plan effective as of the first day of such Plan Year and shall continue to apply to the Plan (whether or not the plan ceases to be “top-heavy”) until the Plan is terminated or otherwise amended.
12.2. Definitions.
Notwithstanding any other provision of the Plan to the contrary, when used in this Article the following terms shall have the meaning set forth below:
(a) “Accrued Benefit” means a Participant’s Accrued Benefit determined in accordance with the provisions of the Plan and using the actuarial assumptions set forth on Appendix A as of the most recent valuation date that falls within or ends with the 12-month period ending on the Determination Date.
(b) “Average Special Compensation” means the highest average annual compensation that can be obtained by averaging a Participant’s Special Compensation over any five consecutive calendar years of his service. For the purpose of computing Average Special Compensation, Special Compensation in years before January 1, 1984 and in years after the close of the last Plan Year in which the Plan is top-heavy may be disregarded.
LA3:752821.27 166
(c) “Determination Date” means, with respect to each Plan Year, the last day of the preceding Plan Year; provided however, that in the case of the first Plan Year of the Plan, the determination date shall be the last day of such Plan Year.
(d) “Key Employee” shall have the meaning set forth in Code section 416(i)(1) and the regulations promulgated thereunder.
(e) “Non-key Employee” means any Employee who is not a Key Employee.
(f) “Permissive Aggregation Group” means the Required Aggregation Group of plans plus any other plan or plans of the Company which, when considered as a group with the Required Aggregation Group, would continue to satisfy the requirements of Code sections 401(a)(4) and 410.
(g) “Required Aggregation Group” means each qualified plan of the Company in which at least one Key Employee participates or participated at any time during the Determination Period (regardless of whether the plan terminated) and any other qualified plan of the Company that enables the plan described above to meet the requirements of Code sections 401(a)(4) or 410.
(h) “Special Compensation” shall have the meaning set forth in Section 1.10(a).
(i) “Valuation Date” means the annual date on which the assets and liabilities of the Plan are valued, which shall be the last day of each Plan Year.
12.3. Determination of Top-Heavy Status.
The Plan shall be considered “top-heavy” for a Plan Year if, as of the Determination Date for that Plan Year, the aggregate of the present values of the Accrued Benefits of Key Employees under the Plan (and under all other plans required or permitted to be aggregated with this Plan) exceeds 60% of the aggregate of the present values of the Accrued Benefits of all Employees under the Plan (and under all other plans required or permitted to be aggregated with this Plan). For purposes of determining the account balance or the present value of the Accrued Benefit of any Employee, distributions made with respect to such Employee within a five-year period ending on the Determination Date must be included. This shall also 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. However, if any individual has not performed any service for any Employer maintaining the Plan (other than benefits under the Plan) at any time during the five-year period ending on the Determination Date, any Accrued Benefit for such individual (and the account of such individual) shall not be taken into account. Each plan of the Company in which a Key Employee participates and each other Plan of the Company that enables this Plan to meet the requirements of Code sections 401(a) or 410 is required to be aggregated to test for top-heaviness. Plans of the Company, which, when considered with this Plan and other plans of the Company that are required to be aggregated with this Plan, would continue to satisfy the requirements of Code sections 401(a) and 410 may be
LA3:752821.27 167
aggregated to test for top-heaviness. If one or more of the Plans required or permitted to be aggregated with this Plan is a defined contribution plan, the Plan will be top-heavy if the sum of the aggregate present values of the Accrued Benefits of the Key Employees under the Plan (and under all other plans required or permitted to be aggregated with this Plan) and the aggregate account balances of the Key Employees under the defined contribution plan or plans required or permitted to be aggregated with this Plan exceeds 60% of the sum of the aggregate present values of the Accrued Benefits of all Employees under the Plan (and under all other plans required or permitted to be aggregated with this Plan) and the aggregate account balance of all Employees under the defined benefit plan or plans required or permitted to be aggregated with this Plan. The foregoing top-heavy ratio shall be computed in accordance with the provisions of Code section 416(g), together with the regulations and rulings thereunder. For purposes of determining whether the plan is top-heavy, the actuarial assumptions set forth on Appendix A shall be used.
12.4. Special Vesting Rule.
Notwithstanding the provisions of Section 5.3 hereof to the contrary, a Participant shall be fully vested upon the completion of six years of Vesting Service and shall be partially vested beginning upon the completion of two years of Vesting Service, as determined in accordance with the following schedule:
Years of Vesting Service Vested Percentage
Fewer than 2 years 0% 2 20% 3 40% 4 60% 5 80% 6 years or more 100%
12.5. Special Minimum Benefit.
(a) Notwithstanding any other provisions of the Plan to the contrary, each Active Participant in the Plan who is not a Key Employee and who has completed a year of Benefit Service (whether or not such Participant is employed by the Company on the last day of the Plan Year, such Participant has made mandatory contributions to the Plan, or such Participant has satisfied any other requirement to accrue a benefit for such Plan Year) shall accrue a benefit (provided solely by Employer contributions and expressed as a life annuity commencing at Normal Retirement Age) of not less than 3 percent of his highest Average Special Compensation per year times the number of years of Benefit Service not to exceed ten (without regard to any offsets for benefits provided under Social Security provided for in Article V). For this purpose, service does not include service completed (i) in plan years beginning prior to January 1, 1984 or (ii) in years when the plan was not top-heavy. No additional benefit shall be accrued for a Participant for a Plan Year if the Participant’s Accrued Benefit for such Plan Year equals or exceeds 30 percent of Average Special Compensation.
LA3:752821.27 168
(b) The company also maintains the various defined contribution plans (the “Defined Contribution Plans”). Individuals who participate in this Plan and in the Defined Contribution Plans and who are Non-Key Employees shall be entitled to a minimum benefit provided for in this Section 12.5, subject to the terms of this Section 12.5. Individuals who participate only in one or more of the Defined Contribution Plans shall receive the minimum contribution provided for in the Defined Contribution Plans according to their terms.
12.6. Change in Top-Heavy Status.
If the Plan shall cease to be a “top-heavy” plan as defined in this Article, and if any change in the benefit structure, vesting schedule or other component of a Participant’s Accrued Benefit shall change as a result of such change in top-heavy status, the nonforfeitable portion of each Participant’s benefits shall not be decreased as a result of such change. In addition, each Participant with at least three years of service with the Company as of the date of such change, may elect to have his nonforfeitable percentage computed under the Plan without regard to such change in status. The period during which the election may be made shall commence on the date the Plan ceases to be a top-heavy plan and shall end on the later of (a) 60 days after the change in status occurs, (b) 60 days after the change in status becomes effective, or (c) 60 days after the Participant is issued written notice of the change by the Company or the Committee.
12.7. Super Top-Heavy Limitations.
In any plan year in which the top-heavy ratio, as computed in accordance with Section 12.3, exceeds 90% (i.e., the plan is super top-heavy), the denominators of the defined benefit fraction (as defined in Section 5C.2(f)) and the defined contribution fraction (as defined in Section 5C.2(f)) shall be computed using 100% of the dollar limitation instead of 125%.
12.8. Modification of the Top-Heavy Rules.
(a) Effective date. This section shall apply for purposes of determining whether the plan is a top-heavy plan under section 416(g) of the Code for plan years beginning after December 31, 2001, and whether the plan satisfies the minimum benefits requirements of section 416(c) of the Code for such years. This section amends the foregoing provisions of Article XII.
(b) New Key Employee Definition. A Key Employee means 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 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. 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.
LA3:752821.27 169
(c) Determination of present values and amounts. This subsection (c) 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.
(1) Distributions during year ending on the determination date. 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 separation from service, death, or disability, this provision shall be applied by substituting "5-year period" for "1-year period."
(2) Employees not performing services during year ending on the determination date. 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.
(c) Minimum benefits. For purposes of satisfying the minimum benefit requirements of section 416(c)(1) of the Code and the plan, in determining years of service with the employer, any service with the employer shall be disregarded to the extent that such service occurs during a plan year when the plan benefits (within the meaning of section 410(b) of the Code) no key employee or former key employee.
ARTICLE XIII
MISCELLANEOUS
13.1. Right to Dismiss Employees.
The Company or any of its subsidiaries may terminate the employment of any Employee as freely and with the same effect as if this Plan were not in existence. Participation in this Plan by an Employee shall not constitute an express or implied contract of employment between an Employee and the Company or any of its subsidiaries.
13.2. Claims Procedure.
(a) Rules Before January 1, 2002.
(1) All claims for benefits shall be filed in writing by the Participant, the Participant’s beneficiary, or the authorized representative of the claimant, by completing such
LA3:752821.27 170
procedures as the Committee shall require. Such procedures shall be reasonable and may include the completion of forms and the submission of documents and additional information.
(2) The Committee shall review all materials and decide whether to approve or deny the claim. If a claim is denied in whole or in part, written notice of denial shall be furnished by the Committee to the claimant within 90 days after the receipt of the claim by the Committee, unless special circumstances require an extension of time for processing the claim, in which event notification of the extension shall be provided to the Participant (prior to the expiration of the 90-day period) or beneficiary and the extension shall not exceed 90 days. (If a notice is not provided within the foregoing time periods, the claim shall be considered denied.) Such written notice shall set forth the specific reasons for such denial, specific reference to pertinent Plan provisions, a description of any additional material or information necessary for the claimant to perfect his claim and an explanation of why such material or information is necessary, all written in a manner calculated to be understood by the claimant. Such notice shall include appropriate information as to the steps to be taken if the claimant wishes to submit his claim for review. The claimant or the claimant’s authorized representative may request such a review upon written application. The claimant may review pertinent documents and may submit issues or comments in writing. The claimant or the claimant’s duly authorized representative must request such review within the reasonable period of time prescribed by the Committee. In no event shall such a period of time be less than 60 days.
(3) A decision on review shall be rendered within 60 days after the receipt of the request for review by the Committee. If special circumstances require a further extension of time for processing, a decision shall be rendered not later than 120 days following the Committee’s receipt of the request for review. If such an extension of time of review is required, written notice of the extension shall be furnished to the claimant. The decision of the Committee shall be furnished to the claimant in writing and shall include specific reasons for the decision, written in a manner calculated to be understood by the claimant, as well as specific references to the pertinent Plan provisions on which the decision is based. (If the decision on review is not furnished within the foregoing time periods, the claim shall be considered denied on review.)
(4) The Committee shall each have full discretionary authority to determine eligibility, status and rights of all persons under the Plan and to construe any and all terms of the Plan.
(b) Claims Procedures Effective January 1, 2002. Notwithstanding the foregoing, the following procedure will apply with respect to claims filed on and after January 1, 2002:
(1) Definitions. For purposes of this section, the following terms shall have the meanings set forth below:
(A) Adverse Benefit Determination. Adverse Benefit Determination means the denial of a claim. It does not encompass the amendment or termination of the Plan. However, it also includes any denial, reduction or termination of benefits or a failure to provide or make payment (in whole or in part) for a benefit and any denial, reduction,
LA3:752821.27 171
termination or failure to provide or make a payment that is based upon on a determination of a Participant’s or beneficiary’s eligibility to participate in a Plan.
(B) Claimant. Claimant means either a Plan Participant or a beneficiary of a Plan Participant with respect to whom a benefits determination is being or has been made.
(C) Notice, Notify or Notification. Notice, Notify or Notification means the delivery or furnishing of information to an individual in a manner that satisfies the standards of ERISA’s regulations on disclosure (29 C.F.R. § 2520.104b-1(b)).
(D) Relevant Document. A document, record or other information is considered “relevant” to a Participant’s benefit claim if such document, record or other information was relied upon in making the benefit determination; was submitted, considered or generated in the course of making the benefit determination, without regard to whether such document, record or other information was relied upon in making the benefit determination; or demonstrates compliance with the administrative processes and safe-guards required to assure consistent application of Plan provisions with respect to similarly-situated Claimants.
(2) Filing of Claim. Any Participant, beneficiary, or his duly authorized representative may file a claim for a Plan benefit to which the Claimant believes that he is entitled. Such a claim must be in writing and delivered to the Committee, or its delegate. Delivery of the claim must be made by first class mail, postage prepaid, or electronically or by facsimile.
(3) Initial Determination of Claim.
(A) Within a reasonable period of time, but not later than 90 days after receipt of such claim, the Committee or its delegate shall Notify the Claimant, of the determination on the claim, whether granting or denying, in whole or in part, unless special circumstances require an extension of time for processing the claim. In no event may the extension period exceed 90 days from the end of the initial period. If an extension is necessary, the Claimant will be given a written notice to this effect prior to the expiration of the initial 90-day period. The Notice will explain the special circumstances requiring the extension and date by which the Committee or its delegate expects to render a determination on the claim.
(B) The Committee or its delegate has full discretion to deny or grant a claim in whole or in part. Such decisions shall be made in accordance with the Plan document and, where appropriate, Plan provisions will be applied consistently with respect to similarly situated Claimants. The Committee shall have the discretion to determine which Claimants are similarly situated. If Notice regarding a claim is not furnished in accordance with this paragraph (B), the claim will be deemed denied and the Claimant will be permitted to exercise his right of review pursuant to paragraph (5) of this section.
LA3:752821.27 172
(4) Duty of Committee Upon an Adverse Benefit Determination. The Committee or its delegate will provide to every Claimant who has received an Adverse Benefit Determination, written Notice setting forth in a manner calculated to be understood by the Claimant: (A) the specific reason or reasons for the denial; (B) reference to the specific Plan provisions on which the Adverse Benefit Determination is based; (C) a description of any additional material or information necessary for the Claimant to perfect the claim and an explanation of why the material or information is necessary; and (D) an explanation of the Plan's claim review procedures and the time limits applicable to such procedures, including a statement of the Claimant’s right to bring a civil action under Section 502(c) of ERISA following an Adverse Benefit Determination.
(5) Request for Review Of An Adverse Benefit Determination. Within 60 days after receipt by the Claimant of written Notification of the Adverse Benefit Determination, the Claimant or his duly authorized representative, upon written application to the Committee, may request the Committee to review the Adverse Benefit Determination, to review Relevant Documents and to submit issues and comments in writing. Delivery of the request for review of the Adverse Benefit Determination must be made by first class mail, postage prepaid, or electronically or by facsimile.
On review of an Adverse Benefit Determination, upon request and free of charge, Claimants will have reasonable access to, and copies of, all documents, records and other information relevant to a Claimant’s claim for benefits.
(6) Decision on Review.
(A) The Committee or its delegate shall make a prompt decision on review and shall have full discretion to deny or grant an appeal in whole or in part. The decision on review shall be written in a manner calculated to be understood by the Claimant, and shall include specific reasons for the decision and references to the specific Plan provisions on which the decision is based. The decision on review shall be made not later than 60 days after the Committee’s receipt of a request for a review, unless special circumstances require an extension of time for processing. In no event may the extension period exceed 60 days from the end of the initial period. If an extension is necessary, the Claimant will be given a written Notice to this effect prior to the expiration of the initial 60-day period. The Notice will explain the special circumstances requiring the extension and date by which the Committee or its delegate expect to render a determination on the claim. If Notice of the decision on the review is not furnished in accordance with this section 13.2(b)(vi), the claim shall be deemed to have been denied and the Claimant shall be permitted to exercise his right to legal remedy pursuant to section 13.2(b)(vii).
(B) The Committee’s (or delegate’s) review will take into account all comments, documents, records and other information submitted regardless of whether the information was previously considered on initial review. Such decisions shall be made in accordance with the Plan document and, where appropriate, Plan provisions will be applied consistently with respect to similarly situated Claimants. The Committee shall have the discretion to determine which Claimants are similarly situated.
LA3:752821.27 173
(C) On review of an Adverse Benefit Determination, upon request and free of charge, Claimants will have reasonable access to, and copies of, all documents, records and other information relevant to a Claimant’s claim for benefits.
(D) With respect to a claim for disability benefits, the Committee or its delegate shall: provide Claimants at least 180 days following receipt of a notification of an Adverse Benefit Determination within which to appeal the determination; provide for a review that does not afford deference to the initial Adverse Benefit Determination and that is conducted by an appropriate named fiduciary of the Plan who is neither the member of the Committee or its delegate who made the Adverse Benefit Determination that is the subject of the appeal, nor the subordinate of such individual; provide that, in deciding an appeal of any Adverse Benefit Determination that is based in whole or in part on a medical judgment, the appropriate named fiduciary shall consult with a health care professional who has appropriate training and experience in the field of medicine involved in the medical judgment; provide for the identification of medical or vocational experts whose advice was obtained on behalf of the Plan in connection with a Claimant’s Adverse Benefit Determination, without regard to whether the advice was relied upon in making the benefit determination; provide that the health care professional engaged for purposes of a consultation as described in this section shall be an individual who is neither an individual who was consulted in connection with the Adverse Benefit Determination that is the subject of the appeal, nor the subordinate of any such individual. Notice of a decision on review shall be made to the Claimant in accordance with section 13.2(b)(6)(A) except that 45 days shall apply instead of 60 days where it appears in that section.
(E) Notice of Adverse Benefit Determination on appeal must contain the following: the specific reason or reasons for the Adverse Benefit Determination; reference to the specific Plan provisions on which the Adverse Benefit Determination is based; and a statement of the Claimant’s right to bring a civil action under Section 502(c) of ERISA following an Adverse Benefit Determination.
(7) Legal Remedy. After exhausting the claims procedure as provided under this Plan, nothing shall prevent any person from pursuing any other legal remedy.
13.3. Forms of Notices.
Wherever provision is made in the Plan for the filing of any notice, election or designation by a Participant, the action of such Participant shall be evidenced by the execution of such form as the Committee may prescribe for the purpose.
13.4. Applicable Law.
This Plan shall be construed and regulated by ERISA, and to the extent applicable, the laws of the State of Colorado.
LA3:752821.27 174
13.5. Inalienability of Benefits - Domestic Relations Orders.
(a) Except as provided below, no Participant or beneficiary shall have any right to assign, transfer, hypothecate, encumber or anticipate his interest in any benefits under this Plan, nor shall such benefits be subject to any legal process to levy upon or attach the same for payment of any claim against any such Participant or beneficiary.
(b) Subsection (a) shall apply to the creation, assignment, or recognition of a right to any benefit payable with respect to a Participant pursuant to a domestic relations order unless such domestic relations order is a “qualified domestic relations order” within the meaning of Code section 414(p) and ERISA section 206(d), in which case the Plan shall make payment of benefits in accordance with the applicable requirements of any such qualified domestic relations order. Whether a domestic relations order is a qualified domestic relations order shall be determined by the Committee pursuant to procedures adopted and applied in compliance with Code section 414(p) and ERISA section 206(d).
(c) Subsection (a) shall not apply to any amount that the Participant is ordered or required to pay under a judgment, order, decree or settlement described in ERISA §206(d)(4), subject to the joint and survivor requirements of ERISA §206(d)(4)(C), if applicable.
(d) Compliance with a federal tax levy pursuant to Code section 6331 or the collection by the United States on a judgment resulting from an unpaid tax assessment shall not be considered a violation of this Section.
13.6. Payments Due Minors or Incapacitated Persons.
If any person entitled to a payment under the Plan is a minor, or if the Committee determines that any such person is incapacitated by reason of physical or mental disability, whether or not legally adjudicated an incompetent, the Committee shall have the power to cause the payments becoming due to such person to be made to the legal guardian or conservator of such person, or if none, to a parent of a minor or the responsible adult with whom a minor maintains his residence or to the custodian for a minor under the Uniform Gifts to Minors Act (or Gift to Minors Act), if permitted by the laws of the state in which the minor resides. Payments made pursuant to such power shall operate as a complete discharge of the Trust Fund, the Trustee and the Committee.
13.7. Uniformity of Application.
The provisions of this Plan shall be applied in a uniform and non-discriminatory manner in accordance with rules adopted by the Committee which shall be systematically followed and consistently applied so that all persons similarly situated shall be treated alike.
13.8. Disposition of Unclaimed Payments.
Any communication, statement or notice addressed to a Participant or beneficiary at his last post office address filed with the Committee, or if no address is filed with the
LA3:752821.27 175
Committee then at his last post office address as shown on the Participating Company’s records, shall be binding on the Participant and his beneficiaries for all purposes of the Plan. Neither the Committee nor the Trustee shall be required to search for or locate a Participant or beneficiary. If the Committee notifies a Participant or Beneficiary that he is entitled to a distribution and also notifies him of the provisions of this section, and the Participant or beneficiary fails to claim his benefits under the Plan or make his address known to the Committee within three calendar years after the notification, the Participant’s Accrued Benefit under the Plan shall be forfeited and used to reduce future contributions to the Plan. Upon termination of the Plan, the Participant’s Accrued Benefit shall be forfeited and shall be applied solely for pension purposes in an equitable manner consistent with the purposes of the Plan, as provided in Section 11.2(b). If either the Participant or beneficiary makes proper claim for the previously forfeited Accrued Benefit at any time, the Participating Company that last employed the Participant shall pay the Accrued Benefit to the Plan, which shall pay the Accrued Benefit to the Participant or beneficiary. Any such payment shall constitute a complete payment of the Participant’s Accrued Benefit under the Plan, and the Participant shall thereafter have no rights under this Plan.
13.9. Time of Payment.
(a) Unless a Participant otherwise elects, the payment of a benefit to which he has become entitled must begin not later than the 60th day after the close of the latest of the following Plan Years:
(i) the Plan Year in which the Participant attains Normal Retirement Age,
(ii) the Plan Year in which occurs the tenth anniversary of the Year in which the Participant commenced participation, or
(iii) the Plan Year in which the Participant terminates service with his Employer.
(b) Notwithstanding the foregoing, the entire interest of a Participant in the Plan will be distributed (i) to such Participant not later than the Required Beginning Date, or (ii) beginning not later than the Required Beginning Date, in accordance with Regulations issued by the Secretary of Treasury, over the life of such Participant or over the lives of such Participant and a designated beneficiary (or over a period not extending beyond the life expectancy of such Participant or the life expectancy of such Participant and a designated beneficiary).
(c) If the distribution of a Participant’s interest has begun in accordance with subsection (b) and if the Participant dies before his entire interest has been distributed to him, the remaining portion of such interest must be distributed at least as rapidly as under the method of distributions being used under subsection (b) as of the date of the Participant’s death. If a Participant dies before the distribution of the Participant’s interest has begun in accordance with subsection (b), the Participant’s entire interest will be distributed within five years after the death of such Participant. Notwithstanding the foregoing sentence, if any portion of the Participant’s interest is payable to (or for the benefit of) a designated beneficiary, and if such portion will be
LA3:752821.27 176
distributed (in accordance with the Regulations to be issued by the Secretary of the Treasury) over the life of such designated beneficiary (or over a period not extending beyond the life expectancy of such beneficiary), and if such distributions begin not later than one year after the date of the Participant’s death or such later date as the Secretary of the Treasury may by Regulations prescribe, then for purposes of this sentence any portion of the Participant’s interest payable to (or for the benefit of) a designated beneficiary shall be treated as distributed on the date on which such distributions begin. Notwithstanding the foregoing, if the designated beneficiary referred to in the preceding sentence is the surviving Spouse of the Participant, the date on which the distributions are required to begin under the foregoing sentence shall not be earlier than the date on which the Participant would have attained age 70-1/2 and, if the surviving Spouse dies before the distributions to the Spouse begin, this provision shall be applied as if the surviving Spouse were the Participant.
(d) For purposes of the foregoing subsections, the following definitions shall apply:
(i) The life expectancy of a Participant and the Participant’s Spouse (other than in the case of a life annuity) may be redetermined but not more frequently than annually.
(ii) For purposes of this subsection, the term “designated beneficiary” means any individual designated as a beneficiary by the Participant or by the terms of the Plan.
(e) Notwithstanding the foregoing, distribution of a Participant’s Accrued Benefit, including a Participant who is a key employee in a top-heavy plan, may be made in accordance with the following (regardless of when such distribution commences):
(i) the distribution is one that would not have disqualified the Plan under section 401(a)(9) of the Internal Revenue Code prior to its amendment by the Tax Equity and Fiscal Responsibility Act of 1982,
(ii) the distribution is in accordance with a method of distribution designated by the Participant whose interest in the Plan is being distributed, or if the Participant is deceased, by a beneficiary of such Participant,
(iii) the designation was in writing, was signed by the Participant or beneficiary, and was made before January 1, 1984, and
(iv) the Participant had accrued a benefit under the plan as of December 31, 1983.
(f) In the case of a Participant who is employed by a Participating Company after his Required Beginning Date, pursuant to Prop. Reg. § 1.411(b)-2(b)(4)(ii), the benefit shall be increased, beginning with the payment for January of each year, to reflect the total benefit earned at the close of the prior year (whether under Article V or Appendix I or Appendix N) as if
LA3:752821.27 177
the Participant did not previously commence benefits; such amount shall be reduced by the DLS Equivalent of the benefit distributions made to the Participant by the close of the prior Plan Year. However, the benefit shall not be decreased below the amount previously in pay status.
13.10. Offset for Payments Under Law.
If a Participant or an Employee receives a payment under any workers’ compensation law now in force or enacted in the future (a “Statutory Payment”), any disability pension (but not a service or deferred vested pension) or death benefits arising out of an on the job accident payable under this Plan prior to August 1, 1998 shall be reduced by the amount of the Statutory Payment that is attributable to the replacement of lost wages. Provided, however, that no amount payable under this Plan shall be reduced by any governmental benefit or pension payable on account of military service after May 31, 1969, or by any benefits payable under the Social Security Act. If a Participant or an Employee receives a retroactive award that covers a period when the individual was receiving payments from the Plan, future payments from the Plan shall also be offset to recoup the amount that is attributable to the prior period when the individual was receiving payments from the Plan. Notwithstanding the foregoing provisions of this Section 13.10, said provisions shall not apply to Modified Disability Pensions, the terms of which are governed by Appendix J.
13.11. Gender and Number.
Whenever used herein, words in any gender shall be deemed to include the other genders, and the singular shall be deemed to include the plural and vice versa, unless the context expressly indicates otherwise.
13.12. Claims Release.
In case of accident resulting in death of an employee which entitles his beneficiaries or his annuitant to benefits under this Plan, they may elect to accept such benefits or to prosecute such claims at law as they may have against the Participating Company that employed such individual. If election is made to accept the benefits, such election shall be in writing and shall release the Company or other Participating Companies, as applicable, from all claims and demands which the Employee had, and his beneficiaries or his annuitant may have against them, otherwise than under this Plan, on account of such accident. If any persons other than the beneficiaries under this Plan might legally assert claims against a Participating Company on account of the death of the Employee, no part of the death benefit under this Plan shall be due or payable until there have also been delivered to the Committee, good and sufficient releases of all claims, arising from or growing out of the death of the Employee, which such other persons might legally assert against any Participating Company. The Committee, in its discretion, may require that the elections and releases above described shall release any other company connected with the accident, including the Company or any other Participating Company, as applicable, or any other Interchange Company. This requirement of an election between claims and benefits shall not apply in the case of Survivor Annuities under Article VI of the Plan.
LA3:752821.27 178
13.13. Damage Claims or Suits.
Should a claim other than under the Plan be presented or suit brought against any Participating Company or against any other company with which arrangements have been made directly or indirectly for interchange of benefit obligations, as described in Appendix B of the Plan, for damages on account of death of an employee, nothing shall be payable under Article VII of the Plan on account of such death except as provided in Section 13.14; provided, however, that the Committee may, in its discretion and upon such terms as it may prescribe, waive this provision if such claims be withdrawn or if such suit be discontinued, and provided further that this provision shall not preclude the payment of survivor annuities under Article VI.
13.14. Judgment or Settlement.
If any judgment is recovered against any Participating Company or any settlement is made of any claim or suit on account of the death of an Employee, and the amount which would otherwise have been payable under the Plan is greater than the amount paid on account of such judgment or settlement, the difference between the two amounts may, in the discretion of the Committee, as applicable, be distributed to the beneficiaries who would have received benefits under the Plan.
13.15. Payment from Trust Fund.
Except as expressly set forth in Sections 5A.2(e), 5C.2(h), and 7.8, and Appendix J, Section 3.4, in no event will any payments hereunder be the liability of either the Committee (or the Plan Design Committee or Investment Committee or QAM), the Company or a Participating Company, and all payments required shall be exclusively out of the Trust Fund held by the Trustee.
13.16. Cessation of Interest.
Upon the delivery to a Participant, Former Participant or retired Participant of a lump sum distribution or the sum of all installments, the interest of such Participant, Former Participant or retired Participant in the Plan and Trust shall thereupon cease.
ARTICLE XIV
HEALTH BENEFITS ACCOUNT
14.1. Establishment of Health Benefits Account.
(a) There is hereby established under the Plan a separate account to provide the health benefits payable pursuant to this Article XIV (the “Health Benefits Account”). The Health Benefits Account is intended to satisfy the requirements of Code Section 401(h). All amounts transferred or contributed to the Health Benefits Account and any income thereon shall be held in trust by the Trustee. Health benefits provided under the Plan, when added to any life
LA3:752821.27 179
insurance protection in the Plan, shall be subordinate to retirement benefits provided under the Plan. The balance of Plan assets not held in the Health Benefits Account shall be deemed held in the Plan’s general account (the “General Account”).
(b) The Health Benefits Account may be funded through transfers described in Section 14.2 below or contributions by the Company or any Participating Company. Any amounts contributed to the Health Benefits Account shall be reasonable and ascertainable. The Company or any Participating Company must, at the time it makes a contribution to the Plan, designate that portion of the contribution allocable to the Health Benefits Account. If an individual’s interest in the Health Benefits Account is forfeited prior to termination of the Plan an amount equal to the amount of the forfeiture must be applied as soon as possible to reduce Company and Participating Company contributions to fund the Health Benefits Account. The sum of the contributions made by the Company and Participating Companies to the Health Benefits Account and the contributions made by the Company and Participating Companies for life insurance protection under the Plan shall not exceed twenty-five percent (25%) of the total contributions made by the Company and Participating Companies to the General Account (excluding contributions to fund past service credits) on or after the date of the establishment of the Health Benefits Account.
(c) Prior to the satisfaction of all liabilities for health benefits under this Article XIV, no part of the Health Benefits Account shall be used for, or diverted to, any purpose other than providing such benefits. The exclusive means of providing benefits through the Health Benefits Account shall be reimbursement of the Company and any Participating Company for expenses incurred in providing health benefits for Retired Participants and their eligible spouses and dependents.
14.2. Amounts Transferred to Health Benefits Account.
(a) Not later than the last day of each Plan Year, the Company may direct the Trustee to transfer from the General Account to the Health Benefits Account an amount equal to the lesser of (i) an amount certified by the chief financial officer of the Company or his delegate to be not in excess of the reasonably estimated expenditures of the Company and any Participating Company for Qualified Current Retiree Health Liabilities for the Plan Year or (ii) the Excess Pension Assets of the Plan determined as of the Plan valuation date next preceding the date of the transfer. Each such transfer is intended to satisfy the requirements of Code Section 420 and shall be referred to hereinafter as a “Qualified Transfer.”
(b) After any Qualified Transfer and on or prior to the last day of the Plan Year which includes the date of the Qualified Transfer, the Trustee shall pay to the Company in cash from the Health Benefits Account an amount certified by the chief financial officer of the Company or his delegate to be not in excess of the expenditures of the Company and any Participating Company for Qualified Current Retiree Health Liabilities for the taxable year of the Company during which the Qualified Transfer was made. Amounts paid out of the Health Benefits Account will be treated as paid first out of transferred assets and income attributable to those assets.
LA3:752821.27 180
(c) No more than one Qualified Transfer may be made in each taxable year of the Company. No Qualified Transfer shall be made before January 1, 1997 or after December 31, 2005 or, if the effective date provisions applicable to Code Section 420 are amended, such later date as may be specified in such amendment.
14.3. Restrictions on Use of Amounts Transferred.
Amounts transferred to the Health Benefits Account pursuant to Section 14.2 (and any income thereon) shall be used only to pay Qualified Current Retiree Health Liabilities. Any amounts transferred to the Health Benefits Account pursuant to Section 14.2 (and any income thereon) which are not so used shall be transferred from the Health Benefits Account to the General Account.
14.4. Vesting of Accrued Benefits.
(a) The Accrued Benefit of each Participant who had not terminated employment with the Company and all Participating Companies as of the date of a Qualified Transfer shall become Vested and nonforfeitable in the same manner which would be required if the Plan had terminated immediately before such Qualified Transfer.
(b) In addition, the Accrued Benefit of each Participant who separated from the service of the Company and all Participating Companies during the one-year period ending on the date of a Qualified Transfer shall become Vested and nonforfeitable in the same manner which would be required if the Plan had terminated immediately before such separation. The amount of such Accrued Benefit, as well as any optional form of benefit payable to a Participant described in the preceding sentence, shall be calculated as of the Pension Effective Date, provided that, solely for those Participants who were not previously Vested, (1) any retroactive lump sum or annuity payment benefits shall be credited with interest, based on the “applicable interest rate” (as defined in Section 1.12C) in effect from time to time, from the Pension Effective Date until the last day of the Plan Year in which the Qualified Transfer occurs and (2) all such benefits shall be paid or commence to be paid as soon as practicable after the last day of the Plan Year in which the Qualified Transfer occurs.
14.5. Minimum Benefit and Minimum Cost Requirements.
(a) No Qualified Transfer shall be made unless each group health plan or arrangement under which Applicable Health Benefits are provided provides that the Applicable Health Benefits provided by the Company or a Participating Company during each taxable year of the Company during the Benefit Maintenance Period are substantially the same as the Applicable Health Benefits provided by the Company or a Participating Company during the taxable year immediately preceding the taxable year of the Company in which a Qualified Transfer is made.
(b) No Qualified Transfer shall be made unless each group health plan or arrangement under which Applicable Health Benefits are provided provides that the Applicable Employer Cost for each taxable year of the Company during the Cost Maintenance Period shall
LA3:752821.27 181
not be less than the higher of the Applicable Employer Cost for each year of the two taxable years of the Company immediately preceding the taxable year of the Company in which a Qualified Transfer is made.
(c) The Company may elect to have Section 14.5(a) or Section 14.5(b), whichever is applicable, applied separately with respect to individuals eligible for benefits under Title XVIII of the Social Security Act at any time during the taxable year and with respect to individuals not so eligible.
(d) Section 14.5(b) shall apply with respect to Qualified Transfers which occur after December 17, 1999 and Section 14.5(a) shall apply with respect to Qualified Transfers which occur on or before that date. Notwithstanding the foregoing, if the Cost Maintenance Period for any Qualified Transfer after December 17, 1999 includes any portion of a Benefit Maintenance Period for any Qualified Transfer on or before such date, Section 14.5(b) shall not apply to such portion of the Cost Maintenance Period (and such portion shall be treated as a Benefit Maintenance Period subject to Section 14.5(a).) Accordingly, the cost maintenance rules of Section 14.5(b) shall not apply until January 1, 2004.
14.6. Definitions.
(a) “Applicable Health Benefits” shall mean health benefits or coverage provided to (i) Retired Participants who, immediately before the Qualified Transfer, have satisfied the eligibility requirements for receipt of retiree health benefits (other than retirement from the Company) and (ii) their eligible spouses and dependents.
(b) “Benefit Maintenance Period” shall mean the five taxable years beginning with the taxable year of the Company in which the Qualified Transfer occurred.
(c) “Excess Pension Assets” shall mean the excess of:
(i) the amount determined under Section 412(c)(7)(A)(ii) of the Code (i.e., the lesser of (A) the fair market value of the Plan’s assets or (B) the value of such assets determined under Section 412(c)(2) of the Code); over
(ii) the greater of:
(A) the amount determined under Section 412(c)(7)(A)(i) of the Code (i.e., the lesser of (i) 150 percent of current liability or (ii) the accrued liability (including normal cost) under the Plan (determined under the entry age normal funding method if such accrued liability cannot be directly calculated under the funding method used for the Plan)); or
(B) 125 percent of current liability as defined in Section 412(c)(7)(B) of the Code (i.e., the meaning of the term “current liability” under Section 412(l)(7) of the Code determined without regard to subparagraphs (C) and (D) thereof and using the rate of interest used under Code Section 412(b)(5)(B)).
LA3:752821.27 182
(d) “Qualified Current Retiree Health Liabilities” shall mean, with respect to any taxable year of the Company:
(i) the aggregate amounts (including administrative expenses) which would have been allowable as a deduction to the Company or a Participating Company for such taxable year with respect to Applicable Health Benefits provided during such taxable year of the Company if: (1) such benefits were provided directly by the Company or a Participating Company, and (2) the Company or Participating Company used the cash receipts and disbursements method of accounting;
(ii) reduced by an amount which bears the same ratio to the amount determined under paragraph (i) above as the value (as of the close of the Plan Year preceding the year of the Qualified Transfer) of the assets in all health benefits accounts or welfare benefit funds (as defined in Section 419(e)(1) of the Code) set aside to pay for Qualified Current Retiree Health Liabilities bears to the present value of the Qualified Current Retiree Health Liabilities for all Plan Years (determined without regard to this paragraph (ii)).
For purposes of paragraph (i) above, benefits will be deemed provided at the time when such benefits would be includible in the gross income of the Retired Participants or spouses or dependents if provided directly by the Company or a Participating Company (or would be so includible but for any provision of the Code excluding such benefit from gross income).
(e) “Retired Participant” shall mean a Participant in the Plan, other than a key employee (within the meaning of Code Section 416(i)(1)), who has received a distribution of pension benefits, is receiving a distribution of pension benefits or has retired and is entitled to receive a future distribution of pension benefits from the Plan.
(f) “Applicable Employer Cost” shall mean, with respect to any taxable year of the Company, the amount determined by dividing: (i) the Qualified Current Retiree Health Liabilities of the Company for such taxable year (determined without regard to any reduction under paragraph (d)(ii) above, and in the case of a taxable year of the Company in which there was no Qualified Transfer, in the same manner as if there had been such a transfer at the end of the taxable year); by (ii) the number of individuals to whom coverage for Applicable Health Benefits was provided during such taxable year of the Company.
LA3:752821.27 183
(g) “Cost Maintenance Period” shall mean the period of five taxable years of the Company beginning with the taxable year in which the Qualified Transfer occurred. If a taxable year is in two or more Cost Maintenance Periods, Section 14.5(b) shall be applied by taking into account the highest Applicable Employer Cost required to be provided under Section 14.5(b) for such taxable year.
LA3:752821.27 A-1
APPENDIX A
ACTUARIAL ASSUMPTIONS AND ALTERNATIVE BENEFIT FORMS
1. Lump Sum of $5,000 ($3,500, if the Participant Terminated prior to 1999) or Less.
For Plan Years beginning on or after January 1, 1997, in the case of a lump sum payment pursuant to Section 6.7, the single sum present value shall be calculated using the DLS Factors.
2. Alternative Benefit Forms. The factors below shall not apply to the Occupational Part for Eligible Separations occurring prior to July 1, 2001 (except that they shall apply to the benefits set forth in Appendices O, P, Q, and R effective for notifications, on or after February 5, 2001, of termination of employment). In addition, the increasing annuity options shall only apply to the extent set forth in Section 6.4.
Participant’s
Age
50% Joint & Survivor
Annuity
100% Joint & Survivor
Annuity
10 Year Certain & Life
Increasing Life
Increasing 50% Joint & Survivor
Annuity
Increasing 100% Joint & Survivor
Annuity
15 0.99 0.98 0.99 0.76 0.75 0.74
16 0.99 0.98 0.99 0.76 0.75 0.74
17 0.99 0.98 0.99 0.77 0.76 0.75
18 0.99 0.98 0.99 0.77 0.76 0.75
19 0.99 0.98 0.99 0.77 0.76 0.75
20 0.99 0.98 0.99 0.77 0.76 0.75
21 0.99 0.98 0.99 0.77 0.76 0.75
22 0.99 0.98 0.99 0.77 0.76 0.75
23 0.99 0.98 0.99 0.77 0.76 0.75
24 0.99 0.98 0.99 0.77 0.76 0.75
25 0.99 0.98 0.99 0.77 0.76 0.75
26 0.99 0.98 0.99 0.77 0.76 0.75
27 0.99 0.98 0.99 0.78 0.77 0.76
28 0.99 0.98 0.99 0.78 0.77 0.76
29 0.99 0.98 0.99 0.78 0.77 0.76
30 0.99 0.98 0.99 0.78 0.77 0.76
31 0.99 0.98 0.99 0.78 0.77 0.76
LA3:752821.27 A-2
Participant’s
Age
50% Joint & Survivor
Annuity
100% Joint & Survivor
Annuity
10 Year Certain & Life
Increasing Life
Increasing 50% Joint & Survivor
Annuity
Increasing 100% Joint & Survivor
Annuity
32 0.99 0.98 0.99 0.78 0.77 0.76
33 0.99 0.98 0.99 0.78 0.77 0.76
34 0.99 0.98 0.99 0.78 0.77 0.76
35 0.99 0.98 0.99 0.79 0.78 0.77
36 0.99 0.98 0.99 0.79 0.78 0.77
37 0.99 0.98 0.99 0.79 0.78 0.77
38 0.99 0.98 0.99 0.79 0.78 0.77
39 0.99 0.98 0.99 0.79 0.78 0.77
40 0.98 0.96 0.99 0.79 0.77 0.76
41 0.98 0.96 0.99 0.80 0.78 0.77
42 0.98 0.96 0.99 0.80 0.78 0.77
43 0.98 0.96 0.99 0.80 0.78 0.77
44 0.98 0.96 0.99 0.80 0.78 0.77
45 0.98 0.96 0.99 0.80 0.78 0.77
46 0.98 0.96 0.99 0.81 0.79 0.78
47 0.97 0.94 0.99 0.81 0.79 0.76
48 0.97 0.94 0.99 0.81 0.79 0.76
49 0.97 0.94 0.99 0.81 0.79 0.76
50 0.97 0.94 0.99 0.82 0.80 0.77
51 0.97 0.94 0.99 0.82 0.80 0.77
52 0.96 0.92 0.99 0.82 0.79 0.75
53 0.96 0.92 0.99 0.82 0.79 0.75
54 0.96 0.92 0.99 0.83 0.80 0.76
55 0.96 0.92 0.99 0.83 0.80 0.76
56 0.95 0.90 0.99 0.83 0.79 0.75
57 0.95 0.90 0.99 0.84 0.80 0.76
58 0.95 0.90 0.98 0.84 0.80 0.76
59 0.95 0.90 0.98 0.84 0.80 0.76
60 0.94 0.88 0.98 0.84 0.79 0.74
LA3:752821.27 A-3
Participant’s
Age
50% Joint & Survivor
Annuity
100% Joint & Survivor
Annuity
10 Year Certain & Life
Increasing Life
Increasing 50% Joint & Survivor
Annuity
Increasing 100% Joint & Survivor
Annuity
61 0.94 0.88 0.98 0.85 0.80 0.75
62 0.94 0.88 0.97 0.85 0.80 0.75
63 0.93 0.86 0.97 0.85 0.79 0.73
64 0.93 0.86 0.96 0.86 0.80 0.74
65 0.92 0.84 0.96 0.86 0.79 0.72
66 0.92 0.84 0.95 0.86 0.79 0.72
67 0.91 0.82 0.95 0.87 0.79 0.71
68 0.91 0.82 0.95 0.87 0.79 0.71
69 0.90 0.80 0.95 0.87 0.78 0.70
70 0.90 0.80 0.95 0.88 0.79 0.70
71 0.90 0.80 0.95 0.88 0.79 0.70
72 0.90 0.80 0.95 0.89 0.80 0.71
73 or
Older
0.90 0.80 0.95 0.89 0.80 0.71
Factors Are Not Interpolated By Month.
