Exhibit 10.4

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

THE HANOVER INSURANCE GROUP CASH BALANCE
PENSION PLAN

PART I

(As amended and restated generally effective January 1, 2016)

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

 

 

84419371\V-5

--------------------------------------------------------------------------------

 

THE HANOVER INSURANCE GROUP CASH BALANCE
PENSION PLAN

PART I

TABLE OF CONTENTS

PAGE

﻿

 

 

﻿

 

 

﻿ARTICLE I

NAME, PURPOSE AND EFFECTIVE DATE OF PLAN

1 

﻿1.01

General Statement

1 

﻿1.02

Name of Plan

1 

﻿1.03

Purpose

2 

﻿1.04

Restated Plan Effective Date

2 

﻿ARTICLE II

DEFINITIONS

2 

﻿ARTICLE III

PARTICIPATION REQUIREMENTS

21 

﻿3.01

Participation Requirements

21 

﻿3.02

Classification Changes

23 

﻿3.03

Participant Cooperation, Participant Refusal

23 

﻿ARTICLE IV

PARTICIPANT ACCOUNTS

24 

﻿4.01

Establishment of Accounts

24 

﻿4.02

Allocations to Accounts

24 

﻿4.03

Adjustments of Accounts

24 

﻿4.04

Distributions

25 

﻿ARTICLE V

EMPLOYER CONTRIBUTIONS

25 

﻿5.01

Employer Contributions

25 

﻿5.02

Payment of Contributions to Trustee

25 

﻿5.03

Receipt of Contributions by Trustee

26 

﻿ARTICLE VI

RETIREMENT AND DISABILITY BENEFITS

26 

﻿6.01

Normal Retirement Benefit

26 

﻿6.02

Early Retirement Benefit

27 

﻿6.03

Subsidized Early Retirement Benefit

28 

﻿6.04

Late Retirement Benefit

31 

﻿6.05

Disability Benefit

32 

﻿6.06

Distribution of Benefits

32 

﻿6.07

Qualified Joint and Survivor Annuity for Married Participants

36 

﻿6.08

Supplementary Pension Benefits

38 

﻿6.09

Suspension of Retirement Benefits

40 

﻿6.10

Rollovers to Other Qualified Plans

41 

﻿ARTICLE VII

DEATH BENEFITS

45 

﻿7.01

Pre-Retirement Death Benefits

45 

﻿7.02

Death Benefits for Certain Dependent Spouses

47 

﻿ARTICLE VIII

BENEFITS UPON TERMINATION FROM SERVICE

49 

﻿8.01

In General

49 

﻿8.02

Termination Benefits

49 

Part I

84419371\V-5

--------------------------------------------------------------------------------

 

﻿

﻿8.03

Forfeitures

51 

﻿8.04

Resumption of Service

52 

﻿8.05

Service with Affiliates

52 

﻿8.06

Distribution of Benefits

52 

﻿8.07

Cashout Repayment Option

52 

﻿8.08

Early Retirement Election

53 

﻿8.09

Amendment to Vesting Schedule

53 

﻿

﻿

 

Part I

84419371\V-5

--------------------------------------------------------------------------------

 

 

ARTICLE I

NAME, PURPOSE AND EFFECTIVE DATE OF PLAN

1.01     General Statement.  The Hanover Insurance Group Cash Balance Pension
Plan (the “Plan”) consists of three parts, Part I, Part II and Part III.  Part I
of the Plan provides a cash balance and pension benefit, which was formerly
provided under a plan known as “The Allmerica Financial Cash Balance Pension
Plan”.  Part II of the Plan provides a pension benefit, which was formerly
provided under a plan known as “The Allmerica Financial Agents’ Pension
Plan”.  Part III of the Plan contains provisions applicable to each of Part I
and Part II. 

The provisions of Part III of the Plan shall override any provision of Part I
and or Part II of the Plan as provided in Part III of the Plan. 

The benefits payable to eligible Participants under Part I of the Plan are
governed by the terms and conditions of Part I of the Plan and Part III of the
Plan.  The definitions of terms as used in this Part I of the Plan are as set
forth in Article II, except as otherwise provided in this Article I.

1.02     Name of Plan.  The prior version of this Part I of the Plan, known as
The Allmerica Financial Cash Balance Pension Plan, generally effective January
1, 1997 (“The Allmerica Cash Balance Plan”), was an amendment and restatement of
the State Mutual Companies’ Pension Plan.  It was adopted by First Allmerica
Financial Life Insurance Company (“First Allmerica”) and its affiliates,
Citizens Insurance Company (“Citizens”) and The Hanover Insurance Company
(“Hanover”).  Effective January 1, 1995, the State Mutual Companies Pension Plan
added a cash balance benefit.  Effective December 31, 1994, benefit accruals
provided under the integrated unit credit benefit formula of the State Mutual
Companies’ Pension Plan were frozen for all Participants, except Participants
eligible for certain continuing benefit accruals.  Certain other accruals and
benefits under this Part I of the Plan were subsequently frozen as provided in
this Part I.

Prior versions of this Part I of the Plan were sponsored by First Allmerica,
formerly known as State Mutual Life Assurance Company of America, from January
1, 1941 to December 31, 2007.  Effective January 1, 2008, this Part I of the
Plan was adopted by Hanover, an Affiliate of First Allmerica, as the sole
Employer.  Effective January 1, 1992, a prior version of this Part I of the Plan
was merged with The Allmerica Financial Agents’ Pension Plan (formerly known as
the State Mutual Agents’ Pension Plan) (the “Agents’ Pension Plan”). 

Benefits payable under the Agents’ Pension Plan are set forth in Part II of the
Plan.  Parts I and II of the Plan are permissively aggregated for purposes of
the qualification and non-discrimination requirements applicable to the Plan
under Code Sections 401 and 410.

Part I -1

84419371\V-5

--------------------------------------------------------------------------------

 

1.03     Purpose.  The Plan has been established for the exclusive benefit of
Participants and their Beneficiaries and as far as possible shall be interpreted
and administered in a manner consistent with this intent and consistent with the
requirements of Code Section 401.

Subject to Article IV of Part III of the Plan and to Section 10.04 of Part III
of the Plan, which relates to the return of Employer contributions under special
circumstances, until such time as the Plan has been terminated and all Plan
liabilities have been satisfied, under no circumstances shall any assets of the
Plan, or any contributions made under the Plan, be used for, or diverted to,
purposes other than for the exclusive benefit of the Participants and their
Beneficiaries and to defray reasonable expenses incurred in the administration
of the Plan.

1.04     Restated Plan Effective Date.  The “effective date” of this amended and
restated Part I of the Plan is January 1, 2016 (except for those provisions of
this Part of the Plan which have an alternative effective date).  Except to the
extent otherwise specifically provided in this Part I of the Plan, (i) the
provisions of this amended and restated Part I of the Plan shall apply to a
Participant who is in the employ of the Employer on or after January 1,
2016.  The rights and benefits of any Participant whose employment with the
Employer terminated prior to January 1, 2016 shall be determined in accordance
with the provisions of this Part I of the Plan as were in effect at the
appropriate time or times prior to January 1, 2016; provided, however, that if
the Accrued Benefit of any such Participant has not been completely distributed
before January 1, 2016, then such Accrued Benefit shall be accounted for and
distributed in accordance with the provisions of this version of Part I of the
Plan, but only to the extent that any such provision is not inconsistent with
Part III of the Plan and subject to the requirements of applicable law.

ARTICLE II

DEFINITIONS

All section and article references in this Part I are to section and article
references in this Part I, except as otherwise expressly provided.

As used in Parts I, II and III of the Plan, the following words and phrases
shall have the meanings set forth in this Part I, unless a different meaning is
clearly required by the context or is otherwise provided in Part II and or Part
III of the Plan.

2.01    “Accrued Benefit”:

(a)       means, except as provided in Section 2.01(b) below, the sum of (i) the
monthly retirement benefit payable as a single life annuity to the Participant
beginning on his or her Normal Retirement Date which is the Actuarial Equivalent
of the Participant’s Projected Account Balance, plus (ii) the Participant’s
Grandfathered Benefit, if any.

Part I - 2

84419371\V-5

--------------------------------------------------------------------------------

 

(b)       means, with respect to the minimum benefit for Non-Key Employee
Participants in a Top Heavy Plan, the sum of such benefits earned by the
Participant, which benefits are payable at the Participant’s Normal Retirement
Date and are described in Section 2.03 of Part III of the Plan.

2.02    “Actuarial Equivalent” means a benefit having the same value as the
benefit or benefits otherwise payable.  Except as otherwise provided in this
Section, the present value of any benefit determined under the terms of the Part
I of the Plan will be the actuarial equivalent of the no-death benefit life
annuity retirement benefit specified in Section 6.01.

Actuarial Equivalent life annuity settlements of Participants' Projected Account
Balances or of optional life annuity Top Heavy Plan benefits will be computed
utilizing (i) the Code Section 417 Mortality Table for determining the amount
payable to a Participant having an annuity starting date on or after January 1,
2004, and (ii) the Code Section 417 Interest Rate for determining the amount
payable to a Participant having an annuity starting date that occurred from
January 1, 2004 through December 31, 2007, and the Code Section 417 Applicable
Interest Rate for determining the amount payable to a Participant having an
annuity starting date on or after January 1, 2008.

Optional annuity settlements of Grandfathered Benefits and of the Actuarial
Equivalent monthly life annuity derived from a Participant's Projected Account
Balance will be computed utilizing the 1983 Group Annuity Table with Projection
H, with mortality rates based on calendar year of birth of 1930 and interest at
the rate of 7% per annum.  Adjustment factors used to determine optional forms
of Grandfathered Benefits and of the Actuarial Equivalent monthly life annuity
derived from a Projected Account Balance are included in Exhibit A, attached
hereto and made a part of Part I of the Plan.

Adjustment factors used to determine optional Grandfathered Benefits not
illustrated and used to determine optional annuities for the Actuarial
Equivalent monthly life annuity derived from a Projected Account Balance not
included in the preceding paragraph, if any, will be computed on an actuarial
basis consistent with that used in computing the factors shown in Exhibit A.

The present value (including, but not limited to, for purposes of Section
7.01(a)(i)(B), Section 7.01(a)(ii)(B), determining eligibility for cashout
distributions under Sections 6.06 and 8.02 and determining the amount of any
lump sum distribution of a Grandfathered Benefit or a benefit for Non-Key
Employee Participants in a Top Heavy Plan) shall be determined on the basis of
(i) the mortality rates specified above and an interest rate of 7% per annum, or
(ii) the Code Section 417 Mortality Table and the Code Section 417 Interest Rate
(or for determining the amount payable to a Participant having an annuity
starting date on and after January 1, 2008, the Code Section 417 Applicable
Interest Rate), whichever produces the greater benefit.

The preceding paragraphs shall not apply to the extent they would cause the Plan
to fail to satisfy the requirements of Article IV of Part III of the Plan or
Section 2.03 of Part III of the Plan.

Part I - 3

84419371\V-5

--------------------------------------------------------------------------------

 

For purposes of the Part I of the Plan,

(a)       the “Code Section 417 Mortality Table” means the applicable mortality
table prescribed by the Secretary of the Treasury pursuant to Code Section
417(e)(3), as in effect from time to time; provided, however, that
notwithstanding the preceding provisions of this paragraph, for distributions
commencing on or after December 31, 2002 and prior to January 1, 2008, the Code
Section 417 Mortality Table means the Table set forth in Revenue Ruling 2001-62
and for purposes of determining the amount payable to a Participant with an
annuity starting date on or after January 1, 2008, the Code Section 417
Mortality Table means the Table set forth in Revenue Ruling 2007-67 or such
other Table as may be prescribed by the Secretary of the Treasury pursuant to
Code Section 417(e)(3);

(b)        for periods beginning on and after January 1, 2004, the “Code Section
417 Interest Rate” means, for the Plan Year which contains the annuity starting
date for the distribution, the annual rate of interest on 30-year Treasury
securities in effect for the second month immediately preceding the first day of
the Plan Year (e.g., November 2006 for the 2007 Plan Year); and

(c)       for periods beginning on and after January 1, 2008, the “Code Section
417 Applicable Interest Rate” means, for the Plan Year which contains the
annuity starting date for the distribution, the applicable interest rate
described by Code Section 417(e) after its amendment by the Pension Protection
Act of 2006, which rate more specifically shall be the adjusted first, second,
and third segment rates applied under rules similar to the rules of Code Section
430(h)(2)(C) (without considering any adjustment under rules similar to the
rules of Code Section 430(h)(2)(C)(iv)) for the lookback month used to determine
the previously applicable interest rate on 30-year Treasury securities (e.g.,
November 2009 for the 2010 Plan Year) or for such other time as the Secretary of
the Treasury may by regulations prescribe.