3. With respect to any provision not described above — 8.00% compounded annually, 1994 Uninsured Pensioner Mortality Table blended 50%/50%.
LA3:752821.27 B-1
APPENDIX B
MANDATORY PORTABILITY AND INTERCHANGE AGREEMENTS
The Mandatory Portability Agreement, as amended, and all Interchange Agreements to which the Company is a party are hereby incorporated as if set forth fully in the Plan.
LA3:752821.27 C-1
APPENDIX C
RETIREMENT REDUCTION FACTORS FOR DEFERRED VESTED PENSIONS
(WITHOUT JOINT AND SURVIVOR ANNUITY ELECTION)
Completed Months of Age
0 1 2 3 4 5 6 7 8 9 10 11
Completed Years of Age 50 .24 .24 .24 .25 .25 .25 .25 .25 .25 .26 .26 .26 51 .26 .26 .26 .27 .27 .27 .27 .27 .27 .28 .28 .28 52 .28 .28 .29 .29 .29 .29 .30 .30 .30 .30 .31 .31 53 .31 .31 .32 .32 .32 .32 .33 .33 .33 .33 .34 .34 54 .34 .34 .35 .35 .35 .35 .36 .36 .36 .36 .37 .37 55 .37 .37 .38 .38 .38 .38 .39 .39 .39 .39 .40 .40 56 .40 .40 .41 .41 .41 .42 .42 .42 .43 .43 .43 .44 57 .44 .44 .45 .45 .45 .46 .46 .46 .47 .47 .47 .48 58 .48 .48 .49 .49 .50 .50 .51 .51 .51 .52 .52 .53 59 .53 .53 .54 .54 .55 .55 .56 .56 .56 .57 .57 .58 60 .58 .59 .59 .60 .60 .61 .62 .62 .63 .63 .64 .64 61 .65 .66 .66 .67 .67 .68 .69 .69 .70 .70 .71 .71 62 .72 .73 .73 .74 .75 .75 .76 .77 .77 .78 .79 .79 63 .80 .81 .82 .82 .83 .84 .85 .85 .86 .87 .88 .88 64 .89 .90 .91 .92 .93 .94 .95 .95 .96 .97 .98 .99 65 1.00
For Ages below Age 50, the following factors shall apply (factors will be interpolated by month), (1) effective January 1, 1997 for the Management Part and (2) for Applicable Occupational Participants, with respect to the Occupational Part:
Age Factor
20 0.03
21 0.03
22 0.03
23 0.03
24 0.03
25 0.04
26 0.04
LA3:752821.27 C-2
Age Factor
27 0.04
28 0.04
29 0.05
30 0.05
31 0.05
32 0.06
33 0.06
34 0.07
35 0.07
36 0.08
37 0.08
38 0.09
39 0.10
40 0.11
41 0.11
42 0.12
43 0.13
44 0.15
45 0.16
46 0.17
47 0.19
48 0.20
49 0.22
These factors are not used for purposes of Article V-E.
LA3:752821.27 D-1
APPENDIX D
RETIREMENT REDUCTION FACTORS FOR DEFERRED VESTED PENSIONS
(WITH 50% JOINT AND SURVIVOR ANNUITY ELECTION
Completed Months of Age
0 1 2 3 4 5 6 7 8 9 10 11
Completed Years of Age
50 .20 .20 .20 .20 .21 .21 .21 .21 .21 .22 .22 .22 51 .22 .22 .22 .22 .23 .23 .23 .23 .23 .24 .24 .24 52 .24 .24 .24 .24 .25 .25 .25 .25 .25 .26 .26 .26 53 .26 .26 .26 .27 .27 .27 .28 .28 .28 .28 .29 .29 54 .29 .29 .30 .30 .30 .30 .31 .31 .31 .31 .32 .32 55 .32 .32 .32 .33 .33 .33 .33 .33 .33 .34 .34 .34 56 .34 .34 .35 .35 .35 .35 .36 .36 .36 .36. .37 .37 57 .37 .37 .38 .38 .38 .39 .39 .39 .40 .40 .40 .41 58 .41 .41 .42 .42 .42 .43 .43 .43 .44 .44 .44 .45 59 .45 .45 .46 .46 .46 .47 .47 .47 .48 .48 .48 .49 60 .49 .50 .50 .51 .51 .52 .52 .53 .53 .54 .54 .55 61 .55 .56 .56 .57 .57 .58 .58 .59 .59 .60 .60 .61 62 .61 .62 .62 .63 .63 .64 .65 .65 .66 .66 .67 .67 63 .68 .69 .69 .70 .71 .71 .72 .73 .73 .74 .75 .75 64 .76 .77 .78 .78 .79 .80 .81 .81 .82 .83 .84 .84 65 .85
With respect to Applicable Occupational Participants, for ages below age 50, the relevant factor is determined by multiplying the applicable factor set forth in Appendix C by 85%.
With respect to the Management Part, this table does not generally apply to Eligible Separations occurring on or after January 1, 1997. With respect to the Occupational Part, this table does not apply to Eligible Separations occurring on or after July 1, 2001. With respect to such Participants, the relevant factor is determined by multiplying the applicable factor set forth in Appendix C by the applicable factor set forth in Appendix A.
LA3:752821.27 E-1
APPENDIX E
MERGER OF U S WEST PROFIT SHARING RETIREMENT PLAN
Effective August 1, 1985, the U S WEST Profit Sharing Retirement Plan (the “Profit Sharing Plan”) was merged into this Plan. The assets held under the trust agreement for the Profit Sharing Plan were transferred to and are now held under the trust agreement for this Plan and are administered as part of the trust created pursuant to this Plan. All benefits payable from the Profit Sharing Plan with respect to Communications Participants shall be payable from this Plan and shall be in addition to all other benefits payable under this Plan.
Accounts. Each participant’s account under the Profit Sharing Plan shall be maintained as a separate account under this Plan and shall be credited annually with interest at the rate earned by the trust under this Plan up through the December 31 prior to the date the Participant incurs an Eligible Separation. However, in no event shall the annual rate be less than 5%. Notwithstanding the foregoing, interest shall accrue at 5% per annum for the portion of the Plan Year in which an Eligible Separation occurs; no interest shall accrue on or after the date of the Eligible Separation.
Determination of Accrued Benefit. The accrued benefit under this Plan attributable to a participant’s account under the Profit Sharing Plan shall be a monthly amount payable as a single life annuity commencing on the Participant’s Normal Retirement Date (or, if later, the earlier of the Pension Effective Date or Required Beginning Date) that is the DLS Equivalent of the account described in the preceding paragraph (as of the Eligible Separation).
Vesting. A participant’s account shall vest according to the following schedule:
Less than 1 year 0% One year but less than two years 20% Two years but less than three years 40% Three years but less than four years 60% Four years but less than five years 80% Five or more years 100%
Notwithstanding the above schedule, the accrued benefit under this Plan attributable to a participant’s account under the Profit Sharing Plan shall become fully vested upon the participant’s death, disability or retirement.
Distributions. The accrued benefit under this Plan attributable to a participant’s account under the Profit Sharing Plan shall be payable under the terms of this Plan as if it were
LA3:752821.27 E-2
an additional Defined Lump Sum under Article V-D. Such benefit shall not be subject to Section 5C.2 and no special rules regarding service pensions shall apply.
Priority Treatment at Termination. The benefits provided by the Profit Sharing Plan on a termination basis just prior to the merger shall be payable in a priority category higher than the highest priority category in section 4044 of ERISA if this Plan is terminated within five years of the date of merger.
LA3:752821.27 F-1
APPENDIX F
PENSION BAND CONVERSION TABLES
TABLE I
Pension Bands in Effect Prior to August 1989
A B C D
For retirements effective on or after the date For retirements For retirements for the company effective on or effective on or listed in Item 1 after the date after the date For retirements below and prior to for the company for the company effective on or the dates listed in listed in Item 2 listed in Item 3 Pension Band after 10-01-85 Item 2 below below below
101 15.83 16.30 16.79 16.38 102 16.50 17.00 17.51 17.08 103 17.17 17.69 18.22 17.77 104 17.84 18.38 18.93 18.46 105 18.50 19.06 19.63 19.15 106 19.17 19.75 20.34 19.84 107 19.85 20.45 21.06 20.54 108 20.52 21.14 21.77 21.24 109 21.19 21.83 22.48 21.93 110 21.85 22.51 23.19 22.61 111 22.52 23.20 23.90 23.31 112 23.18 23.88 24.60 23.99 113 23.86 24.58 25.32 24.70 114 24.52 25.26 26.02 25.38 115 25.18 25.94 26.72 26.06 116 25.86 26.64 27.44 26.77 117 26.52 27.32 28.14 27.45 118 27.19 28.01 28.85 28.14 119 27.86 28.70 29.56 28.84 120 28.53 29.39 30.27 29.53 121 29.19 30.07 30.97 30.21 122 29.87 30.77 31.69 30.92 123 30.53 31.45 32.39 31.60 124 31.19 32.13 33.09 32.28 125 31.87 32.83 33.81 32.99
LA3:752821.27 F-2
A B C D
For retirements effective on or after the date For retirements For retirements for the company effective on or effective on or listed in Item 1 after the date after the date For retirements below and prior to for the company for the company effective on or the dates listed in listed in Item 2 listed in Item 3 Pension Band after 10-01-85 Item 2 below below below
126 32.53 33.51 34.52 33.67 127 33.20 34.20 35.23 34.36 128 33.87 34.89 35.94 35.06 129 34.54 35.58 36.65 35.75 130 35.20 36.26 37.35 36.43 131 35.88 36.96 38.07 37.14 132 36.54 37.64 38.77 37.82 133 37.21 38.33 39.48 38.51 134 37.88 39.02 40.19 39.20 135 38.54 39.70 40.89 39.89 If Retired Then Refer On or After To Column Item 1: Mountain Bell CWA/IBEW 02-01-87 - B
Mountain Bell Service Link CWA Corporate Communications CWA 03-01-87 - B Pacific Northwest Bell CWA/ORTT 02-01-87 - B Material Resources CWA 03-01-87 - B U S WEST Direct CWA-Prod. & Sales 10-01-87 - B Northwestern Bell CWA 01-01-87 - B (Retirements Prior to Above Dates - Refer to Column A) Item 2: Mountain Bell CWA/IBEW 02-01-89 - C Corporate Communications CWA 03-01-89 - C Pacific Northwest Bell CWA/ORTT 02-01-89 - C Material Resources OWA 03-01-89 - C U S WEST Direct CWA-Prod. & Sales 10-01-89 - C Northwestern Bell CWA 01-01-89 - C Item 3: U S WEST Direct - IBEW 10-01-86 - D (Retirements Prior to 10/01/86 - Refer to Column - A
NOTE: U S WEST Enterprises shall refer to Column A only
LA3:752821.27 F-3
TABLE II
Pension Bands in Effect After July 1989
Monthly Benefit Table
A B C D
For retirements effective on or after the date For retirements For retirements For retirements for the company effective on or effective on or effective on or listed in Item 1 after the date after the date after the date and prior to the for the company for the company for the company Pension dates listed in listed in listed in listed in Band Item 2 Item 2 Item 3 Item 4
101 $18.47 $19.02 $17.41 $17.93 102 19.26 19.84 18.15 18.69 103 20.04 20.64 18.89 19.46 104 20.82 21.45 19.62 20.21 105 21.59 22.24 20.35 20.96 106 22.37 23.04 21.09 21.72 107 23.17 23.87 21.84 22.50 108 23.95 24.67 22.57 23.25 109 24.73 25.47 23.31 24.01 110 25.51 26.28 24.04 24.76 111 26.29 27.08 24.77 25.51 112 27.06 27.87 25.50 26.27 113 27.85 28.69 26.25 27.04 114 28.62 29.48 26.97 27.78 115 29.39 30.27 27.70 28.53 116 30.18 31.09 28.45 29.30 117 30.95 31.88 29.17 30.05 118 31.74 32.69 29.91 30.81 119 32.52 33.50 30.65 31.57 120 33.30 34.30 31.38 32.32 121 34.07 35.09 32.11 33.07 122 34.86 35.91 32.86 33.85 123 35.63 36.70 33.58 34.59 124 36.40 37.49 34.31 35.34 125 37.19 38.31 35.06 36.11 126 37.97 39.11 35.78 36.85 127 38.75 39.92 36.52 37.62 128 39.53 40.72 37.26 38.38 129 40.32 41.53 37.99 39.13
LA3:752821.27 F-4
130 41.09 42.32 38.72 39.88 131 41.88 43.14 39.47 40.65 132 42.65 43.93 40.19 41.40 133 43.43 44.73 40.93 42.16 134 44.21 45.54 41.67 42.92 135 44.98 46.33 42.39 43.66
LA3:752821.27 F-5
If Retired Then Refer On or After: To Column: ITEM 1: U S WEST Communications 8-13-89 A Mountain Bell CWA U S WEST Communications 8-6-89 A Mountain Bell IBEW U S WEST Communications 8-13-89 A Mountain Bell Service Link CWA Northwestern Bell Service Link CWA 8-13-89 A U S WEST Communications 8-13-89 A Pacific Northwest Bell CWA/ORTT Business Resources CWA 8-13-89 A U S WEST Communications 8-13-89 A Northwestern Bell CWA U S WEST Direct CWA 8-20-89 A Production and Sales U S WEST Direct--IBEW 8-20-89 A
ITEM 2: U S WEST Communications 1-1-92 B Mountain Bell CWA/IBEW U S WEST Communications 1-1-92 B Mountain Bell Service Link CWA Northwestern Bell Service Link CWA 1-1-92 B U S WEST Communications 1-1-92 B Pacific Northwest Bell CWA/ORTT Business Resources CWA 1-1-92 B U S WEST Communications 1-1-92 B Northwestern Bell CWA U S WEST Direct CWA 1-1-92 B Production and Sales U S WEST Direct--IBEW 1-1-92 B Production and Sales U S WEST Direct--IBEW 1-1-92 B ITEM 3: U S WEST Enterprises 8-13-89 C ITEM 4: U S WEST Enterprises 1-1-92 D
LA3:752821.27 F-6
TABLE III
Pension Band Increases Effective 8-16-92
101 21.49
101(A) 21.92
102 22.42
103 23.32
104 24.24
105 25.13
105(A) 25.63
106 26.04
106(A) 26.56
107 26.97
107(A) 27.51
108 27.88
109 28.78
110 29.70
111 30.60
112 31.49
113 32.42
114 33.31
115 34.21
116 35.13
117 36.02
118 36.94
119 37.86
120 38.76
121 39.65
LA3:752821.27 F-7
122 40.58
123 41.47
124 42.36
125 43.29
126 44.19
127 45.11
128 46.01
129 46.93
130 47.82
131 48.75
132 49.64
133 50.54
134 51.46
135 52.35
LA3:752821.27 F-8
Pension Band Increases Effective 8-16-92
(U S WEST Enterprises)
101 20.26
102 21.12
103 21.99
104 22.84
105 23.68
106 24.54
107 25.43
108 26.27
109 27.13
110 27.98
111 28.83
112 29.69
113 30.56
114 31.39
115 32.24
116 33.11
117 33.96
118 34.82
119 35.67
120 36.52
121 37.37
122 38.25
123 39 09
124 39.93
125 40.80
126 41.64
LA3:752821.27 F-9
127 42.51
128 43.37
129 44.22
130 45.06
131 45.93
132 46.78
133 47.64
134 48.50
135 49.34
LA3:752821.27 F-10
Pension Bands Effective 6-10-93
(U S WEST Enterprises)
91 14.06
92 14.67
93 15.31
94 15.97
95 16.66
96 17.39
97 18.14
98 18.92
99 19.74
100 20.60
101 21.49
101(A) 21.92
102 22.42
103 23.32
104 24.24
105 25.13
105(A) 25.63
106 26.04
106(A) 26.56
107 26.97
107(A) 27.51
108 27.88
109 28.78
110 29.70
111 30.60
112 31.49
LA3:752821.27 F-11
113 32.42
114 33.31
115 34.21
116 35.13
117 36.02
118 36.94
119 37.86
120 38.76
121 39.65
122 40.58
123 41.47
124 42.36
125 43.29
126 44.19
127 45.11
128 46.01
129 46.93
130 47.82
131 48.75
132 49.64
133 50.54
134 51.46
135 52.35
LA3:752821.27 F-12
TABLE IV
PENSION BANDS IN EFFECT ON OR AFTER AUGUST 13, 1995
Pension Band
Effective August 13, 1995
Pension Band
Effective August 13, 1995
Pension Band
Effective August 13, 1995
91 $15.75 107(A) $30.81 127 $50.52
92 16.43 108 31.23 128 51.53
93 17.15 109 32.23 129 52.56
94 17.89 110 33.26 130 53.56
95 18.66 111 34.27 131 54.60
96 19.48 112 35.27 132 55.60
97 20.32 113 36.31 133 56.60
98 21.19 114 37.31 134 57.64
99 22.11 115 38.32 135 58.63
100 23.07 116 39.35
101 24.07 117 40.34
101(A) 24.55 118 41.37
102 25.11 119 42.40
103 26.12 120 43.41
104 27.15 121 44.41
105 28.15 122 45.45
105(A) 28.71 123 46.45
106 29.16 124 47.44
106(A) 29.75 125 48.48
107 30.21 126 49.49
LA3:752821.27 F-13
TABLE V
PENSION BANDS IN EFFECT ON OR AFTER JANUARY 1, 1999
The following Pension Bands and associated monthly pension factors are effective January 1, 1999 (or as of such later date as indicated) for all Occupational Employees, except for Occupational Employees in positions not governed by the Pension Band formula. These factors do not apply if the Participant Terminated prior to the applicable date.
Pension Band
Monthly Pension Factor for
Terminations on and after
January 1, 1999
Monthly Pension Factor for
Terminations on and after
January 1, 2000
Monthly Pension Factor for
Terminations on and after
January 1, 2001 (see also note 1
below)
Monthly Pension Factor for
Terminations on and after
July 1, 2002**(see also note 2 below)
Monthly Pension Factor for
Terminations on and after
July 1, 2003**(see also note 3 below)
91 16.70 17.70 19.29
92 17.42 18.46 20.12
93 18.18 19.27 21.00
94 18.96 20.10 21.91
95 19.78 20.97 22.85
96 20.65 21.89 23.86
97 21.54 22.83 24.89
98 22.46 23.81 25.95
99 23.44 24.84 27.08 28.70 31.57
100 24.45 25.92 28.25 29.95 32.95
101 25.51 27.05 29.48 31.25 34.38
101A* 26.02 27.58 30.07
102 26.62 28.21 30.75 32.60 35.86
103 27.69 29.35 31.99 33.91 37.30
104 28.78 30.51 33.25 35.25 38.78
105 29.84 31.63 34.48 36.55 40.21
105A* 30.43 32.26 35.16
LA3:752821.27 F-14
Pension Band
Monthly Pension Factor for
Terminations on and after
January 1, 1999
Monthly Pension Factor for
Terminations on and after
January 1, 2000
Monthly Pension Factor for
Terminations on and after
January 1, 2001 (see also note 1
below)
Monthly Pension Factor for
Terminations on and after
July 1, 2002**(see also note 2 below)
Monthly Pension Factor for
Terminations on and after
July 1, 2003**(see also note 3 below)
106 30.91 32.76 35.71 37.85 41.64
106A* 31.54 33.43 36.44
107 32.02 33.94 37.00 39.22 43.14
107A* 32.66 34.62 37.73 39.99 43.99
108 33.10 35.09 38.25 40.55 44.61
109 34.16 36.21 39.47 41.84 46.20
110 35.26 37.37 40.73 43.17 47.49
111 36.33 38.51 41.97 44.49 48.94
112 37.39 39.63 43.20 45.79 50.37
113 38.49 40.80 44.47 47.14 51.85
114 39.55 41.92 45.69 48.43 53.27
115 40.62 43.06 46.93 49.75 54.73
116 41.71 44.21 48.19 51.08 56.19
117 42.76 45.33 49.41 52.37 57.61
118 43.85 46.48 50.67 53.71 59.08
119 44.94 47.64 51.93 55.05 60.56
120 46.01 48.78 53.17 56.36 62.00
121 47.07 49.90 54.39 57.65 63.42
122 48.18 51.07 55.66 59.00 64.90
123 49.24 52.19 56.89 60.30 66.33
124 50.29 53.30 58.10 61.59 67.75
125 51.39 54.47 59.37 62.93 69.22
LA3:752821.27 F-15
Pension Band
Monthly Pension Factor for
Terminations on and after
January 1, 1999
Monthly Pension Factor for
Terminations on and after
January 1, 2000
Monthly Pension Factor for
Terminations on and after
January 1, 2001 (see also note 1
below)
Monthly Pension Factor for
Terminations on and after
July 1, 2002**(see also note 2 below)
Monthly Pension Factor for
Terminations on and after
July 1, 2003**(see also note 3 below)
126 52.46 55.61 60.61 64.25 70.68
127 53.55 56.76 61.87 65.58 72.14
128 54.62 57.90 63.11 66.90 73.59
129 55.71 59.06 64.37 68.23 75.05
130 56.77 60.18 65.60
131 57.88 61.35 66.87
132 58.94 62.47 68.09
133 60.00 63.60 69.32
134 61.10 64.76 70.59
135 62.15 65.88 71.81
* Only applicable to Qwest Corporation (formerly U S WEST Communications) CWA. ** These increases are effective April 1, 2002 and April 1, 2003, respectively, in the case of Dex-IBEW
Participants.
Note 1. Notwithstanding the foregoing, if an Applicable Occupational Participant is entitled to an enhanced retirement pension under Section 5A.4(l), the monthly pension factors applicable to Participants Terminated on or after January 1, 2001 (and prior to July 1, 2002) shall apply to the Active Occupational Participant even if he or she Terminated prior to that date.
Note 2. Notwithstanding the foregoing, the monthly pension factors applicable to Participants Terminated on or after July 1, 2002 (and prior to July 1, 2003) shall apply to Occupational Participants who meet all of the following conditions:
(1) they Terminate voluntarily prior to July 1, 2002;
(2) they are entitled to voluntary separation, voluntary termination or voluntary resignation benefits pursuant to Section 3.3 of Appendices O, P, Q or R; and
(3) they are members of an adjustment or force group (within the meaning of the applicable Appendix or collective bargaining agreement) that either has not resolved prior to January 1, 2002 or is opened on or after January 1, 2002.
These factors shall not apply to those entitled to involuntary separation or involuntary termination benefits under Appendices O, P, Q or R, or a collective bargaining agreement, unless they are Terminated on or after July 1,
LA3:752821.27 F-16
2002 (April 1, 2002, in the case of Occupational Participants employed by Qwest Dex, Inc. covered by a IBEW collective bargaining agreement).
Note 3. Notwithstanding the foregoing, the monthly pension factors applicable to Participants Terminated on or after July 1, 2003 shall apply to Occupational Participants who meet all of the following conditions:
(1) they Terminate voluntarily prior to July 1, 2003;
(2) they are entitled to voluntary separation, voluntary termination or voluntary resignation benefits pursuant to Section 3.3 of Appendices O, P or R; and
(3) they are members of an adjustment or force group (within the meaning of the applicable Appendix or collective bargaining agreement) that either has not resolved prior to July 1, 2002 or is opened on or after July 1, 2002.
These factors shall not apply to those entitled to involuntary separation or involuntary termination benefits under Appendices O, P or R, or a collective bargaining agreement, unless they are Terminated on or after July 1, 2003.
LA3:752821.27 G-1
APPENDIX G
MONTHLY PENSION FACTORS AND DETERMINATION DATES FOR COMMISSION DIRECTORY ADVERTISING SALES EMPLOYEES
TABLE I
Pension Factors Prior to October 6, 1992
AVERAGE
MONTHLY
COMMISSIONS
MONTHLY
PENSION
FACTOR
0 - 49 .30
50 - 99 .60 100 - 199 1.70 200 - 299 2.90 300 - 399 4.10 400 499 5.20 500 - 599 6.40 600 - 699 7.50 700 - 799 8.70 800 - 899 9.90 900 - 999 11.00
1,000 - 1,099 12.20 1,100 - 1,199 13.30 1,200 - 1,299 14.50 1,300 - 1,399 15.70 1,400 - 1,499 16.80 1,500 - 1,599 18.00 1,600 - 1,699 19.10 1,700 - 1,799 20.30 1,800 - 1,899 21.50 1,900 - 1,999 22.60 2,000 - 2,249 24.70 2,250 - 2,499 27.60 2,500 - 2,749 30.50 2,750 - 2,999 33.40 3,000 - 3,249 36.30 3,250 - 3,499 39.20 3,500 - 3,749 42.10 3,750 - 3,999 45.00
LA3:752821.27 G-2
4,000 - 4,499 49.30 4,500 - 4,999 55.10 5,000 - 5,499 60.90 5,500 - 5,999 66.70 6,000 - 6,499 72.50 6,500 - 6,999 78.30 7,000 - 7,499 84.10 7,500 - 7,999 89.90 8,000 - 8,499 95.70 8,500 - 8,999 101.50 9,000 - 9,499 107.30 9,500 - 9,999 113.10
10,000 - 10,999 121.80 11,000 - 11,999 133.40 12,000 - 12,999 145.00 13,000 - 13,999 156.60 14,000 - 14,999 168.20 15,000 - 16,000 179.80
LA3:752821.27 G-3
TABLE II
Determination Dates
APPLICABLE COMMISSION PERIOD
DETERMINATION DATES
FOR RETIREMENT (Last day on
active payroll) IBEW: 01-01-85 to 12-31-87 01-01-88 12-31-87 to 12-31-88 01-01-85 to 12-31-88 01-01-89 12-31-88 to 12-30-89 01-01-86 to 12-31-89 01-01-90 12-31-89 to 12-30-90 01-01-86 to 12-31-90 01-01-91 12-31-90 to 12-31-91 01-01-87 to 12-31-91 01-01-92 12-31-91 to 12-31-92 CWA: 01-01-85 to 12-31-87 02-13-88 02-12-88 to 12-30-88 01-01-85 to 12-31-88 01-01-89 12-31-88 to 12-30-89 01-01-85 to 12-31-89 01-01-90 12-31-89 to 12-30-90 01-01-86 to 12-31-90 01-01-91 12-31-90 to 12-31-91 01-01-87 to 12-31-91 01-01-92 12-31-91 to 10-05-92
For retirements after 10-05-92, Basic Monthly Pension Benefits are calculated using average monthly commissions over the five calendar years preceding the calendar year in which Termination occurs.
LA3:752821.27 G-4
TABLE III
Monthly Pension Factors Based on Average Monthly Earnings
For Terminations after October 5, 1992 and before August 19, 2001
Average Monthly Earnings3 Monthly Pension Factor
$ 1,500 to $ 1,599 $ 20.20
$ 1,600 to $ 1,699 $ 21.40
$ 1,700 to $ 1,799 $ 22.80
$ 1,800 to $ 1,899 $ 24.10
$ 1,900 to $ 1,999 $ 25.30
$ 2,000 to $ 2,249 $ 27.60
$ 2,250 to $ 2,499 $ 30.90
$ 2,500 to $ 2,749 $ 34.20
$ 2,750 to $ 2,999 $ 37.40
$ 3,000 to $ 3,249 $ 40.70
$ 3,250 to $ 3,499 $ 43.90
$ 3,500 to $ 3,749 $ 47.20
$ 3,750 to $ 3,999 $ 50.40
$ 4,000 to $ 4,499 $ 55.30
$ 4,500 to $ 4,999 $ 61.80
$ 5,000 to $ 5,499 $ 68.30
$ 5,500 to $ 5,999 $ 74.80
$ 6,000 to $ 6,499 $ 81.30
3 Final Average Earnings is used for Participants described in Section 5A.4(c)(iii) (that is, Qwest Corporation Sales Consultants and Home Office Sales Consultants) who Terminate on or after January 1, 2001. However, this rule does not apply if the Participant ceases to be a Sales Consultant or Home Office Sales Consultant prior to 2001. Prior to August 19, 2001, Final Average Earnings is not used for Participants described in Section 5A.4(c)(ii).
LA3:752821.27 G-5
$ 6,500 to $ 6,999 $ 87.80
$ 7,000 to $ 7,499 $ 94.30
$ 7,500 to $ 7,999 $ 100.80
$ 8,000 to $ 8,499 $ 107.30
$ 8,500 to $ 8,999 $ 113.80
$ 9,000 to $ 9,499 $ 120.30
$ 9,500 to $ 9,999 $ 126.80
$10,000 to $10,999 $ 136.50
$11,000 to $11,999 $ 149.50
$12,000 to $12,999 $ 162.50
$13,000 to $13,999 $ 175.50
$14,000 to $14,999 $ 188.50
$15,000 to $16,000 $ 201.50
LA3:752821.27 G-6
TABLE IV
Monthly Pension Factors Based on Final Average Compensation
For Terminations4 on and after August 19, 2001
Final Average Compensation Monthly Pension Factor
$1,500 to $1,599 21.40
$1,600 to $1,699 22.80
$1,700 to $1,799 24.10
$1,800 to $1,899 25.30
$1,900 to $1,999 27.60
$2,000 to $2,249 30.90
$2,250 to $2,499 34.20
$2,500 to $2,749 37.40
$2,750 to $2,999 40.70
$3,000 to $3,249 43.90
$3,250 to $3,499 47.20
$3,500 to $3,749 50.40
$3,750 to $3,999 55.30
$4,000 to $4,499 61.80
$4,500 to $4,999 68.30
$5,000 to $5,499 74.80
$5,500 to $5,999 81.30
$6,000 to $6,499 87.30
$6,500 to $6,999 94.30
4 This table does not apply if the Participant ceased to be a Sales Employee under the applicable formula prior to August 19, 2001.
LA3:752821.27 G-7
$7,000 to $7,499 100.80
$7,500 to $7,999 107.30
$8,000 to $8,499 113.80
$8,500 to $8,999 120.30
$9,000 to $9,499 126.80
$9,500 to $9,999 136.50
$10,000 to $10,999 149.50
$11,000 to $11,999 162.50
$12,000 to $12,999 175.50
$13,000 to $13,999 188.50
$14,000 and up 201.50
LA3:752821.27 H-1
APPENDIX H
PENSION AD HOC GRADING
Illustration of Ad Hoc COLA Graduation - 1% to 12% Grading
Annuity Annuity Annuity Starting Starting Starting Date Date Date
Dec-95 .042% Jun-93 1.000% Dec-90 2.083%
Nov-95 .083% May-93 1.000% Nov-90 2.167%
Oct-95 .125% Apr-93 1.000% Oct-90 2.250%
Sep-95 .167% Mar-93 1.000% Sep-90 2.333%
Aug-95 .208% Feb-93 1.000% Aug-90 2.417%
Jul-95 .250% Jan-93 1.000% Jul-90 2.500%
Jun-95 .292% Dec-92 1.083% Jun-90 2.583%
May-95 .333% Nov-92 1.167% May-90 2.667%
Apr-95 .375% Oct-92 1.250% Apr-90 2.750%
Mar-95 .417% Sep-92 1.333% Mar-90 2.833%
Feb-95 .458% Aug-92 1.417% Feb-90 2.917%
Jan-95 .500% Jul-92 1.500% Feb-80 to Jan-90 3.000%
Dec-94 .542% Jun-92 1.583% Jan-80 3.5%
Nov-94 .583% May-92 1.667% Dec-79 4.0%
Oct-94 .625% Apr-92 1.750% Jun-75 to Nov-79 4.5%
Sep-94 .667% Mar-92 1.833% May-75 5.0%
Aug-94 .708% Feb-92 1.917% Apr-75 5.5%
Jul-94 .750% Jan-92 2.000% Mar-75 6.0%
Jun-94 .792% Dec-91 2.000% Feb-75 6.5%
May-94 .833% Nov-91 2.000% Jan-75 7.0%
LA3:752821.27 H-2
Apr-94 .875% Oct-91 2.000% Dec-74 7.5%
Mar-94 .917% Sep-91 2.000% Nov-74 8.0%
Feb-94 .958% Aug-91 2.000% Oct-74 8.5%
Jan-94 1.000% Jul-91 2.000% Sep-74 9.0%
Dec-93 1.000% Jun-91 2.000% Aug-74 9.5%
Nov-93 1.000% May-91 2.000% Feb-70 to Jul-74 10.0%
Oct-93 1.000% Apr-91 2.000% Jan-70 10.5%
Sep-93 1.000% Mar-91 2.000% Dec-69 11.0%
Aug-93 1.000% Feb-91 2.000% Nov-69 11.5%
Jul-93 1.000% Jan-91 2.000% Before Nov-69 12.0%Y
LA3:752821.27 I-i
APPENDIX I
EX-MEDIAONE EMPLOYEES (effective January 1, 1997)
TABLE OF CONTENTS
ARTICLE 1 INTRODUCTION 1
1.1 Introduction 1
1.2 Rules of Construction 1
1.3 Application of Appendix I 2
ARTICLE 2 DEFINITIONS 5
2.1 Accrued Benefit 5
2.2 Actuarial Equivalent 5
2.3 Affiliated Company 5
2.4 [Intentionally Left Blank] 6
2.5 Average Annual Compensation 6
2.5A Beneficiary 6
2.6 Benefit 6
2.7 Benefit Service 6
2.8 Cessation Date 6
2.9 [Intentionally Left Blank] 6
2.10 Company 6
2.11 Compensation 6
2.12 Covered Compensation 7
2.13 Death Benefit 7
2.14 [Intentionally Left Blank] 7
2.15 Eligible Separation 7
2.16 Employee 7
2.17 Employment Commencement Date 8
2.18 Entry Date 8
2.18A Former Participant 9
2.19 Grandfathered Participant 9
LA3:752821.27 I-ii
2.20 [Intentionally Left Blank] 9
2.21 Hour of Service 9
2.21A Leased Employee 10
2.22 Leave of Absence 10
2.22A New Rules 10
2.23 One-Year Break in Eligibility Service 10
2.24 One-Year Period of Severance 10
2.25 Participant 11
2.25A Participating Companies 11
2.26 PBGC 11
2.27 Pension or Pension Benefit 11
2.27A Percentage Credits 11
2.28 Period of Service 11
2.29 Period of Severance 11
2.30 Plan 11
2.31 Protected Benefits 11
2.32 [Intentionally Left Blank] 11
2.33 [Intentionally Left Blank] 11
2.34 Retired Participant 11
2.35 Severance Date 11
2.36 Spouse 12
2.37 Termination 12
2.38 Vesting Service 12
ARTICLE 3 AFFILIATED COMPANIES; LEASED EMPLOYEES 13
3.1 Affiliated Companies 13
3.2 Participation by Affiliated Companies 14
3.3 Leased Employees 14
ARTICLE 4 ELIGIBILITY TO PARTICIPATE IN THE PLAN; BENEFIT SERVICE AND VESTING SERVICE 14
4.1 Initial Eligibility 14
4.2 Eligibility Following a Termination of Employment 15
LA3:752821.27 I-iii
4.3 Benefit and Vesting Service 15
4.4 Determination by Committee 17
ARTICLE 5 RETIREMENT DATES AND PENSIONS 17
5.1 Normal Retirement Date 17
5.2 Early Retirement Date 17
5.3 Late Retirement Date 17
5.4 Disability Retirement Date 17
5.5 Payment in Arrears 18
ARTICLE 6 DEFINED LUMP SUM PENSIONS 19
6.1 Application 19
6.2 DLS Normal Pension 19
6.3 DLS Early Pension 22
6.4 Modified Disability Benefit 22
6.5 Death of a Participant before Commencement of Benefits 23
ARTICLE 7 GRANDFATHERED PENSIONS 23
7.1 Application 23
7.2 Normal Retirement Pension 26
7.3 Early Retirement Pension 26
7.4 Late Retirement Pension 26
7.5 Death of a Participant before Commencement of Benefits 27
7.6. Transfers to Other Cable Companies 28
ARTICLE 8 PAYMENT OF BENEFITS 28
8.1 Form of Benefits 28
8.2 Protected Benefits 28
8.3 Deferred Distribution; Minimum Distribution Requirements 28
8.4 Suspension and Adjustment of Benefit Payments 28
8.5 Fractional Rule 29
ARTICLE 9 VESTING; LIMITATIONS ON BENEFITS 29
9.1 No Benefits for Non-Vested Participants 29
9.2 Limitation on Benefits 30
LA3:752821.27 I-iv
LA3:752821.27 I-1
ARTICLE 1
INTRODUCTION
1.1 Introduction.
(a) In 1996, Old U S WEST acquired Continental Cablevision, Inc. as part of its Media Group. Continental Cablevision maintained the Continental Cablevision Retirement Plan (“Cablevision Plan”). Continental Cablevision, Inc. was subsequently renamed MediaOne of Delaware, Inc. Effective January 1, 1997, the Cablevision Plan was merged into this Plan. Appendix I (as in effect before the Separation Time) governed the benefits of employees and former employees of MediaOne of Delaware, Inc. and any other companies that participate in Appendix I (collectively, “MediaOne Employees”).
(b) As set forth in Plan Section 10.4(d), the liabilities under the Plan attributable to Media Participants are transferred from this Plan to, and assumed by, the Media Plan. Virtually all of the MediaOne Employees are Media Participants. As a result, virtually all of the benefits set forth in Appendix I of the Plan (as in effect prior to the Separation Time) have been assumed by the Media Plan.
(c) Prior to the Separation Time, certain MediaOne Employees transferred employment to (or Terminated and were later hired by) entities that were part of the controlled group of U S WEST after the Separation Time. All such individuals who are Communications Participants shall be referred to as Ex-MediaOne Employees. Subject to and in accordance with the provisions of the Employee Matters Agreement, the liabilities with respect to these Ex-MediaOne Employees are retained by this Plan.
(d) Except as otherwise provided herein or by law, the terms of the Cablevision Plan as in effect from time to time prior to December 31, 1996 will govern the determination of rights and liabilities of Ex-MediaOne Employees under the Plan with respect to events before January 1, 1997.
1.2 Rules of Construction.
(a) All references in this Appendix I to “Participant” or “Employee” shall be a reference only to Ex-MediaOne Employees. Notwithstanding any provision of the Plan to the contrary, except as expressly set forth in the Plan, (1) Articles II, III (except Section 3.8), V-A, V-B, V-C, V-D and VII, Section 11.5 and the other Appendices (excluding Appendices A, C, and J) of this Plan shall not apply to Ex-MediaOne Employees and (2) any reference in Appendix I to the “Plan” shall be deemed to be a reference to the Plan without regard to these provisions.
(b) Any reference in Appendix I to an Article or Section shall mean a reference to an Article or Section of Appendix I; any reference to Plan Article or Plan Section shall mean a reference to the Plan without regard to this Appendix I.
LA3:752821.27 I-2
1.3 Application of Appendix I. Appendix I, as set forth herein, describes the benefits earned by Ex-MediaOne Employees prior to the Separation Time. Notwithstanding any provision of this Plan to the contrary, no Ex-MediaOne Participant shall earn any benefits under this Appendix I after the Cessation Date.
(a) If a Participant transferred from a Cable Company to Old U S WEST (which, for purposes of this Section 1.3, shall include any participating company, within the meaning of Plan Section 1.42, prior to the Separation Time) on or after January 1, 1997 (and became a Management Participant on the date of transfer) and before the Separation Time, the Participant’s benefits shall be determined in accordance with Plan Article V-D (including Final Average Compensation, as defined in Plan Section 1.21, upon Termination from Old U S WEST or U S WEST, as applicable, but taking into account his Compensation under Appendix I if it falls within the relevant 60 month period), except that the Participant’s Percentage Credits for periods prior to the Cessation Date shall be determined in accordance with the schedule under Section 6.2(b)(1) of this Appendix I (and shall be based on Benefit Service, not Pension Calculation Service). Notwithstanding the foregoing, (1) the Participant’s Defined Lump Sum shall not be less than the Defined Lump Sum earned under Section 6 as of the Cessation Date, and (2) subject to Section 7.1, a Grandfathered Participant’s benefits shall not be less than the benefits earned under Article 7. For purposes of Article 7, the Grandfathered Participant shall earn Compensation and Average Annual Compensation (as defined in this Appendix I) with respect to amounts paid by Old U S WEST or U S WEST, as applicable, until the earlier of his first Termination (under Plan Section 1.67A) or December 31, 2006; however, such a Participant shall not earn any Benefit Service on or after his transfer from MediaOne of Delaware, Inc. The Protected Benefits shall not apply to benefits earned after the Cessation Date (or January 31, 1998, if earlier).
(b) If a Participant transferred from MediaOne of Delaware, Inc. to Old U S WEST after it was acquired by Old U S WEST and prior to January 1, 1997 (and became a Management Participant on the date of transfer), the Participant’s benefits shall equal the sum of (1) the benefits accrued, if any, under Article 7 through the Cessation Date plus (2) the Participant’s benefits accrued under Plan Articles V-B and V-D on or after the Cessation Date. For purposes of Plan Articles V-B and V-D, the Participant shall not receive any Pension Calculation Service, Percentage Credits or Compensation with respect to any employment prior to the Cessation Date. For purposes of the benefits under Article 7, the Participant shall not earn any Benefit Service, Compensation or Average Annual Compensation on or after his transfer from MediaOne of Delaware, Inc. The Protected Benefits shall not apply to benefits earned after the Cessation Date (or January 31, 1998, if earlier).
(c) This subsection (c) applies if (i) a Management Participant transferred from U S WEST to a Cable Company on or after January 1, 1997, (ii) the person either satisfied the Rule of 55 (as set forth in Plan Section 5B.1(c)) or the Rule of 60 (as set forth below) and (iii) the person transferred back to Old U S WEST as a Management Participant before the Separation Time. Such a Management Participant shall not earn any benefits under this Appendix I or be considered a Participant under this Appendix I. In lieu thereof, such Management Participant continued to be treated as a Participant under the Plan (without regard to Appendix I) for all purposes, including the calculation of Pension Calculation Service and Vesting Service. Accordingly, he continued to earn benefits under Plan Article V-D and, if the Participant satisfied the Rule of 55, Plan Article V-B and
LA3:752821.27 I-3
he shall be entitled to elect the benefit forms in Plan Article VI and the death benefits in Plan Article VII; for these purposes, the Cable Companies were considered participating companies under Plan Articles V-B and V-D prior to the Separation Time. If the Participant was employed by Old U S WEST before 1997 and he met the Rule of 60 but not the Rule of 55, his benefits shall not be less than the benefits earned under Plan Article V-B as of December 31, 1996. A Participant satisfies the Rule of 60 if the transfer to the Cable Companies occurred on or after January 1, 1997 and, as of the date of such transfer, the sum of the numbers representing his or her age and Term of Employment (each number being rounded up to the next integer) equaled 60 or more. For this purpose, any period of Term of Employment prior to the date of transfer to the Cable Companies that has not been credited on the date of transfer shall be counted if the Participant ultimately bridges his Term of Employment pursuant to Plan Section 2.4(b)(2)(B) prior to the Participant’s first Termination occurring after the Cessation Date. (However, no additional period of Term of Employment after the date of transfer to the Cable Companies shall be counted for this purpose.) If the Participant did not satisfy the Rule of 60 at the time of such Termination, the Participant shall never meet the Rule of 60 even if he or she later bridges his Term of Employment pursuant to Plan Section 2.4(b)(2)(B) upon subsequent reemployment.
(d) This subsection (d) applies if (i) a Management Participant transferred from Old U S WEST to the Cable Companies on or after January 1, 1997, (ii) the person did not satisfy the Rule of 55 (as set forth in Plan Section 5B.1(c)) or the Rule of 60 (as set forth in subsection (c) above) and (iii) the person transferred back to Old U S WEST as a Management Participant before the Separation Time. Such a Participant’s benefits shall be determined in accordance with Plan Article V-D (including Final Average Compensation, as defined in Plan Section 1.21, upon Termination from Old U S WEST or U S WEST, as applicable, but taking into account his Compensation under Appendix I if it falls within the relevant 60 month period), except that the Participant’s Percentage Credits for period he was employed by the Cable Companies shall be determined in accordance with the schedule under Section 6.2(b)(1) of this Appendix I (and shall be based on Benefit Service, not Pension Calculation Service). Notwithstanding the foregoing, (1) the Participant’s Defined Lump Sum shall not be less than the Defined Lump Sum earned under Plan Section 5D.2 as of the date of transfer to the Cable Companies plus the Defined Lump Sum under Article 6 as of the Cessation Date (calculated by ignoring Compensation and Percentage Credits earned under Plan Article V-D), and (2) if the Participant was employed by Old U S WEST before 1997, his benefits shall not be less than if applicable, the benefits earned under Plan Article V-B as of December 31, 1996 (for this purpose, an individual shall not earn Term of Employment while employed by the Cable Companies). The Protected Benefits shall not apply to benefits earned prior to the date of transfer to the Cable Companies or after the Cessation Date (or January 1, 1998, if earlier).
(e) This subsection (e) applies if (i) a Management Participant transferred from U S WEST to MediaOne of Delaware, Inc. after it was acquired by U S WEST and prior to January 1, 1997 (or transferred to MediaOne, Inc. prior to January 1, 1997) and (ii) the person transferred back to Old U S WEST as a Management Participant on or after January 1, 1997 and before the Separation Time. In this case, the Participant’s benefits shall equal the sum of (1) the benefits accrued, if any, under Plan Article V-B through the date of the transfer to MediaOne of Delaware, Inc. or MediaOne, Inc. (for this purpose, the Participant shall not earn any Pension Calculation Service, Compensation
LA3:752821.27 I-4
or Final Average Compensation (as defined in Plan Article II) on or after the date of such transfer and shall not earn any Term of Employment while employed by MediaOne of Delaware, Inc. or MediaOne, Inc.); plus (2) the benefits set forth in subsection (a) above (for this purpose, all Pension Calculation Service and Compensation and Final Average Compensation (as defined in Plan Article II) prior to the date of transfer to MediaOne of Delaware, Inc. or MediaOne, Inc. shall be ignored). The Protected Benefits shall not apply to benefits earned prior to the date of transfer to the Cable Companies or after the Cessation Date (or January 1, 1998, if earlier).
(f) The Vesting Service of a Participant described in Section 1.3(a), (b), (d) or (e) shall be the sum of the vesting service earned under Appendix I while employed by the Cable Companies and the vesting service under the Management Part for all other periods, provided that no duplicate service shall be credited. The Vesting Service of a Participant described in Section 1.3(c) shall be determined in accordance with the Management Part.
(g) For all purposes of this Section 1.3, a person shall only be deemed to “transfer” if he reported for work at the transferee company on the business day next following the business day he left the transferring company. Accordingly, Section 1.3(a) - (f) shall not apply if the person incurred an Eligible Separation. In addition, this Section 1.3(a) - (f) shall only apply if the person was a Management Employee at Old U S WEST at the time he transferred from or to Old U S WEST, as applicable. Section 1.3(a) - (f) shall not apply to a person who transferred from or to a Portability Company or was an Occupational Employee at Old U S WEST on the date of transfer.
(h) In situations in which an individual has accrued benefits both under (A) this Appendix I and (B) the Management Part, Occupational Part and/or Portability Plan, and Section 1.3(a) - (f) does not apply, then the Participant shall receive his or her respective benefits from each of the applicable parts of the Plan. For this purpose, the Accrued Benefits earned under Appendix I shall be calculated based on the rules of Appendix I in effect at the Cessation Date. No special rules shall apply except for the rules set forth in subsections (i) and (j).
(i) Notwithstanding the foregoing subsections (a) - (h) or any other provision of the Plan (as defined in Plan Section 1.50), the following rules apply to an Ex-MediaOne Participant who (1) transferred from the Management Part to a Cable Company, or vice versa, during a month or (2) is described in subsection (h) and Terminates and is rehired in the same month. First, if such Ex-MediaOne Participant receives a Percentage Credit under Plan Article V-D for that month, such person shall not receive a Percentage Credit under Article 6 for that month. Second, if such Ex-MediaOne Participant is entitled to a benefit under Article 7 and Plan Article V-B (or Plan Article V-A), (1) he shall not receive any Pension Calculation Service under Plan Article V-B (or Plan Article V-A) for the month of transfer or Termination if he moved from a Cable Company to the Management Part (or Occupational Part) and (2) he shall only receive a partial month of Benefit Service under Article 7 for the month of transfer (or Termination) if he moved from the Management Part (or Occupational Part) to a Cable Company (such partial month shall equal one month minus the portion of such month already credited to him as Pension Calculation Service). Similar rules shall be applied to prevent duplication of service in this case of movements from Plan Article V-A or V-B to Article 6 (or vice versa), from Article 7 to Plan Article V-D, or other transfers.
LA3:752821.27 I-5
(j) An Ex-MediaOne Participant who is a Management Employee at any time after the Cessation Date may elect any form of benefits permitted under Plan Article VI with respect to all benefits (other than benefits accrued under the Occupational Part).
ARTICLE 2
DEFINITIONS
In general, the definitions below apply for purposes of determining the benefits of Ex-MediaOne Employees while employed by the Cable Companies.
2.1 “Accrued Benefit” shall mean the anticipated Pension Benefit to which a Participant would be entitled at his Normal Retirement Date and payable in the form of a lump sum (in the case of benefits under Article 6) or on a single Life Annuity basis (in the case of benefits under Article 7), based on the Participant’s years of Benefit Service, Percentage Credits and Average Annual Compensation as of the date the determination is made. Accrued Benefit shall not include any benefits which are not accrued benefits under Section 411(d)(6) of the Code.
2.2 “Actuarial Equivalent” means a benefit as of a given date that has a value equivalent to the benefit otherwise payable under this Plan, on the basis of the actuarial assumptions, methods and factors set forth in Plan Appendix A. For purposes of this definition, except as explicitly stated otherwise in this Plan, the Participant’s Beneficiary or Spouse shall be deemed to be same age as the Participant. However, with respect to any lump sum payment that may be payable under this Plan, the Actuarial Equivalent lump sum value for payments made in any Plan Year shall be the DLS Equivalent; provided that in the case of a Participant who terminated employment with a Participating Company prior to 1997, the Actuarial Equivalent lump sum value shall be calculated using the PBGC interest rate or rates that would be used for determining the present value of a Participant’s benefit if the Plan had terminated on January 1, 1996 and the 1984 Unisex Pensioners Mortality Table if the resulting lump sum amount is less than $3500.
2.3 “Affiliated Company” is defined in Section 3.1.
2.4 [Intentionally Left Blank]
2.5 “Average Annual Compensation” means the arithmetic annual average of a Participant’s Compensation for the sixty consecutive calendar months of his highest Compensation during the 120 month period ending with the month of Termination. For any calendar year during which each month’s earnings history is not available, Compensation for each month in that calendar year shall equal the total Compensation for that calendar year divided by the number of months of Benefit Service earned during that calendar year. In the case of a Participant who has completed fewer than sixty calendar months of employment as of any date on which it is necessary to determine his Average Annual Compensation, the determination shall be made using as many months of employment as he has completed. In determining Average Annual Compensation, any calendar month during which the participant earned no compensation shall be disregarded and the months
LA3:752821.27 I-6
immediately before and after shall be treated as consecutive. Furthermore, in the case of a Participant described in Section 4.3(e)(2), Compensation for any period which is not aggregated in determining the Participant’s Benefit Service shall be ignored in determining his Average Annual Compensation. Notwithstanding the foregoing, if the Employee Terminates and is reemployed by a Participating Company and the Participant’s benefits with respect to the two periods of employment are determined separately, then the Average Annual Compensation determined with respect to the second period of employment shall not include any Compensation paid prior to the first Termination. Except as expressly set forth in Section 1.3, no person shall earn any Average Annual Compensation after the Cessation Date.
2.5A “Beneficiary” means, as the context warrants, (i) the contingent annuitant elected by a Participant with respect to a Pension Benefit and/or (ii) the Beneficiary elected pursuant to Section 6.5 with respect to a Death Benefit.
2.6 “Benefit” means a Death Benefit or Pension Benefit payable pursuant to the terms of the Plan.
2.7 “Benefit Service” means a period of employment determined in accordance with Section 4.3(a).
2.8 “Cessation Date” means the date the Ex-MediaOne Employee ceased to be employed by a Participating Company (including a termination due to a transfer to Old U S WEST or its subsidiaries) under this Appendix I, which date necessarily occurred prior to the Separation Time.
2.9 [Intentionally Left Blank]
2.10 “Company” means MediaOne of Delaware, Inc. (formerly Continental Cablevision, Inc.), a Delaware corporation, prior to the Separation Time.
2.11 “Compensation” shall mean a Participant’s basic salary or wages, bonuses, overtime, and commissions, but excluding management incentive awards, relocation allowances, any element of compensation received or imputed in connection with stock grants, compensation imputed for federal income tax purposes on account of any employee fringe benefit (whether or not pursuant to a plan) and contributions and payments made by a Participating Company pursuant to employee benefit plans. Any pre-tax contributions made by a Participant pursuant to a plan described in Section 125 or 401(k) of the Code shall be considered part of his Compensation, provided however, that medical opt-out payments shall not be part of Compensation. Compensation earned during a month shall be considered Compensation for the full month, regardless of how many days within the month are actually worked. Compensation shall only include amounts paid by Participating Companies, but shall not include any amounts paid by any other Affiliated Company. The Compensation of each Employee taken into account for determining all benefits provided under the Plan for any determination period shall not exceed $200,000/$150,000 limitations set forth in Plan Section 1.10(d). Except as expressly set forth in Section 1.3, no person shall earn any Compensation after the Cessation Date.
LA3:752821.27 I-7
2.12 “Covered Compensation” means the average of the Taxable Wage Bases for the 35-year period ending with the last day of the Plan Year. In no event shall Covered Compensation exceed the Taxable Wage Base in effect at the beginning of the Plan Year. Covered Compensation shall be automatically adjusted for each Plan Year.
2.13 “Death Benefit” means a Benefit payable on account of the death of a Participant or Former Participant prior to the Annuity Starting Date.
2.14 [Intentionally Left Blank]
2.15 “Eligible Separation” means a separation from the service of a Participating Company, other than a transfer to an Affiliated Company. An individual who transfers to an Affiliated Company will incur an Eligible Separation when he or she separates from the service of such other Affiliated Company for any reason other than another transfer to an Affiliated Company.
2.16 “Employee”
(i) “Employee” means each person who is a common law employee of a Participating Company, other than one who is included in a unit of employees covered by a collective bargaining agreement (unless such agreement provides for participation of such person in the Plan).
(ii) An individual shall not be an “Employee” if he meets any of the following: (1) the individual was performing services for any Participating Company under an agreement, contract, or any other arrangement pursuant to which the individual is characterized or classified by the Participating Company as an independent contractor (or an employee of an independent contractor), (2) the individual’s payments for services for any Participating Company have not been initially treated by any Participating Company as subject to wage withholding under the Code and applicable state law, (3) any individual who was not initially classified by a Participating Company as a common law employee of a Participating Company, (4) any individual who was initially classified as a Leased Employee or (5) any other individual who was leased by a Participating Company from an entity that is the individual’s employer of record. Notwithstanding paragraph (i) above, if the Company determines or agrees that the classification or treatment was incorrect and that the individual was or is in fact a common law employee, such an individual shall not be an Employee (or Participant) either retroactively or prospectively; however, if the Company informs the individual in writing that he is an Employee for purposes of the Plan, he shall be an Employee with respect to service after the date specified in such writing. Notwithstanding the foregoing, if an individual files a claim with the Committee in accordance with Plan Section 13.2 within 60 days of such initial classification, and the Committee determines that such classification is incorrect, the determination by the Committee shall be given retroactive effect.
(iii) Solely for purposes of the requirements of Code section 414(n)(3) (but only to the extent they relate to this Plan), including counting service for eligibility to participate and vesting, “Employee” shall also mean (x) any individual described in paragraph (ii) or (v) who is in fact a common law employee, (y) any common law employee of a
LA3:752821.27 I-8
Participating Company included in a unit of employees covered by a collective bargaining agreement that provides for participation of such person in the Plan and (z) Leased Employees. Notwithstanding the foregoing, if such Leased Employees constitute less than twenty percent of the Participating Companies’ non-highly compensated work force within the meaning of Code section 414(n)(5)(C)(ii), “Employee” shall not include Leased Employees covered by a plan described in Code section 414(n)(5) unless otherwise provided in the Plan.
(iv) By way of example, assume a technician is leased from an entity (or hired as an independent contractor) on May 1, 1998. The Company later determines or agrees that the individual has in fact always been a common law employee and reclassifies him as such (including subjecting him to wage withholding) on June 1, 2000; however, he continues as a technician. Solely for purposes of the requirements of Code section 414(n)(3) (but only to the extent they relate to this Plan), including counting service for eligibility to participate and vesting, this individual will be treated as an Employee on and after May 1, 1998. However, the individual shall not be an Employee (or Participant) for any other purpose with respect to employment either prior or subsequent to June 1, 2000, even though other technicians of the Company are treated as Employees. The individual shall not become an Employee (or Participant) unless and until the Company informs the individual in writing that he is an Employee for purposes of the Plan.
(v) Notwithstanding the foregoing, any individual who agrees he shall not participate in the Plan shall not be an “Employee.”
2.17 “Employment Commencement Date” means the date on which an Employee first rendered an Hour of Service (as defined in Section 2.21(a)) to a Participating Company.
2.18 “Entry Date” means January l and July 1.
2.18A “Former Participant” shall mean a former Participant whose service with all Participating Companies has terminated but shall not include a Retired Participant.
2.19 “Grandfathered Participant” is defined in Section 6.1.
2.20 [Intentionally Left Blank]
2.21 “Hour of Service” means the following:
(a) Each hour for which an Employee is paid, or entitled to payment, for the performance of duties for the Company. These hours shall be credited to the Employee for the computation period or periods in which the duties are performed.
(b) Each hour for which an Employee is paid, or entitled to payment, by the 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 (including disability), jury duty, military duty, lay off or leave of absence; provided, however, that:
LA3:752821.27 I-9
(i) no more than 501 Hours of Service shall be credited under this paragraph (b) to an Employee on account of any single continuous period during which the Employee performs no services (whether or not such period occurs in a single Plan Year or other computation period); and
(ii) an hour for which an Employee is paid, or entitled to payment, by the Company on account of a period during which no duties are performed shall not be credited to the Employee if such payment is made or due under a plan maintained solely for the purpose of complying with applicable worker’s compensation or unemployment compensation or disability insurance laws; and
(iii) Hours of Service shall not be credited for a payment which solely reimburses an Employee for medical or medically related expenses incurred by the Employee.
(c) Each hour for which back pay, irrespective of mitigation of damages, is either awarded or agreed to by the Company; provided, however, that the same Hours of Service shall not be credited under both paragraph (a) or paragraph (b) above and this paragraph (c), and provided, further, that no more than 501 Hours of Service shall be credited under this paragraph (c) with respect to payments of back pay, to the extent that such back pay is agreed to or awarded for a period of time described in paragraph (b) above, during which the Employee did not or would not have performed any duties. These hours shall be credited to the Employee for the computation period or periods to which the award, agreement or payment pertains, rather than the computation period in which the award, agreement or payment is made.
Hours of Service for nonperformance of duties shall be credited in accordance with DOL Regulations Section 2530.200b-2(b). Hours of Service shall be credited to the applicable computation period in accordance with DOL Regulations Section 2530.200b-2(c).
Solely for purposes of determining whether an Employee has incurred a One-Year Break in Eligibility Service, an Employee who is absent from work on account of pregnancy or of the birth or adoption of a child, or for purposes of caring for a newborn or newly adopted child, shall be credited during such absence with the number of Hours of Service which would normally have been credited to him but for such absence (or, if the number just described cannot be determined, with eight Hours of Service per day of such absence); provided, however, that no more than 501 Hours of Service shall be credited with respect to any such pregnancy, birth or adoption. The Employee must furnish to the Administrator such information as shall be reasonably required to establish the reason for such an absence and its duration. Hours of Service credited in accordance with this paragraph shall be credited for the computation period in which the absence begins, if necessary to prevent a One-Year Break in Service in that period, or if not, in the computation period next following that in which the absence begins.
2.21A “Leased Employee” means any person who is not a common law employee of a Participating Company or an Affiliated Company and who performs services for a Participating Company or an Affiliated Company on a substantially full-time basis for a period of at least one year pursuant to an agreement between the Participating Company or Affiliated Company and another
LA3:752821.27 I-10
person, and such services are performed under the primary direction or control of the Participating Company or Affiliated Company.
2.22 “Leave of Absence” means any extended unpaid absence from employment which is authorized in writing by an Affiliated Company on a uniform and nondiscriminatory basis. Leave of Absence may be authorized for reasons of illness, injury, temporary reduction in work force, training, education or other reasons in the discretion of an Affiliated Company. Leave of Absence shall be authorized for any period of military service during which the Employee’s re-employment rights are protected by law. An Employee who leaves employment pursuant to a Leave of Absence, but fails (for any reason other than his death or Retirement) to return to employment with the Participating Company at its expiration and who has not previously been notified by a Participating Company of his Termination, or given notice to a Participating Company of his Termination, shall be deemed to have quit as of the first anniversary date of the commencement of the Leave of Absence, unless he has again become an Employee by the first anniversary date of the commencement of such Leave of Absence.
2.22A “New Rules” mean the changes to the Plan effective on or after January 1, 1997, including without limitation, the benefits provided by Article 6, the new Early Retirement Date provisions (i.e., the ability to commence benefits before age 55), the new lump sum option, the new “pop-up” feature of the joint and survivor annuities, the calculation of Average Annual Compensation over 60 months during the last 120 months of employment (instead of five calendar years of employment), the use of the factors in Plan Appendix A, and the Modified Disability Benefit.
2.23 “One-Year Break in Eligibility Service” means a Plan Year during which an Employee fails to be credited with more than 500 Hours of Service, unless the failure is due to a Leave of Absence, at the expiration of which the Employee returns to employment with a Participating Company.
2.24 “One-Year Period of Severance” means a period of twelve consecutive months beginning on a Participant’s Severance Date or any anniversary thereof, during which the Participant did not perform an Hour of Service (within the meaning of Section 2.21(a)).
2.25 “Participant” means any Employee who has become eligible to participate in the Plan as provided in Article 4, and whose employment with a Participating Company has not terminated.
2.25A “Participating Companies” mean the Cable Companies. See Section 3.2.
2.26 “PBGC” means Pension Benefit Guaranty Corporation.
2.27 “Pension” or “Pension Benefit” means a pension or other payment or payments payable under the terms of the Plan to a Participant, Retired Participant or Former Participant, or the Beneficiary of one of the foregoing, but shall not include Death Benefits.
2.27A “Percentage Credits” is defined in Section 6.2.
LA3:752821.27 I-11
2.28 “Period of Service” means a period of employment determined in accordance with Section 4.3.
2.29 “Period of Severance” means any period commencing on an Employee’s Severance Date, other than a period included in his Period of Service pursuant to Section 4.3(b).
2.30 “Plan” is defined in Section 1.1(b); for periods prior to January 1, 1997, it meant the Continental Cablevision Retirement Plan as in effect from time to time.
2.31 “Protected Benefits” means the grandfathered early retirement benefit described in the second sentence of Section 7.3 and the grandfathered form of benefits set forth in Section 8.2.
2.32 [Intentionally Left Blank]
2.33 [Intentionally Left Blank]
2.34 “Retired Participant” means any Participant whose Pension has commenced (or whose lump sum has been paid) or whose Annuity Starting Date has already occurred.
2.35 “Severance Date” means the earlier of (i) the date an Employee separates from service with the Company because of Retirement, death, quit or discharge, or (ii) the first anniversary of the date on which an Employee begins a period of absence from active employment with the Company, with or without pay, for reasons other than retirement, death, quit or discharge; except that:
(a) if on the date described in clause (ii) an Employee is on a Leave of Absence, and he returns to employment with the Company at the scheduled expiration of the Leave of Absence, the date described in clause (ii) shall not be treated as a Severance Date; and
(b) solely for purposes of determining whether an Employee has incurred a One-Year Period of Severance, the Severance Date of an Employee who is absent beyond the first anniversary of the first date of absence for maternity or paternity reasons shall be the second anniversary of the first date of such absence. The period between the first and second anniversaries of the first date of such an absence shall be neither a Period of Service nor a Period of Severance. An absence for maternity or paternity reasons shall mean an absence on account of pregnancy or of the birth or adoption of a child, or for purposes of caring for a newborn or newly adopted child. The Employee must furnish such information as shall reasonably be required to establish the reason for such an absence and its duration.
2.36 “Spouse” means the current spouse of a Retired Participant at the Annuity Starting Date. “Surviving Spouse” means a spouse at the time of a Participant’s or Former Participant’s death who was legally married to the Participant or Former Participant throughout the twelve months ending on the date of death. Notwithstanding the above, a former spouse will be treated as the spouse or surviving spouse and a current spouse will not be treated as the spouse or surviving spouse to the extent provided under a Qualified Domestic Relations Order.
LA3:752821.27 I-12
2.37 “Termination” means the separation from the service of a Participating Company (other than a transfer to another Participating Company) whether or not such separation is an Eligible Separation.
2.38 “Vesting Service” means a period of employment determined in accordance with Section 4.3(b).
Capitalized terms not defined in this Appendix I are defined in accordance with Plan Article I.
LA3:752821.27 I-13
ARTICLE 3
AFFILIATED COMPANIES; LEASED EMPLOYEES
3.1 Affiliated Companies.
(a) For purposes of the provisions of the Plan other than Section 9.2, “Affiliated Companies” shall mean the Company and all corporations, partnerships, trades or businesses (whether or not incorporated) which constitute a controlled group of corporations with the Company, a group of trades or businesses under common control with the Company, or an affiliated service group including the Company, within the meaning of Section 414(b), Section 414(c), Section 414(m) or (o), respectively, of the Code. For purposes of Section 9.2, “Affiliated Companies” shall mean the Company and all corporations, partnerships, trades or businesses (whether or not incorporated) which constitute a controlled group of corporations with the Company or a group of trades or businesses under common control with the Company, within the meaning of Section 414(b) or Section 414(c) of the Code, as modified by Section 415(h) of the Code, or which constitute an affiliated service group including the Company within the meaning of Section 414(m) of the Code or an entity affiliated under Section 414(o) of the Code. Notwithstanding the foregoing, an entity shall only be an Affiliated Company during the period it is a member of the group described in this subsection (a).
(b) In furtherance and not in limitation of the other provisions of this Plan, all service of an Employee with any one or more of the Affiliated Companies (or as a common law employee of the Company if the individual is not an Employee) shall be treated as employment by the Company for purposes of determining his Hours of Service pursuant to Section 2.21, his years of Vesting Service pursuant to Section 4.3, his eligibility to become a Participant pursuant to Article 4 and limitations on contributions or benefits in Section 9.2; provided, however, that the Benefit Service and Average Annual Compensation of any such Employee shall be determined only with reference to his employment with and Compensation from Participating Companies as an Employee, except as set forth in Section 3.2. The transfer of employment by an Employee to another Affiliated Company shall not be a retirement or Eligible Separation for purposes of the Plan.
(c) Individuals employed by a company which becomes an Affiliated Company shall be credited with Benefit Service and Vesting Service with respect to their service, if any, before their employer became an Affiliated Company, only at the express direction of U S WEST, Inc. Affiliated Companies described in the preceding sentence shall be listed by name in Section 3.2 or on Schedule A to be attached to this Plan.
(d) Any individual who, at any time during 1995, was employed by Providence Journal Company, Copley/Colony, Inc., King Video Cable Company, or any “affiliated company” of any one of them (applying the definition of “Affiliated Companies” contained in the first paragraph of this Section 3.1), shall be credited with Vesting Service with respect to his service with such employer, and his service with such employer shall be treated as service with the Company for purposes of Section 4.1, provided such individual became an employee of the Company no later than December 31, 1995.
LA3:752821.27 I-14
3.2 Participation by Affiliated Companies.
(a) MediaOne, Inc. became a Participating Company effective April 1, 1997. Employees of MediaOne, Inc. as of April 1, 1997 shall be granted credit for all service at MediaOne, Inc. on and after December 6, 1994 for all purposes. Employees shall be granted credit for service at MediaOne, Inc. prior to December 6, 1994 only for purposes of participation and vesting but not for purposes of Benefit Service. Notwithstanding the foregoing or any other provision of the Plan to the contrary, Employees of MediaOne, Inc. shall not be entitled to any benefits pursuant to Article 7 of this Appendix I.
(b) MediaOne of Michigan, Inc. (formerly Booth Communications) became a Participating Company effective June 30, 1997. Employees of MediaOne of Michigan, Inc. as of June 30, 1997 shall be granted credit for all service at MediaOne of Michigan, Inc. on and after June 30, 1997 for all purposes. Employees shall be granted credit for service at MediaOne of Michigan, Inc. (or Booth Communications) prior to June 30, 1997 only for purposes of participation and vesting but not for purposes of Benefit Service. Notwithstanding the foregoing or any other provision of the Plan to the contrary, such Employees shall not be entitled to any benefits pursuant to Article 7 of this Appendix I.
3.3 Leased Employees. A Leased Employee shall be treated as an employee of the Affiliated Company (but not an Employee) for purposes of the Plan, except that (a) contributions to or benefits from a qualified plan maintained by the leasing organization and provided with respect to the Leased Employee’s services for the Affiliated Company shall be treated as having been provided by the Affiliated Company, and (b) the rule stated in the preceding sentence shall not apply to any Leased Employee who is covered by a money purchase plan of the leasing organization which provides for a nonintegrated contribution rate of at least 10% of compensation, immediate participation, and full and immediate vesting. Accordingly, the provisions of Plan Section 2.5(c) shall apply to Leased Employees.
ARTICLE 4
ELIGIBILITY TO PARTICIPATE IN THE PLAN; BENEFIT SERVICE AND VESTING SERVICE
4.1 Initial Eligibility. Each Ex-MediaOne Employee became eligible to participate in the Plan on the Entry Date coinciding with or next following the date on which he met the following requirements: he was an Employee on the Entry Date, and before the Entry Date he attained age 21 and completed a period of twelve consecutive months of employment with a Participating Company during which he was credited with at least 1,000 Hours of Service. The first such period considered was the twelve consecutive months commencing on his Employment Commencement Date; succeeding periods coincided with the Plan Year, commencing in the Plan Year which included the first anniversary of his Employment Commencement Date.
No individual shall become a Participant in this Appendix I on or after the Separation Time.
LA3:752821.27 I-15
4.2 Eligibility Following a Termination of Employment. An Employee who became eligible to participate in the Plan in accordance with Section 4.1, Terminated and subsequently returned to employment with a Participating Company prior to the Separation Time became eligible to participate in the Plan as of the date on which he first completed an Hour of Service (as defined in Section 2.21(a)) following his return to such employment. An Employee who Terminated before he became eligible to participate in the Plan in accordance with Section 4.1 was treated as a new Employee if he returned to a Participating Company prior to the Separation Time; provided, however, that if before his Eligible Separation he had completed the required period of employment described in Section 4.1, so that he would have become eligible but for his absence on the applicable Entry Date, he became eligible to participate in the Plan as of the date on which he first completed an Hour of Service (as defined in Section 2.21(a)) following his return (but not earlier than the Entry Date he would have commenced participation had he not Terminated), unless in the interim he incurred five or more consecutive One-Year Breaks in Eligibility Service.
4.3 Benefit and Vesting Service. The amount of Benefits payable to or on behalf of a Participant, and the eligibility of a Participant or Former Participant for a Benefit, shall be determined in accordance with the following rules:
(a) General Rule: Benefit Service. A Participant’s Period of Service for determining Benefits shall begin on his Employment Commencement Date and end on his Severance Date, but shall only include months in which the Participant is an Employee. It shall not include any period the Participant was a Leased Employee or any service described in Code Section 414(n)(2)(B) or any service with an Affiliated Company that is not a Participating Company. No person shall earn any Benefit Service after the Cessation Date.
(b) General Rule: Vesting Service. A Participant’s Period of Service for determining vesting shall begin on his Employment Commencement Date and end on his Severance Date, subject to the following rules: The Period of Service of a Participant who severs from service with the Company by reason of retirement, quit or discharge, and who thereafter performs an Hour of Service within twelve months of his Severance Date, shall include the intervening Period of Severance. The preceding sentence does not apply to a Participant who severs from service with the Company by reason of Retirement, quit or discharge during an absence from service of twelve months or less which commenced for any reason other than Retirement, quit or discharge; the Period of Service of such a Participant who thereafter performs an Hour of Service within twelve months of the first day of such absence shall include the period intervening between his Severance Date and the date on which the Participant performs such Hour of Service. For purposes of this clause (b), references to an Hour of Service shall mean an Hour of Service as defined in Section 2.21(a). No person shall earn any Vesting Service after the Cessation Date.
(c) Calculation of Periods of Service. Both Benefit Service and Vesting Service shall be calculated in terms of calendar months. Each complete or fractional calendar month in a Participant’s Period of Service shall be treated as a complete calendar month. Furthermore, a Participant’s Periods of Service which are separated by a Period of Severance shall be aggregated, subject to paragraph (e), and subject to the proviso that, notwithstanding any other provision of this Section, no Period of Service preceding a One-Year Period of
LA3:752821.27 I-16
Severance that ended before July 1, 1985 (the initial effective date of this Plan) shall be aggregated with any later Period of Service for any purpose under the Plan.
(d) Years of Benefit and Vesting Service. A Participant shall be credited with a year of Benefit Service and Vesting Service for each period of twelve calendar months in his Period of Service. Two or more such partial years may be aggregated to produce a full year, subject to Sections 4.3(e) and 6.2(e).
(e) Effect of Break in Service. Subject to Section 6.2(e), the Benefit Service and Vesting Service of a Participant who incurred an Eligible Separation, for reasons other than retirement, and who thereafter returned to employment with the Company prior to the Separation Date after having incurred five or more consecutive One-Year Periods of Severance, shall be determined in accordance with the following rules:
(1) If the Participant had become Vested before he incurred his initial One-Year Period of Severance, his Periods of Service shall be aggregated.
(2) Except as set forth in paragraph (3) or Section 8.4, if the Participant had not become vested before he incurred his initial One-Year Period of Severance, his Period of Service prior to his Eligible Separation shall not be aggregated with any subsequent Period of Service unless the number of years in his Period of Service prior to his Eligible Separation is greater than the number of consecutive One-Year Periods of Severance he incurred. If such prior period of employment is not aggregated, then the Participant’s Period of Service, Vesting Service, Average Annual Compensation, Benefit Service, Percentage Credits, Compensation and Accrued Benefit with respect to such prior Period of Service shall be ignored.
(3) Effective as of January 1, 1993: If the Participant left employment before January 1, 1989 and after having been credited with five years or more of Vesting Service, his Periods of Service shall be aggregated.
(f) Leaves of Absence. See Section 2.22 for special rules regarding Leaves of Absence.
4.4 Determination by Committee. All determinations of eligibility, Benefit Service and Vesting Service shall be made by the Committee in its complete discretion.
ARTICLE 5
RETIREMENT DATES AND PENSIONS
5.1 Normal Retirement Date. The Normal Retirement Date of a Participant shall be the later of (a) his 65th birthday or (b) the earlier of the fifth anniversary of his Entry Date or, effective January 1, 1993, his completion of five years of Vesting Service. A Participant (but not a
LA3:752821.27 I-17
Former Participant) shall become 100% Vested upon his Normal Retirement Date, notwithstanding Section 9.1. A Participant who retires on his Normal Retirement Date shall be entitled to receive a Normal Pension Benefit, commencing as of the first day after his Normal Retirement Date (subject to Section 5.5) and payable monthly thereafter during his lifetime. A Participant shall not be entitled to retire on his Normal Retirement Date if he is employed by an Affiliated Company on such date.
5.2 Early Retirement Date. Notwithstanding Section 5.1, a Participant may specify as his Early Retirement Date, in a written notice given in advance by the Participant to a Participating Company, on any day after his Eligible Separation and prior to his Normal Retirement Date, as of which the Participant is Vested. A Participant who elects Early Retirement shall be entitled to receive an Early Pension Benefit, commencing as of his Early Retirement Date (subject to Section 5.5) and payable monthly thereafter during his lifetime.
5.3 Late Retirement Date. Notwithstanding Section 5.1, a Participant who has reached his Normal Retirement Date may continue as an Employee until the date he establishes with a Participating Company for his retirement. Subject to Section 8.5, a Participant who elects Late Retirement shall not be entitled to receive Pension Benefits until the first day after his Eligible Separation. Subject to Section 5.5, commencing as of that day (or the Required Beginning Date, if earlier) and payable monthly thereafter during his lifetime, such Participant shall be entitled to receive a Late Pension Benefit.
5.4 Disability Retirement Date.
(a) If before his Normal Retirement Date a Participant became totally and permanently disabled (as defined herein), he was retired from the service of the Company. A Participant was considered to have become totally and permanently disabled if the Committee determined, based on such medical advice or evidence as it deems sufficient, that the Participant became disabled to such an extent that he was eligible to receive benefits from the Company’s long term disability plan. No Participant’s Disability Retirement Date was before the expiration of the short-term disability payments made by the Company.
(b) (1) Solely for purposes of Article 7, a Participant who retired under Section 5.4(a) prior to January 1, 1997 and subsequently returned to employment with a Participating Company prior to the Separation Time, shall be credited with Benefit Service and Vesting Service as though he were an Employee throughout the period between his Disability Retirement Date and the earlier of (1) his Normal Retirement Date and (2) the date on which the Participant is no longer eligible to receive benefits under a Participating Company’s long term disability plan, on account of his recovery. A Participant who retired on account of disability, recovered prior to the earlier of his Normal Retirement Date or the Separation Time and failed to return to employment with the Company upon his recovery (but subsequently returns to employment with a Participating Company prior to the Separation Time) shall be treated as a terminated Employee upon his failure to return to employment.
(2) Notwithstanding Section 5.4(b)(1), Participants whose Disability Retirement Date occurs during January - March, 1997 and subsequently returned to employment with a Participating Company after April 1, 1997 and prior to the Separation Time, may be credited
LA3:752821.27 I-18
with Benefit Service and Vesting Service for January - March, 1997, but not for any period on or after April 1, 1997. Such Participants shall not be eligible to receive a Modified Disability Pension described in Appendix J. On April 1, 1997, such a Participant was treated as a terminated Employee.
(c) Effective with respect to Participants who first became totally and permanently disabled under Section 5.4(a) on or after April 1, 1997 and subsequently returned to employment with Old U S WEST or its subsidiaries prior to the Separation Time, (1) Section 5.4(b) shall not apply and (2) such Participants will be treated as Terminated on their Disability Retirement Date.
(d) Notwithstanding subsections (a) - (c), any Participant who retired under Section 5.4(a) and did not return to employment with Old U S WEST or its subsidiaries prior to the Separation Time is a Terminated Media Employee; the benefits of such person shall be payable from the Media Plan.
5.5 Payment in Arrears. Notwithstanding the foregoing provisions of this Article 5 or any other provision of this Plan, in the case of any benefit paid pursuant to this Appendix I (other than a lump sum), (1) the first payment shall be made as of the Annuity Starting Date (such payment to be prorated if the Annuity Starting Date is not the first day of a calendar month) and (2) each monthly payment shall be paid in arrears on the first day of the next calendar month (or as soon as practicable thereafter).
ARTICLE 6
DEFINED LUMP SUM PENSIONS
6.1 Application.
(a) Except as provided in this Section 6.1, this Article 6 applies only to Ex-MediaOne Participants who performed duties as Employees for a Participating Company on or after January 1, 1997 and before the Separation Time. Subject to Section 7.1, if such an Ex-MediaOne Participant is also covered by Article 7, his Benefit shall be the greater of the Benefit under Article 6 or the Benefit under Article 7.
(b) Any Ex-MediaOne Employee who was on leave of absence or short-term or long-term disability from a Participating Company on January 1, 1997 and who does not return to actively perform services for a Participating Company at any time prior to the Separation Time shall not be entitled to any benefits under this Article 6. If any Ex-MediaOne Participant on short-term disability on January 1, 1997, is Terminated as a result of the disability and subsequently returns to active employment with a Participating Company, Section 6.2(e) shall apply; provided, the person shall not earn any benefits or receive any Percentage Credits under Article 6 with respect to any period prior to the return to active employment.
6.2 DLS Normal Pension.
LA3:752821.27 I-19
(a) Eligibility. Each Vested Participant who incurs an Eligible Separation shall become entitled to a DLS Pension. The amount of the Normal Pension Benefit shall be the DLS Normal Pension which shall be based on the Participant’s aggregate Percentage Credits and Average Annual Compensation as of the date of the Termination and the DLS Factors in effect on the Pension Effective Date.
(b) Calculation of the Aggregate Percentage Credits.
(1) General. Except as provided below, the aggregate Percentage Credits shall equal the sum of the Percentage Credits credited for each calendar month the Participant earns Benefit Service. The Percentage Credit for each calendar month of Benefit Service shall be based on the Participant’s age on the last day of the calendar month as follows:
Age Percentage Credit
Under 40 1/6%
40-49 1/3%
50 & older 1/2%
By way of example, if a Participant’s employment with a Cable Company commenced in the month when he attained age 40 and Terminated in the month before the month in which he attained age 60, his aggregate Percentage Credits would total 100%, assuming each month constituted Benefit Service.
(2) Initial Percentage Credits as of January 1, 1997. With respect to the period ending December 31, 1996, a Participant’s initial Percentage Credits shall be based on his Benefit Service as of December 31, 1996. However, the Participant shall not receive any initial Percentage Credits unless he is a Participant on January 1, 1997.
(A) For this purpose, a Participant’s hire date shall be adjusted to reflect any periods which are not counted as Benefit Service and the initial Percentage Credits shall be calculated with regard to the Participant’s age during this period. For example, a Participant with a Benefit Service (as of December 31, 1996) of four years, eight months and 15 days shall be treated as if hired on April 16, 1992, even if these are not the Participant’s actual dates of employment because multiple periods of employment have been combined.
(B) For this purpose, any Benefit Service that has been disregarded under any Plan provision shall not be counted. For example, if a Participant previously received a lump sum, the Participant shall not receive any Percentage Credits with respect to that employment unless he repays the lump sum in accordance with the provisions of the Plan. See also Section 4.3(e).