(d)       For purposes of determining the Code Section 417 Applicable Interest
Rate, the first, second, and third segment rates are the first, second, and
third segment rates which would be determined under Code Section 430(h)(2)(C)
(without considering any adjustment under Code Section 430(h)(2)(C)(iv)) if:

(i)        Code Section 430(h)(2)(D) were applied by substituting the average
yields for the month described in clause (ii) below for the average yields for
the 24-month period described in such Code section, and

(ii)       Code Section 430(h)(2)(G)(i)(II) were applied by substituting
“Section 417(e)(3)(A)(ii)(II)” for “Section 412(b)(5)(B)(ii)(II)”, and

(iii)      The applicable percentage under Code Section 430(h)(2)(G) is treated
as being 20% in 2008, 40% in 2009, 60% in 2010, and 80% in 2011.

Part I - 4

84419371\V-5

--------------------------------------------------------------------------------

 

2.03     (a)      “Affiliate” means any incorporated Career Agent of an Employer
and corporation affiliated with the Employer through the action of such
corporation’s board of directors and the Employer’s Board of Directors. 

(b)      “Affiliate” also means:

(i)        Any corporation or corporations which together with the Employer
constitute a controlled group of corporations or an “affiliated service group”,
as described in Code Sections 414 (b) and 414 (m), as now enacted or as later
amended and in regulations promulgated thereunder; and

(ii)       Any partnerships or proprietorships under the common control of the
Employer.

2.04    “Age” means, except for purposes of determining lump sum cash
distributions and optional life annuity benefits, the age of a person at his or
her last birthday.  Lump sum cash distributions and optional life annuity
benefits will be determined on the basis of a person’s age nearest birthday.

2.05    “Allocation” means an amount equal to the percentage of a Participant’s
Eligible Compensation specified below for each of the Plan Years commencing on
or after January 1, 1995 and prior to January 1, 2005. 

Plan Year

Percentage

1995

7%

1996

7%

1997

7%

1998

7%

1999

7%

2000

7%

2001

5%

2002

3%

2003

5%

2004

5.5%

﻿

 

An Employee will not receive more than one Allocation for any Plan Year with
respect to the same Compensation.

2.06    “Annuity Commencement Date” means the date as of which a benefit
commences under the Plan.

Part I - 5

84419371\V-5

--------------------------------------------------------------------------------

 

2.07    “Beneficiary” means the person, trust, organization or estate designated
to receive Plan benefits payable on or after the death of a Participant.

2.08    “Compensation” means:

(a)        For purposes of determining a Participant’s Allocation specified in
Section 4.02, the total wages or salary, overtime, bonuses, and any other
taxable remuneration paid to an Employee by the Employer during the Plan Year,
while the Employee is a Participant, as reported on the Participant’s W-2 for
the Plan Year; provided, however, that Compensation for this purpose shall be
determined without reduction for (i) any Code Section 401(k) salary reduction
contributions contributed on the Participant’s behalf for the Plan Year to any
defined contribution plan sponsored by the Employer and (ii) the amount of any
salary reduction contributions contributed on the Participant’s behalf for the
Plan Year to any Code Section 125 plan sponsored by the Employer.

Notwithstanding the above, Compensation for the above purpose shall not include:

(i)        incentive compensation paid to Participants pursuant to the
Employer’s Executive Long Term Performance Unit Plan or pursuant to any similar
or successor executive compensation plan;

(ii)       Employer contributions to a deferred compensation plan or arrangement
(other than salary reduction contributions to a Code Section 401(k) or Code
Section 125 plan, as described above) either for the year of deferral or for the
year included in the Participant’s gross income;

(iii)      any income which is received by or on behalf of a Participant in
connection with the grant, receipt, settlement, exercise, lapse of risk of
forfeiture or restriction on transferability, or disposition of any stock
option, stock award, stock grant, stock appreciation right or similar right or
award granted under any plan, now or hereafter in effect, of the Employer or any
successor to the Employer, the Employer’s parent, any such successor’s parent,
any subsidiaries or affiliates of the Employer, or any stock or securities
underlying any such option, award, grant or right;

(iv)      severance payments paid in a lump sum;

(v)       Code Section 79 imputed income or long term disability and workers’
compensation benefit payments;

(vi)      taxable moving expense allowances or taxable tuition or other
educational reimbursements;

(vii)     for Plan Years commencing after December 31, 1998, compensation paid
in the form of commissions;

Part I - 6

84419371\V-5

--------------------------------------------------------------------------------

 

(viii)    non-cash taxable benefits provided to executives, including the
taxable value of Employer-paid club memberships, chauffeur services and
Employer-provided automobiles; and

(ix)    other taxable amounts received other than cash compensation for services
rendered, as determined by the Plan Administrator.

(b)        For purposes of Section 2.03 of Part III of the Plan and for purposes
of Article IV of Part III of the Plan, the term “Compensation” means a
Participant’s wages, salaries, 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 the
Employer to the extent that the amounts are includible in gross income
(including, but not limited to, commissions paid salesmen, compensation for
services on the basis of a percentage of profits, commissions on insurance
premiums, tips, bonuses, fringe benefits, and reimbursements or other expense
allowances under a non-accountable plan (as described in Section 1.62-2(c) of
the Treasury Regulations), and excluding the following:

(i)        Employer contributions to a plan of deferred compensation which are
not includible in the Employee’s gross income for the taxable year in which
contributed, or Employer contributions under a simplified employee pension plan
to the extent such contributions are deductible by the Employee, or any
distributions from a plan of deferred compensation;

(ii)       amounts realized from the exercise of a nonqualified stock option, or
when restricted stock (or property) held by an Employee becomes freely
transferable or is no longer subject to a substantial risk of forfeiture;

(iii)      amounts realized from the sale, exchange or other disposition of
stock acquired under a qualified stock option; and

(iv)       other amounts which receive special tax benefits.

For Plan Years commencing after December 31, 1997, Compensation for purposes of
the Part I of the Plan shall also include Employee elective deferrals under Code
Section 402(g)(3), and amounts contributed or deferred by the Employer at the
election of the Employee and not includible in the gross income of the Employee,
by reason of Code Sections 125, 132(f)(4), 402(e)(3) and 402(h)(1)(B).

Additionally, amounts under Code Section 125 include any amounts not available
to a Participant in cash in lieu of group health coverage because the
Participant is unable to certify that he or she has other health coverage
(deemed Code Section 125 compensation).  Such an amount will be treated as an
amount under Code Section 125 only if the Employer does not request or collect
information regarding the Participant’s other health coverage as part of the
enrollment process for the health plan.

Part I - 7

84419371\V-5

--------------------------------------------------------------------------------

 

(c)        Notwithstanding Sections 2.08(a) and (b) above, for Plan Years
beginning on or after January 1, 1994 and prior to January 1, 2002, the annual
Compensation of each Participant taken into account for determining all benefits
provided under Part I of the Plan for any determination period shall not exceed
$150,000.  This limitation shall be adjusted for inflation by the Secretary
under Code Section 401(a)(17)(B) in multiples of $10,000 by applying an
inflation adjustment factor and rounding the result down to the next multiple of
$10,000 (increases of less than $10,000 are disregarded).  The cost-of-living
adjustment in effect for a calendar year applies to any period, not exceeding 12
months, over which Compensation is determined beginning in such calendar year.

If Compensation is being determined for a Plan Year that contains fewer than 12
calendar months, then the annual Compensation limit is an amount equal to the
annual Compensation limit for the calendar year in which the Compensation period
begins multiplied by the ratio obtained by dividing the number of full months in
the period by 12.

If Compensation for any prior determination period is taken into account in
determining a Participant’s benefits for the current Plan Year, the Compensation
for such prior determination period is subject to the applicable annual
compensation limit in effect for that prior period.  For this purpose, in
determining benefits in Plan Years beginning on or after January 1, 1989, the
annual Compensation limit in effect for determination periods beginning before
that date is $200,000.  In addition, in determining benefits in Plan Years
beginning on or after January 1, 1994, the annual Compensation limit in effect
for determination periods beginning before that date is $150,000.

(d)        Notwithstanding the foregoing, the annual Compensation of each
Participant taken into account in determining benefit accruals in any Plan Year
beginning after December 31, 2001, shall not exceed $200,000.  Annual
compensation means Compensation during the Plan Year or such other consecutive
12-month period over which Compensation is otherwise determined under the Part I
of the Plan (the “determination period”).  For purposes of determining benefit
accruals in a Plan Year beginning after December 31, 2001, the annual
Compensation for any prior determination period shall be limited to $200,000.

The $200,000 limit on annual Compensation for determination periods beginning
after December 31, 2001 shall be adjusted for cost-of-living increases in
accordance with Code Section 401(a)(17)(B).  The cost-of-living adjustment in
effect for a calendar year applies to annual Compensation for the determination
period that begins with or within such calendar year.

2.09    “Credited Service” means and includes all Hours of Service (except
excluded Hours described in Sections 2.23(b), (c), (g) and (h)) completed with
the Employer as an eligible Employee on and after the date an Employee becomes a
Participant in Part I of the Plan.

Part I - 8

84419371\V-5

--------------------------------------------------------------------------------

 

For purposes of the Part I of the Plan, a Participant shall receive a Year of
Credited Service for each Plan Year in which he or she completes at least 1,000
Hours of Credited Service; provided that for the Plan Year in which an Employee
initially becomes a Participant in Part I of the Plan, such Participant shall
receive a Year of Credited Service if he or she completes at least 1,000 Hours
of Service in the Plan Year.

A Participant who is absent because of sickness or injury shall receive Credited
Service for the period described in Sections 2.23(b) or (g).  Except as provided
in Section 6.05, if any such absence continues beyond such period, the
Participant shall receive no further Credited Service.

Notwithstanding the rules for determining Credited Service described above:

(i)        Eligible Re-employed Pensioners of First Allmerica, Citizens, Hanover
and General Agents of First Allmerica (as each is described in Section 6.09)
shall receive no further Credited Service for periods of re-employment following
their retirement unless they complete at least 1,000 Hours of Service in a Plan
Year.

(ii)       If during a Plan Year a Participant is employed by the Employer as a
member of an eligible class of Employees and is also employed by an Affiliate,
employed as a member of an ineligible class of Employees, or employed as a
Career Agent or General Agent of First Allmerica, he or she shall receive
Credited Service under this Part I of the Plan only for Hours of Service
completed while employed as a member of an eligible class of Employees.

(iii)      For purposes only of determining eligibility for early retirement and
eligibility for the Rule of 85 and Rule of 95 subsidized Early Retirement
Benefits described in Section 6.02, but not for purposes of computing the amount
of benefits payable, Credited Service shall include Hours of Service completed
with Craftsman Insurance Company and the Hanover Life Insurance Company, both
former affiliates of Hanover, and as a Career Agent or General Agent of First
Allmerica.

2.10    “Determination Date” means the date as of which a Participant’s Accrued
Benefit is calculated.

2.11    “Eligible Compensation” means the Compensation taken into account for
purposes of determining a Participant’s Allocation for a Plan Year pursuant to
Section 4.02.  If a Participant is a Participant in Part I of the Plan on the
first day of any Plan Year, such Participant’s Eligible Compensation shall be
his or her Compensation for such Plan Year paid while the Participant is
employed as a member of an eligible class of Employees.  If an Employee becomes
a Participant in Part I of the Plan on any day after the first day of a Plan
Year, such Participant’s Eligible Compensation shall be his or her Compensation
for such Plan Year paid on and after the date he or she becomes a Participant
and while the Participant is employed as a member of an eligible class of
Employees.

Part I - 9

84419371\V-5

--------------------------------------------------------------------------------

 

2.12    “Eligibility Computation Period” means a period of twelve consecutive
months commencing on an Employee’s Employment Commencement Date or, if an
Employee does not complete at least 1,000 Hours of Service during such initial
period, such Employee’s Eligibility Computation Period means the Plan Year
commencing with the first Plan Year following the Employee’s Employment
Commencement Date and, if necessary, each succeeding Plan Year.

2.13    “Employee” means any employee who is employed by the Employer.

2.14    “Employer” means The Hanover Insurance Company.

2.15    “Employment Commencement Date” means the date on which an Employee first
performs an Hour of Service or, in the case of an Employee who has a One-Year
Break in Service, the date on which he or she first performs an Hour of Service
after such Break.

2.16    “Fiduciary” means any person who (i) exercises any discretionary
authority or discretionary control respecting management of the Plan or
exercises any authority or control respecting management or disposition of its
assets; (ii) renders investment advice for a fee or other compensation, direct
or indirect, with respect to any monies or other property of the Plan or has any
authority or responsibility to do so; or (iii) has any discretionary authority
or discretionary responsibility in the administration of the Plan, including,
but not limited to, the Plan Administrator.

2.17    “First Allmerica” means First Allmerica Financial Life Insurance
Company.