(C) This paragraph applies if a Participant commenced a pension prior to 1997 and is subsequently reemployed by a Participating Company before January 1,
LA3:752821.27 I-20
1997. In this case, notwithstanding any other provision of this Plan, the Participant shall not receive any Percentage Credits with respect to the Benefit Service earned at the time of the first Eligible Separation. See also Section 7.1(e).
(3) Percentage Credits Commencing January 1, 1997. Commencing January 1, 1997, a Participant shall receive a Percentage Credit for any calendar month of Benefit Service. A Participant shall not earn a Percentage Credit for a month if he does not earn Benefit Service for that month or if such month was, or is subsequently, ignored pursuant to Section 4.3(e).
(4) Not Employed on January 1, 1997. Notwithstanding any other provision of this Plan, (A) subject to Section 6.1(b), a Participant who is on a leave of absence or short-term or long-term disability on January 1, 1997 shall not receive any Percentage Credits for any period under Section 6.2(b)(2) or with respect to period any prior to their return to active employment until and unless they return to actively perform services for 30 days for a Participating Company immediately at the end of such leave of absence or short-term or long-term disability, and (B) any person who Terminated prior to 1997, was not an Employee on January 1, 1997 (even if he is an employee of an Affiliated Company on January 1, 1997) and becomes an Employee on or after January 2, 1997 shall not receive any Percentage Credits under Section 6.2(b)(2) or with respect to any period prior to reemployment.
(c) Calculation of the Defined Lump Sum. The Defined Lump Sum as of the date that the Participant incurs an Eligible Separation shall equal the sum of (1) his aggregate Percentage Credits times the Participant’s Average Annual Compensation and (2) 25% of his aggregate Percentage Credits times the amount equal to the excess of the Participant’s Average Annual Compensation over 50% of the Taxable Wage Base in effect on January 1 of the year in which the Termination occurs. Such amount shall be determined as of the date of the Participant’s Termination (whether it is concurrent with or prior to the Eligible Separation). Notwithstanding the foregoing, the amount of the Defined Lump Sum shall not be less than the amount of the Defined Lump Sum that would be paid if the Participant had Terminated on the last day of any prior Plan Year; provided that this amount shall be calculated based on the Taxable Wage Base in effect on January 1 of the year in which the Termination occurs.
(d) Amount of the DLS Normal Pension. If an Ex-MediaOne Participant incurred an Eligible Separation prior to the Separation Time, the amount of the DLS Normal Pension to which a Participant is entitled as of the date of the Eligible Separation shall be a monthly amount payable as a single-Life Annuity commencing on the Participant’s Normal Retirement Date (or, if later, the earlier of the Pension Effective Date or Required Beginning Date) that is the DLS Equivalent of the Defined Lump Sum. Such amount shall be considered earned as of the date of the Participant’s Termination notwithstanding the fact that such amount shall not be calculated until the date of the Participant’s Eligible Separation.
LA3:752821.27 I-21
(e) Treatment of Reemployed Participants.
(1) This subsection (e) addresses Participants who Terminate after 1996, incur an Eligible Separation (either concurrent with or subsequent to the Termination) and are later reemployed by a Participating Company and incur another Eligible Separation.
(2) If the Participant was Vested at the time of the prior Eligible Separation, any previously unpaid benefit earned under this Article 6 with respect to such prior period of employment shall remain as a frozen annuity; the Participant may not elect a lump sum with respect to such annuity. Participants may not buy back any benefits that previously commenced. Upon reemployment, notwithstanding Section 4.3, the Participant shall not be credited with any Percentage Credits earned with respect to such prior employment.
(3) If the Participant was not Vested at the time of prior Eligible Separation and is rehired before such prior period of service is ignored pursuant to Section 4.3(e)(2), then the Participant shall, upon reemployment, be credited with the Percentage Credits earned with respect to such prior employment. In addition, if the Participant subsequently becomes Vested, the Participant’s DLS Normal Pension payable upon the subsequent Eligible Separation shall not be less than the DLS Normal Pension earned at the time of the earlier Eligible Separation (based upon the Percentage Credits and Average Annual Compensation earned at the time of the first Termination, and DLS Factors in effect at the time of the first Pension Effective Date).
(f) Tax Qualification Rules. Section 411(a)(9) and 411(d)(6) of the Code shall be implemented by (1) ensuring that the Defined Lump Sum is not decreased in accordance with the rules set forth in subsection (c) and (2) ensuring that the DLS Normal Pension calculated at the Eligible Separation is not decreased. Because the DLS Normal Pension shall not be calculated until Eligible Separation, the Plan shall not prohibit the DLS Normal Pension from being less than an amount equal to the Defined Lump Sum at the end of an earlier Plan Year converted to a single Life Annuity payable at the Participant’s Normal Retirement Date by using the DLS Factors in effect on the end of such earlier Plan Year.
(g) Rules For Transfers To Affiliated Companies. This subsection addresses the treatment of Participants who Terminate after 1996 by transferring to an Affiliated Company that is neither a Participating Company (with respect to Appendix I) nor a participating company (within the meaning of Plan Section 1.42) and subsequently transfer back to a Participating Company (with respect to Appendix I), in each case without incurring an Eligible Separation. (If the Participant incurs an Eligible Separation either at the time of the initial Termination or at the time the individual Terminates employment with the Affiliated Company, the rules of subsection (e), rather than this subsection (g), shall apply.) When the Participant subsequently incurs an Eligible Separation from the Participating Company, his Defined Lump Sum shall equal (1) if the Participant was Vested when he first Terminated, the sum of the Defined Lump Sum calculated as of the first Termination (based on Percentage Credits and Average Annual Compensation as of such first Termination) plus the Defined Lump Sum earned with respect to the second period of employment with the Participating Company (disregarding Percentage Credits and Average Annual Compensation with respect to the first period of employment with the Participating Company) or (2) if the Participant was not Vested
LA3:752821.27 I-22
when he first Terminated, the Defined Lump Sum calculated based on his aggregate Percentage Credits and Average Annual Compensation earned during both periods of employment with the Participating Companies. Regardless of whether clause (1) or (2) of the preceding sentence applies, the DLS Normal Pension with respect to such a Participant shall be calculated as the DLS Equivalent (based on the DLS Factors in effect on the date following the Participant’s Eligible Separation) of the aggregate Defined Lump Sum described in the preceding sentence.
6.3 DLS Early Pension. If an Ex-MediaOne Participant incurred an Eligible Separation prior to the Separation Time, the amount of the Early Pension Benefit shall be the DLS Early Pension, which shall be equal to the greater of (a) the DLS Normal Pension calculated in Section 6.2(d), reduced by the factors in Plan Appendix C to reflect early commencement of benefits, or (b) the Minimum Amount. Regardless of when the Participant commences benefit, the Minimum Amount is a single-Life Annuity commencing on the Pension Effective Date that is the DLS Equivalent of the Defined Lump Sum calculated in Section 6.2(c).
6.4 Modified Disability Benefit. No Participant shall be eligible to receive a Modified Disability Benefit (as set forth in Appendix J) by virtue of Appendix I.
6.5 Death of a Participant before Commencement of Benefits. Subject to Section 206(d) of ERISA, the following rules shall apply in the case of a Vested Participant or Vested Former Participant who dies before his Annuity Starting Date.
(a) In general, Participants described in Sections 1.3(a)-(e) are entitled to a benefit under Plan Article V-D; accordingly, their pre-retirement death benefit will be determined in accordance with Plan Article V-D, subject to appropriate modification to reflect Section 1.3 and the other provisions of this Appendix I. By way of example, a Participant described in Section 1.3(a) is generally entitled to a benefit equal to the greater of the Defined Lump Sum Benefit or the benefit under Article 7 of this Appendix I; if such a Participant dies prior to the Annuity Starting Date, his Qualified Pre-Retirement Survivor Annuity would be the greater of the pre-retirement death benefits set forth in Plan Article V-D (excluding those relating to benefits described in Plan Article V-B) or Article 7 of this Appendix I. Such a Participant (but not Former Participant) would be entitled to waive the Qualified Pre-Retirement Survivor Annuity payable to his spouse in accordance with the rules of Plan Article V-D. In contrast, if the Participant were described in Section 1.3(b), the Participant would be entitled to a Qualified Pre-Retirement Survivor Annuity under Section 7 (which could not be waived) plus the Qualified Pre-Retirement Survivor Annuity attributable to the benefits under Plan Articles V-B and V-D after the Cessation Date, which could be waived.(b) If a Participant or Former Participant dies before the Annuity Starting Date and is not Vested, no pre-retirement death benefit shall be payable. The provisions of Section 6.6 of Appendix I in effect before the Separation Time that provided a pre-retirement death benefit to a Participant who died prior to being vested shall no longer apply. Such provisions only applied to Participants who are employed by the Cable Companies at the time of their death. Because on or after the Separation Time, none of the Participants in the Plan will be employed by the Cable Companies, those provisions do not apply after the Separation Time.
(c) See also Section 7.5.
LA3:752821.27 I-23
ARTICLE 7
GRANDFATHERED PENSIONS
7.1 Application.
(a) Except as otherwise provided, (1) this Article 7 applies only to an Employee who both was employed by MediaOne of Delaware, Inc. (the “Company”) before January 1, 1997 and is covered by Article 6 (a “Grandfathered Participant”) and (2) a Grandfathered Participant’s Benefit shall be the greater of the Benefit under Article 6 or the Benefit under Article 7. Any person who first becomes an Employee on or after January 1, 1997 shall not become eligible to participate in this Article 7 and shall not earn any Benefit Service, Average Annual Compensation or Accrued Benefits under this Article 7. Employees of MediaOne, Inc. and MediaOne of Michigan, Inc. did not earn any benefits under this Article 7.
(b) This subsection addresses the benefits of any Participant who was on leave of absence or short-term or long-term disability on January 1, 1997.
(1) If any such Participant returned, prior to the Separation Time, to actively perform services for the Company for at least thirty days at the end of the leave of absence or short-term or long-term disability, his Benefits shall be determined in accordance with Section 7.1(a) and, if applicable, Section 7.1(d) and (e).
(2) If any such Participant does not return to actively perform services for the Company at the end of the period (or returns, but does not actively perform services for at least thirty days), the Participant shall be Terminated on the date set forth in Section 2.22, Section 5.4 or the date of Termination after the return to employment, as applicable. Such Participant’s Benefits shall be the Participant’s vested Accrued Benefit under this Article 7 (which shall be determined without regard to the New Rules). In the case of a Participant who returns, prior to the Separation Time, to service for less than thirty days, such benefits shall not be less than any vested benefits earned under Article 6 with respect to the period of reemployment.
(3) Notwithstanding paragraph (2), if a Participant on short-term disability on January 1, 1997 became totally and permanently disabled pursuant to Section 5.4(a) and subsequently returns to active employment with a Participating Company prior to the Separation Time (whether or not at the end of the period of disability), Sections 6.2(e) and 7.1(d) shall apply, provided the person shall not earn any benefits or receive any Percentage Credits under Article 6 with respect to any period prior to the return to active employment.
(c) Notwithstanding the foregoing or any other provision of this Plan, any person employed by the Company before 1997 who was not an Employee of the Company on January 1, 1997 (even if he is an employee of a Participating Company or an Affiliated Company on January 1, 1997) shall not participate in this Article 7 on or after January 1, 1997 and shall not earn any Benefit
LA3:752821.27 I-24
Service, Average Annual Compensation or Accrued Benefits on or after January 1, 1997 under this Article 7. If such Participant is reemployed by a Cable Company after 1996, such person’s benefit under this Plan shall be the sum of (1) the Vested Accrued Benefit under this Article 7 as of the date of Termination prior to 1997, except that the Participant may elect a lump sum (based on the DLS Factors in effect on the Pension Effective Date following the period of reemployment) unless the Participant previously commenced payments, and (2) the Vested Benefits earned under Article 6 with respect to the period of reemployment. See also Section 6.2(b)(4)(B).
(d) (1) This subsection (d) addresses Participants who terminates employment with the Company on or after January 1, 1997 (including a transfer to another Participating Company) and are reemployed by a Participating Company and incur an Eligible Separation. See also Section 6.2(e) and (g). Notwithstanding the foregoing or any other provision of this Plan, any such Participant shall not earn any Benefit Service, Average Annual Compensation or Accrued Benefits under Article 7 on or after the date of such termination of employment with the Company. Such Participant’s benefit under this Article 7 shall be limited to his or her Vested Accrued Benefit as of the date of the termination that has occurred on or after January 1, 1997. Notwithstanding the preceding two sentences, any person who terminates in January - March, 1997 and is rehired by the Company prior to April 1, 1997 may earn Accrued Benefits under this Article 7 until March 31, 1997.
(2) If the Participant incurred an Eligible Separation prior to being reemployed by a Participating Company and was Vested at that time (or the Participant is described in Section 6.2(g) and was Vested at the time of the transfer back to a Participating Company), the benefit under this Plan upon the Eligible Separation following the period of reemployment shall be equal to (A) any remaining unpaid benefit earned as of the date of the first termination of employment with the Company that occurs on or after January 1, 1997, which shall be the greater of the benefits earned under Article 6 or Article 7 as of such date and which may not be paid as a lump sum (unless the Participant is described in Section 6.2(g)) plus (B) his benefits earned pursuant to Article 6 with respect to reemployment. If the Participant previously commenced the benefits described in clause (A), such benefits shall continue in the same form and amount both during reemployment and thereafter. Participants may not buy back any benefits that previously commenced.
(3) If the Participant incurred an Eligible Separation prior to being reemployed by a Participating Company and was not Vested at that time (or the Participant is described in Section 6.2(g) and was not Vested at the time of the transfer back to a Participating Company), is rehired before such prior period of Benefit Service is ignored pursuant to Section 4.3(e)(2) and subsequently vests, his benefits upon the Eligible Separation following the period of reemployment shall be determined in accordance with Section 7.1(a) and the Participant may elect a lump sum (based on the DLS Factors in effect on the Pension Effective Date following the period of reemployment). If the prior Benefit Service is ignored, no benefits shall be paid under Article 7.
(e) This subsection applies if a Participant is employed by the Company on January 1, 1997 and had commenced a pension prior to 1997. In this case, the Participant (1) shall receive the pension earned at the time of the earlier termination of employment plus (2) subject to
LA3:752821.27 I-25
subsection (c) above, the greater of the benefit earned under Article 7 (without regard to the benefit described in the preceding clause (1)) or the benefit under Article 6. See Section 6.2(b)(2)(C).
(f) Notwithstanding the foregoing or any other provision of this Plan, except as expressly set forth in Section 1.3, no person shall earn any Benefit Service, Average Annual Compensation or Accrued Benefits on or after the Cessation Date under this Article 7.
7.2 Normal Retirement Pension.
(a) The amount of the Normal Pension Benefit shall be an amount equal to one-twelfth (1/12th) of: (1) the excess of 0.95 percent of his Average Annual Compensation, over 0.37 percent of his Average Annual Compensation, with such Average Annual Compensation not to exceed his average Compensation for the three last full calendar years before his Severance Date, and not to exceed Covered Compensation, times (2) the number of years of Benefit Service credited to him (not to exceed 30 years).
(b) Notwithstanding the foregoing, in no event shall such Pension Benefit be less than the largest of the following amounts:
(1) An amount calculated under the following formula determined as of September 30, 1989: (A) the excess of one percent of his Average Annual Compensation, over one percent of his Primary Social Security Benefit times (B) the number of Years of Benefit Service credited to him (not to exceed 30 years). In the case of a Participant whose Compensation for the 1988 Plan Year was in excess of $78,353, “December 31, 1988” shall be substituted for “September 30, 1989” in the preceding sentence. Defined terms used in this paragraph (1) shall have the meaning given to them in the Plan as in effect on December 31, 1988, provided that: “Primary Social Security Benefit” shall be defined in accordance with its meaning set forth in the Plan on December 31, 1996.
(2) An amount calculated under the formula in subsection (a) above determined as of February 28, 1997, using the definitions of “Average Annual Compensation” and “Compensation” as in effect on December 31, 1996.
(3) The Participant’s Pension Benefit determined as of December 31, 1993, frozen in accordance with Treasury Regulations 1.401(a)(4)-13; or
(4) The Participant’s Early Retirement Pension (as determined at the end of any prior Plan Year).
7.3 Early Retirement Pension. The amount of the Early Pension Benefit shall be a Pension Benefit, determined in the manner set forth in Section 7.2 but based upon his years of Benefit Service and Average Annual Compensation as of his Termination reduced by the factors in Plan Appendix C. However, in the case of a Participant who Terminates on or after age 55, the Early Retirement Pension shall not be less than the Pension Benefit described in the preceding sentence (as of the earlier of the Cessation Date and January 31, 1998) reduced by one-half percent (0.5%) for each month that the Early Retirement Date precedes the Participant’s Normal Retirement Date.
LA3:752821.27 I-26
7.4 Late Retirement Pension. The amount of the Late Pension Benefit shall be a Pension Benefit, determined in the manner set forth in Section 7.2 but based upon his years of Benefit Service and Average Annual Compensation as of his Late Retirement Date. Upon attainment of age 65, he shall be provided with written notice from the Committee in accordance with Section 8.13(c), as though he were a re-employed Participant.
7.5 Death of a Participant before Commencement of Benefits.
(a) If a Participant or Former Participant dies before the Annuity Starting Date and does not have five years of Vesting Service (and is not otherwise Vested) or if a Participant or Former Participant is not survived by a Surviving Spouse, no death benefit shall be payable under this Article 7.
(b) Qualified Pre-Retirement Survivor Annuity.
(1) Except as provided in subsection (c) or (d) below, if a Vested Participant (or a Vested Former Participant) dies prior to the Annuity Starting Date and is survived by a Surviving Spouse, a death benefit in the form of a Qualified Pre-Retirement Survivor Annuity, as described below, shall be payable to such Surviving Spouse. Subject to Sections 1.3 and 7.1, if the Spouse consents to a distribution within 60 days after notification of an entitlement to a death benefit, such Survivor Annuity shall be a monthly Benefit for the life of the Surviving Spouse which is equal to the amount the Surviving Spouse would have received under Article 7 if the Participant had commenced receiving benefits under a Joint and Survivor Annuity on the day before his death.
(2) If the Spouse does not consent to a distribution within 60 days after notification of entitlement to a death benefit, payment of a Qualified Pre-Retirement Survivor Annuity shall commence as of the day following the day the Spouse elects (in writing) to receive the Survivor Annuity but not later than the date on which the deceased Participant or Former Participant would have attained age 65. The amount of the benefit shall be the amount the Surviving Spouse would have received if the Participant or Former Participant had Terminated on the earlier on the date of his death or actual Termination, survived until the date the Survivor Annuity commenced, retired with a Joint and Survivor Annuity on such date and died on the day after such date.
(3) Payment of the Survivor Annuity shall be made as soon as practicable after the date as of which it commences; the first payment shall include any payments not made which were due on and after the date as of which it commenced.
(c) If, pursuant to Section 1.3 or 7.1 or any other provision of this Appendix I, the Ex-MediaOne Participants’ benefits under Appendix I include a benefit calculated solely under Article 7 without regard to any comparison to a Defined Lump Sum Benefit, then no waiver of the Qualified Pre-Retirement Survivor Annuity is permitted. To the extent, however, that the benefits under Article 7 are compared to a Defined Lump Sum Benefit, the Participant or a Surviving Spouse of a Participant (but not in either case a Former Participant or the spouse of a Former Participant) may elect to waive the benefit in accordance with (1) the rules set forth in this Appendix I prior to the
LA3:752821.27 I-27
Separation Time in the case of a Participant described in Section 1.3(h), or (2) the rules of Section 6.5 in the case of an individual described in Section 1.3(a) or (e).
7.6. Transfers to Other Cable Companies. If a Participant terminates employment with the Company and commences employment with another Cable Company on the next business day, such Participant shall earn Compensation and Average Annual Compensation with respect to the amounts paid by the Cable Company until the earlier of his first Termination from the Cable Company (or other Participating Companies) or December 31, 2006; however, such a Participant shall not earn Benefit Service on or after his Termination from the Company for purposes of this Article 7.
ARTICLE 8
PAYMENT OF BENEFITS
8.1 Form of Benefits. The forms of payment of Pension Benefits available to Accrued Benefits earned under this Appendix I shall be determined in accordance with Plan Article VI.
8.2 Protected Benefits. Notwithstanding Section 8.1, if the Participant elects a Qualified Joint and Survivor Annuity under Plan Section 6.2 or a life annuity with a 10-year certain under Plan Section 6.3, the amount the benefit payable under Appendix I shall not be less than the actuarial equivalent (calculated by taking into account the spouse’s actual age and on the basis of an interest rate of 8% and the 1971 Group Annuity Mortality Table (male rates for participants/female rates for beneficiaries) of the Participant’s Accrued Benefit as of the earlier of the Cessation Date or January 31, 1998 (payable in the form of a single Life Annuity at the Annuity Starting Date). For purposes of the preceding sentence, if the Participant elects a Qualified Joint and Survivor Annuity, (1) the grandfathered benefit will include a free pop-up to the amount of the entire Accrued Benefit (earned through Termination) payable as a single Life Annuity and (2) the pop-up benefit to the Participant shall be ignored for purposes of computing the amount of the grandfathered benefit.
8.3 Deferred Distribution; Minimum Distribution Requirements. The requirements of Plan Section 13.9(b) - (f) shall apply to any distribution of a Participant’s benefit and shall take precedence over any inconsistent provisions of the Plan.
8.4 Suspension and Adjustment of Benefit Payments.
(a) The Benefit payable to a Participant who (1) was reemployed by an Affiliated Company on or after his Annuity Starting Date and before he reaches age 70½ and whose Reemployment Commencement Date was before 1997, or (2) continued in employment with an Affiliated Company after his Normal Retirement Date, will be permanently withheld for any calendar month during which the Employee completes at least 40 hours of service with an Affiliated Company in ERISA Section 203(a)(3)(B) service. The Benefit permanently withheld will be the actual amount scheduled to be paid for the calendar month in which the foregoing conditions for suspension are met.
LA3:752821.27 I-28
(b) In the case of a Participant described in subsection (a), upon the Participant’s subsequent Eligible Separation, his Benefit shall be redetermined in accordance with the provisions of the Plan applicable to him as of the date of his subsequent Eligible Separation, as if no prior benefit payments had been made. His Benefit, as so redetermined and without regard to whether it is determined under Article 6 or 7, shall then be reduced by (i) the Actuarial Equivalent of the Benefit payments, if any, made to the Participant or (ii) in the case of a Participant who received a lump sum payment, the Actuarial Equivalent of such payment before his reemployment began. The Participant’s Benefit as so redetermined (but before reduction for benefits paid) shall not be less than his Benefit before the suspension of payments. The form of payment of any Benefit to which he may thereafter become entitled shall be determined in accordance with the provisions of Article 8, without regard to the form in which his Benefit had previously been paid. Payment of such Participant’s benefits shall resume in accordance with Plan Section 5C.3(c).
(c) No payment shall be withheld by the Plan pursuant to this Section unless the Plan notifies the Employee in accordance with Plan Section 5C.3.
(d) In the case of a Participant who is reemployed by an Affiliated Company on or after his Annuity Starting Date and whose Reemployment Commencement Date is after 1996, no benefits shall be withheld. See also Sections 6.2(e) and 7.1(d). Upon the Participant’s subsequent Eligible Separation, his Benefit for the period of reemployment shall be calculated by ignoring all Benefit Service, Compensation and Percentage Credits earned before the Reemployment Commencement Date.
8.5 Fractional Rule. The method of computing a Participant’s accrued benefit under this Plan is intended to satisfy the requirements of the Fractional Rule provided in Section 411(b)(1)(C) of the Code.
ARTICLE 9
VESTING; LIMITATIONS ON BENEFITS
9.1 No Benefits for Non-Vested Participants. The Benefits payable under the Plan to or in respect of a Participant who incurs an Eligible Separation for any reason other than his death, before he has become Vested, shall be zero. Subject to Section 6.2(e), the Benefit Service and Vesting Service credited to such a Participant before the termination of his employment shall be restored to him in the event that he returns to employment with an Affiliated Company before he has incurred five consecutive One-Year Periods of Severance.
9.2 Limitation on Benefits. Any other provision of the Plan notwithstanding, no Participant’s Benefit shall exceed the amount determined in accordance with Plan Section 5C.2, as modified by the following rules:
(a) Plan Section 5C.2(a)(3) shall not apply. Accordingly, the compensation limit in Plan Section 5C.2(a)(1) shall not be adjusted after the Participant retires or Terminates.
LA3:752821.27 I-29
(b) Plan Section 5C.2(f) shall apply if the Participant participated in the Continental Mutual Savings Plan.
(c) Plan Section 5C.2(h) shall not apply. Accordingly, no additional amount shall be paid to the Participant (or survivor) by any Participating Company (or Qwest or U S WEST or any affiliate thereof).
(d) The provisions in Plan Section 5C.2 relating to Portability Companies, Interchange Companies and Former Affiliates shall not apply.
LA3:752821.27 J-i
APPENDIX J
MODIFIED DISABILITY PENSIONS (effective January 1, 1997)
TABLE OF CONTENTS
SECTION 1. UNDERTAKING 1
SECTION 2. DEFINITIONS 2
SECTION 3. ADMINISTRATION 4
3.1 Administrator 4 3.2 Appellate Reviewer 4 3.3 Discretion 4 3.4 Funding of MDP Program Benefits 4
SECTION 4. MDP DISABILITY PENSION BENEFITS 6
4.1 Eligibility to Receive MDP Program Benefits 6 4.2 Benefit Payment Schedule 6 4.3 Benefit Payment Amount 6 4.4 Coordination With Other Sources of Disability Income 8 4.5 Application for Benefits 9 4.6 Exclusions 9 4.7 Duration of MDP Program Benefits 10 4.8 Employment Status 10 4.9 Amounts Accrued Prior to Death 10 4.10 Subrogation 10 4.11 Social Security Assistance and Fee Allowance 11
SECTION 5. CROSS REFERENCE TO PENSION PLAN PROVISIONS 12
LA3:752821.27 J-1
SECTION 1.
UNDERTAKING
The purpose of the Modified Disability Pension Program (“the MDP Program”) is to provide post-employment income through the payment of disability benefits to Participants of the Company and Participating Companies when they Terminate on account of a Disability. The Plan is intended to support the Company’s commitment to Participants by providing reasonable income replacement, in combination with other benefits, for Participants unable to work because of a Disability. The MDP Program superseded and replaced the following benefit plan provisions applicable as of December 31, 1996, with respect to certain active Management Employees of Old U S WEST:
(i) Long-term disability benefits under the U S WEST Disability Plan; and
(ii) Disability pension benefits under Section 5B.2 of the U S WEST Pension Plan.
Effective January 1, 2001, this Appendix supercedes and replaces the long-term disability benefits under the Qwest welfare plans with respect to Management Employees of Qwest and other entities that become Participating Companies on January 1, 2001 (excluding those whose disability commenced prior to January 1, 2001).
The effective date of the MDP Program described herein is January 1, 2001.
LA3:752821.27 J-2
SECTION 2.
DEFINITIONS
The following terms shall have the meaning set forth below, and other terms that are capitalized but not defined in this Appendix shall have the meanings set forth in the Qwest Pension Plan (“Plan”) document to which this MDP Program is appended, unless the context clearly indicates otherwise:
2.1 “Administrator” shall mean, effective April 1, 2001, the persons appointed by the Vice President – Risk Management (or the successor thereof), Qwest Services Corporation to administer the MDP Program. The Administrator may be an outside third party administrator (which may be an entity), the EBC or one or more Employees. From January 1, 2001 until March 31, 2001, the EBC was the Administrator.
2.2 “Appellate Reviewer” shall mean, effective April 1, 2001, the Administrator (or such other entity or person appointed by the Vice President – Risk Management (or the successor thereof), Qwest Services Corporation) to review and grant or deny appeals for benefit claims under the MDP Program. From January 1, 2001 until March 31, 2001, the Appellate Committee under the Qwest disability plan was the Appellate Reviewer.
2.3 “Approved Provider” shall mean those licensed as follows when they provide services within the scope of their license, and the full range of proper treatment for the Disability-causing condition falls within the scope of the Approved Provider’s license and practice: Physician (a doctor of medicine or osteopathy licensed to prescribe and administer all drugs and perform surgery); nurse midwife/practitioner; dentist; licensed professional counselor; podiatrist; ophthalmologist or optometrist; chiropractor; psychiatrist; psychologist; and social worker.
2.4 “Base Pay” shall mean a Participant’s regular wage or salary rate in effect immediately prior to the individual’s termination from employment (as recorded in the Company’s human resource information system). “Base Pay” will not include overtime, bonuses, commissions, sales incentives, “at-risk” pay, or differentials. Notwithstanding the foregoing, Base Pay shall not exceed limit on compensation set forth in Code section 401(a)(17) and Plan Section 1.10(d). Effective November 4, 2002, in the case of a Participant employed by each of Qwest Dex, Inc. (“Dex”) and SGN LLC (“SGN”) pursuant to the Joint Management Agreement (“Agreement”) by and among the Company, Dex, SGN and Dex Holding LLC, during the period that such Participant is so employed by both Dex and SGN (or until the Agreement is no longer in effect if earlier), such Participant’s Base Pay shall be determined by treating SGN as a Participating Company.
2.5 “Claims Manager” shall mean those individuals responsible for reviewing and approving or denying claims for Workers’ Compensation payments under the applicable state laws.
2.6 “Disabled” or “Disability” shall mean the circumstance, as a result of sickness or injury, and as determined by the Administrator in its sole discretion based upon objective medical evidence, when a Participant is unable to engage in any occupation or employment for which
LA3:752821.27 J-3
the Participant is qualified, or may reasonably become qualified for by training, education or experience, other than a job that pays less than 60% of their Base Pay at the time the Participant became Disabled.
2.7 “Employee” shall mean any Covered Employee as defined in Section 1.12 of the Plan.
2.8 “Normal Take Home Pay” shall mean gross Base Pay minus applicable estimated federal, state and local taxes and is calculated using the Base Pay and tax withholding in effect on the Participant’s last day on the active payroll. Deductions, including but not limited to garnishments, 401(k) contributions, United Way, and flexible spending accounts, will not be considered a deduction for this purpose. The estimated taxes will be determined in accordance with the rules of the Administrator or its delegate.
2.9 “Objective Findings” shall mean written documentation of observable, measurable and reproducible symptoms, such as, but not limited to, x-ray reports, elevated blood pressure readings, and lab test results.
2.10 “On-Job Injury or Illness” or “Occupational Injury or Illness” shall mean an injury or illness that arises out of and in the course or scope of employment with a Participating Company, and has been accepted by a Claims Manager as a compensable Workers’ Compensation claim under the Workers’ Compensation Program of the respective state.
2.11 “Participant” shall mean any Employee who is a Management Employee and who has completed one year of Service. For purposes of the MDP Program, “Management Employee” shall not include an Employee temporarily promoted to that status after December 31, 2000. In addition, it shall not include an Employee temporarily promoted to that status prior to January 1, 2001, unless the Participant has remained in that status for a period of more than 12 consecutive months. “Participant” shall include any “Prior Participant” provided such individual continues to fulfill all conditions for participation in this Appendix J. “Prior Participant” shall mean any Communications Participant who was receiving a Modified Disability Pension under the Plan at the Separation Time.
2.12 “Service” shall mean an Employee’s Term of Employment (TOE) as defined in the Qwest Pension Plan.
2.13 “Social Security” shall mean the federal Social Security Administration or disability benefits provided by that agency.
2.14 “Workers’ Compensation” shall mean the state agencies or the wage replacement benefits for an On-Job/Occupational Injury or Illness provided in accordance with state law in the state where the Participant resides, regardless of slight differences in the title of the agency or benefits provided.
LA3:752821.27 J-4
SECTION 3.
ADMINISTRATION
3.1 Administrator. The Administrator shall administer the Plan and shall have all powers and authority set forth in Section 8.9(a) and (d) of the Plan.
3.2 Appellate Reviewer. The Appellate Reviewer shall have all authority and discretion to review and grant or deny appeals for benefits under the MDP Program and authorize disbursements according to the MDP Program. The appeals procedures shall be set forth in the summary plan description and shall generally be in accordance with appeals procedure set forth in the Qwest disability plans.
3.3 Discretion. The Administrator shall have the right and discretion to determine for all parties, all matters of fact or interpretation relating to the administration of MDP Program provisions, including questions of eligibility and any other matters. This discretion is granted to the Appellate Reviewer with respect to its exercise of its powers described in Section 3.2, above, and to such other persons as may be designated by the Administrator to perform other functions for the MDP Program. The decisions rendered by the Administrator, the Appellate Reviewer or such delegates shall be conclusive and binding on all persons subject only to the right to appeal under the terms of the MDP Program.
3.4 Funding of MDP Program Benefits.
(a) The disability pension under the MDP Program shall only be paid by the Trust funding the Plan to the extent that the DLS Equivalent of the combination of such disability pension and the normal retirement pension (excluding the Account Balance Formula pension) payable under the Plan do not exceed a “qualified disability pension benefit” as that term is defined in Treasury Reg. §1.411(a)-7(c)(3). In order to make the foregoing comparison under Treasury Reg. §1.411(a)-7(c)(3), the following calculations shall be made. First, the “equivalent combination benefit” shall be calculated. The “equivalent combination benefit” shall be a single Life Annuity (providing equal monthly payments and commencing on the Pension Effective Date) that is the DLS Equivalent, using the DLS Factors in effect on the Participant’s Pension Effective Date, of the combination of such disability pension under this Appendix J and the normal retirement pension (excluding the Account Balance Formula pension) under the Plan. Second, a qualified disability pension benefit shall be calculated; it equals a single Life Annuity (commencing on the Pension Effective Date) providing equal monthly payments equal to the monthly benefit (excluding the Account Balance Formula pension) which would be payable to the Participant if he continued employment with the Participating Company until attainment of age 65 and retired at that time, provided that it shall not be less than the Participant’s actual normal retirement pension (excluding the Account Balance Formula pension) under the Plan. For purposes of calculating this qualified disability pension benefit, (1) the various rules dealing with cessation of benefits under Articles V-B and V-D shall apply, (2) to the extent applicable, the Participant shall be assumed to earn Compensation at the same rate in
LA3:752821.27 J-5
effect prior to his Termination, (3) the normal retirement pension that would be payable under Article V-D shall be based on the DLS Factors in effect on the Participant’s Pension Effective Date and (3) no reduction factors shall be applied to reflect payment prior to age 65. Finally, the equivalent combination benefit shall be compared to the qualified disability pension benefit. If the equivalent combination benefit is less than or equal to the qualified disability pension benefit, the entire disability pension under this Appendix J shall be paid from the Trust. Otherwise, the disability pension payable from this Trust shall be reduced to the extent that the recalculated equivalent combination benefit (ignoring any disability pension not paid out of the Trust) is equal to the qualified disability pension benefit.
(b) Any disability pension amount payable under this Appendix J that is in excess of the amount that can be paid from the Trust under subsection (a) shall be deemed to constitute a welfare plan benefit and shall be paid either from the assets of the Company or respective Participating Company or, at the direction of the Company, from the assets of a tax-exempt trust created by the Company under Section 501 (c) of the Internal Revenue Code. The funds of any such 501 (c) trust may be used to pay welfare plan benefits as well as any reasonable administrative expenses under the MDP Program that are not allocable to the Pension Plan Trust. The Company’s contribution to the 501 (c) trust funds may be in the form of the Company’s common stock and up to 25% of such trust may be invested in Company stock.
(c) Any disability pension under the MDP Program payable to an Employee who is not also a Participant in the Plan (without regard to this Appendix J) shall be paid from either the assets of the applicable Participating Company or, at the direction of the Company, from the tax-exempt trust established pursuant to Section 3.4(a) above.
LA3:752821.27 J-6
SECTION 4.
MDP DISABILITY PENSION BENEFITS
4.1 Eligibility to Receive MDP Program Benefits. Except as provided in Section 4.6, a Participant is eligible for a disability pension under the MDP Program only if the Participant was a Prior Participant or, on or after Separation Time (or such later date the Participant’s Employer becomes a Participating Company), the Participant terminates employment (while a Management Employee) with a Participating Company on account of a Disability and continues to be Disabled. Notwithstanding the foregoing, Management Employees of Qwest and other entities that become Participating Companies on January 1, 2001 shall not be eligible if their disability commenced prior to January 1, 2001. As set forth in Section 10.4(d), no MDP Program benefits shall be paid on and after the Separation Time to Media Participants.
Subject to any other conditions established under this MDP Program, a modified disability pension will be paid to eligible Participants during their Disability if they fulfill all of the following requirements and obligations:
a. Seek proper care and treatment from an Approved Provider, and follow a recommended treatment plan.
b. Provide documentation supporting Disability to the Administrator or Appellate Reviewer (or its delegates) upon request. Documentation must support the claim for Disability and include Objective Findings, diagnosis and any other information relevant to the nature and duration of the Disability, as well as a plan for treatment or management of the problem(s).
c. Report for medical or psychological examinations from time to time, at the request of the Administrator or Appellate Reviewer (or its delegates), for the purpose of determining the Participant’s condition.
d. Reimburse the MDP Program for any overpayment of a disability pension that occurs for any reason, including, but not limited to, a Social Security award received for a period during which the Participant also received a disability pension.
e. Apply for Social Security Disability Benefits when eligible or at the Administrator’s or Appellate Reviewer’s request, and exhaust all permissible appeals for such benefits if denied.
MDP Program benefits may be suspended if a Participant and/or the Participant’s Approved Provider fails to satisfy any of the foregoing requirements.
4.2 Benefit Payment Schedule. Modified disability pension payments are paid monthly, in arrears, at the end of each calendar month following Termination (prorated for any partial month).
LA3:752821.27 J-7
4.3 Benefit Payment Amount.
(a) Subject to subsection (b), Eligible Participants will receive modified disability pension payments which, in combination with other sources of disability income, equals 60% of Base Pay for the period for which the disability pension payment is made.
(b) Normal Take Home Pay Adjustment. The amount of the modified disability pension payable when the Participant is also receiving non-taxable Workers’ Compensation (an offset under Section 4.4) will be calculated as follows:
(1) First, the difference between 60% of Normal Take Home Pay and the amount of the Workers’ Compensation benefit is calculated.
(2) The amount calculated in (1) above will be “grossed up”, i.e., increased by an amount equal to the estimated taxes to be owed by the Participant on that amount and the gross-up. The estimated taxes will be determined in accordance with the rules of the Administrator or its delegate.
(3) This total amount calculated in (2) above will then be reduced by other sources of disability income (excluding non-taxable Workers’ Compensation) to determine the MDP Program benefit.
An example of a Workers’ Compensation offset payment (assuming no other offset payments) follows.
LA3:752821.27 J-8
Workers’ Compensation Offset
Example of Disability Pension (Plan Payment)
Base Pay $1,000 minus Estimated Taxes - 250 equals Normal Take Home Pay $ 750 times Payment Scheduled Percent (60%) x 60 equals Maximum Payment Amount $ 450 minus Workers’ Compensation Benefit - 300 equals Net Plan Benefit $ 150 plus Gross-up for Applicable Estimated Taxes + 50 equals Gross Plan Payment $ 200
Total “Gross Pay” ($300 Workers’ Compensation Benefit plus $200 Gross
Plan Payment) $ 500 minus Estimated Taxes - 50 equals Final Net Pay $ 450
4.4 Coordination With Other Sources of Disability Income. MDP Program benefits will be offset by other Company-provided or government-provided sources of disability income or wages, in order to provide a benefit amount described in Paragraph 4.3 above. These other sources of income include, but are not limited to, Social Security benefits payable to the Participant, Workers’ Compensation or similar disability benefits, and any state or federal disability benefit (except benefits payable on account of military service).
The offset for MDP Program payments shall include an offset for any disability pension payment to which the Participant is entitled under the Occupational Part or as a rotational Employee on rotation from Bell Communications Research, Inc. (“Bellcore”) under the Bellcore pension plan. The offset for MDP Program payments shall also include an offset for any service pension paid to the Participant; if the Participant elects any form of benefits other than a single life annuity, the offset shall be calculated as the single life annuity option.
The Social Security benefits used in calculating MDP Program benefits include only the amount payable to a Participant under the initial Social Security determination and does not include benefits payable to a Participant’s family. Any increases in Social Security benefits thereafter will not result in a further reduction of the modified disability pension. If Social Security benefits are determined after the modified disability pension benefits begin, any retroactive Social Security benefits payable to a Participant are considered an offset for the MDP Program and will be used in determining modified disability pension benefits.
LA3:752821.27 J-9
MDP Program payments will continue at the rate provided in Section 4.3 until a benefit determination is received from Social Security and/or Workers’ Compensation. Offsets will retroactively apply to any determinations made after benefits have been paid. Upon receipt of the determination the Administrator will calculate a “reimbursement amount,” adjust current benefit payment amounts and notify the Participant of the amount they will be required to reimburse the MDP Program. The reimbursement amount will be equal to the offset amount that would have normally applied to Plan benefits. All reimbursements must be made within ninety (90) days after the Participant receives notice of the reimbursement amount. Otherwise, future modified disability pension payments shall be withheld to offset the reimbursement amount. Similar procedures shall apply to effect the offset of retroactive payments from other sources of disability income covered by this Section 4.4.
4.5 Application for Benefits. Application for MDP Program benefits must be submitted by the Participant within 90 days of the Participant’s termination from employment with the Participating Company, or MDP Program benefits will be forfeited.
4.6 Exclusions. Participants are not eligible for MDP Program benefits in the following circumstances:
(a) For Disabilities caused or contributed to by commission of a felony; intentionally self-inflicted injury (however, if the Employee’s Disability is a mental health condition, the Employee may remain eligible for modified disability pension payments under this Plan during the period that the Employee is Disabled on account of a self-inflicted injury inflicted solely on account of such mental health conditions); military service; war or any act of war, declared or undeclared; or active participation in a riot, insurrection, rebellion or civil commotion;
(b) If the Participant has received short-term disability benefits under the Qwest Disability Plan or any other disability plan maintained for the benefit of employees of a Participating Company which the Participant has not reimbursed to the Participating Company within ninety (90) days after receiving notice of the amount of the reimbursement due under that plan as a result of a retroactive Social Security payment, participation in the MDP Program is suspended until such time as the overpayment under that plan is resolved; when such overpayment is resolved, the individual’s participation in the MDP Program will resume, but there will be no payments made with respect to any period of suspension referred to in this subsection 4.6 (b);
(c) Any Participant who does not become Disabled until after termination from employment with a Participating Company;
(d) Any Participant who is not a Management Employee at Termination; and
(e) Any Participant who is or becomes Disabled while on a transitional or surplus transitional leave of absence, even if such Participant has not yet been terminated from employment.
LA3:752821.27 J-10
4.7 Duration of MDP Program Benefits. Payments of benefits under the MDP Program may continue until one of the following occurs:
(1) a Participant is no longer Disabled;
(2) a Participant fails to meet any of the requirements set forth in Section 4.1, above;
(3) the death of the Participant;
(4) at such time after termination from a Participating Company as the Participant is hired by the Company or any of its subsidiaries; or
(5) a Participant exhausts the maximum payment period for MDP Program benefits set forth below:
Age at Termination Maximum Payment of Employment Period 62 or younger to age 65 63 2-1/2 years 64 2 years 65 1-1/2 years 66 1 year 67 3/4 year 68 1/2 year 69 or older 1/4 year
4.8 Employment Status. An individual who is terminated from the payroll of a Participating Company is considered a former Employee. The individual’s receipt of MDP Program benefits under this Plan confers no right of re-employment if the individual recovers from the Disability at a later time.
4.9 Amounts Accrued Prior to Death. Modified disability benefits payable to a Participant but not actually paid at the time of the Participant’s death shall be paid to the spouse of the deceased Participant or, in the absence of a surviving Spouse, to the Participant’s surviving dependents or, in the absence of surviving dependents, to the Participant’s estate. Payments made pursuant to this provision shall operate as a complete discharge of the Plan, the Company, Administrator and Appellate Reviewer.
4.10 Subrogation. In the event of any payment of benefits under the MDP Program, the Plan shall be subrogated up to the amount of Plan payments to all the rights of recovery of the Participant (including any rights against the Company and/or Participating Company) for whom such payment is made against any person or organization, except against insurers on policies of insurance issued to and in the name of the Participant for whom such payment is made. The Participant shall execute and deliver such instruments and papers as may be
LA3:752821.27 J-11
required and do whatever else is necessary to secure such rights. This right of subrogation shall apply without respect to whether the Participant is fully compensated by any third party, and the Plan shall have a first priority to reimbursement within the limitations of this Section 4.10.
This subrogation provision allows the Plan the right to recover (against both the responsible third party and/or the Participant) benefits and wages paid on behalf of the Participant from a third party whose negligent or wrongful actions caused illness or injury to that Participant.
Failure or refusal of a Participant to cooperate with the Plan in its efforts to enforce the subrogation rights of this Section 4.10 (including, without limitation, any failure or refusal to execute and deliver subrogation agreements or other instruments reasonably needed to secure and enforce the Plan’s rights, or any failure or refusal to refrain from actions adverse to the Plan’s subrogation right) shall be grounds for denying modified disability pension benefits under the Plan.
4.11 Social Security Assistance and Fee Allowance. Participants will be eligible to receive assistance in obtaining Social Security Disability benefits and/or a fee allowance under one of the following provisions (except to the extent that such assistance or allowance is made available under any other plan in which the employee participates):
(1) If the Participating Employers maintain contracts with one or more vendors that provide Social Security advocacy services, the fees for the service will be entirely paid under the Plan as an MDP Program expense so long as the Participant uses the contracted vendor and fully cooperates with the vendor’s requests.
(2) If the Participant elects to hire an attorney not under contract with the Participating Employers, and coordinates the payment of attorney fees through the Social Security Administration, the fee allowance will be paid by reducing the gross Social Security Disability Benefit offset against MDP Program benefits (or, if applicable, the reimbursement amount described in Section 4.4). For appeals to the Social Security Administration filed prior to April 1, 1998, the amount of the fee allowance will be equal to what is withheld from the Social Security Disability Benefit. For appeals to the Social Security Administration filed after March 31, 1998, the amount of the fee allowance will be equal to the lesser of (A) the maximum amount the Participating Employers would have paid a contracted vendor under subparagraph (1), above, or (B) $4,000 (or the maximum amount the Social Security Administration is allowed to withhold by law, if that amount is higher).
LA3:752821.27 J-12
SECTION 5.
CROSS REFERENCE TO PENSION PLAN PROVISIONS
In addition to the definitions incorporated pursuant to Section 2 into this MDP Program from the Qwest Pension Plan document to which it is appended, the following provisions* of the Qwest Pension Plan shall apply to the administration of MDP Program benefits:
Article II, Service (for purposes of determining a Participant’s Period of Service or Term of Employment).
Article IV, Contributions
Article IX, Trust Agreement
Sections 10.1, 10.2 and 10.3 of Article X, Participating Companies
Article XI, Termination and Amendment
Article XIII, Miscellaneous (except Sections 13.4, 13.8 and 13.9, 13.12 and 13.13)
*These references shall be deemed changed to any parallel provisions of a restatement or revision to the Qwest Pension Plan.
LA3:752821.27 K-1
APPENDIX K
LEAVES OF ABSENCE (effective January 1, 1997)
LEAVE TYPE ASSOCIATED SERVICE CREDIT*
Anticipated Disability 30 days upon reinstatement Campaign 30 days upon reinstatement
Care of Newborn/Adopted/Foster Children
Service for entire leave upon reinstatement on or after 9/29/95
Departmental 30 days upon reinstatement Educational 30 days upon reinstatement
(per 12 months in a 2 year period)
Expatriate Spousal Up to five years Family Care Service for entire leave upon
reinstatement on or after 9/29/95
Illness 30 days upon reinstatement for all non-paid time, full service for all paid
time Military Full Service Credit
Part-time Political Full Service Credit Pending Placement Up to 2 years upon
reinstatement Personal 30 days upon reinstatement Political Full Service Credit
Surplus Transitional Full Service Credit Transitional Full Service Credit
Union Full Service Credit
__________________________
• Subject to Section 2.7, Service Credit includes Term of Employment and Pension Calculation Service, but not Vesting Service.
LA3:752821.27 L-1
APPENDIX L
DEATH BENEFIT ELIGIBILITY CRITERIA
Criteria for determining eligible Beneficiaries to receive death benefits under Article VII for active and retiree Participants.
Beneficiaries and order of priority of Beneficiaries when one or more eligible beneficiary exists at the time of participant’s death.
1) 100% of death benefit will be paid to eligible surviving spouse - eligible spouse is defined as individual to whom an employee/retiree is legally married pursuant to the laws of the state in which the employee/retiree lives at the time determination of an individual’s status as a spouse is made.
However, if there are dependent children of the employee/retiree that live in the household of a former spouse or another relative (as opposed to the spouse’s household) at the time of death, the amount of the death benefit shall be divided equally among the spouse and all dependent children regardless of where they live. For purposes of the preceding sentence, children away at school or college shall be considered members of the household where they normally reside, or where they previously resided before leaving for school if they now maintain their own residence. The spouse shall receive the spouse’s portion plus the portions for all dependent children residing in spouse’s household (such amounts shall be paid directly to the spouse, as opposed to the spouse as conservator for the children). The remaining benefits shall be paid to the applicable dependent children and shall require conservatorship necessary for payment to minors.
2) If there is no eligible surviving spouse, 100% to eligible dependent children in equal shares.
3) If there are no eligible surviving spouse or surviving dependent children, 100% to all eligible dependent parents in equal shares.
4) If there are no eligible surviving spouse, surviving dependent children, or surviving eligible dependent parents, 100% in equal shares to other eligible dependent relatives: dependent relatives would be defined as: grandchildren, brothers, sisters, grandparents, deceased spouse’s parents, and deceased spouse’s grandparents.
NOTE:
1) Dependent children are defined as: the natural or adopted children of the deceased or retired employee who are either (x) under age 23, dependent and unmarried or (y) if over age 23, unmarried, disabled and dependent upon participant for support.
2) Unborn children at the time of participant’s death are not eligible for death benefit.
LA3:752821.27 L-2
3) Conservatorship is required for payment to be made to eligible dependent children under age 18.
A dependent children must meet one of the three criteria:
1) Claimed on deceased participant’s tax return as a dependent, or
2) Proof of child support from the deceased prior to death, or
3) Living in a home provided by deceased participant, or in the home of the deceased participant.
Dependent parents and/or dependent relatives must meet one of the two criteria:
1) Claimed on deceased participant’s tax return as a dependent, or
2) Living in a home provided by deceased participant or in the home of the deceased participant.
This Appendix L shall also apply to Former Participants not employed after 1996.
The following factors shall be used to calculate the lump sum benefit increase set forth in Section 7.3(c).
Probability Factors That A Participant
Will Be Survived By A Qualified Beneficiary
Age at Death
Probability of Qualified Beneficiary
Age at Death
Probability of Qualified Beneficiary
40 74.0% 70 55.5%
41 74.0% 71 54.0%
42 74.0% 72 52.5%
43 74.0% 73 51.0%
44 74.0% 74 49.5%
45 74.0% 75 47.5%
46 74.0% 76 45.5%
LA3:752821.27 L-3
Age at Death
Probability of Qualified Beneficiary
Age at Death
Probability of Qualified Beneficiary
47 74.0% 77 44.0%
48 74.0% 78 42.0%
49 74.0% 79 40.0%
50 74.0% 80 39.0%
51 73.5% 81 37.0%
52 73.0% 82 35.5%
53 73.0% 83 34.0%
54 72.5% 84 32.5%
55 72.0% 85 30.5%
56 71.5% 86 29.0%
57 70.5% 87 27.5%
58 69.5% 88 25.0%
59 68.0% 89 23.5%
60 67.5% 90 22.0%
61 66.5% 91 20.0%
62 65.0% 92 18.0%
63 64.0% 93 15.5%
64 62.5% 94 13.5%
65 62.5% 95 10.5%
66 61.0% 96 7.5%
67 59.5% 97 4.0%
68 58.0% 98 0.0%
LA3:752821.27 L-4
Age at Death
Probability of Qualified Beneficiary
Age at Death
Probability of Qualified Beneficiary
69 56.6% 99 0.0%
LA3:752821.27 M-1
APPENDIX M
ADDITIONAL DEFINED LUMP SUM BENEFIT FOR MANAGEMENT PARTICIPANTS (effective as of August 11, 2000)
TABLE OF CONTENTS
INTRODUCTION .................................................................................................................... M-1
ARTICLE I DEFINITIONS...................................................................................... M-1
ARTICLE II PARTICIPATION ................................................................................ M-3
ARTICLE III INVOLUNTARY TERMINATION BENEFITS................................. M-4
ARTICLE IV VOLUNTARY TERMINATION BENEFITS ..................................... M-7
ARTICLE V CONDITIONS FOR RECEIPT OF BENEFITS .................................. M-8
ARTICLE VI GENERAL ADMINISTRATION ...................................................... M-10
ARTICLE VII EXTRA PAYMENTS......................................................................... M-15
EXHIBIT 1 Participating Companies .................................................................... M-16
INTRODUCTION
The purpose of this Appendix M is to provide additional retirement benefits to certain Participants who are Formally Notified, during the period from August 11, 2000 up to and including June 30, 2001, that they will be involuntarily terminated from employment (or that they are eligible for a Voluntary Termination Program) and who meet each of the other conditions set forth in this Appendix M.
ARTICLE I
DEFINITIONS
The following terms shall have the meaning set forth below, and other terms that are capitalized but not defined in this Appendix shall have the meaning set forth in the Qwest Pension Plan (the “Plan”) document to which this Program is appended, unless the context clearly indicates otherwise:
1.1 “Annual Base Salary” shall mean the employee’s current annual rate of base cash compensation exclusive of commission and incentive payments, bonuses or other performance awards, and exclusive of any overtime, differentials and other allowances. However, for employees
LA3:752821.27 M-2
working under a sales compensation plan, it means the annual target rate of base cash compensation. “Annual Base Salary” for regular, part-time employees, means the annual, full-time rate of base compensation, excluding items referenced above, times a fraction which is the number of scheduled hours of work per week divided by 40. For all employees, the foregoing rate shall be determined at the time of Formal Notification (with respect to the employee’s job at that time) or June 30, 2000 (with respect to the employee’s job at that time), whichever rate is greater. Notwithstanding the foregoing, the Participant’s Annual Base Salary shall not exceed the compensation limit set forth in Section 1.10(d) of the Plan.
1.2 “Force Group” shall mean any identifiable group of employees described in terms of a company, department, subdepartment, level of management, geographic location, or in other identifiable terms such as type of work, e.g., technical versus non-technical.
1.3 “Formally Notified” and “Formal Notification” mean an employee has received a Summary Plan Description for one of the Separation Plans and a Waiver Letter personally addressed to that employee outlining the benefits to which the employee may become entitled under this Program and the Separation Plan as a result of either (i) not being placed in an ongoing position in the Force Group or (ii) being a member of a Force Group implementing a Voluntary Termination Program.
1.4 “Guidelines” shall mean the U S WEST Guidelines for Force Reduction effective August 11, 2000, as set forth in a separate document not a part of this Program, as they may be amended from time to time. The Guidelines provide flexible guidance to managers in exercising management discretion in reductions in force, including the exercise of the management decision to place employees in surplus status, and the management decision whether or not an employee in the Force Group shall be placed in an ongoing position. Such decisions are business decisions and are not subject to the terms of this Program.
1.5 “Management Team” shall mean those managers directly responsible for resolving a surplus of employees in a particular Force Group, pursuant to the Guidelines.
1.6 “Participant” means a Covered Employee eligible to participate in the Program as described in Article II, either Article III or IV, and Article V and VI. Any person who does not meet all of the terms and conditions for a benefit under this Appendix M shall not be a Participant.
1.7 “Participating Company” shall mean those companies identified in Appendix 1 of the Program (and any successors to such companies), as such Appendix may be amended from time to time, with the approval of the Executive Vice President - Human Resources (or its successor) of the Company.
1.8 “Plan” refers to the Qwest Pension Plan (formerly the U S WEST Pension Plan).
1.9 “Program” refers to this Appendix M.
1.10 “Program Administrator” refers to the plan administrator described in Section 6.1 of this Program.
LA3:752821.27 M-3
1.11 “Qwest Companies” shall mean Qwest Communications International Inc., all wholly owned Subsidiaries of Qwest Communications International Inc., and all partially owned subsidiaries controlled by Qwest Communications International Inc. However, participation in this Program by such partially owned subsidiaries shall be subject to ratification by the respective board of directors.
1.12 “Separation Plans” mean, as to non-Communication Employees, the U S WEST Management Separation Plan and, as to Communication Employees, the U S WEST Communications Group Management Separation Plan.
1.13 “Sixty Day Employees” means (1) all STLA Eligible Employees and (2) all Surplus Employees who the Qwest Companies determine, in their sole discretion, may be entitled to 60 days notice under the Worker Adjustment and Retraining Notification Act.
1.14 “STLA Eligible Employee” means a Surplus Employee who is eligible for a surplus transitional leave of absence, but does not take it.
1.15 “Surplus Employees” and “Employees in Surplus Status” both refer to employees in the Force Group who, as a result of force reduction, are Formally Notified that they are not placed in ongoing positions and may be subject to involuntary termination.
1.16 “Term Employees” and “Temporary Employees” include all employees on the payroll of Qwest Companies who are performing an assignment which is not intended to be ongoing and which is intended to have a specified end date (by reference to a calendar end date or the project end date). For purposes of this Program only, “Term or Temporary Employees” refer to such employees identified above without respect to titles or job descriptions such as temporary project, project work, term assignment, temporary assignment, etc. and such an assignment shall be called a “Term or Temporary Position.”
1.17 “Voluntary Termination Program” is the offering by the Management Team by Formal Notification to employees within a Force Group of an opportunity to volunteer to terminate employment in return for voluntary termination benefits under Article IV of this Plan and Article IV of the Separation Plan.
1.18 “Waiver Letter” shall mean the letter agreement (containing a release and waiver and encompassing the conditions described in Article V of the Program) which Employees are required to sign as a condition for receipt of benefits under the Separation Plan and this Program.
ARTICLE II
PARTICIPATION
2.1 General Rule of Participation. An employee is eligible to participate in the Program if he or she meets all of the following conditions:
(a) He or she is a regular full time or regular part time employee, not at the officer level,
LA3:752821.27 M-4
(b) He or she is a Participant in the Pension Plan on the date the employee is Formally Notified that he or she is a Surplus Employee or a member of a Force Group implementing a Voluntary Termination Program,
(c) He or she is Formally Notified, during the period from August 11, 2000 up to and including June 30, 2001, that he or she is a Surplus Employee or a member of a Force Group implementing a Voluntary Termination Program,
(d) He or she meets all of the conditions for Program benefits set forth in Article V and VI, and
(e) He or she is not excluded from participating by virtue of Section 2.2.
2.2 Exclusions and Exceptions.
(a) Leased workers, independent contractors, Term Employees, and Temporary Employees are excluded from participation in the Program.
(b) A salaried or non-salaried employee who is covered by a collective bargaining agreement is excluded from participation in the Program subject to negotiation between the employee’s company and the union bargaining agent. Occupational Employees are excluded from participation.
(c) An employee whose employment is terminated for reasons other than the resolution of a surplus pursuant to the Guidelines, such as voluntary resignation, dismissal for poor work performance, or misconduct, is not eligible to participate according to the Program, and forfeits any previously attained eligibility for benefits in Article III or IV.
(d) Any employee who is terminated as a result of the sale or other transfer of any portion of a Qwest Company (regardless of whether such sale is a stock or an asset transaction) if such employee receives, or has the right to receive, a comparable offer of employment with the purchaser or transferee in such transaction by virtue of written contractual arrangements made by a Qwest Company, is not eligible to participate under this Program. (For purposes of this provision, the decision as to whether or not an offer of employment is a “comparable offer of employment” shall be determined by the Management Team pursuant to Section 6.10(b) in its sole discretion on the basis of business judgment and not in any fiduciary capacity).
(e) Any employee who is party to another severance agreement that gives the employee the choice between the severance pay under the Separation Plan and the benefits under the other agreement is not eligible to participate under this Program.
(f) Any Employee who is on (or elects to take) surplus transitional leave of absence is excluded from participating. Any STLA Eligible Employee may participate but is entitled to a lesser amount than other employees.
LA3:752821.27 M-5
ARTICLE III
INVOLUNTARY TERMINATION BENEFITS
3.1 Eligible Employees. All Surplus Employees who are eligible to participate in this Program whose employment with a Participating Company is subject to involuntary termination and who are not excluded below are eligible to receive benefits described in Section 3.2, subject to the terms and conditions of Article V. The following employees shall not be eligible for any benefits under this Article III:
(a) Any non-Communication Employee who is entitled to the “buy-down” benefits set forth in Section 3.1(d) of the U S WEST Management Separation Plan.
(b) Any employee who is entitled to the “voluntary termination benefits” set forth in Article IV of this Appendix M.
(c) Any employee who is discharged for cause and any employee who voluntarily resigns (whether or not such action on the part of the employee may have been influenced by pending or threatened involuntary layoffs).
(d) Any Surplus Employee who accepts any position in any Qwest Company during the 60-day period following termination of employment shall immediately forfeit all eligibility for benefits under this Appendix M.
3.2 Additional Defined Lump Sum.
(a) Each Employee entitled to a benefit pursuant to Section 3.1 shall be entitled to an additional Defined Lump Sum in the amount set forth below. Said additional Defined Lump Sum shall be paid as set forth in Section 5D.2(i) of the Plan.
(b) Subject to subsection (c), the amount of the additional Defined Lump Sum shall be calculated as follows. First, divide the Employee’s Annual Base Salary by 365 days to achieve a daily rate (rounded to the nearest cent). Second, multiply the daily rate times the total number of days for which the Employee is eligible based on his or her Annual Base Salary according to the following table (the amount varies depending upon whether the Employee is a Sixty Day Employee):
Employee’s Annual Base Salary Not a Sixty Day Employee Sixty Day Employee
at least $ 1,000 but less than $30,000 120 days 60 days
at least $30,000 but less than $40,000 150 days 90 days
at least $40,000 but less than $50,000 180 days 120 days
at least $50,000 but less than $80,000 210 days 150 days
$80,000 and above 240 days 180 days
LA3:752821.27 M-6
Third, add an additional amount to the amount calculated under the above table based on the Employee’s TOE in excess of ten (10) years. More specifically, for every full year of TOE over ten (10) years, add seven days of Annual Base Salary (based on the daily rate previously calculated) up to a maximum total amount of three hundred and sixty-five (365) days (305 days if a Sixty Day Employee). No credit is given for partial years. Accordingly, the sum of the amount of days under the above table and the days due for 10 or more years of TOE shall not exceed 365 days (305 days if a Sixty Day Employee).
Subject to subsection (c), the resulting sum equals the additional Defined Lump Sum.
(c) Payment of the additional Defined Lump Sum shall be subject to the conditions set forth in Article V, including executing the Waiver Letter described in Section 5.1 and 5.2 on a timely basis. If a Participant who is not a Sixty Day Employee does not sign such Waiver Letter on a timely basis, such Participant shall only be entitled to an additional Defined Lump Sum equal to the Employee’s Annual Base Salary divided by 365 days to achieve a daily rate (rounded to the nearest cent) multiplied by 60 days. No additional amount shall be payable in this case, irrespective of the Participant’s years of TOE or his Annual Base Salary. If a Sixty Day Employee does not sign such Waiver Letter on a timely basis, such Employee shall not be entitled to any benefit under this Appendix M.
(d) The payments hereunder (less applicable withholding taxes) shall be made in any form and time permitted under Article VI of the Plan, provided that benefits under Section 3.2(b) (excluding the 60 days payable to a Employee who is not a Sixty Day Employee even if a Waiver Letter is not signed) shall not commence prior to the date the employee’s signed valid Waiver Letter is received by the appropriate Qwest Company personnel.
3.3 Additional 60 Days Pension Accrual and TOE.
(a) For certain limited purposes and subject to subsection (c), each Employee entitled to a benefit under Section 3.1 shall be deemed to have remained on the payroll of Qwest Companies for 60 days after his or her actual date of termination of employment. This rule applies regardless of whether the Employee executed the Waiver Letter set forth in Sections 5.1 and 5.2. The sole purposes for which this rule applies are as follows: (1) to determine the Participant’s Accrued Benefit under Article V-B, V-D and/or Article V-E, as applicable, in each case subject to the various cessation, cutoff and coordination rules set forth in said Articles (for purposes of determining the Participant’s Accrued Benefit, Compensation under Articles V-B and V-D shall be projected for 60 days at the Participant’s current annual rate of base cash compensation, as in effect at the time of Formal Notification; Compensation under Article V-E shall be projected for 60 days at the rate of the Participant’s Annual Base Salary, but shall exclude any portion of such 60-day period that would have been paid prior to January 1, 2001 (accordingly, the Participant shall not receive Compensation Credits under Article V-E for any portion of such 60 days that would have been paid prior to January 1, 2001)); (2) to determine the Employee’s TOE for purposes of Section 3.2(b) of this Appendix M; (3) to determine if the Participant has three years of continuous service as a Management Employee under Section 5D.7; (4) to determine the applicable retirement reduction under the Plan (accordingly, the Participant will be deemed two months older for purposes of calculating the amount of the reduction); and (5) to determine the Participant’s age for purposes of the DLS Equivalent and
LA3:752821.27 M-7
Actuarial Equivalent of a benefit and for purposes of Appendices A, C and D (accordingly, the Participant will be deemed two months older for purposes of calculating the DLS Normal Pension under Section 5D.2(d), the Minimum Pension under Section 5D.3, the amount of a lump sum under Article V-B (or a service pension under Article V-D), and the amount of an alternative form under Appendix A. Except for the purpose described in the preceding clause (2), these benefits apply whether or not the Participant executes the Waiver Letter described in Section 5.1 and 5.2.
(b) The foregoing rule shall not apply for any other purpose, including without limitation, (1) to determine the date of the Participant’s Eligible Separation, the Pension Effective Date or the Annuity Starting Date (accordingly, DLS Equivalent will be calculated using the DLS Factors in effect on the actual Pension Effective Date but, as set forth in (a)(5) above, the age 60 days after termination) and (2) to determine if the Participant is eligible for any other Plan benefits (for example, the Participant will not be entitled to any benefits under Article VII or Appendix J in the event the individual dies or becomes disabled during this period).
(c) Section 3.3(a) and (b) do not apply to a Sixty Day Employee.
This Program establishes benefits available to eligible Employees who have been declared Surplus Employees. While the benefits set forth herein are to assist Surplus Employees, it is their responsibility to obtain new employment or make some other transition from the Qwest Companies. Neither the Separation Plans, Guidelines for Workforce Reduction nor this Program guarantees or creates a contract, express or implied, for (1) any specific job search procedure, (2) job placement within or outside Qwest Companies or (3) a certain type or amount of career guidance services and/or educational assistance.
ARTICLE IV
VOLUNTARY TERMINATION BENEFITS
4.1 Eligible Employees. All Employees who are eligible to participate in this Program with 5 or more full years TOE are eligible to receive termination benefits as described in Section 4.2, below, subject to the terms and conditions described in Article V, if they terminated employment pursuant to a Voluntary Termination Program implemented in their Force Group. The following employees shall not be eligible for the voluntary termination benefits under this Article IV:
(a) Any employee who is discharged for cause, and any employee who voluntarily resigns (whether or not such action on the part of the employee may have been influenced by pending or threatened involuntary layoffs) if such employee has not been Formally Notified of a Voluntary Termination Program.
(b) If an Employee otherwise eligible to receive termination benefits described in Section 4.2, below, accepts any extension of employment offered after having signed a Waiver Letter, the Employee shall be deemed to have forfeited all eligibility, rights, and benefits under Article IV of this Program, except that upon subsequent expiration of such extended employment, the employee will be eligible to receive voluntary termination benefits provided (A) the Program provisions for voluntary termination benefits are then in effect, (B) the employee fulfilled all requirements of the extended
LA3:752821.27 M-8
employment position, and (C) the employee fulfills all conditions then in effect under the Program to receive the voluntary termination benefits. Notwithstanding the foregoing, nothing in this Program guarantees that either the Program or any voluntary termination benefits under the Program will remain in existence at any specific time and the Program sponsor is not bound to maintain such benefits for any specific duration.
Employees who are (i) on leaves of absence with right of reinstatement, and (ii) receiving short term disability benefits shall be eligible for termination benefits under Article IV if such employee is in a Force Group offered a Voluntary Termination Program.
4.2 Additional Defined Lump Sum.
(a) Each Employee entitled to a benefit pursuant to Section 4.1 shall be entitled to an additional Defined Lump Sum in the amount set forth below. Said additional Defined Lump Sum shall be paid as set forth in Section 5D.2(i) of the Plan.
(b) The amount of the additional Defined Lump Sum shall be calculated as follows. First, divide the Employee’s Annual Base Salary by 365 days to achieve a daily rate (rounded to the nearest cent). Second, multiply the daily rate times the total number of days for which an Employee is eligible based on his or her Annual Base Salary according to the following table:
Employee’s Annual Base Salary Days
at least $ 1,000 but less than $30,000 120 days at least $30,000 but less than $40,000 150 days at least $40,000 but less than $50,000 180 days at least $50,000 but less than $80,000 210 days $80,000 and above 240 days
Third, add an additional amount to the amount calculated under the above table based on the Employee’s TOE in excess of ten (10) years. More specifically, for every full year of TOE over ten (10) years, add seven days of Annual Base Salary (based on the daily rate previously calculated) up to a maximum total amount of three hundred and sixty five (365) days (including the total days for which the employee receives any consideration period lump sum buyout pursuant to Section 4.1(a) of the Separation Plan). No credit is given for partial years. Accordingly, the sum of the amount of days under the above table, the days due for 10 or more years of TOE and the total days for which the employee receives any consideration period lump sum buyout pursuant to Section 4.1(a) of the Separation Plan shall not exceed 365 days.
The resulting sum equals the additional Defined Lump Sum.
(c) Payment of the additional Defined Lump Sum shall be subject to the conditions set forth in Article V.
(d) The payments hereunder (less applicable withholding taxes) shall be made in any form and time permitted under Article VI of the Plan, provided that benefits shall not commence prior to
LA3:752821.27 M-9
the date the employee’s signed valid Waiver Letter is received by the appropriate Qwest Company personnel.
Eligibility for any and/or all of the Voluntary Termination Benefits set forth in this Section 4.2 shall be subject to the conditions set forth in Article V. This Program outlines benefits available to eligible Employees who have received Formal Notification. While the benefits set forth herein are to assist such employees, it is their responsibility to obtain new employment or make some other transition from the Qwest Companies. Neither the Separation Plans, Guidelines for Workforce Reduction nor this Plan guarantees or creates a contract, express or implied, for (1) any specific job search procedure, (2) job placement within or outside Qwest Companies, or (3) a certain type or amount of career guidance services and or educational assistance.
ARTICLE V
CONDITIONS FOR RECEIPT OF BENEFITS
5.1 Proprietary and Confidential Information; Release of Claims. In consideration for and as a pre-condition of receiving benefits under the Program and the Separation Plan, an employee must sign a standard form of agreement acceptable to Qwest Communications International Inc. not to disclose or use proprietary or confidential information of Qwest Companies. The employee must also agree to execute a waiver, release and covenant not to sue applicable to all Qwest Companies, in a form acceptable to Qwest Communications International Inc., regarding any and all liability of any Qwest Company, including termination of employment from any Qwest Company, and the application of the Guidelines, the Program and the Separation Plan to the employee, including but not limited to, claims of discrimination on any grounds. The waiver, release, and covenant must be validly executed by an employee on or after the employee’s last day on a Qwest Company payroll and it must not be revoked by the employee at any time as conditions of receiving benefits. Also, as further consideration, and as a pre-condition, for receipt of benefits under the Program and Separation Plan, an employee must sign a standard form of agreement acceptable to Qwest Communications International Inc. requiring that all claims that may arise, directly or indirectly, regarding (1) the terms and conditions and/or obligations pursuant to the Waiver Letter and/or (2) the Employee’s employment with Qwest Companies or termination of employment from Qwest Companies, and/or (3) any related disputes involving the Qwest Companies and/or their employees, directors, officers or agents, be subject to arbitration. Notwithstanding the foregoing, execution of a Waiver Letter is not required to receive the 60-days additional Defined Lump Sum set forth in Section 3.2(c) or the benefits set forth in Section 3.3, provided that neither such benefit is payable to Sixty Day Employees.
5.2 Disability Benefit Waiver. Employees eligible to receive benefits under Article III or IV must execute an additional release and waiver of any and all rights to short and long term disability benefits (whether or not payable under this Pension Plan) to which they might otherwise be entitled after their termination date.
5.3 No Dual Benefits. No Participant shall be entitled or permitted to receive benefits under both Article III and Article IV of the Program. The first acceptance of benefits under either Article III or Article IV which becomes irrevocable shall cause the Employee to be ineligible for all
LA3:752821.27 M-10
other Program benefits which the Employee may otherwise have been eligible to receive. Furthermore, once having received benefits under Article III or Article IV, no employee shall be eligible to receive benefits under either provision at any subsequent time.
In addition, no Participant shall be entitled or permitted to receive benefits under the Program and under Section 3.2(b) or Section 4.2(b) of the Separation Plan with respect to the same termination of employment. Furthermore, once having received benefits under the Program or under Section 3.2(b) or Section 4.2(b) of the Separation Plan on or after August 11, 2000, no employee shall be eligible to receive benefits under either such provisions at any subsequent time. As a condition of receiving the Program benefits, the Participant must agree that if, for any reason, the Participant is or becomes entitled to benefits under Section 3.2(b) or Section 4.2(b) of the Separation Plan on or after August 11, 2000, the Participant must return the Program benefits prior to the time the Participant receives such Separation Plan benefits (and vice versa) and, that if the Participant does not do so, the Separation Plan benefits shall be automatically paid directly to the Pension Plan to satisfy such obligation. Notwithstanding the foregoing, a Participant entitled to benefits under Article III of the Program with respect to a particular termination may be entitled to the medical and educational assistance benefits set forth in Article III of the Separation Plan, in each case payable with respect to the same involuntary termination, but not any subsequent termination. Similarly, a Participant entitled to benefits under Article IV of the Program with respect to a particular termination may be entitled to the medical, consideration period and educational assistance benefits set forth in Article IV of the Separation Plan, in each case payable with respect to the same voluntary termination, but not any subsequent termination.
5.4 Non-Discrimination. No Participant shall be entitled or permitted to receive benefits under the Program if the payment of such benefits would cause the Pension Plan to violate Section 401(a)(4) of the Code as determined in the sole discretion of the Employees’ Benefit Committee (as defined in Section 8.6 of the Plan) based upon the advice of the Plan’s actuaries. If the payment of said benefits would, in the sole Committee’s determination, cause the Plan to violate Section 401(a)(4), certain payments to Highly Compensated Employees shall not be made as follows. Payments under this Program otherwise payable hereunder to Highly Compensated Employees who have the highest rate of benefits as compared to Compensation (such rate to be determined in accordance with the calculation of rate groups under Code Section 401(a)(4)) shall be reduced until said Participants fall in the next lower rate group. Such process shall be continued until the Employees’ Benefit Committee determines (in its sole discretion based upon the advice of the Plan’s actuaries) that the payment of the benefits hereunder does not cause the Plan to discriminate under Section 401(a)(4) of the Code. No benefits shall be reduced in the case of any Participant who is a non-Highly Compensated Employee or who is not a participant in the Company’s Nonqualified Pension Plan.
ARTICLE VI
GENERAL ADMINISTRATION
6.1 Sponsor; Administrator; Participating Companies. Qwest Communications International Inc., has established this Program on behalf of all Qwest Companies designated as Participating Companies under Appendix 1 of this Program. Qwest Communications International
LA3:752821.27 M-11
Inc., is the “plan sponsor” and “plan administrator” as those terms are defined in ERISA. As Program Administrator, Qwest Communications International Inc., shall have primary responsibility for the operation and administration of the Program, and this responsibility shall be delegated as designated in the Program or as determined by the Executive Vice President - Human Resources (or its successor), Qwest Services Corporation.
6.2 Management of Termination Benefits - Named Fiduciaries; Delegation. The Program Administrator and such other persons and organizations as are designated pursuant to the Plan as having responsibility to administer or manage any aspect of this Program including, but not limited to, the payment of an additional Defined Lump Sum benefit to eligible employees shall be a “named fiduciary” as that term is defined in ERISA with respect to the task or tasks assigned or delegated to that person or organization. Each named fiduciary may further delegate his, her or their responsibilities by designating, in writing, other persons or organizations to carry out their respective fiduciary responsibilities and may employ persons to assist or advise them with regard to any such responsibilities consistent with the terms of the Program. (“Administration” and “management” of this Program do not include any decisions to amend or terminate all or any portion of the Program, which functions are reserved to Qwest Communications International Inc. as matters of business judgment, as described in Section 6.10, below.)
6.3 Discretion. As Program Administrator of the Program, Qwest Communications International Inc. has the right and discretion to determine all matters of fact or interpretation relating to the administration of such Program including questions of eligibility, interpretation of Program provisions, application of Program provisions to specific circumstances, or any other matters. This discretion shall be delegated to such persons or entities, such as the Review Committee; to the extent such persons or entities are responsible for Program administration. The decisions by the Program Administrator or by the Review Committee and other such delegates shall be conclusive and binding.
6.4 Effect on Other Benefit Plans, Programs and Policies. Except with respect to severance plans, programs, and policies as discussed below in this Section 6.4, nothing in this Program shall alter or enhance the benefits available under the terms of any other plans, programs or policies which apply to terminated employees, and terminated employees will be entitled to all rights and benefits of such other plans, programs and policies if the conditions therein are satisfied. Specifically, without limitation, terminated employees eligible for a pension under the Plan shall receive retirement benefits according to the Plan in addition to any benefits to which such employees may become entitled under the Program.
With respect to Program Participants, the Program provisions supersede all other severance pay plans, guidelines, programs, or policies covering benefits to be received upon termination of non-bargained Qwest Company employees resulting from force reductions or surplus within any Participating Company, and also supercede the benefits set forth in Sections 3.2(a) and (b) and 4.2(b) of the Separation Plan, but not any other benefits described in Article III or Article IV of the Separation Plan. As a condition of receiving the Program benefits, the Participant must agree that if, for any reason, the Participant is or becomes entitled to benefits under Section 3.2(b) or Section 4.2(b) of the Separation Plan or another severance pay plan etc. on or after August 11, 2000, the Participant must return the Program benefits prior to the time the Participant receives such Separation Plan benefits (and vice versa) and, that if the Participant does not do so, the Separation Plan benefits
LA3:752821.27 M-12
shall be automatically paid directly to the Pension Plan to satisfy such obligation. If an employee becomes entitled to any payment under any severance benefit plan, program or policy not described in the first sentence of this paragraph (excluding any other benefits payable pursuant to Article III or Article IV of the Separation Plan), as well as to a benefit under this Program by reason of the same employment termination, the total benefits under this Program shall be reduced by the amount of the severance payment received under such other plan, program or policy.
6.5 Claims and Appeals Regarding Guideline Application and Program Benefits. All claims by persons who believe that the Program has not been properly administered or that they did not receive a Program benefit to which they were entitled shall be referred to one or more individuals in Qwest Companies Human Resources or other organizations as determined by the Executive Vice President - Human Resources (or its successor), Qwest Services Corporation for review and coordination of response. Claims regarding any termination benefit must be submitted in writing.
A denial of any claim regarding a Program benefit shall be issued in writing within not more than ninety days after receipt of the written claim. The written response will include the specific reasons for the denial, specific references to pertinent Program provisions on which the denial is based, a description of any additional material or information necessary to perfect the claim and why such material or information is necessary, and an explanation of the appeal procedure.
Within sixty days of receiving a denial of any claim regarding a Program benefit, the claimant may submit a written appeal for review of the denial. The Executive Vice President - Human Resources (or its successor), Qwest Services Corporation shall appoint a Review Committee which shall be the named fiduciary that will afford a full review of the denial of any claim regarding a Program benefit. The Review Committee (which may be the same review committee under the Separation Plans) shall consist of three or more persons and may be appointed as a standing committee or as needed on an ad hoc basis. On receipt of a written appeal regarding a Program benefit, the Review Committee shall:
(a) make a full review of such decision within sixty days of receipt of the written appeal or within 120 days, provided the claimant is notified of the delay and the reasons for requiring an additional sixty days, and
(b) notify the claimant in writing of the decision on review, specifying the reasons for the decision and providing specific references to pertinent Program provisions.
Any person whose claim regarding a Program benefit is denied shall have such further rights as are provided in Section 503 of ERISA and the regulations thereunder, and Qwest Companies Human Resources or a designee of the Executive Vice President - Human Resources (or its successor), Qwest Services Corporation and the Review Committee shall retain such right, authority and discretion as is provided in or not expressly limited by Section 503 and the regulations thereunder.
The decision as to what employees, if any, will receive Formal Notification, and the decision to implement use of this Program, as well as all other Management Team decisions, including but not limited to, offering ongoing employment to Surplus Employees, shall all constitute business decisions
LA3:752821.27 M-13
to be determined by the Management Team on the basis of business judgment and not in any fiduciary capacity.
Claims regarding any benefit must be submitted in writing within six months of the date a person has reason to believe that the Program has not been properly administered or that the person did not receive a Program benefit to which s/he was entitled.
6.6 Funding of Program Benefits. Except as set forth below, all benefits under this Program shall be paid out of Plan assets.
If the benefits under this Program (including any Extra Payments under Article VII) are limited by Section 5C.2 of the Plan and the Participant is not a participant in the Company’s Nonqualified Pension Plan, then the excess not payable under this Program shall be paid to the Participant pursuant to Section 5C.2(h) of this Plan. No such payments shall give rise to any Extra Payments.
If the benefits under this Program (including any Extra Payments under Article VII) are limited by Sections 1.10(d) or 5C.2 of the Plan or Section 5.4 of the Program and the Participant is a participant in the Company’s Nonqualified Pension Plan, then the excess not payable under this Program shall be paid to the Participant pursuant to the Nonqualified Pension Plan. Notwithstanding the provisions of the Nonqualified Pension Plan, the excess additional Defined Lump Sum and/or any Extra Payments payable under the Nonqualified Plan (instead of the Program) shall not be multiplied by 1.35 pursuant to Section 5.2(b) or Article VI or any other provision of the Nonqualified Pension Plan. No such payments shall give rise to any Extra Payments.
There shall be no duplication of benefits pursuant to the foregoing provisions.
6.7 Assignment and Waiver of Benefits. Benefits provided under this Program shall not be subject to assignment or alienation as set forth in Section 13.5 of the Plan. An Employee shall be ineligible for benefits under Article IV of this Plan in the event the Employee otherwise eligible to receive such benefits accepts an offer for extended employment after he or she has signed a Waiver Letter.
6.8 Effect of Death. No benefits shall be paid under the Program with respect to employees who die prior to the date of scheduled termination of employment. For eligible Participants entitled to receive any payment under this Program who die after signing their Waiver Letter, any unpaid amounts owing under this Program at the time of death shall be paid to the Participant’s Beneficiary designated pursuant to Section 5D.5(f) of the Plan.