2.18    “Five Percent Owner” means, in the case of a corporation, any person who
owns (or is considered as owning within the meaning of Code Section 318) more
than five percent of the outstanding stock of the Employer or stock possessing
more than five percent of the total combined voting power of all stock of the
Employer.  In the case of an Employer that is not a corporation; “Five Percent
Owner” means any person who owns or under applicable regulations is considered
as owning more than five percent of the capital or profits interest in the
Employer.  In determining percentage ownership hereunder, employers that would
otherwise be aggregated under Code Sections 414(b), (c), and (m) shall be
treated as separate employers.

2.19    “Former Participant” means a person who had been an active Participant
in Part I or Part II of the Plan (as applicable), but who has ceased to accrue
further Credited Service for any reason.

2.20    “Grandfathered Benefit” means either the Basic Grandfathered Benefit or
the Special Grandfathered Benefit, as defined below.

Part I - 10

84419371\V-5

--------------------------------------------------------------------------------

 

(a)       “Basic Grandfathered Benefit” means the monthly retirement benefit
payable as a single life annuity to an actively employed Participant on his or
her Normal Retirement Date, calculated in accordance with the benefit formula
set forth in Section 6.01 of Part I of the Plan, as in effect on December 31,
1994.  Such benefit shall be calculated based on the Participant’s Average
Monthly Compensation and Credited Service, determined as of December 31, 1994,
based on the provisions of Part I of the Plan as in effect on such date.

(b)       “Special Grandfathered Benefit” means the monthly retirement benefit
payable as a single life annuity to an actively employed Participant on his or
her Normal Retirement Date, calculated in accordance with the benefit formula
set forth in Section 6.01 of Part I of the Plan, as in effect on December 31,
1994.  Such benefit shall be based on the Participant’s Average Monthly
Compensation and Credited Service calculated as of the date of determination,
both being determined in accordance with the provisions of Part I of the Plan as
in effect on December 31, 1994.  The Special Grandfathered Benefit is available
only to Participants who were actively employed by the Employer or by an
Affiliate and accruing Credited Service on December 31, 1994, whose age on
December 31, 1994, when added to two times their Credited Service as of such
date (determined in accordance with the provisions of Part I of the Plan as in
effect on December 31, 1994), total at least 85.

For purposes of this Section “actively employed” means that the Participant was
performing work duties for the Employer or an Affiliate on December 31, 1994 or
was then absent by reason of a scheduled day off, paid vacation day, personal
day, or sick day or was then absent due to an Employer-approved leave of
absence.  Additionally, a Participant shall be deemed to have been actively
employed on December 31, 1994 if on such date the Participant was then employed
by the Employer or by an Affiliate and was then receiving disability benefits
under his or her Employer’s long-term disability benefit plan.

Notwithstanding the above, each Section 401(a)(17) Employee’s Special
Grandfathered Benefit under this Part I of the Plan will be the greater of the
Special Grandfathered Benefit determined for the Employee under (i) or (ii)
below:

(i)        the Employee’s Special Grandfathered Benefit, calculated as described
above, based on the Employee’s total Years of Credited Service as of the date of
determination; or

(ii)       the sum of:

(A)      the Employee’s Plan Accrued Benefit as of December 31, 1993, frozen in
accordance with Section 1.401(a)(4)-13 of the Treasury Regulations, and

Part I - 11

84419371\V-5

--------------------------------------------------------------------------------

 

(B)      the Employee’s Special Grandfathered Benefit determined under the
benefit formula applicable for the 1994 Plan Year, as applied to the Employee’s
Years of Credited Service (calculated as of the date of determination in
accordance with the provisions of Part I of the Plan as in effect on December
31, 1994) for Plan Years beginning on or after January 1, 1994 and prior to
January 1, 2005.

A “Section 401(a)(17) Employee” means an Employee whose 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.

Notwithstanding anything in  Part I of the Plan to the contrary, if an Employee
who is accruing additional Special Grandfathered Benefits ceases to be eligible
to accrue further benefits under Part I of the Plan because of termination of
employment, retirement, transfer to an ineligible class of Employees, or for any
other reason, such Employee shall not be eligible to accrue any additional
Special Grandfathered Benefits upon resumption of service as an otherwise
eligible Employee of the Employer.

Notwithstanding anything in Part I of the Plan to the contrary, no additional
Special Grandfathered Benefits shall accrue for periods after December 31,
2004.  Except as provided in the following paragraph, the amount of a
Participant’s Special Grandfathered Benefit shall be frozen as of December 31,
2004, with such frozen Special Grandfathered Benefit being calculated based on
the Participant’s Average Monthly Compensation and Credited Service as of the
earlier of December 31, 2004 or the date the Participant ceases to be eligible
to accrue additional Special Grandfathered Benefits determined in accordance
with the provisions of Part I of the Plan as in effect on such date.

If a Participant was eligible to accrue additional Special Grandfathered
Benefits as of December 31, 2004 under the provisions of Part I of the Plan in
effect on December 31, 2004, the amount of the Participant’s frozen Special
Grandfathered Benefit shall be increased to reflect increases in the cost of
living after December 31, 2004 by:

(i)        5% per annum, compounded annually, for each Plan Year commencing on
or after January 1, 2005 and ending on the earlier of (A) the date the
Participant commences distribution of his or her Special Grandfathered Benefit
or (B) the last day of the month within which the Participant would have
completed 35 years of Credited Service (based on the provisions of Part I of the
Plan in effect on December 31, 2004) if he or she had remained in continuous
employment with the Employer through such date (the “Maximum Service Date”), and

Part I - 12

84419371\V-5

--------------------------------------------------------------------------------

 

(ii)       If the Participant has not commenced receiving distribution of his or
her Special Grandfathered Benefit prior to his or her Maximum Service Date, 3%
per annum, compounded annually, for each Plan Year commencing after the
Participant’s Maximum Service Date and ending on the date the Participant begins
receiving his or her Special Grandfathered Benefit.

If the Participant commences receiving distribution of his or her Special
Grandfathered Benefit as of any date other than the first day of a Plan Year,
the cost of living adjustment percentage for such Plan Year shall be determined
by multiplying the applicable cost of living adjustment percentage for such year
by a fraction the numerator of which is the number of full or partial months
from the first day of such Plan Year until the date as of which distribution of
the Participant’s Special Grandfathered Benefit commences and the denominator of
which is 12.  If a Participant would have completed 35 years of Credited Service
on a day other than the last day of the Plan Year, then the cost of living
adjustment for such Plan Year shall be determined by multiplying 5% by a
fraction the numerator of which is the number of full or partial months from the
first day of such Plan Year until the date the Participant would have completed
35 years of Credited Service and the denominator of which is 12.  The remaining
months of the Plan Year after the Participant would have completed 35 years of
Credited Service will be credited with a cost of living adjustment determined by
multiplying 3% by a fraction the numerator of which is the remaining full months
of such Plan Year and the denominator of which is 12.  The foregoing cost of
living adjustment provided in this Section 2.20(b) shall be applied to each
eligible Participant’s Special Grandfathered Benefit without regard to his or
her employment status after December 31, 2004.  A Participant will not be
eligible for this cost of living adjustment if the Participant had ceased
accruing additional Special Grandfathered Benefits prior to December 31, 2004
due to the Participant’s retirement, death or other termination of employment
prior to December 31, 2004.

2.21    “Group Annuity Contract” means the group annuity contract or contracts
issued by the Insurer through which benefits of the Plan are to be funded.

2.22    “Highly Compensated Employee” means any Employee who:

(a)        was a Five Percent Owner at any time during the Plan Year or the
preceding Plan Year; or

(b)        for the preceding Plan Year:

(i)        had Compensation from the Employer in excess of $80,000 (as adjusted
pursuant to Code Section 414(q)(1)), and

(ii)       for such preceding Plan Year was in the top-paid group of Employees
for such preceding Year.

Part I - 13

84419371\V-5

--------------------------------------------------------------------------------

 

For purposes of this Section the “top-paid group” for a Plan Year is the top 20%
of Employees ranked on the basis of Compensation paid during such Year.

In addition to the foregoing, the term “Highly Compensated Employee” shall also
mean any former Employee who separated from service prior to the Plan Year,
performs no service for the Employer during the Plan Year, and was an actively
employed Highly Compensated Employee in the separation year or any Plan Year
ending on or after the date the Employee attained Age 55.

In determining whether an Employee is a Highly Compensated Employee for Plan
Years beginning in 1997, the amendments of Code Section 414(q) stated above are
treated as having been in effect for Plan Years beginning in 1996.

For purposes of this Section, “Compensation” means Compensation determined for
purposes of Article IV of Part III of the Plan but, for Plan Years beginning
before January 1, 1998, without regard to Code Sections 125, 402(e)(3) and
402(h)(1)(B).

The determination of who is a Highly Compensated Employee, including the
determinations of the numbers and identity of employees in the top-paid group
and the Compensation that is considered will be made in accordance with Code
Section 414(q) and regulations thereunder.

2.23     “Hour of Service” means:

(a)       Each hour for which an Employee is paid, or entitled to payment, for
the performance of duties for the Employer.  For purposes of Part I of the Plan,
an Employee who is exempt from the requirements of the Fair Labor Standards Act
of 1938, as amended, shall be credited with 45 Hours of Service for each
complete or partial week he or she would be credited with at least one Hour of
Service under this Section 2.23.

(b)       Each hour for which an Employee is paid, or entitled to payment, by
the Employer on account of a period of time during which no duties are performed
(irrespective of whether the employment relationship has terminated) due to
vacation, holiday, illness, incapacity (including disability), layoff, jury
duty, military duty or leave of absence.  Notwithstanding the preceding
sentence:

(i)        No more than the number of Hours in one regularly scheduled work year
of the Employer shall be credited to an Employee under this Subsection (b) on
account of any single continuous period during which the Employee performs no
duties (whether or not such period occurs in a single computation period);

(ii)       No hours shall be credited under this Section 2.23(b) for any
payments made or due under a plan maintained solely for the purpose of complying
with any applicable workers’ compensation, unemployment compensation or
disability insurance laws; and

Part I - 14

84419371\V-5

--------------------------------------------------------------------------------

 

(iii)      No hours shall be credited under this Section 2.23(b) for a payment
which solely reimburses an Employee for medical or medically related expenses
incurred by the Employee.

For purposes of this Section 2.23(b) a payment shall be deemed to be made by or
due from the Employer regardless of whether such payment is made by or due from
the Employer directly, or indirectly through, among others, a trust fund or
insurer, to which the Employer contributes or pays premium.

(c)       Each hour for which back pay, irrespective of mitigation of damages,
is either awarded or agreed to by the Employer.  The same Hours of Service shall
not be both credited under Sections 2.23(a) or (b), as the case may be, and
under this Section 2.23(c).  No more than 501 Hours shall be credited under this
Subsection for a period of time during which an Employee did not or would not
have performed duties.

(d)       Special rules for determining Hours of Service for reasons other than
the performance of duties.

In the case of a payment which is made or due and which results in the crediting
of Hours of Service under Section 2.23(b) or in the case of an award or
agreement for back pay, to the extent that such an award or agreement is made
with respect to a period during which an Employee performs no duties, the number
of Hours of Service to be credited shall be determined as follows:

(i)        In the case of a payment made or due which is calculated on the basis
of units of time (such as hours, days, weeks or months), the number of Hours of
Service to be credited for “exempt” Employees described in Section 2.23(a) shall
be determined as provided in such Section 2.23(a).  For all other Employees, the
Hours of Service to be credited shall be those regularly scheduled hours in such
unit of time; provided, however, that when an Employee does not have regularly
scheduled hours, such Employee shall be credited with eight (8) Hours of Service
for each workday for which he or she is entitled to be credited with Hours of
Service under Section 2.23(b).

(ii)       Except as provided in Section 2.23(d)(iii), in the case of a payment
made or due which is not calculated on the basis of units of time, the number of
Hours of Service to be credited shall be equal to the amount of the payment
divided by the Employee’s most recent hourly rate of compensation (as determined
below) before the period during which no duties are performed.

(A)      The hourly rate of compensation of Employees paid on an hourly basis
shall be the most recent hourly rate of such Employees.

(B)      In the case of Employees whose compensation is determined on the basis
of a fixed rate for specified periods of time (other than hours)

Part I - 15

84419371\V-5

--------------------------------------------------------------------------------

 

such as days, weeks or months, the hourly rate of compensation shall be the
Employee’s most recent rate of compensation for a specified period of time
(other than an hour), divided by the number of hours regularly scheduled for the
performance of duties during such period of time.  The rule described in Section
2.23(d)(i) shall be applied under this Section 2.23(d)(ii)(B) to Employees
without a regular work schedule.