6.9 Effect on Employment Rights. Nothing in this Program shall be construed as giving to any officer, agent or employee of a Participating Company any right, express or implied, to be employed by any Participating Company, nor shall this Program be construed as a contract for, or as providing any right to claim, any pension or other benefit allowance after any termination from the service of the Participating Company, except as set forth herein. Employment at Qwest Companies remains “at will” which means that employees may terminate their employment at any time, with or without cause, and the Qwest Companies reserve the right to do the same. Except as otherwise
LA3:752821.27 M-14
provided herein, this Program shall have no effect upon the Qwest Pension Plan nor upon any other employee benefit plan maintained in whole or in part by the Participating Company. No officer, agent or employee of a Participating Company shall, because of this Program, become entitled to any offer of relocation, lateral transfer, downgrade with pay protection, or any other term, benefit or entitlement of employment at any time, whether or not such individual is covered by this Program, unless such provision is specifically set forth herein.
6.10 Amendment and Termination.
(a) Any decision to amend or terminate this Program, in whole or in part, including decisions as to the nature and timing of such amendments or termination, shall constitute business decisions by the Company, as the Program sponsor and not as a Program fiduciary. As such, these decisions shall be made in the sole discretion of the Company on the basis of business considerations. The Program may be amended by a writing approved by the Company’s Board of Directors and signed on behalf of the Company by an officer of the Company duly authorized by the Board of Directors. The Program may also be amended in writing by the Plan Design Committee or other persons(s) to the extent authority to amend the Program has been delegated to the Plan Design Committee or such person(s) by the Board of Directors. Each amendment shall be effective on such date as the Company or its delegee may determine.
(b) Notwithstanding subsection (a), pursuant to the Separation Plans and this Program document, the Management Team has been delegated the authority (i) as to how to define or identify the employees who will receive Formal Notification for the benefits under Article IV and (ii) to determine whether job offers made to Surplus Employees are “comparable offers of employment” so that the Separation Plan design may be amended in this regard as appropriate to each Force Group circumstance. In exercising this authority, the Management Team is acting solely on behalf of the Plan Sponsor on the basis of business considerations and not as a Plan fiduciary. The decisions of the Management Team regarding the foregoing matters shall be reflected in a written form which shall be deemed to be incorporated into and made a part of the Separation Plan and, by virtue of determining who is entitled to benefits under this Program, indirectly into this Plan document.
(c) Amendments in or termination of the Program with respect to any Participating Company shall not affect the rights of any employee, without the employee’s consent, to any Program benefit to which the employee may have become irrevocably entitled under the Program prior to the date such amendment or termination is adopted.
6.11 Effective Date. This Program is effective as of August 11, 2000. With respect to subsidiaries acquired or organized by Qwest Communications International Inc., after such date, the Program shall be effective only as of the date, if any, that participation by such subsidiary is approved by the Executive Vice President - Human Resources (or its successor), Qwest Services Corporation.
LA3:752821.27 M-15
ARTICLE VII
EXTRA PAYMENTS
7.1 Extra Payments.
(a) This Article VII applies to Participants who incur a 10% penalty under Code section 72(t) with respect to the payment by the Plan of the additional Defined Lump Sum under Article III of this Appendix M in the year the payment of such additional Defined Lump Sum is made, and provide proof of such payment as set forth below. These Participants will be paid an additional amount (the “Extra Payment”) as soon as practicable after timely proof, satisfactory to the Qwest Companies, is provided that the Participant paid the 10% penalty under Code section 72(t) with respect to the payment of the additional Defined Lump Sum directly from the Plan to the Participant as set forth above. Such proof must in all cases include a copy of the federal tax return for the year the additional Defined Lump Sum is paid. Extra Payments will only be made under this Article VI to Participants who submit the proper election forms for such Extra Payments (with such proof) prior to April 15th of the second calendar year following the calendar year in which the additional Defined Lump Sum is paid by the Plan.
(b) The amount of the Extra Payment shall equal the amount which, after payment of all federal and state income taxes (based on the net combined marginal federal and applicable state tax rate (in all cases, after taking into account federal deduction for state taxes at the applicable state rate) actually applicable to the Participant in the year the additional Defined Lump Sum is paid) including the 10% penalty under Code section 72(t), equals the excess of (1) 8.55% of the additional Defined Lump Sum over (2) 6.2% of the lesser of the additional Defined Lump Sum or the excess of the Taxable Wage Base (in effect for the year the additional Defined Lump Sum is paid) over the wages (subject to Social Security taxes) actually paid to the Participant from the Qwest Companies during the year the additional Defined Lump Sum is paid. The Extra Payment shall be paid in any form available under Article VI of the Plan, as elected by the Participant (subject to spousal consent, if required by Article VI).
(c) No Extra Payment shall be made on any Extra Payment.
(d) Notwithstanding the provisions of the Nonqualified Pension Plan or Section 5C.2(h), no Extra Payments shall be made under the Plan (including Section 5C.2(h)), the Program or the Nonqualified Pension Plan with respect to any excess additional Defined Lump Sum payable, in accordance with Section 6.6 of this Appendix M, under Section 5C.2(h) of the Plan or under the Nonqualified Pension Plan. See section 5.2(c) of the Nonqualified Pension Plan, which is incorporated by reference.
LA3:752821.27 M-16
Exhibit 1
Participating Companies
Qwest Advanced Technologies, Inc. Qwest Business Resources, Inc. Qwest Capital Funding, Inc. Qwest Communications Federal Services, Inc. Qwest Communications Services, Inc. Qwest Corporation Qwest Dex, Inc. Qwest Education Foundation Qwest Enhanced Service, Inc. Qwest Federal Relations, Inc. Qwest Information Technologies, Inc. Qwest Interprise America, Inc. Qwest Asset Management Company Qwest Long Distance, Inc. Qwest Services Corporation
LA3:752821.27 N-1
APPENDIX N
EL PASO COUNTY TELEPHONE COMPANY EMPLOYEES
1.1 Background
The management employees of El Paso County Telephone Company (hereafter, the “EPCTC Employees”) participated in the Retirement and Security Program of the National Telephone Cooperative Association (“NTCA Plan”) until June 30, 2000. The accrued benefit of the EPCTC Employees was transferred from that plan to this Plan, effective July 1, 2000, and the EPCTC Employees began to participate in this Plan on July 1, 2000.
The regular provisions of the Plan apply, except as specified below.
2.1 Applicability of This Appendix
This Appendix applies only to those individuals who were EPCTC Employees on July 1, 2000.
The benefit accrual rules in this Appendix apply while the individual continues to be an EPCTC Employee. Any EPCTC Employee who ceases to be an EPCTC Employee will immediately cease to accrue benefits pursuant to this Appendix N, even if he continues to be an Employee. An individual who becomes an EPCTC Employee after July 1, 2000 shall not accrue benefits under this Appendix.
This Appendix shall be construed in such a way that it reflects all of the protected benefits (under Code section 411(d)(6)) that EPCTC Employees have with respect to the amounts transferred from the NTCA Plan.
Notwithstanding any provision of the Plan to the contrary, except as expressly set forth in the Plan, (1) Articles II, III, V-A, V-B, V-D, V-E, VI and VII, Section 11.5 and the other Appendices of this Plan shall not apply to EPCTC Employees.
3.1 Accrued Benefit
This section shall apply in lieu of Articles II, V-B, V-D and V-E.
All EPCTC Employees are fully vested in their accrued benefit under this Appendix.
An EPCTC Employee’s accrued benefit in this Plan shall equal his accrued benefit in the NTCA Plan as of June 30, 2000, plus 0.2168 times 7.5% times one-twelfth of his Months of Benefit Service (defined below) times High-5 Pay (defined below).
A Month of Benefit Service means any calendar month in which the EPCTC Employee is credited with at least one Hour of Service with El Paso County Telephone Company (or a successor company). Months of Benefit Service do not include any periods before July 1, 2000.
LA3:752821.27 N-2
High-5 Pay means the average Pay (defined below) of the five highest (out of the last 10) Plan Years. High-5 Pay shall include amounts prior to July 1, 2000, to the extent that such amounts were recognized as compensation (for benefit accrual purposes) under the NTCA Plan.
Pay means those items paid by El Paso County Telephone Company that are included in the EPCTC Employee’s wages (as defined in Code section 3401(a) for the purpose of federal income tax withholding, but determined without regard to any rules that limit the remuneration included in wages based on the nature or location of the employment or the services performed), plus amounts that would have been so included but for Code section 125 or 402(e)(3). Pay does not include the value of life insurance provided to the EPCTC Employee. Pay for a Plan Year shall not exceed the limit of Code section 401(a)(17) for that Plan Year. For EPCTC Employees age 55 and older, the Pay in one Plan Year shall not exceed the prior Plan Year’s Pay by more than the greater of 10% or 6% plus the prior year’s increase (up to 9%) in the Consumer Price Index.
4.1 Distribution Options
This section shall apply in lieu of Article VI of the Plan.
Form of Distribution. A Participant has the following distribution options for his accrued benefit under this Appendix.
(a) Lump Sum. A lump sum.
(b) Life Annuity. An annuity for the life of the Participant.
(c) Life Annuity (5 Years Guaranteed). An annuity for the life of the Participant, with 60 guaranteed monthly payments.
(d) Life Annuity (10 Years Guaranteed). An annuity for the life of the Participant, with 120 guaranteed monthly payments.
(e) 50% QJSA. A life annuity for the Participant, followed by a 50% survivor annuity to the Participant’s spouse.
(f) 50% QJSA (10 Years Guaranteed). A life annuity for the Participant, followed by a 50% survivor annuity to the Participant’s spouse, with 120 guaranteed monthly payments.
(g) 662/3% QJSA. A life annuity for the Participant, followed by a 662/3% survivor annuity to the Participant’s spouse.
(h) 662/3% QJSA (10 years guaranteed). A life annuity for the Participant, followed by a 662/3% survivor annuity to the Participant’s spouse, with 120 guaranteed monthly payments.
(i) 100% QJSA. A life annuity for the Participant, followed by a 100% survivor annuity to the Participant’s spouse.
LA3:752821.27 N-3
(j) 100% QJSA (10 years guaranteed). A life annuity for the Participant, followed by a 100% survivor annuity to the Participant’s spouse, with 120 guaranteed monthly payments.
(k) Guaranteed annuity. An annuity under (b), (e), (g), or (i), and if the Participant dies -- and, for (e), (g), and (i), both the Participant and the Participant’s spouse die – before the minimum amount described in (1) is distributed, the beneficiary will receive a lump sum equal to (1) the value of the lump sum the Participant would have received on the annuity starting date, less (2) the total dollar amount of annuity payments actually paid to the Participant and, if applicable, the Participant’s spouse, without any actuarial adjustment.
The Participant may choose only one form of distribution, except that he may elect to be paid part of his accrued benefit in the form of a lump sum and the remaining portion in another form. If the Participant elects any type of annuity, he may also elect to increase his initial payments by a temporary supplement that is payable until either age 62 or age 65 (age 66 if the Participant was born in 1937 through 1954, age 67 if the Participant was born after 1954), in which case his subsequent payments shall be reduced by the actuarial equivalent of the temporary supplement. The amount of the temporary supplement shall be elected by the Participant, but shall not exceed the Participant’s estimated Social Security benefit as determined by the Committee.
4.2 Actuarial Equivalence. The Participant’s annualized pension shall be determined by applying the following actuarial adjustments to the Participant’s accrued benefit.
(a) Lump Sum. The size of the lump sum shall be determined by converting the annualized pension into a life annuity and then converting that amount into a single sum using the DLS Factors for Management Employees.
(b) Life Annuity. The Participant’s annualized pension shall be increased by 10%.
(c) Life Annuity (5 years guaranteed). The Participant’s annualized pension shall be increased by 5%.
(d) Life Annuity (10 years guaranteed). The Participant’s annualized pension shall not be adjusted.
(e) 50% QJSA. If the Participant was born in a calendar year 11 or more years later than his spouse, the annualized pension shall be 95% plus ½% for each year later that the Participant was born. If the Participant was born in a calendar year at least 6 but no more than 10 years later than his spouse, the annualized pension shall be 90% plus 1% for each year later that the Participant was born. If the Participant was born in a calendar year 5 or fewer years different from his spouse, the annualized pension shall be 95%. If the Participant was born in a calendar year at least 6 but no more than 10 years earlier than his spouse, the annualized pension shall be 100% less 1% for each year earlier than the Participant was born. If the Participant was born in a calendar
LA3:752821.27 N-4
year at least 11 years earlier than his spouse, the annualized pension shall be 95% less ½% for each year earlier that the Participant was born.
(f) 50% QJSA (10 years guaranteed). The annualized pension shall be adjusted by subtracting an additional 5% from the factor derived for the 50% QJSA option.
(g) 662/3% QJSA. The annualized pension shall be adjusted by multiplying it by a factor that is equal to 2/3 of the adjustment factor determined under the 50% QJSA option and 1/3 of the adjustment factor determined under the 100% QJSA option.
(h) 662/3% QJSA (10 years guaranteed). The annualized pension shall be adjusted by subtracting an additional 4% from the factor derived for the 662/3% QJSA option.
(i) 100% QJSA. If the adjustment factor in (e) is less than 95%, the adjustment factor here in (g) is 2 times the difference between such factor and 50%, but the resulting adjustment factor here in (g) shall not be less than 70%. If the adjustment factor in (e) is 95%, the adjustment factor here in (g) shall be 90%. If the adjustment factor in (e) is greater than 95%, the adjustment factor here in (g) is 50% of the sum of 85% and the adjustment factor in (e).
(j) 100% QJSA (10 years guaranteed). The annualized pension shall be adjusted by subtracting an additional 2% from the factor derived for the 100% QJSA option.
(k) Guaranteed Annuity. If the annuity being guaranteed is a single life annuity, the annualized pension shall be 97% of the amount determined under (b). If the annuity being guaranteed is the 50% QJSA, the annualized pension shall be adjusted by subtracting an additional 6% from the factor determined under (e). If the annuity being guaranteed is the 662/3% QJSA, the annualized pension shall be adjusted by subtracting an additional 5% from the factor determined under (g). If the annuity being guaranteed is the 100% QJSA, the annualized pension shall be adjusted by subtracting an additional 3% from the factor determined under (i).
4.3 Annuity Starting Dates. A Participant’s annuity starting date shall be the first day of any month selected by the Participant, within the following guidelines. In general, the earliest annuity starting date is the month coincident with or next following the date he terminates employment with all Participating and Non-Participating Companies. The latest annuity starting date is the January 1 after the later of the date the Participant attains age 70½ or the date he terminates employment with all Participating and Non-Participating Companies. A Participant who remains employed by a Participating or Non-Participating Company after his 65th birthday may elect to begin receiving his accrued benefit under this Appendix on the first day of any month; however, such Participant shall cease accruing benefits under this Plan and all other defined benefit plans maintained by the Participating and Non-Participating Companies on his annuity starting date.
4.4 Actuarial Adjustment for Early Retirement. The annualized pension of a Participant whose employment with all Participating and Non-Participating Companies terminates (his “termination date”) before the month is which he attains age 55 shall be determined pursuant to Appendix C. The
LA3:752821.27 N-5
annualized pension of a Participant whose termination date is on or after the first day of the month in which he attains age 55, but before the first day of the month in which he attains age 65 (his “NRD”), shall not be adjusted if he is eligible for the Rule-of-85, but otherwise shall be adjusted by multiplying the pension by 100% less ¼% for each month that his termination date precedes his NRD less an additional ¼% for each month (if any) in excess of 60 months that his termination date precedes his NRD. A Participant is eligible for the Rule-of-85 if, on his termination date, the sum of his age (in months, rounded up) and his service (in months, rounded up, and including all service prior to July 1, 2000 recognized by the NTCA Plan for the rule-of-85, as well as the Participant’s Period of Service after July 1, 2000) is equal to at least 85 years.
4.5 Actuarial Adjustment for Late Retirement. The annualized pension of a Participant whose termination date is after his NRD shall be adjusted by multiplying the pension by 100% plus ¼% for each month that his termination date exceeds his NRD. The annualized pension of a Participant whose termination date is after his NRD shall not be less than his pension on his NRD, increased by 5% per year until his termination date.
4.6 Certain Provisions of Article VI Still Applicable. Sections 6.2(b) and 6.2(c), which discuss the selection of the form of distribution and any necessary spousal consent, as well as Section 6.8, which discusses the direct rollover election, will apply to the benefits accrued under this Article.
5.1 Death Benefits.
This Section applies in lieu of Article VII of the Plan and the pre-retirement death benefits set forth in Article V of the Plan.
5.2 Death While Employed. If the Participant dies while he is employed by a Participating or Non-Participating Company, his beneficiary shall receive the actuarial equivalent of the Participant’s accrued benefit under this Appendix (calculated as of the day before the Participant died using the actuarial adjustments specified in Section N.4), or if greater (for Participants who die before age 65), 100 times the monthly pension that would have been payable, had the Participant survived until age 65, continued earning Pay at the same rate as when he died, and then terminated employment at age 65 and received a single life annuity with 120 guaranteed monthly payments. The beneficiary of an unmarried Participant shall be the Participant’s estate, which shall receive a lump sum. The beneficiary of a married Participant shall be the Participant’s surviving spouse, who shall receive either a lump sum or a single life annuity with payment beginning on the first day of any month selected by the surviving spouse before the Participant’s 65th birthday, or if later, the first of the month after the Participant died (calculated using the actuarial adjustments that apply under Section N.4 for a same-age Participant, including the Rule-of-85 subsidy if the Participant was eligible for it when he died). If the surviving spouse dies before her payments begin, her estate shall receive a lump sum (calculated as of the day before the surviving spouse’s death, using the actuarial adjustments specified in Section N.4 for Participants of the age of the surviving spouse).
5.3 Death Before Distribution Elected. If the Participant dies after terminating employment with all Participating and Non-Participating Companies but before choosing a distribution option, no benefits will be paid if he is unmarried, and if he is married, he will be treated as having elected a 50% QJSA on the day before his death. The surviving spouse may elect to receive a lump sum
LA3:752821.27 N-6
(calculated using the DLS Factors for Management Employees who are her age) instead of her annuity; this election may occur at any time after the Participant’s death and before her annuity payments must begin under the next sentence. If the surviving spouse chooses to receive an annuity, she may elect for payments to begin at any time between the Participant’s 55th and 65th birthdays (with the payments calculated using the actuarial adjustments that apply under Section N.4 for a same-age Participant, including the Rule-of-85 subsidy if the Participant was eligible for it when he died); if the Participant dies after his 65th birthday, payments shall begin as of the first day of the month after the Participant died. If the surviving spouse dies before making any election, no benefits will be paid.
5.4 Death After Form of Distribution Elected. If the Participant chose a lump sum and dies before payment is made, payment will be made to his estate. If the Participant chose a life annuity, no payments will be made after the Participant’s death. If the Participant chose option a life annuity with 5 or 10 years of payments guaranteed or a guaranteed annuity based on his life alone, and he dies before all guaranteed payments have been made, the actuarial equivalent of the remaining payments shall be paid in a lump sum (calculated using the applicable interest rate DLS Factor for Management Employees) to the Participant’s estate. If the Participant chose a 50% or 662/3% or 100% QJSA, the surviving spouse will receive payments after the Participant’s death, and if there is no surviving spouse, payments will end when the Participant dies. If the Participant chose a 50% or 662/3% or 100% QJSA with a guaranteed annuity or with 10 years of payments guaranteed, his surviving spouse will receive payments after his death, and if there is no surviving spouse or the surviving spouse dies before receiving all guaranteed payments, the actuarial equivalent of the remaining payments shall be paid in a lump sum (calculated using the applicable interest rate DLS Factor for Management Employees) to the estate of the last to die of the Participant and his spouse.
LA3:752821.27 O-1
APPENDIX O
ENHANCED RETIREMENT PENSION BENEFIT FOR CWA-COMM PARTICIPANTS (effective as of October 12, 2000)
TABLE OF CONTENTS
ARTICLE I DEFINITIONS.......................................................................................O-1
ARTICLE II PARTICIPATION .................................................................................O-2
ARTICLE III BENEFITS.............................................................................................O-4
ARTICLE IV CONDITIONS FOR RECEIPT OF BENEFITS ...................................O-7
ARTICLE V PROGRAM ADMINISTRATION ........................................................O-8
ARTICLE VI EXTRA PAYMENT............................................................................O-10
INTRODUCTION
The purpose of this Appendix O is to provide additional retirement benefits to certain eligible Occupational Participants who (1) have been determined by Qwest Corporation (the “Company”) to be in an Adjustment Group or are otherwise designated as participants by the Company, (2) are involuntarily terminated from employment (or voluntarily terminate under rules set forth herein) and (3) meet each of the other conditions set forth in this Appendix O.
ARTICLE I
DEFINITIONS
The following terms shall have the meaning set forth below, and other terms that are capitalized but not defined in this Appendix shall have the meaning set forth in the Qwest Pension Plan (the “Plan”) document to which this Program is appended, unless the context clearly indicates otherwise.
1.1 “Adjustment Group” means the work group or titles to be force adjusted, as determined by the Company. The Adjustment Group will include all Regular Full-Time and Regular Part-Time Employees within the same organization having the same title classification who are within a Reasonable Commuting Area (“RCA”). The Adjustment Group also may include employees in other organizations who have essentially the same type of work in the same or different title classification within the RCA, or may include other employees as mutually agreed to by the Company and the Union.
1.2 “Company” means Qwest Corporation, unless otherwise specifically noted.
LA3:752821.27 O-2
1.3 “Expanded VS Offer” means (1) an offer of Program benefits made to a Covered Employee who, in a manner designated by the Company, has previously shown interest in terminating employment so that his or her job can be filled by another employee who could potentially be facing layoff as part of an Adjustment Group (sometimes referred to as EVSPP) or (2) an offer of Program benefits made to a Covered Employee outside of a formal surplus declaration pursuant to the program known a Zip-VSPP. These offers are made under guidelines established by the Company and the Union which determine the conditions to be met before an offer can be made.
1.4 “Incidental Employee” means any employee who is designated on Company payroll records as an Incidental Employee. Such employees are normally engaged for an indefinite period of time, and employed on an as-needed basis for a cumulative total of less than eight hundred fifty (850) hours in a calendar year.
1.5 “Impacted Employee” means any Covered Employee who is determined by inverse TOE among the employees in an Adjustment Group as a potential for layoff.
1.6 “Participant” means a Covered Employee eligible to participate in the Program as described in Articles II and III. Any person who does not meet all of the terms and conditions for a benefit under this Appendix O shall not be a Participant.
1.7 “Plan” refers to Qwest Pension Plan (formerly the U S WEST Pension Plan).
1.8 “Program” refers to this Appendix O.
1.9 “Program Administrator” refers to the administrator described in Section 5.1 of this Program.
1.10 “Reasonable Commuting Area (“RCA”)” means the Reasonable Commuting Areas set forth in Addendum 6 of the collective bargaining agreement between the Union and the Company dated August 16, 1998.
1.11 “Regular Full-Time” means any Employee of Qwest Corporation who is designated on Company payroll records as a Regular Full-Time Employee. Such employees are normally employed to work at least forty (40) hours per calendar week for an indefinite period.
1.12 “Regular Part-Time Employee” means any Employee of Qwest Corporation who is a Union member or an Occupational Employee and who is designated on Company payroll records as a Regular Part-Time Employee. Such employees are normally engaged for an indefinite period of time and scheduled to work at least eleven hundred and fifty (1,150) hours per calendar year, but fewer hours than a Regular Full-Time Employee is usually scheduled.
1.13 “Regular Term Employee” means any employee who is designated on Company payroll records as a Regular Term Employee (either full-time or part-time). Such employees are normally employed for a specified project with the definite understanding that his or her employment will terminate upon completion of the project.
1.4 “Union” means Communications Workers of America.
LA3:752821.27 O-3
ARTICLE II
PARTICIPATION
2.1 General Rule of Participation. An Employee is eligible to participate in the Program if he or she meets all of the following conditions:
(a) He or she is a Regular Full-Time or Regular Part-Time Employee of Qwest Corporation;
(b) He or she is either (1) in a bargaining unit covered by the August 16, 1998, bargaining agreement between the Company and the Union, or (2) an Occupational Employee not covered by any collective bargaining agreement, or (3) an Occupational Employee in Operator & Information Services (“OIS”) covered by the OIS Alternative Transition Plan;
(c) He or she is a Participant in the Pension Plan;
(d) He or she is (1) in a force group designated by the Company as an Adjustment Group for participation in the Program or (2) volunteers, at the Company’s invitation, to be considered for an Expanded VS Offer; and
(e) He or she is not excluded from participating by virtue of Section 2.2.
2.2 Exclusions and Exceptions.
An employee is an excluded employee and therefore excluded from coverage under this Program if any of the following applies:
(a) He or she is on the Qwest Business Resources, Inc. payroll;
(b) He or she is covered by a collective bargaining agreement between Qwest Corporation and the IBEW, or holds a job title at a job location in Montana as identified in Appendix A of the IBEW contract;
(c) He or she is eligible for and elects to take the Surplus Transitional Leave of Absence (STLA);
(d) He or she is an Incidental Employee or a Regular Term Employee (full-time or part-time) or hold any job classification other than Regular Full-Time or Regular Part-Time;
(e) He or she is on a leave of absence and the leave does not guarantee a return to work;
(f) Except as set forth in Section 2.1(d)(2), he or she separates from employment for reasons other than a Company designated force adjustment process; or
LA3:752821.27 O-4
(g) He or she incurs an Eligible Separation prior to October 12, 2000 or after 90 days prior to expiration of the collective bargaining agreement between the Company and Union in effect on August 16, 1998 (including any extensions).
2.3 Program Use.
The Company will notify the Union, in writing, of its intention to make force adjustments. The Program may be offered to Impacted Employees or other eligible Covered Employees as a part of the force adjustment process. The Company will determine the number of employees from each force group eligible for the Program, and will determine the work group or titles subject to the Program,. The decision to implement this Program is a business decision and not subject to the “Benefit Claim and Appeal Procedure” described in this Program.
ARTICLE III
BENEFITS
3.1 Benefits.
(a) A person who is eligible to participate under Article II is not a Participant unless he or she meets the conditions set forth in either Section 3.2 or 3.3.
(b) The amount of the additional retirement pension to which a Participant is entitled as of the date of the Eligible Separation shall be the monthly amount payable as a single-Life Annuity commencing on the Participant’s Normal Retirement Date (or, if later, the earlier of the Pension Effective Date or Required Beginning Date) that is the DLS Equivalent of the Defined Lump Sum, as defined in Section 3.2 or 3.3, as applicable. The amount of benefits payable under Appendix O shall be determined without regard to whether the Participant qualifies for a service pension or a deferred vested pension under Article V-A.
(c) The amount of the additional retirement pension for any Participant whose Annuity Starting Date is prior to attainment of age 65 shall be equal to the greater of (1) the pension calculated in subsection (b), reduced by the factors in Appendix C to reflect early commencement of benefits or (2) the Minimum Amount. Regardless of when the Participant commences benefits, the Minimum Amount is a single-Life Annuity commencing on the Pension Effective Date that is the DLS Equivalent of the Defined Lump Sum as defined in Section 3.2 or 3.3, as applicable.
(d) Except as set forth below, a Participant may elect to receive the benefit amount in any form permitted under Article VI of the Plan available to that Occupational Employee.
(1) For all Participants notified, prior to February 5, 2001, of their termination of employment, the only Qualified Joint and Survivor Annuity (even if the Participant otherwise qualifies for a service or disability pension) shall be a Qualified Joint and Survivor Annuity with the survivor annuity equal to 50% of the amount payable during the joint lives of the Participant and his Spouse. For this purpose, the factors set forth in Appendix D of the Plan shall apply for purposes of determining the amount of said qualified
LA3:752821.27 O-5
joint and survivor annuity. If Participant’s Spouse predeceases Participant on or after the Annuity Starting Date, the amount payable during the remainder of the Participant’s life shall not be increased.
(2) For all Participants notified, on or after February 5, 2001, of their termination of employment, all of the benefit forms set forth in Article VI applicable to Management Participants shall also be available with respect to the benefits under this Appendix O, even if such benefits are not available to the regular benefits under the Occupational Part. Such amounts shall be calculated based on the factors set forth in Appendix A applicable to Management Participants.
(3) In all cases, if the Participant elects a lump sum benefit, amount shall equal the Defined Lump Sum. Such an election may only be made in accordance with Section 6.5(c).
(e) This subsection (e) applies if a Former Participant dies after termination of employment pursuant to the Program but prior to the Annuity Starting Date of his benefit under this Appendix O. No benefits are payable if the Participant dies prior to his or her scheduled separation date under the Program.
(1) Single Participants. If an unmarried Former Participant dies within 60 days after his Eligible Separation and prior to the Annuity Starting Date of his benefits under this Appendix, his estate (which shall include the Participant’s probate estate or living trust) shall be entitled to a lump sum death benefit equal to the Defined Lump Sum. If there is no such personal representative of the Participant’s estate duly appointed and acting in that capacity within 90 days after the Participant’s death, benefits shall be paid in accordance with the rules in Section 5D.5(f), except the Participant may not designate a Beneficiary. No death benefits shall be paid if the Former Participant dies after the end of the 60-day period beginning on his Eligible Separation. These death benefits shall not be paid if the Former Participant is married at the time of his death.
(2) Qualified Preretirement Survivor Annuity.
(A) Except as provided in paragraph (3) below, if a Former Participant dies prior to the Annuity Starting Date and is married at the time of his death, a death benefit in the form of a Qualified Preretirement Survivor Annuity, as described below, shall be payable to such surviving Spouse. If the Spouse consents to a distribution within 60 days after notification of an entitlement to a death benefit, such Survivor Annuity shall be a monthly life annuity for the life of the surviving Spouse which is equal to the greatest of the following:
(i) a single life annuity (for the Spouse’s life) commencing on the Pension Effective Date that is the DLS Equivalent of the Defined Lump Sum. This clause (i) shall not apply to a surviving Spouse of a Former Participant, unless the Former Participant dies before the end of the 60-day period beginning on his Eligible Separation; or
LA3:752821.27 O-6
(ii) a single life annuity for the Spouse’s life equal to the amount that would have been payable if the Former Participant had begun to receive a Pension in the form of a Qualified Joint & 50% Survivor Annuity (as described in the preceding subsection (d)) and immediately died.
(B) If the Spouse does not consent to a distribution within 60 days after notification of entitlement to a death benefit, payment of a Survivor Annuity shall commence as of the day following the day the Spouse elects (in writing) to receive the Survivor Annuity but not later than the date on which the deceased Former Participant would have attained age 65. The amount of the benefit shall be the greater of (x) to the extent applicable, the amount described in clause (i) of the preceding paragraph (A) (without any adjustment to reflect later payment), or (y) the amount the Surviving Spouse would have received if the Former Participant had survived until the date the Survivor Annuity commenced, retired with a Qualified Joint and 50% Survivor Annuity on such date and died on the day after such date.
(C) Payment of the Survivor Annuity shall be made as soon as practicable after the date as of which it commences; the first payment shall include any payments not made which were due on and after the date as of which it commenced.
(3) Special Spousal Waiver. A surviving Spouse of a Former Participant entitled to a Survivor Annuity may elect not to receive such Survivor Annuity and instead elect to receive a cash lump sum equal to the Defined Lump Sum. However, the surviving Spouse shall not be entitled to elect a lump sum hereunder unless the Former Participant dies before the end of the 60-day period beginning on his Eligible Separation. In order to make such an election, the surviving Spouse must give notice to the Plan on a form meeting the spousal consent requirements set forth in Plan Section 6.2(c)(1). Notwithstanding any provision of the Plan to the contrary, no such notice shall be valid and no lump sum may be elected unless the surviving Spouse consents, within 60 days after the notification from a Participating Company that the surviving Spouse is entitled to a death benefit, to an immediate lump sum distribution. Any purported election of a lump sum after such date shall be null and void.
(4) No Designation of Beneficiary Permitted. A Participant may not designate a beneficiary or beneficiaries to receive death benefits that may become payable under this Appendix on account of his death prior to his Annuity Starting Date.
(f) Payment of the additional pension shall be subject to the conditions set forth in Article IV.
3.2 Involuntary Separation Benefits.
(a) An Impacted Employee described in Article II is eligible for benefits under this Section 3.2 if he or she is laid off by the Company as a part of a force adjustment process. Layoffs will be made among employees in inverse order of TOE within the defined Adjustment Group in an RCA after the Company has taken other steps consistent with the collective bargaining agreement
LA3:752821.27 O-7
between the CWA and the Company to reduce force surplus conditions. An employee is not eligible for benefits under this Section 3.2 if:
(1) he or she separates or is terminated for reasons other than as a part of a Company designated force adjustment; or
(2) he or she is offered and decline reassignment that would not:
A. require travel from his or her residence to a new work location that is over 35 miles further than the distance from the residence to his or her former work location; or
B. result in a lower rate of pay; or
(3) he or she is eligible for and has elected benefits under Section 3.3 of this Program.
(b) Defined Lump Sum. Each Participant entitled to a benefit pursuant to Section 3.2 shall be entitled to a Defined Lump Sum in the amount set forth below. Said Defined Lump Sum shall be paid as set forth in Section 3.1 of the Program. The Defined Lump Sum will be calculated based on the employee's TOE at date of Eligible Separation as follows: $600 for each year of TOE up to and including nine years; plus $1,000 for each year of TOE from years 10 through 19 years; plus $1,500 for each year of TOE from years 20 and each subsequent year. In no event will a Participant's benefit exceed twice his or her base annual salary plus applicable differentials (subject to the limit in Section 1.10(d)).
3.3 Voluntary Separation Benefits.
(a) An Employee described in Article II who is a member of an Adjustment Group may elect, in order of TOE within the Adjustment Group and to the extent necessary (as determined by the Company) to eliminate the force adjustment condition in the work force, to leave the service of the Company and receive benefits under Section 3.3 if:
(A) His or her
(i) reassignment opportunity would require him or her to travel at least 35 miles further to the new work location than to the former work location; or
(ii) reassignment would result in a lower rate of pay; or
(iii) participation in the voluntary Program would reduce the number of less senior employees in the Adjustment Group who qualify for the voluntary Program under (i) or (ii) above; and
(B) He or she has not elected benefits under Section 3.2; and
LA3:752821.27 O-8
(C) He or she separates employment as a result of the Company designated force adjustment. (An employee is not eligible if he or she resigns or is terminated for any other reason.)
(b) An Employee described in Article II who is eligible to participate in the Program by reason of volunteering, at the Company's invitation, to be considered for an Expanded VS Offer may elect to leave the service of the Company and receive benefits under this Section 3.3 if:
(A) he or she receives an Expanded VS Offer; and
(B) he or she is not otherwise eligible for benefits under this Section 3.3; and
(C) he or she has not elected benefits under Section 3.2; and
(D) he or she separates employment as a result of accepting the Expanded VS Offer. (He or she is not eligible if he or she resigns or is terminated for any other reason.)
(c) Conditions For Receiving Benefits.
(1) For Employees who participate in the Program pursuant to Section 3.3(a), the election to leave the service of the Company and receive payments under the Program must be in writing and delivered to the Company within ten (10) calendar days from the date of the Company's offer. Such election may not be revoked after this ten (10) day period.
(2) For Employees who are eligible for the Program by reason of receiving an Expanded VS Offer, the election to leave the service of the Company and receive payments under the Program must be in writing and delivered to the Company within two (2) calendar days from the date the Employee received the Expanded VS Offer. Such election may not be revoked after this two (2) day period.
(3) By agreement with the Union, the Company may impose additional conditions on the receipt of Program benefits. Such other conditions shall include, but are not limited to, requiring an employee to waive his or her rights to future Disability Plan payments in exchange for the receipt of benefits.
(d) Defined Lump Sum. Each Participant entitled to a benefit pursuant to Section 3.3 shall be entitled to a Defined Lump Sum in the amount set forth below. Said Defined Lump Sum shall be paid as set forth in Section 3.1 of the Program. The amount of the Defined Lump Sum shall be calculated based upon $1,100.00 for each year of TOE (prorated for any partial year of service) at the date of Eligible Separation up to a maximum of $26,400, but in no event to exceed twice the base annual salary plus applicable differentials (subject to the limit in Section 1.10(d)).
LA3:752821.27 O-9
ARTICLE IV
CONDITIONS FOR RECEIPT OF BENEFITS
4.1 Payments After Participant’s Death.
If a Participant who is eligible for a payment under this Program dies after the Annuity Starting Date of Program benefits, any unpaid lump sum which the employee was entitled to receive shall be paid to the estate of the Participant. If any other form was elected, the survivor benefits, if any, shall be paid in accordance with the form elected.
4.2 Payment Offsets.
An employee who receives payments under this Program and is subsequently reemployed and entitled to benefits under this Program, will receive benefits based upon his/her TOE, subject to an offset of prior Program payments received and not refunded to the Plan. Similarly, a Participant who becomes entitled to payments under this Program who has previously received benefits under the Company’s Voluntary or Involuntary Separation Payment Plans will receive benefits under this Program based upon his/her TOE, subject to an offset of prior Voluntary and Involuntary Separation Payment Plan payments received and not refunded to the Company. In addition, no Participant shall be entitled or permitted to receive benefits under the Program and under the Voluntary Separation Payment Plan or Involuntary Separation Payment Plan with respect to the same termination of employment.
ARTICLE V
PROGRAM ADMINISTRATION
5.1 Sponsor and Administrator.
With respect to this Program, Qwest Communications International Inc. is the “plan sponsor” and “plan administrator” as those terms are defined in ERISA. Qwest Communications International Inc. shall have primary responsibility for the operation and administration of the Program, and this responsibility shall be delegated as designated in the Program or as determined by the Executive Vice President - Human Resources (or its successor), Qwest Services Corporation.
5.2 Named Fiduciaries and Delegation.
The Program Administrator and such other persons and organizations as are designated as having responsibility to administer or manage the payment of a Program benefit to eligible employees, shall be a “named fiduciary” as that term is defined in ERISA with respect to the task or tasks specifically assigned or delegated to that person or organization. Each named fiduciary may designate, in writing, other persons or organizations to carry out their respective fiduciary responsibilities and may employ persons to advise with regard to any such responsibilities consistent with the terms of this Program. The decision to implement this Program and other decisions regarding implementation are business decisions and are not delegated fiduciary obligations.
LA3:752821.27 O-10
5.3 Program Administrator’s Discretion.
Except as otherwise required under the terms of any applicable collective bargaining agreement, Qwest Communications International Inc., as the Program Administrator, has the right and discretion to determine all matters of fact or interpretation relating to the administration of the Program, including questions of eligibility, interpretation of Program provisions, and any other matters. This discretion is delegated to Director - Labor Relations, Qwest Corporation, and the Program Review Committee for purposes of determining claims and appeals, and to such other persons as may be designated by the Executive Vice President - Human Resources (or its successor), Qwest Services Corporation for other Program purposes. The decisions by the Program Administrator or any other fiduciary to whom such discretion has been granted shall be conclusive and binding on all persons subject only to the right to appeal under the terms of this Program.
5.4 Benefits Not Assigned Or Alienated.
Assignment or alienation of any benefits provided by the Program will not be permitted or recognized as set forth in Section 13.5 of the Plan. This means that, except as required by applicable law, benefits provided under the Program are not subject to sale, assignment, anticipation, alienation, attachment, garnishment, levy, execution or any other form of transfer.
5.5 Benefit Claim and Appeal Procedures
Program participants, or any person duly authorized by them, may file a claim in writing for benefits under this Program or for review of any other appropriate matter related to the Program. The written claim should be sent to Director - Labor Relations, Qwest Corporation or other persons as determined by the Executive Vice President - Human Resources (or its successor), Qwest Services Corporation for review and coordination of response. The written claim should be sent within 90 days of the date of the occurrence of facts giving rise to the claim. If the claim is denied, the claimant will receive, within 90 days of the date the claim was received, written notice of the decision, including the specific reason for the decision, the pertinent provisions of the Program, a description of additional information necessary to appeal a claim and why such information is necessary, and an explanation of the appeal procedure should the claimant wish to submit the claim for review.
In some cases, more than 90 days may be needed to make a decision. In such cases, the claimant will be notified in writing, within the initial 90-day period, of the reason more time is needed. An additional 90 days may be taken to make the decision if the claimant is sent such a notice. The extension notice will show the date by which the decision will be sent.
A claimant may follow the appeal procedure if:
• no reply at all is received by the claimant within 90 days after filing the claim, or in those cases when a notice has extended the time an additional 90 days and no reply is received within 180 days after filing the claim; or
• written denial of the claim for benefits or other matters is received within the proper time limit and the claimant wishes to appeal the written denial.
LA3:752821.27 O-11
When a claim for benefits or review of any other appropriate matter related to the Program is denied, if the participant or other duly authorized person wishes to appeal this denial, such appeal must be submitted in writing within 60 days after the denial is received. The Executive Vice President - Human Resources (or its successor), Qwest Services Corporation shall appoint a Review Committee which shall be the named fiduciary that will afford a full review of the denial of any claim regarding a Program benefit. Unless the Review Committee sends notice in writing that the claim is a special case needing more time to make a decision, the Review Committee must conduct a review and decide on the appeal of the denied claim within 60 days after receipt of the written request for review. In special cases, needing more time to make a decision, the Review Committee will send notice in writing that there will be a delay and give the reasons for the delay. In such cases, the Review Committee may have 60 days more, or a total of 120 days, to make its decision.
If the claimant sends a written request for review of a denied claim, the person sending the request has the right to:
• review pertinent Program documents, and
• send to the Review Committee, a written statement of the issues and any other documents in support of the claim for benefits or other matters under review.
The Review Committee's decision shall be given to the claimant in writing within 60 days or, if extended, 120 days, and shall include specific reasons for the decision, and specific reference to the relevant Program provisions. If the Review Committee does not give its decision on review within the appropriate time span, the claimant may consider the claim denied.
Employees may pursue claims and appeal rights described above before seeking any other legal recourse regarding claims for benefits.
5.6 Funding of Program Benefits. Except as set forth in the next sentence, all benefits under this Program shall be paid out of Plan assets. If the benefits under this Program (including any Extra Payments under Article VI) are limited by Section 5C.2 of the Plan, then the excess not payable under this Program shall be paid to the Participant pursuant to Section 5C.2(h) of this Plan. No such payments shall give rise to any Extra Payments. There shall be no duplication of benefits pursuant to the foregoing provisions.
5.7 Amendment and Termination. Any decision to amend or terminate this Program, in whole or in part, including decisions as to the nature and timing of such amendments or termination, shall constitute business decisions by Qwest Communications International Inc. (“Qwest”), as the Program sponsor and not as a Program fiduciary. As such, these decisions shall be made in the sole discretion of the Qwest on the basis of business considerations. Subject to the collective bargaining agreement between Qwest Corporation and the Union, the Program may be amended by a writing approved by the Board of Directors of Qwest and signed on behalf of Qwest by an officer of Qwest duly authorized by such Board of Directors. Subject to the collective bargaining agreement between Qwest Corporation and the Union, the Program may also be amended in writing by the Plan Design Committee or other persons(s) to the extent authority to amend the Program has been delegated to the
LA3:752821.27 O-12
Plan Design Committee or such person(s) by the Board of Directors of Qwest. Each amendment shall be effective on such date as Qwest or its delegee may determine.
5.8 Effective Date. This Program is effective as of October 12, 2000.
ARTICLE VI
EXTRA PAYMENTS
6.1 Extra Payments.
(a) This Article VI applies to Participants who incur a 10% penalty under Code section 72(t) with respect to the payment by the Plan of the additional Defined Lump Sum under Article III of this Appendix in the year the payment of such additional Defined Lump Sum is made, and provide proof of such payment as set forth below. These Participants will be paid an additional amount (the “Extra Payment”) as soon as practicable after timely proof, satisfactory to the Qwest Companies, is provided that the Participant paid the 10% penalty under Code section 72(t) with respect to the payment of the additional Defined Lump Sum directly from the Plan to the Participant as set forth above. Such proof must in all cases include a copy of the federal tax return for the year the additional Defined Lump Sum is paid. Extra Payments will only be made under this Article VI to Participants who submit the proper election forms for such Extra Payments (with such proof) prior to April 15th of the second calendar year following the calendar year in which the additional Defined Lump Sum is paid by the Plan.
(b) The amount of the Extra Payment shall equal the amount which, after payment of all federal and state income taxes (based on the net combined marginal federal and applicable state tax rate (in all cases, after taking into account federal deduction for state taxes at the applicable state rate) actually applicable to the Participant in the year the additional Defined Lump Sum is paid) including the 10% penalty under Code section 72(t), equals the excess of (1) 8.55% of the additional Defined Lump Sum over (2) 6.2% of the lesser of the additional Defined Lump Sum or the excess of the Taxable Wage Base (in effect for the year the additional Defined Lump Sum is paid) over the wages (subject to Social Security taxes) actually paid to the Participant from the Qwest Companies during the year the additional Defined Lump Sum is paid. The Extra Payment shall be paid in any form available under Article VI of the Plan, as elected by the Participant (subject to spousal consent, if required by Article VI).
(c) No Extra Payment shall be made on any Extra Payment.
(d) Notwithstanding the provisions of Section 5C.2(h), no Extra Payments shall be made under the Plan (including Section 5C.2(h)) or the Program with respect to any excess additional Defined Lump Sum payable, in accordance with Section 5.6 of this Appendix, or under Section 5C.2(h) of the Plan.
LA3:752821.27 P-1
APPENDIX P
ENHANCED RETIREMENT PENSION BENEFIT FOR IBEW-COMM PARTICIPANTS (effective as of November 1, 2000)
TABLE OF CONTENTS
ARTICLE I DEFINITIONS........................................................................................P-1
ARTICLE II PARTICIPATION ..................................................................................P-2
ARTICLE III BENEFITS..............................................................................................P-4
ARTICLE IV CONDITIONS FOR RECEIPT OF BENEFITS ....................................P-7
ARTICLE V PROGRAM ADMINISTRATION AND EXTRA PAYMENTS...........P-7
INTRODUCTION
The purpose of this Appendix P is to provide additional retirement benefits to certain eligible Occupational Participants who (1) have been determined by Qwest Corporation or Qwest Business Resources, Inc. (the “Company”) to be in an adjustment group or are otherwise designated as participants by the Company, (2) are involuntarily terminated from employment (or voluntarily terminate under rules set forth herein) and (3) meet each of the other conditions set forth in this Appendix P.
ARTICLE I
DEFINITIONS
The following terms shall have the meaning set forth below, and other terms that are capitalized but not defined in this Appendix shall have the meaning set forth in the Qwest Pension Plan (the “Plan”) document to which this Program is appended, unless the context clearly indicates otherwise.
1.1 “Agreement” means the collective bargaining agreement between the Company and the Union, dated August 16, 1998 (including any extensions).
1.2 “At Risk Employee” means Employees who the Company identifies as directly affected by the surplus in the event all employees in the surplus group remain in the job position and title they were in at the time the surplus condition was declared.
1.3 “Company” means Qwest Corporation or Qwest Business Resources, Inc., as applicable, unless otherwise specifically noted.
LA3:752821.27 P-2
1.4 “Incidental Employee” means any employee of the Company who is designated on Company payroll records as an Incidental Employee. Such employees are normally engaged for an indefinite period of time, and employed on an as-needed basis for a cumulative total of less than eight hundred fifty (850) hours in a calendar year.
1.5 “Impacted Employee” means any Covered Employee who is determined by inverse TOE among the employees in an adjustment group as a potential for layoff.
1.6 “Participant” means a Covered Employee eligible to participate in the Program as described in Articles II and III. Any person who does not meet all of the terms and conditions for a benefit under this Appendix P shall not be a Participant.
1.7 “Plan” refers to Qwest Pension Plan (formerly the U S WEST Pension Plan).
1.8 “Program” refers to this Appendix P.
1.9 “Program Administrator” refers to the administrator described in Section 5.1 of this Program.
1.10 “Reasonable Commuting Distance (“RCD”)” means a thirty-five (35) mile radius from the current work location.
1.11 “Regular Employee” means any Employee of the Company who is classified by the Company as a Regular Full-Time or Regular Part-Time Employee. Regular Employee does not include any persons who are classified by the Company as Temporary or Incidental.
1.12 “Regular Full-Time Employee” means any Employee of the Company who is designated on Company payroll records as a Regular Full-Time Employee. Such employees are normally employed to work at least forty (40) hours per calendar week for an indefinite period.
1.13 “Regular Part-Time Employee” means any Employee of the Company who is designated on Company payroll records as a Regular Part-Time Employee. Such employees are normally engaged for an indefinite period of time and scheduled to work at least eleven hundred and fifty (1,150) hours per calendar year, but fewer hours than a Regular Full-Time Employee is usually scheduled.
1.14 “Temporary Employee” means any employee who is designated on Company payroll records as a Regular Temporary Employee (either full-time or part-time). Such employees are normally employed for a specified project with the understanding that his or her employment will terminate upon completion of the project.
1.15 “Union” means International Brotherhood of Electrical Workers (“IBEW”), Local 206.
LA3:752821.27 P-3
ARTICLE II
PARTICIPATION
2.1 General Rule of Participation. An Employee is eligible to participate in the Program if he or she meets all of the following conditions:
(a) He or she is a Regular Employee of Qwest Corporation or Qwest Business Resources, Inc.;
(b) He or she is in a bargaining unit covered by the Agreement;
(c) He or she is a Participant in the Pension Plan;
(d) He or she: (1) is in a force group designated by the Company as an adjustment group for participation in the Program, or (2) volunteers, at the Company’s invitation, for termination pursuant to Article 11.1 of the Agreement; and
(e) He or she is not excluded from participating by virtue of Section 2.2.
2.2 Exclusions and Exceptions.
An employee is an excluded employee and therefore excluded from coverage under this Program if any of the following applies:
(a) He or she is covered by a collective bargaining agreement with the CWA;
(b) He or she is eligible for and elects to take the Surplus Transitional Leave of Absence (STLA);
(c) He or she is an Incidental Employee or a Temporary Employee (full-time or part-time) or holds any job classification other than Regular Full-Time or Regular Part-Time;
(d) He or she is on a leave of absence and the leave does not guarantee a return to work;
(e) Except as set forth in Section 2.1(d)(2) of this Appendix P, he or she separates from employment for reasons other than a Company designated force adjustment process; or
(f) He or she incurs an Eligible Separation prior to November 1, 2000 or after 90 days prior to expiration of the Agreement.
2.3 Program Use.
The Program may be offered by the Company to eligible Covered Employees as a part of the force adjustment process. For purposes of this Program, surplus exists when the Company gives at least 90 days notice to the Union that it is necessary to reduce the size of the work force or
LA3:752821.27 P-4
relocate jobs due to changes in equipment or methods of operation or due to other conditions. The Company may also authorize payment of voluntary termination payments subject to needs of the business regardless of work force reduction status. The Company will determine the number of employees, and the work locations in which a surplus exists, and the number of employees considered At Risk in such titles and locations. The decision to implement this Program is a business decision and not subject to the “Benefit Claim and Appeal Procedure” described in this Program.
ARTICLE III
BENEFITS
3.1 Benefits.
(a) A person who is eligible to participate under Article II is not a Participant unless he or she meets the conditions set forth in either Section 3.2 or 3.3.
(b) The amount of the additional retirement pension to which a Participant is entitled as of the date of the Eligible Separation shall be the monthly amount payable as a single-Life Annuity commencing on the Participant’s Normal Retirement Date (or, if later, the earlier of the Pension Effective Date or Required Beginning Date) that is the DLS Equivalent of the Defined Lump Sum, as defined in Section 3.2 or 3.3, as applicable. The amount of benefits payable under Appendix P shall be determined without regard to whether the Participant qualifies for a service pension or a deferred vested pension under Article V-A.
(c) The amount of the additional retirement pension for any Participant whose Annuity Starting Date is prior to attainment of age 65 shall be equal to the greater of (1) the pension calculated in subsection (b), reduced by the factors in Appendix C to reflect early commencement of benefits or (2) the Minimum Amount. Regardless of when the Participant commences benefits, the Minimum Amount is a single-Life Annuity commencing on the Pension Effective Date that is the DLS Equivalent of the Defined Lump Sum as defined in Section 3.2 or 3.3, as applicable.
(d) Except as set forth below, a Participant may elect to receive the benefit amount in any form permitted under Article VI of the Plan available to that Occupational Employee.
(1) For all Participants notified, prior to February 5, 2001, of their termination of employment, the only Qualified Joint and Survivor Annuity (even if the Participant otherwise qualifies for a service or disability pension) shall be a Qualified Joint and Survivor Annuity with the survivor annuity equal to 50% of the amount payable during the joint lives of the Participant and his Spouse. For this purpose, the factors set forth in Appendix D of the Plan shall apply for purposes of determining the amount of said qualified joint and survivor annuity. If Participant’s Spouse predeceases Participant on or after the Annuity Starting Date, the amount payable during the remainder of the Participant’s life shall not be increased.
LA3:752821.27 P-5
(2) For all Participants notified, on or after February 5, 2001, of their termination of employment, all of the benefit forms set forth in Article VI applicable to Management Participants shall also be available with respect to the benefits under this Appendix P, even if such benefits are not available to the regular benefits under the Occupational Part. Such amounts shall be calculated based on the factors set forth in Appendix A applicable to Management Participants.
(3) In all cases, if the Participant elects a lump sum benefit, amount shall equal the Defined Lump Sum. Such an election may only be made in accordance with Section 6.5(c).
(e) The rules in Section 3.1(e) of Appendix O apply if a Former Participant dies after termination of employment but prior to the Annuity Starting Date of his benefit under this Appendix. No benefits are payable if the Participant dies prior to his or her scheduled separation date pursuant to the Program.
(f) Payment of the additional pension shall be subject to the conditions set forth in Article IV.
3.2 Involuntary Termination Benefits.
(a) An Impacted Employee described in Article II is eligible for benefits under this Section 3.2 if he or she is laid off by the Company as a part of a force adjustment process after the Company has taken other steps consistent with the collective bargaining agreement between the Union and the Company to reduce force surplus conditions. The Company will notify At Risk employees in the surplus group of their eligibility for Involuntary Termination Payments if such an offer becomes necessary to resolve a surplus condition Layoffs will be made among employees in inverse order of TOE within each job title by location and work group, except for construction technicians and Central Office Equipment Installation Department employees, who will be laid off in inverse order of TOE on a state-wide basis. An employee is not eligible for benefits under this Section 3.2 if:
(1) he or she resigns or is terminated for reasons other than as a part of a Company designated force adjustment (including, without limitation, dismissal for cause); or
(2) he or she has received a job offer that is within a Reasonable Commuting Distance from the location at which the surplus is declared; or
(3) he or she is eligible for and has elected benefits under Section 3.3 of this Program.
(b) Defined Lump Sum. Each Participant entitled to a benefit pursuant to Section 3.2(a) shall be entitled to a Defined Lump Sum in the amount set forth below. Said Defined Lump Sum shall be paid as set forth in Section 3.1 of the Program. The Defined Lump Sum will be calculated based on the employee’s Pension Calculation Service and base weekly wage rate
LA3:752821.27 P-6
(excluding tour or temporary differentials, overtime pay or other extra payments, and subject to the limit in Plan Section 1.10(d)) on the date of Eligible Separation as follows. If the Participant has 1-10 years of Pension Calculation Service, the Defined Lump Sum is a total of one week of pay for each year of Pension Calculation Service. If the Participant has 11-19 years of Pension Calculation Service, the Defined Lump Sum is a total of two weeks of pay for each year of Pension Calculation Service. If the Participant has 20-24 years of Pension Calculation Service, the Defined Lump Sum is a total of 60 weeks of pay. If the Participant has 25 or more years of Pension Calculation Service, the Defined Lump Sum is a total of 75 weeks of pay.
(c) Special Rules. Each Participant who would be entitled to a benefit pursuant to Section 3.2(a) except for the fact he or she has received a job offer that is within a Reasonable Commuting Distance from the location at which the surplus is declared shall be entitled to a Defined Lump Sum in the amount set forth in this subsection (c). Said Defined Lump Sum shall be 50% of the amount set forth in Section 3.2(b) if the new job offer pays 75% or more but less than 85% of the current position of the Employee. Said Defined Lump Sum shall be the amount set forth in Section 3.2(b) if the new job offer pays less than 75% of the current position of the Employee. No amount is paid if the new job offer pays 85% or more of the current position of the Employee.
3.3 Voluntary Termination Benefits.
(a) In the event that the Company elects to implement the voluntary portion of the Program, the Company will notify employees in the surplus group of their eligibility for Voluntary Termination Benefits if such an offer becomes necessary to resolve a surplus condition. Voluntary Termination Benefits will be offered to those eligible employees described below on or before the tenth (10th) day before the final day of the surplus if the surplus has not been relieved, as determined by the Company. An Employee described in Article II who is a member of an adjustment group may elect, in order of seniority within the adjustment group and to the extent necessary (as determined by the Company) to eliminate the force adjustment condition in the work force, to leave the service of the Company and receive benefits under Section 3.3 subject to the following conditions:
(A) The Company will determine the job titles and work locations in which the surplus exists, and the number of employees in such titles and locations who are considered to be At Risk in such titles and locations;
(B) The number of employees who make such election shall not exceed the number of employees determined by the Company to be At Risk;
(C) He or she has not received a job offer that is within a Reasonable Commuting Distance from the location at which the surplus is declared;
(D) He or she has not elected benefits under Section 3.2; and
LA3:752821.27 P-7
(E) Except as set forth in Section 2.1(d)(2) of this Appendix P, he or she separates employment as a result of the Company designated force adjustment. (An employee is not eligible if he or she resigns or is terminated for any other reason.)
(b) Conditions For Receiving Benefits. For Employees who participate in the Program pursuant to Section 3.3(a), the election to leave the service of the Company and receive payments under the Program must be in writing and delivered to the Company within ten (10) calendar days from the date of the Company's offer. Such election may not be revoked after this ten (10) day period.
(c) Defined Lump Sum. Each Participant entitled to a benefit pursuant to Section 3.3(a) shall be entitled to a Defined Lump Sum in the amount set forth below. Said Defined Lump Sum shall be paid as set forth in Section 3.1 of the Program. The amount of the Defined Lump Sum shall be calculated based upon $1,150.00 for each year of Pension Calculation Service (prorated for any partial year of Pension Calculation Service) at the date of Eligible Separation up to a maximum of $29,000.
ARTICLE IV
CONDITIONS FOR RECEIPT OF BENEFITS
4.1 Payments After Participant’s Death.
If a Participant who is eligible for a payment under this Program dies after the Annuity Starting Date of Program benefits, any unpaid lump sum which the employee was entitled to receive shall be paid to the estate of the Participant. If any other form was elected, the survivor benefits, if any, shall be paid in accordance with the form elected.
4.2 Payment Offsets.
An employee who receives payments under this Program and is subsequently reemployed and entitled to benefits under this Program, will receive benefits based upon his or her Pension Calculation Service, subject to an offset of prior Program payments received and not refunded to the Plan. Similarly, a Participant who becomes entitled to payments under this Program who has previously received benefits under the Company’s Voluntary or Involuntary Termination Payment Plans will receive benefits under this Program based upon his or her Pension Calculation Service, subject to an offset of prior Voluntary and Involuntary Termination Payment Plan payments received and not refunded to the Company. In addition, no Participant shall be entitled or permitted to receive benefits under the Program and under the Voluntary Termination Payment Plan or Involuntary Termination Payment Plan with respect to the same termination of employment.
LA3:752821.27 P-8
ARTICLE V
PROGRAM ADMINISTRATION AND EXTRA PAYMENTS
5.1 Incorporation of Article V and VI of Appendix O.
Articles V and VI of Appendix O are incorporated by reference, except that: (a) the reference to “Director – Labor Relations” in Sections 5.3 and 5.5 of said Article V shall instead be deemed a reference to “Chief Bargaining Agent – Labor Relations,” (b) the reference to the “collective bargaining agreement between the Company and the Union” in Section 5.7 of said Article V shall instead be deemed a reference to the “Agreement” and (c) notwithstanding Section 5.8 of said Article V, this Program is effective as of November 1, 2000.
LA3:752821.27 Q-1
APPENDIX Q
ENHANCED RETIREMENT PENSION BENEFIT FOR CWA-BRI PARTICIPANTS (EFFECTIVE AS OF NOVEMBER 6, 2000)
TABLE OF CONTENTS
ARTICLE I DEFINITIONS.................................................................................. Q-1
ARTICLE II PARTICIPATION ............................................................................ Q-2
ARTICLE III BENEFITS........................................................................................ Q-4
ARTICLE IV CONDITIONS FOR RECEIPT OF BENEFITS .............................. Q-7
ARTICLE V PROGRAM ADMINISTRATION AND EXTRA PAYMENTS..... Q-8
INTRODUCTION
The purpose of this Appendix Q is to provide additional retirement benefits to certain eligible Occupational Participants who (1) have been determined by Qwest Business Resources, Inc. (the “Company”) to be in an adjustment group, (2) are involuntarily terminated from employment (or voluntarily terminate under rules set forth herein) and (3) meet each of the other conditions set forth in this Appendix Q.
ARTICLE I
DEFINITIONS
The following terms shall have the meaning set forth below, and other terms that are capitalized but not defined in this Appendix shall have the meaning set forth in the Qwest Pension Plan (the “Plan”) document to which this Program is appended, unless the context clearly indicates otherwise.
1.1 “Agreement” means the collective bargaining agreement between the Company and the Union, dated August 16, 1998 (including any extensions).
1.2 “Company” means Qwest Business Resources, Inc., unless otherwise specifically noted.
1.3 “Full-Time Employee” means any Employee of the Company engaged to work a full-time or normal workweek.
LA3:752821.27 Q-2
1.4 “Impacted Employee” means any Covered Employee who is determined by inverse TOE among the employees in an adjustment group as a potential for layoff.
1.5 “Participant” means a Covered Employee eligible to participate in the Program as described in Articles II and III. Any person who does not meet all of the terms and conditions for a benefit under this Appendix Q shall not be a Participant.
1.6 “Part-Time Employee” means any Employee of the Company who is employed and normally scheduled to work less hours per average month than a comparable Full-Time Employee in the same job title, classification and work group.
1.7 “Plan” refers to Qwest Pension Plan (formerly the U S WEST Pension Plan).
1.8 “Program” refers to this Appendix Q.
1.9 “Program Administrator” refers to the administrator described in Section 5.1 of this Program.
1.10 “Reasonable Commuting Distance (“RCD”)” means a thirty-five (35) mile radius from the current work location.
1.11 “Regular Employee” means any Full-Time Employee or Part-Time Employee of the Company whose employment is reasonably expected to continue for more than one year and does not include any persons who are classified by the Company as Temporary Employees.
1.12 “Temporary Employee” means any Employee of the Company normally engaged for a period of twelve months or less.
1.13 “Union” means Communications Workers of America (“CWA”).
ARTICLE II
PARTICIPATION
2.1 General Rule of Participation. An Employee is eligible to participate in the Program if he or she meets all of the following conditions:
(a) He or she is a Regular Employee of Qwest Business Resources, Inc.;
(b) He or she is in a bargaining unit covered by the Agreement;
(c) He or she is a Participant in the Pension Plan;
(d) He or she is in a force group designated by the Company as an adjustment group for participation in the Program; and
(e) He or she is not excluded from participating by virtue of Section 2.2.
LA3:752821.27 Q-3
2.2 Exclusions and Exceptions.
An employee is an excluded employee and therefore excluded from coverage under this Program if any of the following applies:
(a) He or she is covered by a collective bargaining agreement with the IBEW;
(b) He or she is eligible for and elects to take the Surplus Transitional Leave of Absence (STLA);
(c) He or she is a Temporary Employee or holds any job classification other than Full-Time or Part-Time;
(d) He or she is on a leave of absence and the leave does not guarantee a return to work;
(e) He or she separates from employment for reasons other than a Company designated force adjustment process; or
(f) He or she incurs an Eligible Separation prior to November 6, 2000 or after 60 days prior to expiration of the Agreement.
2.3 Program Use.
The Program may be offered by the Company to Impacted Employees or other eligible Covered Employees as a part of the force adjustment process. When the Company determines that it is necessary to reduce the size of the work force due to changes in methods of operation or economic conditions, the Company Bargaining Agent will give the Union Bargaining Agent as much notice as possible in writing, which in no case shall be less than 60 calendar days prior to the effective date of the force adjustment. Included in such notification to the Union Bargaining Agent will be a description of the reason for the force adjustment, the job titles, functions, work groups, and locations involved, and the Company’s plan for accomplishing such force adjustment. The decision to implement this Program is a business decision and not subject to the “Benefit Claim and Appeal Procedure” described in this Program.
ARTICLE III
BENEFITS
3.1 Benefits.
(a) A person who is eligible to participate under Article II is not a Participant unless he or she meets the conditions set forth in either Section 3.2 or 3.3.
(b) The amount of the additional retirement pension to which a Participant is entitled as of the date of the Eligible Separation shall be the monthly amount payable as a single-Life Annuity commencing on the Participant’s Normal Retirement Date (or, if later, the
LA3:752821.27 Q-4
earlier of the Pension Effective Date or Required Beginning Date) that is the DLS Equivalent of the Defined Lump Sum, as defined in Section 3.2 or 3.3, as applicable. The amount of benefits payable under Appendix Q shall be determined without regard to whether the Participant qualifies for a service pension or a deferred vested pension under Article V-A.
(c) The amount of the additional retirement pension for any Participant whose Annuity Starting Date is prior to attainment of age 65 shall be equal to the greater of (1) the pension calculated in subsection (b), reduced by the factors in Appendix C to reflect early commencement of benefits or (2) the Minimum Amount. Regardless of when the Participant commences benefits, the Minimum Amount is a single-Life Annuity commencing on the Pension Effective Date that is the DLS Equivalent of the Defined Lump Sum as defined in Section 3.2 or 3.3, as applicable.
(d) Except as set forth below, a Participant may elect to receive the benefit amount in any form permitted under Article VI of the Plan available to that Occupational Employee.
(1) For all Participants notified, prior to February 5, 2001, of their termination of employment, the only Qualified Joint and Survivor Annuity (even if the Participant otherwise qualifies for a service or disability pension) shall be a Qualified Joint and Survivor Annuity with the survivor annuity equal to 50% of the amount payable during the joint lives of the Participant and his Spouse. For this purpose, the factors set forth in Appendix D of the Plan shall apply for purposes of determining the amount of said qualified joint and survivor annuity. If Participant’s Spouse predeceases Participant on or after the Annuity Starting Date, the amount payable during the remainder of the Participant’s life shall not be increased.
(2) For all Participants notified, on or after February 5, 2001, of their termination of employment, all of the benefit forms set forth in Article VI applicable to Management Participants shall also be available with respect to the benefits under this Appendix Q, even if such benefits are not available to the regular benefits under the Occupational Part. Such amounts shall be calculated based on the factors set forth in Appendix A applicable to Management Participants.
(3) In all cases, if the Participant elects a lump sum benefit, amount shall equal the Defined Lump Sum. Such an election may only be made in accordance with Section 6.5(c).
(e) The rules in Section 3.1(e) of Appendix O apply if a Former Participant dies after termination of employment pursuant to the Program but prior to the Annuity Starting Date of his benefit under this Appendix. No benefits are payable if the Participant dies prior to his or her scheduled separation date pursuant to the Program.
(f) Payment of the additional pension shall be subject to the conditions set forth in Article IV.
LA3:752821.27 Q-5
3.2 Involuntary Termination Benefits.
(a) An Impacted Employee described in Article II is eligible for benefits under this Section 3.2 if he or she is laid off by the Company as a part of a force adjustment process after the Company has taken other steps consistent with the collective bargaining agreement between the Union and the Company to reduce force surplus conditions. Layoffs will be made among employees in inverse order of TOE within each job title by location, work group and function. An employee is not eligible for benefits under this Section 3.2 if:
(1) he or she resigns or is terminated for reasons other than as a part of a Company designated force adjustment (including, without limitation, dismissal for cause, release due to medical restrictions or the expiration of a leave of absence); or
(2) he or she has received a job offer that does not require a change of residence (within the meaning of Article 22 of the Agreement) and the job offer does not result in a reduction of the employee’s basic weekly wage rate of more than 10%; or
(3) he or she has elected benefits under Section 3.3 of this Program.
(b) Defined Lump Sum. Each Participant entitled to a benefit pursuant to Section 3.2(a) shall be entitled to a Defined Lump Sum in the amount set forth below. Said Defined Lump Sum shall be paid as set forth in Section 3.1 of the Program. The Defined Lump Sum will be calculated based on the employee’s Pension Calculation Service and basic weekly wage rate (excluding differentials, overtime pay or other extra payments) on the date of Eligible Separation as set forth in the following chart:
Pension Calculation Service Involuntary Termination Benefit
Less than 6 months None 6 months but less than 1 year 1 week’s pay 1 year but less than 2 years 2 week’s pay 2 years but less than 3 years 3 week’s pay 3 years but less than 4 years 4 week’s pay 4 years but less than 5 years 5 week’s pay 5 years but less than 6 years 6 week’s pay 6 years but less than 7 years 7 week’s pay 7 years but less than 8 years 8 week’s pay 8 years but less than 9 years 10 week’s pay 9 years but less than 10 years 12 week’s pay 10 years but less than 11 years 14 week’s pay 11 years but less than 12 years 16 week’s pay 12 years but less than 13 years 18 week’s pay 13 years but less than 14 years 20 week’s pay 14 years but less than 15 years 22 week’s pay 15 years but less than 16 years 26 week’s pay 16 years but less than 17 years 30 week’s pay
LA3:752821.27 Q-6
17 years but less than 18 years 34 week’s pay 18 years but less than 19 years 38 week’s pay 19 years but less than 20 years 42 week’s pay
20 or more years 42 week’s pay plus 5 additional week’s pay for each full or partial year over 20
Notwithstanding the preceding chart, in no event shall the Participant’s benefit exceed twice the Participant’s annual compensation at the basic weekly wage rate received during the twelve months preceding Termination (excluding differentials, overtime pay or other extra payments), subject to Section 1.10(d).
In addition, six percent (6%) of the Participant’s adjusted earnings (as defined in Article 25 of the Agreement, and subject to Section 1.10(d)) will be added to the Defined Lump Sum of each Participant entitled to a benefit pursuant to this Section 3.2.
(c) Payment Offsets. An employee who received benefits under the Company’s Involuntary Termination Benefit Plan or who receives involuntary termination benefits under this Program and is subsequently reemployed and entitled to involuntary termination benefits under this Program within five years of reemployment, will receive benefits in an amount equivalent to a certain number of week’s pay as calculated in Section 3.2(b) above minus the number of weeks of pay used to determine the prior involuntary termination benefit.
3.3 Voluntary Resignation Benefits.
(a) In the event that the Company elects to implement the voluntary portion of the Program, the Company will notify employees in the surplus group of their eligibility for Voluntary Resignation benefits if such an offer becomes necessary to resolve a surplus condition. An Employee described in Article II who is a member of an adjustment group may elect, in order of seniority within the adjustment group and to the extent necessary (as determined by the Company) to eliminate the force adjustment condition in the work force, to leave the service of the Company and receive benefits under Section 3.3 subject to the following conditions:
(1) The Company will determine the job titles, locations, work groups and functions in which the surplus exists, and the number of employees in such job titles, locations, work groups and functions who are considered to be surplus;
(2) The number of employees who make such election shall not exceed the number of employees determined by the Company to be surplus;
(3) He or she has not received a job offer that is within a Reasonable Commuting Distance from the location at which the surplus is declared which does not result in a reduction of the employee’s basic weekly wage rate of more than 10%;
(4) He or she has not received benefits under Section 3.2; and
LA3:752821.27 Q-7
(5) He or she separates employment as a result of the Company designated force adjustment. (An employee is not eligible if he or she resigns or is terminated for any other reason.)
(b) Conditions For Receiving Benefits. For Employees who participate in the Program pursuant to Section 3.3(a), the election to leave the service of the Company and receive payments under the Program must be in writing and delivered to the Company within ten (10) calendar days from the date of the Company's offer. Such election may not be revoked after this ten (10) day period.
(c) Defined Lump Sum. Each Participant entitled to a benefit pursuant to Section 3.3(a) shall be entitled to a Defined Lump Sum in the amount set forth below. Said Defined Lump Sum shall be paid as set forth in Section 3.1 of the Program. The amount of the Defined Lump Sum shall be calculated based upon $1,000.00 for each year of Pension Calculation Service (prorated for any partial year of Pension Calculation Service at the rate of $83 for each full month of service during such partial year and $83 for the final month of service if the Participant was on the active payroll for at least fifteen days during such month on the date of resignation) at the date of Eligible Separation up to a maximum of the lesser of $30,000, or twice the Participant’s annual compensation at the basic weekly wage rate received during the twelve months preceding Termination (excluding differentials, overtime pay or other extra payments), subject to Plan Section 1.10(d). In addition, six percent (6%) of the Participant’s adjusted earnings (as defined in Article 25 of the Agreement, subject to Section 1.10(d)) will be added to the Defined Lump Sum of each Participant entitled to a benefit pursuant to this Section 3.3.
ARTICLE IV
CONDITIONS FOR RECEIPT OF BENEFITS
4.1 Payments After Participant’s Death.
If a Participant who is eligible for a payment under this Program dies after the Annuity Starting Date of Program benefits, any unpaid lump sum which the employee was entitled to receive shall be paid to the estate of the Participant. If any other form was elected, the survivor benefits, if any, shall be paid in accordance with the form elected.
4.2 Payment Offsets.
No Participant shall be entitled or permitted to receive benefits under the Program and under the Voluntary Resignation Benefit Plan or Involuntary Termination Benefit Plan with respect to the same termination of employment
LA3:752821.27 Q-8
ARTICLE V
PROGRAM ADMINISTRATION AND EXTRA PAYMENTS
5.1 Incorporation of Article V and VI of Appendix O.
Articles V and VI of Appendix O are incorporated by reference, except that: (a) the reference to “Director – Labor Relations” in Sections 5.3 and 5.5 of said Article V shall instead be deemed a reference to “Bargaining Agent – Labor Relations,” (b) the reference to the “collective bargaining agreement between the Company and the Union” in Section 5.7 of said Article V shall instead be deemed a reference to the “Agreement” and (c) notwithstanding Section 5.8 of said Article V, this Program is effective as of November 6, 2000.
LA3:752821.27 R-1
APPENDIX R
ENHANCED RETIREMENT PENSION BENEFIT FOR CWA-DEX PARTICIPANTS (effective as of October 19, 2000)
TABLE OF CONTENTS
ARTICLE I DEFINITIONS....................................................................................... R-1
ARTICLE II PARTICIPATION ................................................................................. R-3
ARTICLE III BENEFITS............................................................................................. R-4
ARTICLE IV CONDITIONS FOR RECEIPT OF BENEFITS ................................... R-6
ARTICLE V PROGRAM ADMINISTRATION AND EXTRA PAYMENTS.......... R-7
INTRODUCTION
The purpose of this Appendix R is to provide additional retirement benefits to certain eligible Occupational Participants who (1) have been determined by Qwest Dex, Inc. (the “Company”) to be in an Adjustment Group or are otherwise designated as participants by the Company, (2) are involuntarily terminated from employment (or voluntarily terminate under rules set forth herein) and (3) meet each of the other conditions set forth in this Appendix R.
ARTICLE I
DEFINITIONS
The following terms shall have the meaning set forth below, and other terms that are capitalized but not defined in this Appendix shall have the meaning set forth in the Qwest Pension Plan (the “Plan”) document to which this Program is appended, unless the context clearly indicates otherwise.
1.1 “Adjustment Group” means the Wage/Skill Group(s) or title(s) to be force adjusted, as determined by the Company. The Adjustment Group will include all Regular Full-Time and Regular Part-Time Employees having the same title who are within the same location, as set forth in Section 15.1(a) of the Agreement. The Company may expand the Adjustment Group to other titles in the Wage/Skill Group who have employees performing essentially the same type of work.
1.2 “Agreement” means the collective bargaining agreement between the Union and the Company dated October 15, 1998 (including any extensions).
1.3 “Company” means Qwest Dex, Inc., unless otherwise specifically noted.
LA3:752821.27 R-2
1.4 “Eligible Compensation” means pay for regular hours worked, overtime, differentials, commissions, individual performance bonus, excused non-paid Union time, and all paid time, subject to the limit in Section 1.10(d).
1.5 “Impacted Employee” means any Covered Employee who is determined by inverse TOE among the employees in an Adjustment Group as a potential for layoff.
1.6 “Participant” means a Covered Employee eligible to participate in the Program as described in Articles II and III. Any person who does not meet all of the terms and conditions for a benefit under this Appendix R shall not be a Participant.
1.7 “Plan” refers to the Qwest Pension Plan (formerly the U S WEST Pension Plan).
1.8 “Program” refers to this Appendix R.
1.9 “Program Administrator” refers to the administrator described in Section 5.1 of this Program.
1.10 “Regular Full-Time Employee” means any Employee of Qwest Dex, Inc. who is a Union member or an Occupational Employee and who is designated on Company payroll records as a Regular Full-Time Employee. Such employees are normally employed to work at least forty (40) hours per calendar week for an indefinite period.
1.11 “Regular Part-Time Employee” means any Employee of Qwest Dex, Inc. who is a Union member or an Occupational Employee and who is designated on Company payroll records as a Regular Part-Time Employee. Such employees are normally employed to work less than forty (40) hours per calendar week for an indefinite period.
1.12 “Regular Term Employee” means any employee who is designated on Company payroll records as a Regular Term Employee (either full-time or part-time). Such employees are normally employed for a specified project with the definite understanding that their employment will terminate upon completion of the project.
1.13 “Union” means Communications Workers of America.
1.14 “Wage/Skill Group” means the wage/skill groups set forth in the Agreement.
1.15 “Work Location” means the work locations set forth in Section 15.1(a) of the Agreement.
ARTICLE II
PARTICIPATION
2.1 General Rule of Participation. An Employee is eligible to participate in the Program if he or she meets all of the following conditions:
LA3:752821.27 R-3
(a) He or she is a Regular Full-Time or Regular Part-Time Employee of Qwest Dex, Inc.;
(b) He or she is in a bargaining unit covered by the Agreement;
(c) He or she is a Participant in the Pension Plan;
(d) He or she: (1) is in a force group designated by the Company as an Adjustment Group for participation in the Program; or (2) volunteers, at the Company’s invitation, for termination pursuant to Section 15.3.B of the Agreement; and
(e) He or she is not excluded from participating by virtue of Section 2.2.
2.2 Exclusions and Exceptions.
An employee is an excluded employee and therefore excluded from coverage under this Program if any of the following applies:
(a) He or she is eligible for and elects to take the Surplus Transitional Leave of Absence (STLA);
(b) He or she is a Regular Term Employee (full-time or part-time) or holds any job classification other than Regular Full-Time or Regular Part-Time;
(c) He or she is on a leave of absence and the leave does not guarantee a return to work;
(d) Except as set forth in Section 2.1(d)(2) of this Appendix R, he or she separates from employment for reasons other than a Company designated force adjustment process; or
(e) He or she incurs an Eligible Separation prior to October 19, 2000 or after 90 days prior to expiration of the Agreement.
2.3 Program Use.
The Company will notify the Union, in writing, of its intention to make force adjustments. The Program may be offered to Impacted Employees or other eligible Covered Employees as a part of the force adjustment process. The Company will determine the number of employees from each force group eligible for the Program, and will determine the Wage/Skill Groups or titles subject to the Program. The decision to implement this Program is a business decision and not subject to the “Benefit Claim and Appeal Procedure” described in this Program.
LA3:752821.27 R-4
ARTICLE III
BENEFITS
3.1 Benefits.
(a) A person who is eligible to participate under Article II is not a Participant unless he or she meets the conditions set forth in either Section 3.2 or 3.3.
(b) The amount of the additional retirement pension to which a Participant is entitled as of the date of the Eligible Separation shall be the monthly amount payable as a single-Life Annuity commencing on the Participant’s Normal Retirement Date (or, if later, the earlier of the Pension Effective Date or Required Beginning Date) that is the DLS Equivalent of the Defined Lump Sum, as defined in Section 3.2 or 3.3, as applicable. The amount of benefits payable under Appendix R shall be determined without regard to whether the Participant qualifies for a service pension or a deferred vested pension under Article V-A.
(c) The amount of the additional retirement pension for any Participant whose Annuity Starting Date is prior to attainment of age 65 shall be equal to the greater of (1) the pension calculated in subsection (b), reduced by the factors in Appendix C to reflect early commencement of benefits or (2) the Minimum Amount. Regardless of when the Participant commences benefits, the Minimum Amount is a single-Life Annuity commencing on the Pension Effective Date that is the DLS Equivalent of the Defined Lump Sum as defined in Section 3.2 or 3.3, as applicable.
(d) Except as set forth below, a Participant may elect to receive the benefit amount in any form permitted under Article VI of the Plan available to that Occupational Employee.
(1) For all Participants notified, on or after February 5, 2001, of their termination of employment, the only Qualified Joint and Survivor Annuity (even if the Participant otherwise qualifies for a service or disability pension) shall be a Qualified Joint and Survivor Annuity with the survivor annuity equal to 50% of the amount payable during the joint lives of the Participant and his Spouse. For this purpose, the factors set forth in Appendix D of the Plan shall apply for purposes of determining the amount of said qualified joint and survivor annuity. If Participant’s Spouse predeceases Participant on or after the Annuity Starting Date, the amount payable during the remainder of the Participant’s life shall not be increased.
(2) For all Participants notified, on or after February 5, 2001, of their termination of employment, all of the benefit forms set forth in Article VI applicable to Management Participants shall also be available with respect to the benefits under this Appendix R, even if such benefits are not available to the regular benefits under the Occupational Part. Such amounts shall be calculated based on the factors set forth in Appendix A applicable to Management Participants.
LA3:752821.27 R-5
(3) In all cases, if the Participant elects a lump sum benefit, the amount shall equal the Defined Lump Sum. Such an election may only be made in accordance with Section 6.5(c).
(e) The rules in Section 3.1(e) of Appendix O apply if a Former Participant dies after termination of employment pursuant to the Program but prior to the Annuity Starting Date of his benefit under this Appendix. No benefits are payable if the Participant dies prior to his or her scheduled separation date pursuant to the Program.
(f) Payment of the additional pension shall be subject to the conditions set forth in Article IV.
3.2 Involuntary Separation Benefits.
(a) An Impacted Employee described in Article II is eligible for benefits under this Section 3.2 if he or she is laid off by the Company as a part of a force adjustment process. Layoffs will be made among employees in inverse order of TOE within the defined Wage/Skill Group after the Company has taken other steps consistent with the Agreement to reduce force surplus conditions. An employee is not eligible for benefits under this Section 3.2 if:
(1) he or she separates or is terminated for reasons other than as a part of a Company designated force adjustment; or
(2) he or she is offered and declines reassignment to a lateral position (within the same Wage Group) within the same Work Location; or
(3) he or she is eligible for and has elected benefits under Section 3.3 of this Program.
(b) Defined Lump Sum. Each Participant entitled to a benefit pursuant to Section 3.2 shall be entitled to a Defined Lump Sum in the amount set forth below. Said Defined Lump Sum shall be paid as set forth in Section 3.1 of the Program. The Defined Lump Sum will be calculated based on the employee’s TOE on the date of Eligible Separation as follows: $700 for each year of TOE up to and including ten years; plus $1,000 for each year of TOE from years 11 through 15, plus $1,500 for each year of TOE from years 16 through 19, plus $2,000 for each year of TOE from year 20 onwards, up to a maximum total benefit of the greater of $28,000 or one year of base salary (subject to the limit in Section 1.10(d)). In addition, three percent of Eligible Compensation will be added to the Defined Lump Sum of Participants in Wage Groups 1, 2, 3 and 4 whose Eligible Separation occurs prior to December 31, 2000.