(C)      In the case of Employees whose compensation is not determined on the
basis of a fixed rate for specified periods of time, the Employee’s hourly rate
of compensation shall be the lowest hourly rate of compensation paid to
Employees in the same job classification as that of the Employee or, if no
Employees in the same job classification have an hourly rate, the minimum wage
as established from time to time under Section 6(a)(1) of the Fair Labor
Standards Act of 1938, as amended.

(iii)      Rule against double credit.  An Employee shall not be credited on
account of a period during which no duties are performed with more hours than
such employee would have been credited but for such absence.

(e)       Crediting of Hours of Service to computation periods

(i)        Hours of Service described in Section 2.23(a) shall be credited to
the Employee for the computation period or periods in which the duties are
performed.

(ii)       Hours of Service described in Section 2.23(b) shall be credited as
follows:

(A)      Hours of Service credited to an Employee on account of a payment which
is calculated on the basis of units of time (such as hours, days, weeks or
months) shall be credited to the computation period or periods in which the
period during which no duties are performed occurs, beginning with the first
unit of time to which the payment relates.

(B)      Hours of Service credited to an Employee by reason of a payment which
is not calculated on the basis of units of time shall be credited to the
computation period in which the period during which no duties are performed
occurs, or if the period during which no duties are performed extends beyond one
computation period, such Hours of Service shall be allocated between not more
than the first two computation periods in accordance with reasonable rules
established by the Employer, which rules shall be consistently applied with
respect to all Employees within the same job classification, reasonably defined.

Part I - 16

84419371\V-5

--------------------------------------------------------------------------------

 

(iii)      Hours of Service described in Section 2.23(c) shall be credited to
the computation period or periods to which the award or agreement for back pay
pertains, rather than to the computation period in which the award, agreement or
payment is made.

(f)        For purposes only of determining participation and vesting under Part
I of the Plan, Hours of Service shall include periods of service calculated in
accordance with the rules set forth in the other subsections of this Section
2.23:

(i)        with the Employer in a job or position in which the Employee was not
eligible to participate in this Part I of the Plan; or

(ii)       as a Career Agent or General Agent of First Allmerica;

(iii)      for periods prior to January 1, 1998, with Citizens, Hanover or as an
employee of a General Agent of First Allmerica;

(iv)      with Financial Profiles, Inc., or Advantage Insurance Network,
Affiliates of First Allmerica, including periods of service completed prior to
the date it became an Affiliate; or

(v)       with an Affiliate.

(g)       Rules for Non-Paid Leaves of Absence.  For purposes of Part I of the
Plan, a Participant will also be credited with Hours of Service during any
non-paid leave of absence granted by the Employer.  Except as provided in
Section 2.23(a) for exempt Employees, the number of Hours of Service to be
credited under this Section 2.23(g) shall be the number of regularly scheduled
working hours in each workday during the leave of absence; provided, however,
that no more than the number of Hours in one regularly scheduled work year of
the Employer will be credited for each non-paid leave of absence.  In the case
of a non-exempt Employee without a regular work schedule, the number of Hours to
be credited shall be based on a 40 hour work week and an eight hour
workday.  Hours of Service described in this Section 2.23(g) shall be credited
to the Employee for the computation period or periods during which the leave of
absence occurs.

Notwithstanding the foregoing, for Plan Years beginning after December 31, 1998,
all Employees (exempt and non-exempt) shall be credited with eight Hours of
Service for each workday for which they are entitled to be credited with Hours
of Service for a non-paid leave of absence pursuant to this Section 2.23(g)

(h)       Rules for Maternity or Paternity Leaves of Absence.  In addition to
the foregoing rules and solely for purposes of determining whether a One Year
Break in Service for participation and vesting purposes has occurred in a
computation period, an individual who is absent for maternity or paternity
reasons shall receive credit for the Hours of Service which would otherwise have
been credited to such individual but for such absence, or in any case in which
such Hours of Service cannot be determined, 8 Hours of Service per day of such
absence; provided, however, that:

Part I - 17

84419371\V-5

--------------------------------------------------------------------------------

 

(i)        Hours of Service shall not be credited under both this Section
2.23(h) and one of the other subsections of this Section 2.23;

(ii)       no more than 501 Hours of Service shall be credited for each
maternity or paternity absence; and

(iii)      if a maternity or paternity leave extends beyond one Plan Year, the
Hours of Service shall be credited to the Plan Year in which the absence begins
to the extent necessary to prevent a One Year Break in Service, otherwise such
Hours of Service shall be credited to the following Plan Year.

For purposes of this paragraph, an absence from work for maternity or paternity
reasons means an absence (i) by reason of the pregnancy of the individual, (ii)
by reason of a birth of a child of the individual, (iii) by reason of the
placement of a child with the individual in connection with the adoption of such
child by such individual, or (iv) for purposes of caring for such child for a
period beginning immediately following such birth or placement.

(i)        Other Federal Law.  Nothing in this Section 2.23 shall be construed
to alter, amend, modify, invalidate, impair or supersede any law of the United
States or any rule or regulation issued under any such law.

2.24     “Insurer” means First Allmerica.

2.25     “Internal Revenue Code” or “Code” means the Internal Revenue Code of
1986, as amended, and any future Internal Revenue Code or similar Internal
Revenue laws.

2.26     “Key Employee”.  In determining whether the Plan (in the aggregate,
including Parts I, II, and III) is top-heavy for Plan Years beginning after
December 31, 2001, “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 is: (a) an officer of the Employer (as that term
is defined within the meaning of Code Section 416 and the regulations
thereunder) having an annual Compensation greater than $130,000 (as adjusted
under Code Section 416(i)(1) for Plan Years beginning after December 31, 2002),
a (b) Five Percent Owner, or (c) a 1-percent owner of the Employer having an
annual Compensation of more than $150,000.  In determining whether a Plan is top
heavy for Plan Years beginning before January 1, 2002, “Key Employee” means any
Employee or former Employee (including any deceased Employee) who at any time
during the 5-year period ending on the determination date, is (i) an officer of
the Employer (as that term is defined within the meaning of Code Section 416 and
the regulations thereunder) having an annual Compensation that exceeds 50
percent of the dollar limitation under Code Section 415(b)(1)(A), (ii) an owner
(or an individual considered an owner under Code Section 318) of one of the ten
largest interests in the Employer if such individual’s Compensation exceeds 100
percent of the dollar limitation under Code Section 415(c)(1)(A), (ii) a Five
Percent Owner, or (iv) a 1-percent owner of the Employer who has an annual
Compensation of more than $150,000.

Part I - 18

84419371\V-5

--------------------------------------------------------------------------------

 

The determination of who is a Key Employee will be made in accordance with Code
Section 416(i)(1) and the regulations and other guidance of general
applicability issued thereunder.  For purposes of determining whether a
Participant is a Key Employee, the Participant’s Compensation means Compensation
as defined for purposes of Article IV of Part III of the Plan, but for Plan
Years beginning before January 1, 1998, without regard to Code Sections 125,
402(e)(3) and 402(h)(1)(B).

2.27     “Limitation Year” means a calendar year.

2.28     “Non-Highly Compensated Employee” means any employee who is not a
Highly Compensated Employee.

2.29     “Non-Key Employee” means any Employee who is not a Key Employee.

2.30     “Normal Retirement Age” means Age 65.

2.31     “Normal Retirement Date” means the first day of the month in which the
Participant’s Normal Retirement Age occurs.

2.32     “One Year Break in Service” means any Plan Year or Eligibility
Computation Period during which the Employee has not completed more than 500
Hours of Service.

2.33     “Participant” means any eligible Employee who participates in the Plan
as provided in Article III of Part I of the Plan and or Article III of Part II
of the Plan as applicable; and who has not for any reason become ineligible to
participate further in the Plan.

2.34     “Plan Administrator” means the Benefits Committee, which shall have
fiduciary responsibility for the interpretation and administration of the Plan
as provided in Article VII of Part III of the Plan (Plan Fiduciary
Responsibilities).  Members of the Benefits Committee shall be appointed as
provided in Section 8.01 of Part III of the Plan.

2.35     “Plan Sponsor” means the Employer.

2.36     “Plan Year” means a calendar year.

2.37     “Plan Year Allocation Date” means for any Plan Year the date each
Participant’s Account shall be credited with an Allocation for the Plan
Year.  Such date shall be the March 1 following the Plan Year with respect to
which the Allocation is made.    

Notwithstanding the foregoing, for Plan Years beginning after December 31, 1997
the Plan Year Allocation Date means the first business day of March following
the Plan Year with respect to which the Allocation is made.

2.38     “Projected Account Balance” means:

(a)       With respect to a Participant who has attained his or her Normal
Retirement Date on the Determination Date, the Participant’s Account Balance as
of such Determination Date; and

Part I - 19

84419371\V-5

--------------------------------------------------------------------------------

 

(b)       With respect to a Participant who has not attained his or her Normal
Retirement Date as of the Determination Date, the projected value of the
Participant’s Account Balance as of his or her Normal Retirement Date determined
as if (i) the Participant has a separation from service on the Determination
Date, and (ii) the Participant’s Account Balance is credited with earnings on a
daily basis based upon an annual effective rate equal to the Code Section 417
Interest Rate from the Determination Date through the Participant’s Normal
Retirement Date. 

(c)       Notwithstanding anything in Part I of the Plan to the contrary, in
determining a Participant’s Projected Account Balance, the Code Section  417
Interest Rate in effect for the Plan Year that contains the Determination Date
shall be assumed to remain the same for all future Plan Years, and a
Participant's Projected Account Balance valued as of his Annuity Commencement
Date for payment of his entire remaining Account Balance will not be less than
the sum of the Allocations to his Account Balance, reduced to reflect the value
of any prior distributions.

2.39     “Qualified Domestic Relations Order” means any judgment, decree or
order (including approval of a property settlement agreement) which:

(a)       relates to the provision of child support, alimony payments, or
marital property rights to a spouse, former spouse, child or other dependent of
a Participant;

(b)       is made pursuant to a state domestic relations law (including a
community property law);

(c)       constitutes a “qualified domestic relations order” within the meaning
of Code Section 414(p); and

(d)       is entered on or after January 1, 1985.

Effective April 6, 2007, a domestic relations order that otherwise satisfies the
requirements for a qualified domestic relations order (“QDRO”) will not fail to
be a QDRO: (i) solely because the order is issued after, or revises, another
domestic relations order or QDRO; or (ii) solely because of the time at which
the order is issued, including issuance after the annuity starting date or after
the Participant’s death.

2.40     “Qualified Joint and Survivor Annuity” means an immediate annuity for
the life of the Participant, with a survivor annuity for the life of the
Participant’s spouse which is the amount of the annuity payable during the joint
lives of the Participant and the Participant’s spouse.  The Qualified Joint and
Survivor Annuity (i) for the purposes of Part I of the Plan will be the
Actuarial Equivalent of the Plan’s no-death benefit life annuity normal form of
benefit; and (ii) for the purposes of Part II of the Plan will be the Actuarial
Equivalent of the Plan’s normal form of benefit.

2.41     “Top Heavy Plan” means for any Plan Year beginning after December 31,
1983 that any of the following conditions exists:

Part I - 20

84419371\V-5

--------------------------------------------------------------------------------

 

(a)       If the top heavy ratio (as defined in Article II of Part III of the
Plan) for this Plan exceeds 60 percent and this Plan is not part of any required
aggregation group or permissive aggregation group of plans.

(b)       If this Plan is a part of a required aggregation group and part of a
permissive aggregation group and the top heavy ratio for the group of plans
exceeds 60 percent.

(c)       If this Plan is a part of a required aggregation group and part of a
permissive aggregation group of plans and the top heavy ratio for the permissive
aggregation group exceeds 60 percent.

See Article II of Part III of the Plan for requirements and additional
definitions applicable to Top Heavy Plans.

2.42     “Top Heavy Plan Year” means that, for a particular Plan Year commencing
after December 31, 1983, the Plan is a Top Heavy Plan.

2.43     “Trustee” means the bank, trust company or person(s) who shall be
constituted the original trustee or trustees for the Plan and Trust created
therefor, and also any such successor trustee or trustees.  The duties and
responsibilities of the Trustee are set forth in the Trust Indenture in the form
annexed hereto.

2.44     “Year of Service” means any Plan Year during which an Employee
completes at least 1,000 Hours of Service; provided, however, that for purposes
of determining Plan entry under Article III of Part I of the Plan, “Year of
Service” means an Eligibility Computation Period during which an Employee
completes at least 1,000 Hours of Service; provided, further however, that for
purposes of determining Plan entry under Article III of Part II of the Plan,
“Year of Service” shall mean any twelve consecutive month period during which he
completes 1,000 Hours of Service computed from the date an Employee first
performs an Hour of Service, or any anniversary thereof (or again performs an
Hour of Service upon re-employment following a termination resulting in a One
Year Break in Service).

ARTICLE III

PARTICIPATION REQUIREMENTS

3.01     Participation Requirements.  

(a)       Employee Participation.  Individuals who were Participants in Part I
of the Plan on December 31, 2015 shall continue to be Participants in Part I of
the Plan on January 1, 2016.

Notwithstanding anything in Part I of the Plan to the contrary, for periods
commencing on and after January 1, 2005, (i) no Employee who had not previously
been a Participant in Part I of the Plan shall become a Participant in Part I of
the Plan, and (ii) a Former Participant who is re-employed as an

Part I - 21

84419371\V-5

--------------------------------------------------------------------------------

 

Employee shall be reinstated as an active Participant in Part I of the Plan but
only for purposes of increasing Plan vesting on his or her frozen Accrued
Benefit and for purposes of determining eligibility for early retirement under
Section 6.02. 

For Plan Years that commenced prior to January 1, 2005, an Employee became
eligible to be a Participant on the first day of the calendar month coincident
with or next following completion of one Year of Service, provided he or she was
then an eligible Employee.

Eligible Employees who were actively employed and who were Participants in The
Allmerica Financial Cash Balance Pension Plan as adopted by Citizens Insurance
Company of America or in The Allmerica Financial Cash Balance Pension Plan as
adopted by The Hanover Insurance Company, each of which were merged with and
into this Part I of the Plan, became Participants in this Part I of the Plan on
January 1, 1998.

Notwithstanding the foregoing:  (i) an Employee who was formerly employed by
Financial Profiles, Inc. shall not become eligible to become a Participant in
this Part I of the Plan until January 1, 1999; and (ii) an Employee who was
formerly employed by Advantage Insurance Network shall not become eligible to
become a Participant in this Part I of the Plan until August 1, 1999.

Notwithstanding the foregoing, the following persons shall not be eligible to
become or remain active Participants in Part I of the Plan:

(i)        Employees who are or were eligible to participate in The Allmerica
Financial Agents’ Retirement Plan;

(ii)       Retirees of First Allmerica or retirees of General Agents of First
Allmerica who are receiving retirement benefits under this Part I of the Plan
whose current period of post-retirement re-employment with First Allmerica,
Citizens or Hanover began prior to January 1, 1988;

(iii)      Retirees of Citizens or Hanover who are receiving retirement benefits
under this Part I of the Plan whose current period of post-retirement
re-employment with First Allmerica, Citizens or Hanover began prior to January
1, 1993;

(iv)     Leased Employees, within the meaning of Code Sections 414(n) and (o);

(v)       A contractor’s employee, i.e., a person working for a company
providing goods or services (including temporary employee services) to the
Employer or to an Affiliate whom the Employer does not regard to be its common
law employee, as evidenced by its failure to withhold taxes from his or her
compensation, even if the individual is actually the Employer’s common law
employee; or

Part I - 22

84419371\V-5

--------------------------------------------------------------------------------

 

(vi)      An independent contractor, i.e., a person who is classified by the
Employer as an independent contractor, as evidenced by its failure to withhold
taxes from his or her compensation, even if the individual is actually the
Employer’s common law employee.

(b)       Reeligibility of Former Participants.  A Former Participant, who again
becomes eligible to participate in Part I of the Plan, will become a Participant
in Part I of the Plan on the date of his or her recommencement of service with
the Employer.  Any other former Employee who again becomes eligible will become
a Participant on the entry date determined under the rules set forth in Section
3.01(a).

3.02     Classification Changes.  In the event of a change in job
classification, such that an Employee, although still in the employment of the
Employer, no longer is an eligible Employee, he or she shall receive no further
Credited Service under Part I of the Plan, and the Participant’s Accrued Benefit
on the date he or she becomes ineligible shall continue to vest, become payable
or be forfeited, as the case may be, in the same manner and to the same extent
as if the Employee had remained an eligible Participant.

For periods commencing prior to January 1, 2005, in the event a Participant
becomes ineligible to accrue further Credited Service because he or she is no
longer a member of an eligible class of Employees, but has not terminated his or
her employment with an Employer, such Participant shall again be eligible to
accrue further Credited Service immediately upon his or her return to an
eligible class of Employees.

In the event an Employee who is not a member of the eligible class of Employees
becomes a member of the eligible class, such Employee shall participate
immediately if such Employee has satisfied the minimum service requirements of
Part I of the Plan, and would have previously become a Participant had he or she
been in the eligible class.

3.03     Participant Cooperation, Participant Refusal.  Each Employee who is
eligible shall become a Participant on the entry date specified in Section
3.01(a) unless he or she notifies the Plan Administrator in writing prior to
such entry date that he or she does not wish to be a Participant under this Part
I of the Plan.  Any such election not to participate in this Part I of the Plan
shall be irrevocable.  In order to waive participation in this Part I of the
Plan, an Employee must agree to irrevocably waive his or her right to become a
Participant in any other qualified retirement plan sponsored by the
Employer.  Each eligible Employee who becomes a Participant hereunder thereby
agrees to be bound by all of the terms and conditions of this Part I of the
Plan.  Each eligible Employee, by becoming a Participant in this Part I of the
Plan, agrees to cooperate fully with the Insurer, including completion and
signing of such forms as are required by the Insurer under the Group Annuity
Contract.

Part I - 23

84419371\V-5

--------------------------------------------------------------------------------

 

ARTICLE IV

PARTICIPANT ACCOUNTS

4.01     Establishment of Accounts.  For Plan Years commencing on or after
January 1, 1995, a memorandum Account shall be established under Part I of the
Plan for each Participant.  Such Account shall be credited with Allocations in
accordance with Section 4.02 and shall be adjusted in accordance with Section
4.03 and for any distributions in accordance with Section 4.04.  The resultant
value determined at any time, after the operation of Sections 4.02, 4.03 and
4.04, shall be the Participant’s “Account Balance.”  The memorandum Account is
part of a mechanism for computing benefits under Part I of the
Plan.  Accordingly, there need be no relationship between Participants’ Account
Balances and the amount or nature of Plan assets.

4.02     Allocations to Accounts.  For each Plan Year commencing on or after
January 1, 1995 and prior to January 1, 2005 during which a Participant
completes a Year of Credited Service and, regardless of the number of Hours of
Service credited to the Participant, for any such Plan Year during which a
Participant dies or first retires, such Participant’s Account shall be credited
with an Allocation for such Plan Year as of the Plan Year Allocation
Date.  Allocations under the Plan are part of the mechanism for computing
benefits under the Plan and do not relate to actual contributions to the Plan.

Notwithstanding anything in the Plan to the contrary, no Allocations shall be
credited to Participants for Plan Years beginning on or after January 1, 2005;
provided, however, (i) that Allocations shall be credited to eligible
Participants for the 2004 Plan Year as of the 2004 Plan Year Allocation Date and
(ii) memorandum Accounts shall continue to be credited with investment
experience credits after December 31, 2004, as provided in Section 4.03 of Part
I of the Plan.

4.03     Adjustments of Accounts.

(a)       Adjustment for Earnings for Plan Years beginning on and after January
1, 2004.  For each Plan Year beginning on or after January 1, 2004, each
Participant’s Account shall be credited with earnings on a daily basis based
upon an annual effective rate equal to the Code Section 417 Interest Rate in
effect for such Plan Year.

(b)       Adjustment for Investment Experience for Plan Years beginning on or
after January 1, 1995 and before January 1, 2004.  For each Plan Year
beginning on or after January 1, 1995 and before January 1, 2004, Participants
in Part I of the Plan shall make investment experience elections with respect to
their respective Account Balances from among choices prescribed by the Plan
Administrator.  The specific investment choices and the time and manner of
making elections may be changed from time to time.  Each Participant’s Account
Balance shall be adjusted to reflect investment experience in the same manner as
if the Account Balance were actually invested pursuant to the Participant’s
elections and as if each

Part I - 24

84419371\V-5

--------------------------------------------------------------------------------

 

Allocation were actually a contribution made to the Plan on the relevant Plan
Year Allocation Date.

4.04     Distributions.  The Account Balance shall be decreased for any
non-annuity distributions paid to the Participant or his or her Beneficiary.  In
the event a benefit becomes payable as an annuity in accordance with Article VI
or as a survivor annuity in accordance with Article VII, the Account Balance
shall be decreased by the Actuarial Equivalent of such annuity as of the Annuity
Commencement Date.

ARTICLE V

EMPLOYER CONTRIBUTIONS

5.01     Employer Contributions.

(a)       Employer Contributions for Plan Years beginning after December 31,
1997.  The Employer shall contribute for each Plan Year during which Part I of
the Plan is in effect that amount, if any, which the enrolled actuary for the
Plan determines is necessary to fund the Plan under the actuarial cost method in
effect for the Plan.  No contributions will be required of or permitted by
Employees.

(b)       Employer Contributions for Plan Years beginning prior to January 1,
1998.  Each Employer shall contribute for each Plan Year during which the Plan
is in effect that amount, if any, which the enrolled actuary for the Plan
determines is necessary to fund Part I of the Plan under the actuarial cost
method in effect for Part I of the Plan.  No contributions will be required of
or permitted by Employees.

Except as provided below, contributions paid by each Employer and earnings
thereon will be used only to fund Plan costs and benefits for its Employees and
will not be used to fund Plan costs and benefits for any other
Employees.  Notwithstanding the foregoing:

(i)        Plan contributions paid by First Allmerica and General Agents of
First Allmerica and earnings thereon will be used to fund Plan costs and
benefits of both First Allmerica and such General Agents.

(ii)       Plan contributions paid by First Allmerica and General Agents of
First Allmerica and earnings thereon will also be used to fund costs and
benefits of The Allmerica Financial Agents’ Pension Plan (Part II of the Plan),
which plan was merged with this Part I of the Plan on January 1, 1992.

5.02     Payment of Contributions to Trustee.  The Employer shall make payment
of all contributions directly to the Trustee to be held, managed and invested in
one or more Group Annuity Contracts and in other investments permitted under the
Trust, but subject to Section 5.03.

Part I - 25

84419371\V-5

--------------------------------------------------------------------------------

 

5.03     Receipt of Contributions by Trustee.  The Trustee shall accept and hold
under the Trust such contributions of money, or other property approved by the
Employer for acceptance by the Trustee, on behalf of the Employer and its
Employees and Beneficiaries as it may receive from time to time from the
Employer, other than cash it is instructed to remit to the Insurer for deposit
with the Insurer.  However, the Employer may pay contributions directly to the
Insurer, and such payment shall be deemed a contribution to the Trust to the
same extent as if payment had been made to the Trustee.  All such contributions
shall be accompanied by written instructions from the Plan Administrator or its
designee accounting for the manner in which they are to be credited.

ARTICLE VI

RETIREMENT AND DISABILITY BENEFITS

6.01     Normal Retirement Benefit.  Subject to Section 6.07, each Participant
who retires on his or her Normal Retirement Date (and each Former Participant
with a vested benefit deferred to his or her Normal Retirement Date) shall be
entitled to receive a monthly life annuity commencing on such Date and
terminating on the last regular payment date prior to his or her death, which
monthly benefit shall equal the Participant’s Accrued Benefit (or, in case of
each Former Participant with a vested benefit, the Former Participant’s vested
Accrued Benefit).

Notwithstanding the foregoing, the Grandfathered Benefit (if any) of each
Participant shall not be less than the largest periodic Grandfathered Benefit
that would have been payable to the Participant upon separation from service at
or prior to Normal Retirement Age under Part I of the Plan.  For purposes of
comparing periodic benefits in the same form commencing prior to and at Normal
Retirement Age, the greater benefit is determined by converting the benefit
payable prior to Normal Retirement Age into the same form of annuity benefit
payable at Normal Retirement Age and comparing the amount of such annuity
payments.

Notwithstanding the foregoing, Non-Key Employees who are Participants in a Top
Heavy shall be entitled to the minimum benefit described in Section 2.03 of Part
III of the Plan if such benefit is greater than the benefit provided by this
Section 6.01.

Each actively employed Participant’s Accrued Benefit shall become 100% vested
and nonforfeitable when the Participant attains his or her Normal Retirement
Age.  An actively employed Participant may terminate employment with the
Employer and retire on his or her Normal Retirement Date.  Upon such date the
Participant shall be entitled to receive, or to begin to receive, his or her
Normal Retirement Benefit.

The Plan Administrator shall notify the Trustee (and Insurer, if appropriate) as
and when the Normal Retirement Age and Normal Retirement Date of each
Participant shall occur and shall also advise the Trustee (and Insurer, if
appropriate) as to the manner in which retirement benefits are to be distributed
to a Participant, subject to the provisions of this Article.  Upon receipt of
such notification and subject to the other provisions of this

Part I - 26

84419371\V-5

--------------------------------------------------------------------------------

 

Article, the Trustee or Insurer shall take such action as may be necessary in
order to commence payment of the Participant’s Normal Retirement Benefit.