3.3 Voluntary Separation Benefits.
(a) An Employee described in Article II who is a member of an Adjustment Group may elect, in order of TOE within the Adjustment Group and to the extent
LA3:752821.27 R-6
necessary (as determined by the Company) to eliminate the force adjustment condition in the work force, to leave the service of the Company and receive benefits under Section 3.3 if:
(1) He or she is not offered reassignment to a lateral position (within the same Wage Group) within the same Work Location;
(2) He or she has not received benefits under Section 3.2; and
(3) Except as set forth in Section 2.1(d)(2) of this Appendix R, he or she separates employment as a result of the Company designated force adjustment. (An employee is not eligible if he or she resigns or is terminated for any other reason.)
(b) Conditions For Receiving Benefits.
(1) For Employees who participate in the Program pursuant to Section 3.3(a), the election to leave the service of the Company and receive payments under the Program must be in writing and delivered to the Company within ten (10) working days from the date of the Company’s offer (or longer, as the Company may permit). Such election may not be revoked after this ten (10) day period.
(2) For purposes of submitting elections within the ten (10) working day period above, “working days” shall mean Monday through Friday of each week.
(3) By agreement with the Union, the Company may impose additional conditions on the receipt of Program benefits. Such other conditions shall include, but are not limited to, requiring an employee to waive his or her rights to future Disability Plan payments in exchange for the receipt of benefits.
(c) Defined Lump Sum. Each Participant entitled to a benefit pursuant to Section 3.3 shall be entitled to a Defined Lump Sum in the amount set forth below. Said Defined Lump Sum shall be paid as set forth in Section 3.1 of the Program. The amount of the Defined Lump Sum shall be $700 for each year of TOE up to and including ten years; plus $1,000 for each year of TOE from year 11 onwards, up to a maximum total benefit of $12,000. In addition, three percent of Eligible Compensation will be added to the Defined Lump Sum of Participants in Wage Groups 1, 2, 3 and 4 whose Eligible Separation occurs prior to December 31, 2000.
ARTICLE IV
CONDITIONS FOR RECEIPT OF BENEFITS
4.1 Payments After Participant’s Death.
If a Participant who is eligible for a payment under this Program dies after the Annuity Starting Date of Program benefits, any unpaid lump sum which the employee was entitled to receive shall be paid to the estate of the Participant. If any other form was elected, the survivor benefits, if any, shall be paid in accordance with the form elected.
LA3:752821.27 R-7
4.2 Payment Offsets.
An employee who receives payments under this Program and is subsequently reemployed and entitled to benefits under this Program, will receive benefits based upon his/her TOE, subject to an offset of prior Program payments received and not refunded to the Plan. Similarly, a Participant who becomes entitled to payments under this Program who has previously received benefits under the Company’s Voluntary or Involuntary Separation Payment Plans will receive benefits under this Program based upon his/her TOE, subject to an offset of prior Voluntary and Involuntary Separation Payment Plan payments received and not refunded to the Company. In addition, no Participant shall be entitled or permitted to receive benefits under the Program and under the Voluntary Separation Payment Plan or Involuntary Separation Payment Plan with respect to the same termination of employment.
4.3 Release.
In consideration for and as a pre-condition of receiving benefits under the Program, the Employee must execute a release of any and all claims against the Company and its affiliates and the Union in a form satisfactory to the Company and the Union.
ARTICLE V
PROGRAM ADMINISTRATION AND EXTRA PAYMENTS
5.1 Incorporation of Article V and VI of Appendix O.
Articles V and VI of Appendix O are incorporated by reference, except that (a) the reference to the “collective bargaining agreement between the Company and the Union” in Section 5.7 of said Article V shall instead be deemed a reference to the “Agreement” and (b) notwithstanding Section 5.8 of said Article V, this Program is effective as of October 19, 2000.
LA3:752821.27
APPENDIX S
ADDITIONAL DEFINED LUMP SUM BENEFIT (effective as of July 1, 2001)
TABLE OF CONTENTS
ARTICLE I DEFINITIONS........................................................................................S-1
ARTICLE II PARTICIPATION ..................................................................................S-3
ARTICLE III BENEFITS..............................................................................................S-5
ARTICLE IV CONDITIONS FOR RECEIPT OF BENEFITS ....................................S-7
ARTICLE V GENERAL ADMINISTRATION ..........................................................S-8
ARTICLE VI EXTRA PAYMENTS...........................................................................S-12
INTRODUCTION
The purpose of this Appendix S is to provide additional retirement benefits to certain Participants who are involuntarily terminated from employment between July 1, 2001 and June 30, 2003 and who meet each of the other conditions set forth in this Appendix S.
ARTICLE I
DEFINITIONS
Whenever the following capitalized terms are used in this Appendix S, they shall have the meaning specified below, and other terms that are capitalized but not defined in this Appendix S shall have the meaning set forth in the Qwest Pension Plan (the “Plan”) document to which this Program is appended, unless the context clearly indicates otherwise:
1.1 “Annual Base Salary” shall mean the employee’s current annual rate of base cash compensation exclusive of commission and incentive payments, bonuses or other performance awards, and exclusive of any overtime, differentials and other allowances. The foregoing rate shall be determined on the Notification Date (with respect to the employee’s job at that time). For purposes of the Pension Plan, Annual Base Salary shall not exceed the limit in Section 1.10(d).
1.2 “Cause” shall mean violation of any Participating Company policy, willful misconduct, a willful failure to perform the employee’s duties, insubordination, theft, dishonesty, conviction of a felony or any other willful conduct that is materially detrimental to the
LA3:752821.27 S-2
Participating Company. In all cases, whether an employee has been terminated for Cause shall be determined by the Participating Company in its sole discretion.
1.3 “Exempt” shall mean exempt from the overtime provisions of the Fair Labor Standards Act.
1.4 “Formally Notified” and “Formal Notification” shall mean an employee has received a Summary Plan Description for the Program and a Waiver Letter outlining the benefits to which the employee may become entitled to under the Program as a result of his or her employment being involuntarily terminated by a Participating Company.
1.5 “Management Team” shall mean those managers of a Participating Company who are responsible for determining which employees are involuntarily terminated from employment with such Participating Company.
1.6 “Non-Exempt” shall mean not exempt from the overtime provisions of the Fair Labor Standards Act.
1.7 “Notification Date” shall mean the date on which an employee is Formally Notified that his or her employment is being involuntarily terminated by a Participating Company.
1.8 “Participant” shall mean a Covered Employee eligible to participate in the Program as described in Article II. Any person who does not meet all of the terms and conditions for a benefit under this Appendix S shall not be a Participant.
1.9 “Participating Company” shall mean shall mean Qwest, Qwest Services Corporation (“QSC”) and all wholly owned subsidiaries of QSC that, with the consent of the Committee, participate in the Program.
1.10 “Plan” shall mean the Qwest Pension Plan.
1.11 “Program” shall mean this Appendix S.
1.12 “Program Administrator” shall mean the plan administrator described in Section 5.1 of this Program.
1.13 “Prior Plans and Policies” shall mean the U S WEST Management Separation Plan, the U S WEST Communications Group Management Separation Plan, the Qwest Severance Policy, and Appendix M of the Plan, as in effect from time to time on or before June 30, 2001.
1.14 “Qwest” shall mean Qwest Communications International Inc. and any successor thereto.
1.15 “Qwest Companies” shall mean Qwest, QSC, all wholly owned subsidiaries of QSC, and all partially owned subsidiaries controlled by QSC.
1.16 “STLA Eligible Employee” means an employee who is eligible for a surplus transitional leave of absence, but does not take it.
1.17 “Term Employees” and “Temporary Employees” shall mean all employees of a Participating Company who are performing an assignment which is not intended to be ongoing and which is intended to have a specified end date (by reference to a calendar end date or the project end date). For purposes of this Program only, “Term or Temporary Employees” refers to such employees identified above without respect to titles or job descriptions such as temporary project, project work, term assignment, temporary assignment, etc.
1.18 “Termination Date” shall mean the date a Participant is actually removed from all payrolls of the Qwest Companies.
1.19“Waiver Letter” shall mean the letter agreement (containing a release and waiver and encompassing the conditions described in Article IV of the Program) which employees are required to sign as a condition for receipt of benefits under Article III of the Program.
ARTICLE I
PARTICIPATION
2.1 General Rules of Participation. An employee is eligible to participate in the Program if he or she meets all of the following conditions:
(a)
(b)
(c)
(d)
(e)
He or she is a regular full-time or regular part-time salaried Employee of a Participating Company.
He or she is a Participant in the Plan on his or her Notification Date.
He or she is Formally Notified on or between July 1, 2001 and June 30, 2003, that his or her employment is being involuntarily terminated by a Participating Company.
He or she meets all of the conditions for Program benefits set forth in Article IV.
He or she is not excluded from participating by virtue of Section 2.2.
2.2 Exclusions and Exceptions.
(a) All officers of a Participating Company and employees who are at the level of Vice President or above at a Participating Company are excluded from participation in the Program.
(b) Any leased worker, independent contractor, Term Employee and Temporary Employee of a Participating Company is excluded from participation in the Program. Employees who accept a Term or Temporary Position while classified as a regular full-time salaried employee (other than a regular term employee) of a Participating Company shall be eligible (unless otherwise agreed) to receive benefits as set forth in the Program.
LA3:752821.27 S-3
LA3:752821.27 S-4
(c) Any employee (salaried or non-salaried) who is covered by a collective bargaining agreement is excluded from participation in the Program subject to negotiation between the Participating Company and the union bargaining agent. Occupational Employees are excluded from participation in the Program.
(d) Any employee whose employment is terminated for reasons other than involuntary termination by a Participating Company, including, but not limited to, voluntary resignation, death or retirement is not eligible to participate in the Program (whether or not such action on the part of the employee may have been influenced by pending or threatened involuntary layoffs). Any employee who gives notice of voluntary resignation and is asked to leave early by the Participant Company shall be considered to have voluntarily resigned and shall not be eligible to participate in the Program.
(e) Any employee whose employment is involuntarily terminated by a Participating Company for Cause or for poor work performance or misconduct is not eligible to participate in the Program (whether or not such action on the part of the employee may have been influenced by pending or threatened involuntary layoffs).
(f) Any employee whose employment is terminated as a result of the sale or other transfer of any portion of a Qwest Company (regardless of the form of such sale or transfer) if such employee receives, or has the right to receive, an offer of employment (of a comparable position with a comparable base salary, ignoring other benefits) with the purchaser or transferee in such transaction by virtue of contractual arrangements made by a Qwest Company, is not eligible to participate in the Program. For purposes of this provision, the decision as to whether or not an offer of employment is described in the preceding sentence shall be determined by the Management Team pursuant to Section 5.10(b) in its sole discretion as a Program sponsor function and not in any fiduciary capacity.
(g) Any employee who is terminated as a result of the outsourcing of a business function by a Participating Company if such employee receives, or has the right to receive, a comparable position (including comparable base pay, and ignoring other benefits) as an independent contractor or employee of a vendor or a third party performing the same or similar functions for a Participating Company, is not eligible to participate in the Program. For purposes of this provision, the decision as to whether or not an offer or position constitutes is described in this subsection (g) shall be determined by the Management Team pursuant to Section 5.10(b) in its sole discretion as a Program sponsor function and not in any fiduciary capacity.
(h) Any employee who is on (or elects to take) Surplus Transitional Leave of Absence is excluded from participating in the Program. Any STLA Eligible Employee may participate in the Program.
(i) Any employee whose Notification Date is on or before June 30, 2001 or on or after July 1, 2003 is excluded from participating in the Program. However, any employee whose Notification Date is on or before June 30, 2001, may be eligible to participate in the Prior Plans and Policies subject to the terms and conditions set forth in the Prior Plans and Policies; the Prior Plans and Policies shall not apply to any employee whose Notification Date is on or after July 1, 2001.
LA3:752821.27 S-5
(j) Any employee who, prior to involuntary termination by a Participating Company, receives and declines an “Alternative Job Offer” from any Qwest Company shall be ineligible to participate in the Program. An “Alternative Job Offer” is an offer of employment to an employee for an ongoing position with any Qwest Company which has: (i) the same, or greater, Annual Base Salary as the position from which the employee was involuntarily terminated, and (ii) an office location within 35 miles of the office location of the position from which the employee was involuntarily terminated.
(k) Any employee who accepts any position with any Qwest Company during the 30-day period following his or her Termination Date shall immediately forfeit all eligibility for benefits under the Program.
(l) An employee who is party to another severance agreement that gives the employee the choice between the severance pay under the Qwest Management Separation Plan and the benefits under the other agreement is not eligible to participate in this Program.
ARTICLE III
BENEFITS
3.1 Eligible Participants. All employees who fulfill the eligibility requirements of Section 2.1 and are not excluded from participation under Section 2.2 are eligible to receive benefits under Section 3.2 upon their involuntary termination of employment with a Participating Company, subject to the conditions set forth in Article IV.
3.2 Additional Defined Lump Sum. Each Participant entitled to a benefit pursuant to Section 3.1 shall be entitled to an additional Defined Lump Sum in the amount set forth in this Section 3.2. Said additional Defined Lump Sum shall be paid as set forth in Section 5D.2(j) or 5E.4, as applicable, of the Plan. Payment of the additional Defined Lump Sum shall be subject to the conditions set forth in Article IV, including executing the Waiver Letter described in Sections 4.1, 4.2 and 4.3 on a timely basis. The payments hereunder (less applicable withholding taxes) shall be made in any form and time permitted under Article VI of the Plan, provided that benefits under this Section 3.2 shall not commence prior to the date the employee’s signed valid Waiver Letter is received by the appropriate Qwest Company personnel.
(a) For Participants whose Notification Date is on or after May 1, 2002, the following amounts shall be paid.
(1) Participants who are Exempt on their Notification Date shall receive an amount equal to one-twelfth (1/12th) of their Annual Base Salary for each full or partial year of TOE, subject to a minimum of one-fourth (1/4th) of their Annual Base Salary and a maximum of their Annual Base Salary.
(2) Participants who are Non-Exempt on their Notification Date shall receive an amount equal to one-fifty-seconds (1/52nd) of their Annual Base Salary for each full or partial year of TOE, subject to a minimum of one-thirteenths (1/13th) of their Annual Base Salary and a maximum of six-thirteenths (6/13th) of their Annual Base Salary. Participants who have more than 2 years of TOE on
LA3:752821.27 S-6
October 1, 2001 shall receive a minimum of three-twenty-sixths (3/26th) of their Annual Base Salary.
(3) Notwithstanding the foregoing, a Participant who was reclassified from Exempt to Non-Exempt status during the one year period prior to his or her Notification Date shall receive payments pursuant to paragraph (1) instead of paragraph (2).
(b) For Participants whose Notification Date is before May 1, 2002, different rules applied.
(1) Participants who are at the level of Senior Director, Director or Supervisor on their Notification Date shall receive an amount equal to one-twelfth (1/12th) of their Annual Base Salary for each full or partial year of TOE, subject to a minimum of one-fourth (1/4th) of their Annual Base Salary and a maximum of their Annual Base Salary.
(2) All Participants not described in Section 3.2(a) above who are Exempt on their Notification Date shall receive an amount equal to one-twelfth (1/12th) of their Annual Base Salary for each full or partial year of TOE, subject to a minimum of one-sixth (1/6th) of their Annual Base Salary and a maximum of one-half (1/2) of their Annual Base Salary.
(3) All other Participants who are Non-Exempt on their Notification Date shall receive an amount equal to one-twenty-sixth (1/26th) of their Annual Base Salary for each full or partial year of TOE, subject to a minimum of one-twenty-sixth (1/26th) of their Annual Base Salary and a maximum of three-twenty-sixths (3/26th) of their Annual Base Salary.
3.3 Determination of Employment Level. For purposes of Section 3.2 above, whether a Participant is Exempt or Non-Exempt or is at the level of Supervisor, Director or Senior Director, shall be determined by a Participating Company using job codes and other data contained in its payroll systems, and all such determinations shall be made solely at the discretion of the Participating Company as a Program sponsor function and not in any fiduciary capacity and shall be final and binding upon all Participants.
ARTICLE IV
CONDITIONS FOR RECEIPT OF BENEFITS
4.1 Proprietary and Confidential Information. In consideration for and as a pre-condition of receiving benefits under the Program, an employee must sign a standard form of agreement acceptable to Qwest to not disclose or use proprietary or confidential information of any Qwest Company.
4.2 Release of Claims. As further consideration for and as a pre-condition of receiving benefits under the Program, an employee must also agree to execute a waiver, release and covenant not to sue, applicable to all Qwest Companies in a form acceptable to Qwest. The
LA3:752821.27 S-7
waiver, release and covenant to not sue shall release all Qwest Companies from all liability, including termination of employment from any Qwest Company, and the application of the Program to the employee, including but not limited to, claims of discrimination on any grounds. The waiver, release and covenant must be validly executed by an employee on or after the employee’s last day on any Qwest Company payroll within the time periods set forth in the Waiver Letter and it must not be revoked by the employee at any time as a condition of receiving benefits under the Program. Also, as further consideration, and as a pre-condition for receipt of benefits under the Program, an employee must sign a standard form of agreement acceptable to Qwest requiring that all claims that may arise, directly or indirectly, regarding: (i) the terms and conditions and/or obligations pursuant to the Waiver Letter, and/or (ii) the employee’s employment and/or termination of employment from any Qwest Company, and/or (iii) any related disputes involving any Qwest Company and/or their employees, directors, officers or agents, be subject to arbitration.
4.3 Disability Benefit Waiver. As further consideration for and as a pre-condition of receiving benefits under the Program , an employee must waive any and all rights to short and long term disability benefits (payable under the Plan or otherwise) to which they might otherwise be entitled after their Termination Date.
4.4 No Dual Benefits. No Participant shall be entitled or permitted to receive both Program benefits and similar benefits pursuant to any other contract, plan or arrangement with any Participating Company with respect to the same termination of employment. No Participant shall be entitled or permitted to receive benefits under this Program and under either the Prior Plans and Policies or Section 3.2 of the Qwest Management Separation Plan with respect to the same termination of employment.
Notwithstanding the foregoing, a Participant entitled to benefits under the Program with respect to a particular involuntary termination of employment may be entitled to Discounted COBRA Coverage and Target Bonus Awards under Sections 3.3 and 3.4 of the Qwest Management Separation Plan with respect to the same involuntary termination of employment.
As a condition of receiving the Program benefits, the Participant must agree that if, for any reason, the Participant is or becomes entitled to benefits under Section 3.2 of the Qwest Management Separation Plan on or after July 1, 2001 with respect to the same termination of employment, the Participant must return the Program benefits prior to the time the Participant receives such Qwest Management Separation Plan benefits (and vice versa) and, that if the Participant does not do so, the Qwest Management Separation Plan benefits shall be automatically paid directly to the Plan to satisfy such obligation.
4.5 Non-Discrimination. No Participant shall be entitled or permitted to receive benefits under the Program if the payment of such benefits would cause the Plan to violate Section 401(a)(4) of the Code as determined in the sole discretion of the Employee Benefits Committee (as defined in Section 8.6 of the Plan) based upon the advice of the Plan’s actuaries. If the payment of said benefits would, in the sole determination of the Employee Benefits Committee, cause the Plan to violate Section 401(a)(4) of the Code, certain payments to Highly Compensated Employees shall not be made as follows. Payments under this Program otherwise payable hereunder to Highly Compensated Employees who have the highest rate of benefits as compared
LA3:752821.27 S-8
to Compensation (such rate to be determined in accordance with the calculation of rate groups under Code Section 401(a)(4)) shall be reduced until said Participants fall in the next lower rate group. Such process shall be continued until the Employee Benefits Committee determines (in its sole discretion based upon the advice of the Plan’s actuaries) that the payment of the benefits hereunder does not cause the Plan to discriminate under Section 401(a)(4) of the Code. No benefits shall be reduced in the case of any Participant who is a non-Highly Compensated Employee or who is not a participant in the Company’s Nonqualified Pension Plan.
ARTICLE V
GENERAL ADMINISTRATION
5.1 Sponsor; Administrator; Participating Companies. Qwest has established this Program on behalf of all Participating Companies. Qwest is the “plan sponsor” and “plan administrator” as those terms are defined in the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). As Program Administrator, Qwest shall have primary responsibility for the operation and administration of the Program, and this responsibility shall be delegated as designated in the Program or as determined by the Executive Vice President - Human Resources (or the successor thereof), Qwest Services Corporation.
5.2 Management of Termination Benefits - Named Fiduciaries; Delegation. The Program Administrator and such other persons and organizations as are designated pursuant to the Program as having responsibility to administer or manage any aspect of this Program including, but not limited to, the payment of an additional Defined Lump Sum benefit to eligible employees, shall be a “named fiduciary” as that term is defined in ERISA with respect to the task or tasks assigned or delegated to that person or organization. Each named fiduciary may further delegate his, her or their responsibilities by designating other persons or organizations to carry out their respective fiduciary responsibilities and may employ persons to assist or advise them with regard to any such responsibilities consistent with the terms of the Program. “Administration” and “management” of this Program do not include any decisions to amend or terminate all or any portion of the Program, which functions are reserved to Qwest as Program sponsor functions and not in any fiduciary capacity, as described in Section 5.10 below.
5.3 Discretion. As Program Administrator, Qwest has the right and discretion to determine all matters of fact or interpretation relating to the administration of the Program including questions of eligibility, interpretation of Program provisions, application of Program provisions to specific circumstances, or any other matters. This discretion shall be delegated to such persons or entities, such as the Employee Benefits Committee, to the extent such persons or entities are responsible for Program administration. The decisions by the Program Administrator or by the Employee Benefits Committee and other such delegates shall be conclusive and binding.
5.4 Effect on Other Benefit Plans, Programs and Policies. Except with respect to severance plans, programs, and policies as discussed below in this Section 5.4, nothing in this Program shall alter or enhance the benefits available under the terms of any other plans, programs or policies which apply to employees, and employees will be entitled to all rights and benefits of such other plans, programs and policies if the conditions therein are satisfied.
LA3:752821.27 S-9
Specifically, without limitation, involuntarily terminated employees eligible for a service pension under the Plan shall receive retirement benefits according to the Plan in addition to any benefits to which such employees may become entitled under the Program.
The Program provisions supersede all other severance pay plans, guidelines, programs, or policies covering benefits to be received upon involuntary termination of non-bargained Participating Company employees resulting from force reductions or surplus within any Participating Company. If an employee becomes entitled to any payment under any severance benefit plan, program or policy not described in the preceding sentence, as well as to a benefit under this Program by reason of the same involuntary termination of employment, the total benefits under this Program shall be reduced by the amount of the severance payment received under such other plan, program or policy.
Notwithstanding the foregoing, subject to Section 4.4, the Program provisions do not supersede the Qwest Management Separation Plan. However, with respect to Program Participants, the benefits set forth in Section 3.2 of the Qwest Management Separation Plan are not applicable.
5.5 Claims and Appeals Regarding Involuntary Termination Benefits. All claims by persons who believe that the Program has not been properly administered or that they did not receive a Program benefit to which they were entitled shall be referred to one or more individuals in Qwest Companies Human Resources or other organizations as determined by the Executive Vice President - Human Resources (or the successor thereof), Qwest Services Corporation for review and coordination of response. Claims regarding any termination benefit must be submitted in writing.
A denial of any claim regarding a Program benefit shall be issued in writing within not more than ninety (90) days after receipt of the written claim. The written response will include the specific reasons for the denial, specific references to pertinent Program provisions on which the denial is based, a description of any additional material or information necessary to perfect the claim and why such material or information is necessary, and an explanation of the appeal procedure. If no written denial is issued within 90 days, the claim shall be deemed denied on the 90th day.
Within sixty (60) days of receiving a denial or a deemed denial of any claim regarding a Program benefit, the claimant may submit a written appeal for review of the denial. The Executive Vice President - Human Resources (or the successor thereof), Qwest Services Corporation, shall forward the appeal to the Employee Benefits Committee appointed to adjudicate appeals under the Plan which shall be the named fiduciary that will afford a full review of the denial of any claim regarding a Program benefit. On receipt of a written appeal regarding a Program benefit, the Employee Benefits Committee shall:
(a) make a full review of such decision within sixty (60) days of receipt of the written appeal or within 120 days, provided the claimant is notified of the delay and the reasons for requiring an additional sixty (60) days, and
LA3:752821.27 S-10
(b) notify the claimant in writing of the decision on review, specifying the reasons for the decision and providing specific references to pertinent Program provisions. If the decision is not received within 120 days the claimant’s claim is deemed denied on the 120th day.
Any person whose claim regarding a Program benefit is denied shall have such further rights as are provided in Section 503 of ERISA and the regulations thereunder, and Qwest Companies Human Resources or a designee of the Executive Vice President - Human Resources (or the successor thereof), Qwest Services Corporation and the Employee Benefits Committee shall retain such right, authority and discretion as is provided in or not expressly limited by ERISA Section 503 and the regulations thereunder.
The decision as to what employees, if any, will receive Formal Notification, and the decision to implement use of this Program, as well as all other Management Team decisions, including but not limited to, offering ongoing employment or contracts to employees, shall be determined by the Management Team as Program sponsor functions and not in any fiduciary capacity.
Claims regarding any termination benefit must be submitted in writing within six (6) months of the date a person has reason to believe that the Program has not been properly administered or that the person did not receive a Program benefit to which he or she was entitled.
5.6 Funding of Program Benefits. Except as set forth below, all benefits under this Program shall be paid out of Plan assets.
If the benefits under this Program (including any Extra Payments under Article VI) are limited by Section 5C.2 of the Plan and the Participant is not a participant in the Company’s Nonqualified Pension Plan, then the excess not payable under this Program shall be paid to the Participant pursuant to Section 5C.2(h) of the Plan. No such payments shall give rise to any Extra Payments.
If the benefits under this Program (including any Extra Payments under Article VI) are limited by Sections 1.10(d) or 5C.2 of the Plan or Section 4.5 of the Program and the Participant is a participant in the Company’s Nonqualified Pension Plan, then the excess not payable under this Program shall be paid to the Participant pursuant to the Nonqualified Pension Plan. Notwithstanding the provisions of the Nonqualified Pension Plan, the excess additional Defined Lump Sum and/or any Extra Payments payable under the Nonqualified Pension Plan (instead of the Program) shall not be multiplied by 1.35 pursuant to Section 5.2(b) or Article VI or any other provision of the Nonqualified Pension Plan. No such payments shall give rise to any Extra Payments.
There shall be no duplication of benefits pursuant to the foregoing provisions.
5.7 Assignment and Waiver of Benefits. Benefits provided under the Program shall not be subject to assignment or alienation as set forth in Section 13.5 of the Plan. Involuntary termination benefits under Article III of the Program shall be deemed irrevocably waived and forfeited in the event a Participant otherwise eligible to receive such benefits accepts an offer for extended employment after the Participant has signed a Waiver Letter.
LA3:752821.27 S-11
5.8 Effect of Death. No benefits shall be paid under the Program with respect to employees who die prior to the date of termination. For eligible Participants entitled to receive any payment under this Program who die after signing their Waiver Letter, any unpaid amounts owing under the Program at the time of death shall be paid to the Participant’s Beneficiary designated pursuant to Article V-D or V-E of the Plan.
5.9 Effect on Employment Rights. Nothing in the Program shall be construed as giving to any officer, agent or employee of any Participating Company any right, express or implied, to be employed by any Participating Company, nor shall the Program be construed as a contract for, or as providing any right to claim, any pension or other benefit allowance after any termination from the service of any Participating Company, except as set forth herein. Employment at the Qwest Companies remains “at will” which means that employees may terminate their employment at any time, with or without cause, and the Qwest Companies reserve the right to do the same. Except as otherwise provided herein, the Program shall have no effect upon the Plan nor upon any other employee benefit plan maintained in whole or in part by any Participating Company. No officer, agent or employee of any Participating Company shall, because of this Program, become entitled to any offer of relocation, lateral transfer, downgrade with pay protection, or any other term, benefit or entitlement of employment at any time, whether or not such individual is covered by the Program, unless such provision is specifically set forth herein.
5.10 Amendment and Termination.
(a) Any decision to amend or terminate the Program, in whole or in part, including decisions as to the nature and timing of such amendments or termination, shall be made by Qwest as a Program sponsor function and not in any fiduciary capacity. As such, these decisions shall be made in the sole discretion of Qwest. The Program may be amended by a writing approved by Qwest’s Board of Directors and signed on behalf of Qwest by an officer of Qwest duly authorized by the Board of Directors. The Program may also be amended in writing by the Plan Design Committee or other persons(s) to the extent authority to amend the Program has been delegated to the Plan Design Committee or such person(s) by the Board of Directors. Each amendment shall be effective on such date as Qwest or its delegee may determine. Amendment or termination of the Program with respect to any Participating Company shall not affect the rights of any employee, without the employee’s consent, to any Program benefit to which the employee may have become irrevocably entitled under the Program prior to the date such amendment or termination is adopted.
(b) Notwithstanding subsection (a), pursuant to this Program document, each Management Team has been delegated the authority to amend the design of this Program in certain limited respects solely as applied to the employees for which the Management Team is responsible. In exercising this authority, each Management Team is acting solely on behalf of the Participating Company as a Program sponsor function and not in any fiduciary capacity. The Program design features over which each Management Team has this authority include whether job offers made to employees are described in Sections 2.2(f) and (g) so that the Program design may be amended in this regard as appropriate to each employee’s circumstances.
5.11 Effective Date. This Program is effective as of July 1, 2001. With respect to subsidiaries acquired or organized by Qwest after such date, the Program shall be effective only
LA3:752821.27 S-12
as of the date, if any, that participation by such subsidiary is approved by the Executive Vice President - Human Resources (or its successor), Qwest Services Corporation.
ARTICLE VI
EXTRA PAYMENTS
6.1 Extra Payments.
(a) This Article VI applies to Participants who incur a 10% penalty under Code Section 72(t) with respect to the payment by the Plan of the additional Defined Lump Sum under Article III of this Appendix S in the year the payment of such additional Defined Lump Sum is made, and provide proof of such payment as set forth below. These Participants will be paid an additional amount (the “Extra Payment”) as soon as practicable after timely proof, satisfactory to the Qwest Companies, is provided that the Participant paid the 10% penalty under Code section 72(t) with respect to the payment of the additional Defined Lump Sum directly from the Plan to the Participant as set forth above. Such proof must in all cases include a copy of the federal tax return for the year the additional Defined Lump Sum is paid. Extra Payments will only be made under this Article VI to Participants who submit the proper election forms for such Extra Payments (with such proof) prior to April 15th of the second calendar year following the calendar year in which the additional Defined Lump Sum is paid by the Plan.
(b) The amount of the Extra Payment shall equal the amount which, after payment of all federal and state income taxes (based on the net combined marginal federal and applicable state tax rate (in all cases, after taking into account federal deduction for state taxes at the applicable state rate) actually applicable to the Participant in the year the additional Defined Lump Sum is paid) including the 10% penalty under Code section 72(t), equals the excess of (1) 8.55% of the additional Defined Lump Sum over (2) 6.2% of the lesser of the additional Defined Lump Sum or the excess of the Taxable Wage Base (in effect for the year the additional Defined Lump Sum is paid) over the wages (subject to Social Security taxes) actually paid to the Participant from the Qwest Companies during the year the additional Defined Lump Sum is paid. The Extra Payment shall be paid in any form available under Article VI of the Plan, as elected by the Participant (subject to spousal consent, if required by Article VI).
(c) No Extra Payment shall be made on any Extra Payment.
(d) Notwithstanding the provisions of the Nonqualified Pension Plan or Section 5C.2(h), no Extra Payments shall be made under the Plan (including Section 5C.2(h)), the Program or the Nonqualified Pension Plan with respect to any excess additional Defined Lump Sum payable, in accordance with Section 5.6 of this Appendix S, under Section 5C.2(h) of the Pension Plan or under the Nonqualified Pension Plan. See section 5.2(c) of the Nonqualified Pension Plan, which is incorporated by reference.
LA3:752821.27 T-1
APPENDIX T
ENHANCED RETIREMENT PENSION BENEFIT FOR
CWA-CHOICE TV-OMAHA PARTICIPANTS (EFFECTIVE AS OF AUGUST 11, 2002)
TABLE OF CONTENTS
ARTICLE I DEFINITIONS...................................................................................T-1
ARTICLE II PARTICIPATION .............................................................................T-2
ARTICLE III BENEFITS.........................................................................................T-3
ARTICLE IV CONDITIONS FOR RECEIPT OF BENEFITS ...............................T-5
ARTICLE V PROGRAM ADMINISTRATION AND EXTRA PAYMENT........T-6
INTRODUCTION
The purpose of this Appendix T is to provide additional retirement benefits to certain eligible Occupational Participants who (1) have been determined by Qwest Corporation – Choice TV – Omaha (the “Company”) to be in an adjustment group, (2) are involuntarily terminated from employment (or voluntarily separate under rules set forth herein) and (3) meet each of the other conditions set forth in this Appendix T.
ARTICLE I
DEFINITIONS
The following terms shall have the meaning set forth below, and other terms that are capitalized but not defined in this Appendix shall have the meaning set forth in the Qwest Pension Plan (the “Plan”) document to which this Program is appended, unless the context clearly indicates otherwise.
1.1 “Agreement” means the collective bargaining agreement between the Company and the Union, effective August 11, 2002 (including any extensions), that is limited exclusively to Omaha, Nebraska.
LA3:752821.27 T-2
1.2 “Company” means Qwest Corporation – Choice TV – Omaha, unless otherwise specifically noted.
1.3 “Impacted Employee” means any Covered Employee who is determined by reverse order of TOE among the Employees in the adjustment group as a potential for layoff.
1.4 “Participant” means a Covered Employee who is entitled to receive benefits in accordance with Article III of the Program. Any person who does not meet all of the terms and conditions to receive benefits under this Appendix T shall not be a Participant.
1.5 “Plan” refers to Qwest Pension Plan (formerly the U S WEST Pension Plan).
1.6 “Program” refers to this Appendix T.
1.7 “Program Administrator” refers to the administrator described in Section 5.1 of this Program.
1.8 “Regular Employee” means an Employee of the Company who is expected to be scheduled to work on a regular basis.
1.9 “Term Employee” means an Employee of the Company who is employed on an as-needed basis for an indefinite period of time.
1.10 “Union” means Communications Workers of America.
ARTICLE II
PARTICIPATION
2.1 General Rule of Participation. An employee is eligible to participate in the Program if he or she meets all of the following conditions:
(a) He or she is a Regular Employee of the Company;
(b) He or she is in a bargaining unit covered by the Agreement;
(c) He or she is a Participant in the Plan;
(d) He or she is in a force group designated by the Company as an adjustment group for participation in the Program; and
(e) He or she is not excluded from participating by virtue of Section 2.2 of the Program.
2.2 Exclusions and Exceptions. An employee is an excluded employee and therefore excluded from coverage under this Program if any of the following applies:
(a) He or she is a Term Employee;
LA3:752821.27 T-3
(b) He or she separates from employment for reasons other than a Company designated force adjustment process; or
(c) He or she incurs an Eligible Separation prior to August 11, 2002 or after June 30, 2003.
2.3 Program Use.
The Company will advise the Union of its intention to make force adjustments in accordance with the terms of the Agreement. The Program may be offered to Impacted Employees or other eligible Covered Employees as a part of the force adjustment process. The decision to implement this Program is a business decision and not subject to the “Benefit Claim and Appeal Procedure” described in this Program.
ARTICLE III
BENEFITS
3.1 Benefits.
(a) A person who is eligible to participate under Article II is not a Participant unless he or she meets the conditions set forth in either Section 3.2 or 3.3.
(b) The amount of the additional retirement pension to which a Participant is entitled as of the date of the Eligible Separation shall be the monthly amount payable as a single-Life Annuity commencing on the Participant’s Normal Retirement Date (or, if later, the earlier of the First Starting Date or Required Beginning Date) that is the DLS Equivalent of the Defined Lump Sum, as defined in Section 3.2 or 3.3, as applicable. The amount of benefits payable under the Program shall be determined without regard to whether the Participant qualifies for a service pension or a deferred vested pension under Article V-A of the Plan.
(c) The amount of the additional retirement pension for any Participant whose Annuity Starting Date is prior to attainment of age 65 shall be equal to the greater of (1) the pension calculated in subsection (b), reduced by the factors in Appendix C to reflect early commencement of benefits or (2) the Minimum Amount. Regardless of when the Participant commences benefits, the Minimum Amount is a single-Life Annuity commencing on the First Starting Date that is the DLS Equivalent of the Defined Lump Sum as defined in Section 3.2 or 3.3, as applicable.
(d) Except as set forth below, a Participant may elect to receive the benefit amount in any form permitted under Article VI of the Plan available to that Occupational Employee.
(1) All of the benefit forms set forth in Article VI applicable to Management Participants shall also be available with respect to the benefits under the Program, even if such benefits are not available to the regular benefits under the Occupational Part. Such amounts shall be calculated based on the factors set forth in Appendix A applicable to Management Participants.
LA3:752821.27 T-4
(2) However, in all cases, if the Participant elects a lump sum benefit, the amount shall equal the Defined Lump Sum; such an election may only be made in accordance with Section 6.5(c) of the Plan.
(e) The rules in Section 3.1(e) of Appendix O apply if a former Participant dies after termination of employment pursuant to the Program but prior to the Annuity Starting Date of his benefit under the Program. No benefits are payable if the Participant dies prior to his or her scheduled separation date pursuant to the Program.
(f) Payment of the additional pension shall be subject to the conditions set forth in Article IV of the Program.
3.2 Involuntary Termination Benefits.
(a) An Impacted Employee described in Article II is eligible for involuntary termination benefits under this Section 3.2 if he or she is laid off by the Company as a part of a force adjustment process described in Article 10 of the Agreement or is involuntarily Terminated as a result of the sale of Choice TV-Omaha. Layoffs of Employees will be made in the reverse order of the Employees’ Terms of Employment in the event that there are two or more Employees in the same job title who perform substantially the same job functions. An Employee is not eligible for involuntary termination benefits under this Section 3.2 if:
(1) he or she separates from service or is terminated for reasons other than as a part of a Company designated force adjustment (including, without limitation, dismissal for just cause) or the sale of Choice TV-Omaha; or
(2) he or she has been offered another position within Qwest or one of its Subsidiaries; or
(3) he or she is eligible for and has elected voluntary separation benefits under Section 3.3 of this Program.
(b) Defined Lump Sum. Each Participant entitled to involuntary termination benefits pursuant to this Section 3.2 shall be entitled to a Defined Lump Sum paid as set forth in Section 3.1 of the Program. The Defined Lump Sum will be calculated based on the Participant’s Term of Employment on the date of Eligible Separation as follows: $1,100 for each full year during the Participant’s Term of Employment (including a prorated amount thereof for any partial year during the Participant’s Term of Employment) up to a maximum total benefit of $25,000, subject to the aggregate limit on benefits of Section 3.2(d).
LA3:752821.27 T-5
(c) Acquisition Supplement. The Defined Lump Sum of a Participant as determined under the preceding Section 3.2(b) shall be increased by a supplement equal to $3,000 if all of the following requirements are satisfied:
(1) there is an acquisition of Choice TV-Omaha; and
(2) the Participant is on the payroll of the Company at the close of the sale of Choice TV-Omaha; and
(3) the Participant is otherwise eligible for involuntary termination benefits under Section 3.2 of this Program.
(d) Aggregate Limit on Benefits. In no event shall the total involuntary termination benefits (including any acquisition supplement) payable to any Participant under this Section 3.2 exceed two times the Participant’s annual base salary (determined in accordance with the rates set forth in Addendum I of the Agreement and excluding, without limitation, any bonus payments, differentials, and overtime pay).
3.3 Voluntary Separation Benefits.
(a) In the event that the Company elects to offer voluntary separation benefits, the Company will notify Employees in the affected group of their eligibility for voluntary separation benefits. An Employee is not eligible for voluntary separation benefits under this Section 3.3 if:
(1) he or she separates from service or is terminated for reasons other than as a part of a Company designated force adjustment (including, without limitation, dismissal for just cause); or
(2) he or she has been offered another position within Qwest or one of its Subsidiaries; or
(3) he or she is eligible for involuntary termination benefits under Section 3.2 of this Program.
LA3:752821.27 T-6
(b) Defined Lump Sum. Each Participant entitled to a voluntary separation benefit pursuant to this Section 3.3 shall be entitled to a Defined Lump Sum paid as set forth in Section 3.1 of the Program. The Defined Lump Sum will be calculated based on the Participant’s Term of Employment on the date of Eligible Separation as follows: $1,100 for each full year during the Participant’s Term of Employment (including a prorated amount thereof for any partial year during the Participant’s Term of Employment). In no event shall the total voluntary separation benefits payable to any Participant under this Section 3.3 exceed the lesser of $25,000 or two times the Participant’s annual base salary (determined in accordance with the rates set forth in Addendum I of the Agreement and excluding, without limitation, any bonus payments, differentials, and overtime pay).
ARTICLE IV
CONDITIONS FOR RECEIPT OF BENEFITS
4.1 Payments After Participant’s Death.
If a Participant who is eligible for a payment under this Program dies after the Annuity Starting Date of Program benefits, any unpaid lump sum which the Participant was entitled to receive shall be paid to the estate of the Participant. If any other form was elected, the survivor benefits, if any, shall be paid in accordance with the form elected.
4.2 Payment Offsets.
No Participant shall be entitled or permitted to receive benefits under the Program and any other voluntary separation benefits or involuntary termination benefits with respect to the same termination of employment.
4.3 Release.
In consideration for and as a condition precedent to receiving any benefits under this Program, the Participant must execute a release of any and all claims against the Company and its affiliates and the Union in a form satisfactory to the Company and the Union.
ARTICLE V
PROGRAM ADMINISTRATION AND EXTRA PAYMENT
5.1 Incorporation of Article V and VI of Appendix O.
Articles V and VI of Appendix O are incorporated by reference, except that: (a) the reference to the “collective bargaining agreement between the Company and the Union” in Section 5.7 of said Article V shall instead be deemed a reference to the “Agreement” and (b) notwithstanding Section 5.8 of said Article V, this Program is effective as of August 11, 2002.
LA3:752821.27 U-1