6.02     Early Retirement Benefit.  Any actively employed Participant who has
completed at least fifteen Years of Service (or, if earlier, who has completed
at least fifteen Years of Credited Service, with Years of Credited Service
completed before 1995 being determined in accordance with the terms of Part I of
the Plan as in effect on December 31, 1994) may elect to retire on the first day
of any month following attainment of Age 55, in which event he or she shall
receive, subject to Section 6.07 in the case of a married Participant, a monthly
life annuity commencing on the date of his or her early retirement and
terminating on the last regular payment date prior to his or her death. Each
early retiree’s monthly life annuity will be equal to the Actuarial Equivalent
of the early retiree’s Accrued Benefit, except that the portion of the Accrued
Benefit attributable to the Participant’s Grandfathered Benefit, if any, shall
equal the early retiree’s Grandfathered Benefit multiplied by the appropriate
percentage.

﻿

 

 

Retirement Age

 

Percentage of Monthly Grandfathered Benefit*

65

 

100

64

 

93 1/3

63

 

86 2/3

62

 

80

61

 

73 1/3

60

 

66 2/3

59

 

63 1/3

58

 

60

57

 

56 2/3

56

 

53 1/3

55

 

50

﻿

 

 

*If benefit payments commence in a month other than the month in which the
Participant attains the specified Age, the percentage shall be determined by
straight line interpolation.

﻿

﻿

Provided,  however, that an actively employed Participant (i) who is entitled to
a Special Grandfathered Benefit, (ii) who has been continuously employed as a
member of an eligible class of Employees from January 1, 1995 until the date of
his or her early retirement, and (iii) whose combined Age and Years of Credited
Service as of the date of determination (calculated in accordance with the
provisions of Part I of the Plan in effect on December 31, 1994) total at least
85 (the “Rule of 85”) shall be entitled to receive a Special Grandfathered
Benefit determined without the above actuarial reduction.

Provided,  however, that an actively employed Participant (i) who is entitled to
a Grandfathered Benefit, (ii) who has attained Age 62, and (iii) whose combined
Age and Years of Credited Service as of the date of determination (calculated in
accordance with the provisions of Part I of the Plan in effect on December 31,
1994) total at least 95 (the

Part I - 27

84419371\V-5

--------------------------------------------------------------------------------

 

“Rule of 95”) shall be entitled to receive a Grandfathered Benefit determined
without the above actuarial reduction.

For purposes of determining eligibility for the Rule of 85 and Rule of 95
subsidized early retirement benefits, but not for purpose of computing actual
benefit amounts, Years of Credited Service shall include Hours of Service
completed as a Career Agent or General Agent of First Allmerica.

If a Participant terminates employment after having completed at least fifteen
Years of Service, he or she may elect to retire on the first day of any month
following his or her 55th birthday and prior to his or her Normal Retirement
Date.  If any such Former Participant elects to retire early, he or she shall be
entitled to receive a monthly retirement benefit equal to a percentage of the
monthly benefit to which the Participant would have been entitled on his or her
Normal Retirement Date.  Such percentage shall be obtained by applying the
appropriate percentage set forth in the table above to the monthly benefit
payable on the Former Participant’s Normal Retirement Date.

Notwithstanding the foregoing, if this Plan is a Top Heavy Plan, and if greater
than the benefit described above, each Non-Key Employee who elects early
retirement shall be entitled to receive a monthly early retirement benefit equal
to the appropriate percentage above of his or her Accrued Benefit described in
Section 2.01(b).

6.03     Subsidized Early Retirement Benefit.  Any eligible Participant who
elected an immediate early retirement benefit to commence between March 1, 2003
and May 1, 2004 shall be entitled to an increased retirement benefit, computed
as described below, to commence on the date of his or her actual retirement.

(a)       Eligible Participants.  Only Participants in Part I of the Plan who
are actively employed by First Allmerica on February 1, 2003 (or are then on an
Employer-approved paid leave of absence, which paid leave commenced no earlier
than December 18, 2002) shall be eligible for the subsidized early retirement
benefit described in this Section 6.03.  In addition, in order to be eligible
for such benefits, a Participant must have retired between March 1, 2003 and May
1, 2004 and met the following requirements:

(i)        The Participant must be eligible for a “Special Grandfathered
Benefit” (as described in Section 2.20(b)) on the date of his or her early
retirement.

(ii)       The Participant must have been continuously employed as a member of
an eligible class of Employees from January 1, 1995 until the date of his or her
retirement.

(iii)      The Participant must not have attained Age 65 on the date of his or
her retirement.

(iv)      The Participant must not be eligible for the Rule of 85 subsidized
early retirement benefit (as described in Section 6.02) on the date of his or
her retirement.

Part I - 28

84419371\V-5

--------------------------------------------------------------------------------

 

(v)       The Participant’s job or position with First Allmerica must have been
or will be eliminated by May 1, 2003 as a result of the reorganization of the
Allmerica Financial Services Division of First Allmerica.

(vi)      The Participant must be actively at work on the last business day
preceding the date of his or her early retirement or then be on vacation, be on
an Employer-approved paid leave of absence or be absent due to sickness or
injury.

(vii)    The Participant must execute an appropriate release satisfactory to
First Allmerica releasing the company (and its subsidiaries and affiliates and
its and their officers, directors and employees) from all liability arising out
of or relating to his or her employment with First Allmerica or with any of its
predecessors, subsidiaries or affiliates.

(b)       Qualified Early Retirement Benefit.  Those eligible Participants as
described in Section 6.03(a) who retired between March 1, 2003 and May 1, 2004
shall be entitled to a subsidized early retirement benefit, to be computed as
follows:

(i)        Subsidized Early Retirement Benefit.  Those eligible Participants
electing early retirement under Section 6.03 shall be entitled to an increased
retirement benefit commencing on their date of actual retirement, to be computed
as follows:

The Participant’s early retirement benefit shall be computed as provided in
Section 6.02, except as provided below:

Any eligible Participant may elect to retire on the first day of any month
between March 1, 2003 and May 1, 2004, in which event he or she shall receive,
subject to Section 6.07 in the case of a married Participant, a monthly life
annuity commencing on the date of his or her early retirement and terminating on
the last regular payment date prior to his or her death.  An eligible
Participant may also choose one of the distribution options set forth in Section
6.06, with spousal consent if the Participant is married.  In the case of a
Participant who chooses a monthly life annuity, such benefit will be equal to
the sum of (A) and (B) below:

(A)      A monthly life annuity benefit that is the Actuarial Equivalent (as
described in Section 2.02) of the Participant’s Account Balance (as described in
Section 4.01), plus

Part I - 29

84419371\V-5

--------------------------------------------------------------------------------

 

(B)      A monthly life annuity benefit which is equal to a percentage of the
Participant’s Special Grandfathered Benefit, accrued to the date of actual
retirement, based on the Participant’s Age, Average Monthly Compensation and
Credited Service (such Average Monthly Compensation and Credited Service being
calculated in accordance with the provisions of Part I of the Plan in effect on
December 31, 1994), each determined as of the date of the Participant’s early
retirement.  Such percentage shall be equal to the appropriate percentage
determined from the Schedule below of the Special Grandfathered Benefit that
would have been payable had the Participant’s date of initial eligibility for
the Rule of 85 subsidized early retirement benefit (as described in Section
6.02) been his or her Normal Retirement Date, based on the assumption that his
or her continuous employment had continued until such date, but with the actual
benefit being based on the Participant’s Special Grandfathered Benefit actually
accrued as of the date of early retirement.

﻿

 

Retirement Age*

Percentage of Special Monthly Grand-Fathered Benefit**

﻿

 

55

1.0000

54

0.9333

53

0.8667

52

0.8000

51

0.7333

50

0.6667

49

0.6333

48

0.6000

47

0.5667

46

0.5333

45

0.500

﻿

*This Schedule assumes the Participant would have been eligible for the Rule of
85 subsidized early retirement benefit at Age 55.  If a Participant would have
been eligible for the Rule of 85 at a date later than Age 55, the appropriate
percentage shall be determined by the Plan actuary using the same assumptions
used in constructing the above Schedule.

**If a benefit commences in a month other than the month in which the
Participant attains the specified Age, the percentage shall be determined by
straight line interpretation.

Part I - 30

84419371\V-5

--------------------------------------------------------------------------------

 

Example.  Assume an eligible Participant will attain Age 52 on January 1, 2004
and will have completed 32 Years of Credited Service on such date.  Assume
further that as of such date the Participant has accrued a Special Grandfathered
Benefit, payable as a single life annuity, of $1,000 per month.  Thus, the
Participant will initially be eligible for the Rule of 85 subsidized early
retirement benefit on January 1, 2007, the date the Participant will attain Age
55.  Under the terms of Section 6.03, the Participant may elect to retire on
January 1, 2004 and begin to receive an immediate early retirement benefit.  If
a single life annuity benefit is chosen, such life annuity benefit will be equal
to $800 per month ($1,000 x 0.8000 = $800).

(ii)       Cost-for-Living (“COL”) Adjustments.  Notwithstanding anything in
Section 6.08 to the contrary, Participants (and the Beneficiaries of
Participants) who elect to retire pursuant to this Section 6.03 shall be
eligible to receive COL benefits, subject to the other rules and requirements
set forth in Section 6.08.  Notwithstanding anything in Section 6.08 to the
contrary, the early retirement monthly annuity benefits described in this
Section 6.03 shall be a part of a Participant’s basic plan benefit and shall be
included in determining any COL adjustment to which the Participant may become
entitled pursuant to Section 6.08.

6.04     Late Retirement Benefit.  If a Participant shall continue in active
service beyond his or her Normal Retirement Date, he or she shall continue to
participate under Part I of the Plan and Trust.  For Employees in Section
203(a)(3)(B) service (as described in Section 6.09(a)), who continue in active
employment beyond their Normal Retirement Date, retirement benefits shall be
suspended, as provided in Section 6.09.  Except as provided in Section 6.07 in
the case of a married Participant, the monthly retirement benefit payable to a
Participant retiring on a late retirement date shall be a monthly life annuity
commencing on the date of his or her late retirement and terminating on the last
regular payment date prior to his or her death.  Each late retiree’s monthly
life annuity will be equal to the late retiree’s Accrued Benefit; provided,
however, that the portion of the Accrued Benefit attributable to the
Participant’s Grandfathered Benefit, if any, shall equal the Participant’s Basic
Grandfathered Benefit, if any, or the Participant’s Special Grandfathered
Benefit, if any.

Notwithstanding the foregoing, if this Plan is a Top Heavy Plan and if greater
than the benefit described above, each Non-Key Employee who elects late
retirement shall be entitled to receive a monthly late retirement benefit equal
to his or her Accrued Benefit described in Section 2.01(b).

Part I - 31

84419371\V-5

--------------------------------------------------------------------------------

 

Notwithstanding the above, monthly annuity benefits shall commence no later than
a Participant’s required beginning date (as defined in Article III of Part III
of the Plan).  If a Participant has not retired by his or her required beginning
date, monthly retirement benefits shall commence on such date and shall be
computed as described in the preceding paragraph, with benefits based on the
assumption that the Participant’s required beginning date was the date of late
retirement.

Notwithstanding the foregoing, if late retirement benefits commence after Age
70½, to the extent required under Code Section 401(a)(9)(C) and regulations
thereunder, a Participant’s Accrued Benefit shall be actuarially increased to
take into account the period after Age 70½ in which the Participant was not
receiving any benefits under the Plan, including any period during which the
Employee is in Section 203(a)(3)(B) service, as described in Section 6.09(a).

6.05     Disability Benefit.  Notwithstanding anything in Part I of the Plan to
the contrary, if a Participant becomes Totally Disabled while employed by the
Employer as an active Participant in Part I of the Plan, such Participant shall
have a 100% vested and nonforfeitable right to his or her Accrued Benefit,
regardless of his or her length of service.

In addition, if a Participant in Part I of the Plan who is eligible for a
Special Grandfathered Benefit was Totally Disabled on December 31, 1994 and
before January 1, 2005, becomes Totally Disabled while employed by the Employer
as an active Participant in Part I of the Plan, it shall be assumed for purposes
of this Part I of the Plan that his or her employment continues from the date of
the commencement of his or her total disability to the earliest of his or her
Normal Retirement Date, death, termination of employment or date that he or she
is no longer Totally Disabled.  Prior to January 1, 2005 and while an eligible
Employee is Totally Disabled, it shall be assumed for purposes of calculating
the Participant’s Special Grandfathered Benefit that the Employee continues to
earn monthly one-twelfth of the Compensation paid to the Participant during the
12 complete months prior to the month in which he or she ceased active service
because of his or her having become Totally Disabled. 

For purposes of Part I of the Plan “Totally Disabled” means the inability to
perform the duties of any occupation for which the Employee is or becomes
reasonably fitted by education, training or experience; provided, however, in
the case of an Employee receiving disability benefits under a long term
disability plan sponsored by the Employer, until benefits have been paid under
such policy for 24 months, such Employee will be considered Totally Disabled if
he or she is unable to perform the duties of his or her occupation and is not
working at any other occupation.

6.06     Distribution of Benefits.  The Plan Administrator shall direct the
Trustee (or Insurer, if applicable) to commence payment of benefits provided
under this Article VI of Part I of the Plan (or provided to a Former Participant
pursuant to Article VIII of Part I of the Plan).  Plan benefits will be paid
only on death, termination of service, Plan termination or retirement.

Part I - 32

84419371\V-5

--------------------------------------------------------------------------------

 

Except as otherwise provided in Section 6.07, the requirements of this Section
shall apply to any distribution of a Participant’s interest and will take
precedence over any inconsistent provisions of this Part I of the Plan.

All distributions required under the Plan shall be determined and made in
accordance with the Treasury Regulations under Code Section 401(a)(9),
including, to the extent applicable, the minimum distribution incidental benefit
requirement of Section 1.401(a)(9)-2 of the Treasury Regulations.

Except as provided below and in Section 6.07, a Participant’s retirement benefit
shall be payable as a life annuity for the life of the Participant with no
further benefits payable after the last regular payment date prior to his or her
death.

At any time prior to actual retirement, a Participant, with spousal consent if
the Participant is married, may elect to receive his or her retirement benefit
under one or more of the following settlement options; provided, however, that a
Participant may not elect to have the balance of his or her Account, described
in Section 4.01, distributed under more than one annuity option, or his or her
Grandfathered Benefit distributed under more than one annuity option.

(a)       An annuity for the joint lives of the Participant and his or her
spouse with 50% or 66 2/3% (whichever is specified when this option is elected)
of such amount payable as an annuity for life to the survivor.  No further
benefits are payable after the death of both the Participant and his or her
spouse.

(b)       An annuity for the life of the Participant and upon his or her death
100%, 66 2/3%, or 50% (whichever is specified when this option is elected) of
the annuity amount will be continued to his or her spouse as his or her
contingent annuitant.  No further benefits are payable after the death of both
the Participant and his or her spouse. 

(c)       An annuity for the life of the Participant with guaranteed installment
payments for a period certain not longer than the life expectancy of the
Participant.

(d)       An annuity for the life of the Participant with guaranteed installment
payments for a period certain not longer than the life expectancy of the
Participant and his or her spouse.

Part I - 33

84419371\V-5

--------------------------------------------------------------------------------

 

(e)       Notwithstanding anything in Part I of the Plan to the contrary, a
single lump sum payment in an amount equal to the Participant’s vested Account
Balance on the Determination Date; provided, however, that except as provided in
Sections 6.06(f) and (g) below, this form of payment shall not be available with
respect to the Participant’s vested Accrued Benefit attributable to the
Participant’s Grandfathered Benefit, if any, on the Determination Date.  In the
event a Participant elects to have his or her vested Account Balance on the
Determination Date payable in a lump sum under this Section 6.06(e), the portion
of his or her Accrued Benefit attributable to his or her Grandfathered Benefit,
if any, shall be paid only in accordance with the otherwise applicable
provisions of this Article VI of Part I of the Plan.

(f)       If the present value of a Participant’s vested Grandfathered Benefit,
if any, on the Determination Date does not exceed $5,000, an immediate single
sum payment in an amount equal to such present value.  If the present value of a
Participant’s vested Grandfathered Benefit exceeds $5,000, only annuity options
in Sections 6.06(a) through (d) above and the option in Section 6.06(h) below
shall be available with respect to such vested Grandfathered Benefit. 

(g)       Notwithstanding anything in Part I of the Plan to the contrary except
Section 6.10, for involuntary cashouts paid after December 1, 2012, an immediate
single lump sum payment of the present value of the Former Participant’s vested
Accrued Benefit on the Determination Date will be paid to a Former Participant
(other than a Former Participant who is a participant in The Hanover Excess
Benefit Retirement Plan) who is not an Employee of the Employer or an Affiliate
if the present value of the Former Participant’s vested Accrued Benefit, if any,
on the Determination Date does not exceed $5,000.  Consent to this involuntary
cashout from the Former Participant will not be required, and spousal consent to
this involuntary cashout will not be required in the case of a married Former
Participant.  For purposes of Sections 6.06 and 8.02, an “involuntary cashout”
is a payment under Section 6.06(g) or its counterpart in Section 8.02, as
appropriate.

(h)       An annuity for only the life of the Participant that terminates on the
last regular payment date prior to the death of the Participant.

All optional forms of benefits shall be the Actuarial Equivalent (as of the date
selected) of the normal retirement benefit described in Section 6.01 or in
Section 2.03 of Part III of the Plan, if applicable.  Any spousal consent shall
satisfy the requirements of Section 6.07.

Unless the Participant elects otherwise, distribution of benefits will begin no
later than the 60th day after the later of the close of the Plan Year in which:

(i)        the Participant attains Normal Retirement Age; or

(ii)       the Participant terminates service with the Employer.

Part I - 34

84419371\V-5

--------------------------------------------------------------------------------

 

Notwithstanding the foregoing, the failure of a Participant and spouse (or where
either the Participant or the spouse has died, the survivor) to consent to a
distribution (other than an involuntary cashout) when a benefit is “immediately
distributable” (as described below) shall be deemed to be an election to defer
commencement of payment of any benefit sufficient to satisfy this Section 6.06
(and provisions of Article III of Part III of the Plan).  In no event will
benefits begin to be distributed (other than as an involuntary cashout) prior to
the later of Age 62 or Normal Retirement Age without the consent of the
Participant.  The consent of the Participant’s spouse will also be required for
any such distribution (other than an involuntary cashout) unless the benefit is
paid in the form of a Qualified Joint and Survivor Annuity.  Any spousal consent
shall satisfy the requirements of Section 6.07.

If the Accrued Benefit is immediately distributable, the Participant and the
Participant’s spouse (or where either the Participant or the spouse has died,
the survivor) must consent to any distribution (other than as an involuntary
cashout) of such Accrued Benefit.  Needed consents of the Participant and the
Participant’s spouse shall be obtained in writing within the 180-day period
ending on the annuity starting date.  The “annuity starting date” is the first
day of the first period for which an amount is paid as an annuity or any other
form.  The Plan Administrator shall notify the Participant and the Participant’s
spouse of the right to defer any distribution (other than an involuntary
cashout) until the Participant’s Accrued Benefit is no longer immediately
distributable.  Such notification shall include a general description of the
material features, and an explanation of the relative values, of the optional
forms of benefit available under the Plan in a manner that would satisfy the
notice requirements of Code Section 417(a)(3), and shall be provided no less
than 30 days and no more than 180 days prior to the annuity starting date;
provided, however, that the minimum 30 day notice period described in this
sentence may be waived by the Participant's written waiver given after notice to
the Participant has described that the Participant was allowed at least 30 days
to consider his choice under this Section and that the Participant was allowed
to revoke his waiver under this Section at any time through his or her annuity
starting date.

Notwithstanding the foregoing, only the Participant need consent to the
commencement of a distribution in the form of a Qualified Joint and Survivor
Annuity while the Accrued Benefit is immediately distributable.  Neither the
consent of the Participant nor the Participant’s spouse shall be required to the
extent that a distribution is required to satisfy Code Section 401(a)(9) or Code
Section 415.

An Accrued Benefit is “immediately distributable” if any part of the Accrued
Benefit could be distributed to the Participant (or surviving spouse) before the
Participant attains (or would have attained if not deceased) the later of Normal
Retirement Age or Age 62.

Notwithstanding the above the entire interest of a Participant or a Beneficiary
must be distributed in accordance with the minimum required distribution rules
set forth in Article III of Part III of the Plan.

Part I - 35

84419371\V-5

--------------------------------------------------------------------------------

 

6.07     Qualified Joint and Survivor Annuity for Married Participants.

(a)       General Rules.  Notwithstanding anything in this Article to the
contrary, unless a married Participant’s Accrued Benefit has been paid in a lump
sum pursuant to Section 6.06, such Participant’s retirement benefit will be
payable to the Participant and his or her spouse in the form of a Qualified
Joint and Survivor Annuity, with the survivor to receive 100% of the benefit
which had been payable during their joint lives, unless an optional form of
benefit is selected pursuant to a qualified election within the 180-day period
ending on the annuity starting date.  In the case of an unmarried Participant,
unless the Participant elects an optional form of benefit, the Participant’s
retirement benefit will be paid in the form of a no- death benefit life annuity.

(b)       Definitions.

(i)        Qualified election:  A “qualified election” means a waiver of a
Qualified Joint and Survivor Annuity meeting the requirements of this Section
6.07(b)(i).  A qualified election shall not be effective unless:  (A) the
Participant’s spouse consents in writing to the election; (B) the election
designates a specific Beneficiary, including any class of Beneficiaries or any
contingent Beneficiaries, which may not be changed without spousal consent (or
the spouse expressly permits designations by the Participant without any further
spousal consent); (C) the spouse’s consent acknowledges the effect of the
election; and (D) the spouse’s consent is witnessed by a Plan representative or
notary public.  Additionally, a Participant’s qualified election will not be
effective unless the election designates a form of benefit payment which may not
be changed without spousal consent (or the spouse expressly permits designations
by the Participant without any further spousal consent).  If it is established
to the satisfaction of a Plan representative that there is no spouse or that the
spouse cannot be located, a waiver will be deemed a qualified election.

Any consent by a spouse obtained under this Section 6.07(b) (or establishment
that the consent of a spouse may not be obtained) shall be effective only with
respect to such spouse.  A consent that permits designations by the Participant
without any requirement of further consent by such spouse must acknowledge that
the spouse has the right to limit consent to a specific Beneficiary, and a
specific form of benefit where applicable, and that the spouse voluntarily
elects to relinquish either or both of such rights.  A revocation of a prior
waiver may be made by a Participant without the consent of the spouse at any
time before the commencement of benefits.  The number of revocations shall not
be limited.  No consent obtained under this provision shall be valid unless the
Participant has received notice as provided in Section 6.07(c) below.

Part I - 36

84419371\V-5

--------------------------------------------------------------------------------

 

(ii)       Spouse (surviving spouse): A “spouse” means the person, if any, to
whom the Participant is lawfully married at his annuity starting date.  A
“surviving spouse” means the person, if any, to whom the Participant is lawfully
married at the date of his death. A former spouse will be treated as the spouse
or surviving spouse only to the extent provided under a Qualified Domestic
Relations Order.

(iii)      Annuity starting date:  An “annuity start date” means the first day
of the first period for which an amount is paid as an annuity or under any other
form.

(c)       Notice Requirement.

(i)        In the case of a Qualified Joint and Survivor Annuity as described in
Section 6.07(a), the Plan Administrator shall provide each Participant no less
than 30 days and no more than 180 days prior to the annuity starting date a
written explanation of:  (A) the terms and conditions of a Qualified Joint and
Survivor Annuity; (B) the Participant’s right to make and the effect of an
election to waive the Qualified Joint and Survivor Annuity form of benefit; (C)
the rights of a Participant’s spouse; (D) the right to make, and the effect of,
a revocation of a previous election to waive the Qualified Joint and Survivor
Annuity; and (E) the relative values of the various optional forms of benefit
under the Plan.  Notices given to Participants pursuant to Code Section
411(a)(11) shall include a description of how much larger benefits will be if
the commencement of distributions is deferred.

Part I - 37

84419371\V-5

--------------------------------------------------------------------------------

 

(ii)       A Participant may commence receiving a distribution in a form other
than a Qualified Joint and Survivor Annuity less than 30 days after receipt of
the written explanation described in the preceding paragraph provided: (A) the
Participant has been provided with information that clearly indicates that the
Participant has at least 30 days to consider whether to waive the Qualified
Joint and Survivor Annuity and elect (with spousal consent) a form of
distribution other than a Qualified Joint and Survivor Annuity; (B) the
Participant is permitted to revoke any affirmative distribution election at
least until the Distribution Commencement Date or, if later, at any time prior
to the expiration of the seven day period that begins the day after the
explanation of the Qualified Joint and Survivor Annuity is provided to the
Participant; and (C) the Distribution Commencement Date is after the date the
written explanation was provided to the Participant.  For distributions on or
after December 31, 1996, the Distribution Commencement Date may be a date prior
to the date the written explanation is provided to the Participant if the
distribution does not commence until at least 30 days after such written
explanation is provided, subject to the waiver of the 30-day period.  For the
purposes of this paragraph, the “Distribution Commencement Date” is the date a
Participant commences distributions from the Plan.  If a Participant commences
distribution with respect to a portion of his/her Account Balance, a separate
Distribution Commencement Date applies to any subsequent distribution.  If
distribution is made in the form of an annuity, the Distribution Commencement
Date is the first day of the first period for which annuity payments are made.

(d)       Applicability.  The provisions of this Section 6.07 shall apply to any
Participant who is credited with at least one Hour of Service with the Employer
on or after January 1, 1976.  In addition, any living Participant or Former
Participant not receiving benefits under Part I of the Plan on August 23, 1984
who would otherwise not receive the benefits prescribed by this Section 6.07
shall be given the opportunity to elect to have the provisions of this Section
apply, provided such Participant or Former Participant was credited with at
least one Hour of Service under this Part I of the Plan or a predecessor plan on
or after September 2, 1974.

The opportunity to elect a Qualified Joint and Survivor retirement option must
be afforded to the appropriate Participants or Former Participants during the
period commencing on August 23, 1984 and ending on the dates benefits would
otherwise commence to such person.

6.08     Supplementary Pension Benefits.  Effective July 1, 1986, and on each
July 1 thereafter, the amount of monthly retirement benefits payable to eligible
retirees (as described below) or their Beneficiaries shall be increased by a
percentage determined in accordance with the following formula:

Percentage Increase = .8 (M - .07) x 100

Part I - 38

84419371\V-5

--------------------------------------------------------------------------------

 

For Plan Years beginning after December 31, 2008, for purposes of the above
formula, “M” equals the annual coupon return on December 31, 2009 and on each
December 31 thereafter of the Barclays Capital U.S. Government/Credit 5-10 Year
Index, or its successor.

For Plan Years beginning after December 31, 1997 and prior to January 1, 2009,
for purposes of the above formula, “M” equaled the earnings rate for the prior
Plan Year on assets representing retired life reserves for retirees of First
Allmerica, Citizens and Hanover.  Additionally, retired life reserve assets of
the Agents’ Pension Plan (Part II of the Plan) and retired life reserve assets
attributable to retirees of General Agents of First Allmerica and retirees of
Beacon Insurance Company of America (“Beacon”), formerly an affiliate of
Hanover, shall be aggregated and combined with the retired life reserve assets
of this Part I of the Plan.

For Plan Years beginning prior to January 1, 1998, for purposes of the above
formula, “M” equaled the earnings rate for the prior Plan Year on assets
representing retired life reserves for retirees of each Employer.  The formula
shall be applied separately and retired life reserves shall be determined
separately for each Employer; provided, however, (i) that for retirees of First
Allmerica and its General Agents who have adopted this Part I of the Plan,
retired life reserve assets shall be aggregated and combined with the retired
life reserve assets of The First Allmerica Agents’ Pension Plan (Part II of the
Plan) and (ii) for Plan Years beginning after December 31, 1992, the retired
life reserve assets of Beacon shall be combined with the retired life reserve
assets of Hanover.

For the Plan Years for which “M” depended on the returns of designated retired
life reserve assets, the earnings rate on retired life reserve assets was to be
determined by an actuary, using the “investment year block” method of crediting
interest that First Allmerica used to credit interest on its Experience Rated
group annuity contracts that were in force on an active basis.  The resulting
earnings rate(s) should neither be associated with nor construed as the
investment yield (all or in part) of the pension fund.

For each Plan Year for which “M” depended on the returns of designated retired
life reserve assets, the retired life reserve assets for newly qualified
retirees to be added to the total retired life assets outstanding was to be
determined using a 7% interest rate and the 1971 GAM mortality table.

The determination of “M’’ and of the overall earning rate(s) shall be final and
conclusively binding for all persons.

The effective date for the payment of supplemental pension benefits paid as a
result of this Section shall be each July 1, commencing with July 1,
1986.  Those eligible to receive supplemental pension benefits as a result of
this Section shall be those retirees of First Allmerica, Citizens, Hanover and
General Agents of First Allmerica (and their Beneficiaries) who were receiving
basic retirement benefits under Part I of the Plan on the July 1 increase
effective date, had been retired for at least 18 months on such increase
effective date, and:

Part I - 39

84419371\V-5

--------------------------------------------------------------------------------

 

(i)        had elected an immediate early retirement benefit pursuant to Section
6.02 (or its successor, if any)

(ii)       had terminated employment after having met the eligibility
requirements for early retirement specified in Section 6.02 (or its successor,
if any) and elected to defer receipt of retirement benefits: or

(iii)      had retired on or after their Normal Retirement Age after having
completed at least 15 years of Credited Service.

The Beneficiaries of any retiree meeting the above requirements shall be
entitled to receive a supplemental pension benefit under this Section if the
Beneficiaries were receiving survivor benefits under Part I of the Plan on the
July 1 increase effective date.

A supplemental pension benefit determined under this Section shall be added to
and become a part of the recipient’s basic benefit under Part I of the Plan and
shall be payable during such period and under such option as the basic benefit
under Part I of the Plan is being paid.

6.09     Suspension of Retirement Benefits.

(a)       Suspension of Benefits.  Except as provided below, Normal, Early or
Late Retirement Benefits will be suspended for each calendar month during which
an Employee or Eligible Re-employed Pensioner (a “Pensioner”) completes more
than 80 Hours of Service as described in Sections 2.23(a) and (b) with an
Employer in a job or position in which the Employee or Pensioner is eligible to
participate in Part I of the Plan (“Section 203(a)(3)(B) service”).

For purposes of this Section 6.09, an “Eligible Re-employed Pensioner” means (i)
a retiree of First Allmerica or a retiree of a General Agent of First Allmerica
who is re-employed by First Allmerica, Citizens or Hanover on or after
January 1, 1988, or (ii) a retiree of Citizens or Hanover who is re-employed by
First Allmerica, Citizens or Hanover on or after January 1, 1993 and (iii) for
Plan Years beginning after December 31, 1988, who had not attained Age 70;
provided, however, that (i) benefits will not be suspended during the calendar
month a Pensioner first retires from the Employer, regardless of the number of
Hours of Service completed by the Pensioner during such month, and (ii) this
Section shall not apply to the Top-Heavy Plan minimum benefits to which any
Non-Key Employee may be entitled under the top-heavy rules of Section 2.03 of
Part III of the Plan.

(b)       Amount Suspended.  The benefit suspended shall be equal to the portion
of the Employee’s or Pensioner’s monthly annuity benefit derived from Employer
contributions, including any temporary early retirement supplement; provided,
however, that earnings credits provided under Section 4.03(a) shall not be
suspended by operation of this Section 6.09.

Part I - 40

84419371\V-5

--------------------------------------------------------------------------------

 

(c)       Resumption of Payment.  If retirement benefit payments have been
suspended, payments shall resume no later than the first day of the third
calendar month after the calendar month in which the Employee or Pensioner
ceases to be employed in Section 203(a)(3)(B) service.  The initial payment upon
resumption shall include the payment scheduled to occur in the calendar month
when payments resume and any amounts withheld during the period between the
cessation of Section 203(a)(3)(B) service and the resumption of payments.

Notwithstanding the foregoing in this Section 6.09(c), there shall be an offset
from any payments to be resumed for the amount of any retirement benefits that
had been paid but which should have been withheld under the suspension rules of
this Section 6.09.  In no event may the offset exceed in any one month more than
25 percent of the amount that would otherwise be payable under Part I of the
Plan (excluding the first payment made after resumption which may be offset
without limitation).  The amount to be resumed shall be the greater of the
benefit amount suspended or a benefit computed as described in Sections 6.01 or
6.02 or 6.04, as appropriate, but based on the pensioner’s Age (and any joint or
contingent annuitant’s Age), Credited Service and Compensation on the date of
resumption.

(d)       Notification.  Notwithstanding anything in Part I of the Plan to the
contrary, effective January 1, 2007, no retirement benefits (Early, Normal or
Late) shall be withheld by the Plan unless the Employee or Pensioner is notified
by personal delivery or first class mail during the first calendar month in
which the Plan withholds payments that his or her benefits are suspended.

Such notifications 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 to the effect that applicable Department of Labor regulations may be
found in Section 2530.203-3 of the Labor Regulations.

In addition, the notice shall inform the Employee or Pensioner 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, as described in Article IX of Part III of the Plan.

6.10     Rollovers to Other Qualified Plans.

Part I - 41

84419371\V-5

--------------------------------------------------------------------------------

 

(a)       Notwithstanding any provision of Part I of the Plan to the contrary
that would otherwise limit a distributee’s election under this Article or under
Articles VII and VIII other than this Section 6.10(a), a distributee may elect,
at the time and in the manner prescribed by the Plan Administrator, to have any
portion of an eligible rollover distribution paid directly to an eligible
retirement plan specified by the distributee in a direct rollover; provided,
however, that if the Actuarial Equivalent present value of a distributee’s
vested Accrued Benefit does not exceed $1,000, the distributee does not have to
be allowed the eligible rollover election described in this sentence.  If the
Actuarial Equivalent present value of a Participant’s Accrued Benefit exceeds
$1,000 and does not exceed $5,000 and the Participant does not elect a
distribution or a rollover, the Plan shall automatically distribute the
Participant’s Accrued Benefit, in a direct rollover, to an eligible individual
retirement plan (a “Rollover IRA”) for the benefit of such Participant and
pursuant to a written agreement with the Rollover IRA provider that provides (i)
the amount rolled over to the Rollover IRA shall be invested in a manner
designed to preserve principal and provide a reasonable rate of return and
liquidity; (ii) all fees and expenses attendant to a Rollover IRA shall not
exceed the fees and expenses charged by the Rollover IRA provider for comparable
IRAs established for reasons other than receipt of a rollover distribution; and
(iii) the Participant on whose behalf the automatic rollover is made under this
Section shall have the right to enforce the terms of the written agreement
establishing the Rollover IRA, with regard to his or her rolled over funds,
against the Rollover IRA provider.  All fees and expenses attendant to the
Rollover IRA shall be allocated to the Rollover IRA.

(b)       Definitions.

Part I - 42

84419371\V-5

--------------------------------------------------------------------------------

 

(i)        Eligible rollover distribution:  An “eligible rollover distribution”
is any distribution of all or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution does not
include:  any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for the life (or life
expectancy) of the distributee or the joint lives (or joint life expectancies)
of the distributee and the distributee’s designated Beneficiary, or for a
specified period of ten years or more; any distribution to the extent such
distribution is required under Code Section 401(a)(9); the portion of any
distribution that is not includible in gross income (determined without regard
to the exclusion for net unrealized appreciation with respect to employer
securities); and any other distribution(s) that is reasonably expected to total
less than $200 during a year.  A portion of a distribution shall not fail to be
an eligible rollover distribution merely because the portion consists of
after-tax employee contributions which are not includible in gross
income.  However, such portion may be transferred only to (A) an individual
retirement account or annuity described in Code Sections 408(a) or (b); (B) for
taxable years beginning after December 31, 2001 and before January 1, 2007, to a
qualified trust which is part of a defined contribution plan that agrees to
separately account for amounts so transferred, including separately accounting
for the portion of such distribution which is includible in gross income and the
portion of such distribution which is not so includible; or (C) for taxable
years beginning after December 31, 2006, to a qualified trust or to an annuity
contract described in Code Section 403(b), if such trust or contract provides
for separate accounting for the portion of such distribution which is includible
in gross income and the portion of such distribution which is not so includible.

(ii)       Eligible retirement plan:  An “eligible retirement plan”  is an
individual retirement account described in Code Section 408(a), an individual
retirement annuity described in Code Section 408(b), a Roth IRA as pursuant to
in Code Section 408A(e), an annuity contract described in Code Section 403(b),
an annuity plan described in Code Section 403(a), a qualified plan described in
Code Section 401(a) that accepts the distributee’s eligible rollover
distribution, or an eligible plan under Code Section 457(b) 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.  However, in the
case of an eligible rollover distribution to the surviving spouse, an eligible
retirement plan is an individual retirement account or individual retirement
annuity.

Part I - 43

84419371\V-5

--------------------------------------------------------------------------------

 

(iii)      Distributee:  A “distributee” includes an Employee or former
Employee.  In addition, the Employee’s or former Employee’s surviving spouse and
the Employee’s surviving spouse or former spouse who is the alternate payee
under a qualified domestic relations order, as defined in Code Section 414(p),
are distributees with regard to the interest of the spouse or former spouse.

(iv)      Direct rollover:  A “direct rollover” is a payment by the Plan to the
eligible retirement plan specified by the distributee.

(c)       For distributions after June 9, 2009, a non-spouse Beneficiary who is
a “designated beneficiary” under Code Section 401(a)(9)(E) and the regulations
thereunder, by a direct trustee-to-trustee transfer (“direct rollover”), may
roll over all or any portion of his or her distribution to an individual
retirement account the Beneficiary establishes for purposes of receiving the
distribution.  In order to do a direct rollover of the distribution, the
distribution otherwise must satisfy the definition of an eligible rollover
distribution.

Although a non-spouse Beneficiary may roll over directly a distribution as
provided above, any distribution made prior to January 1, 2010 is not subject to
the direct rollover requirements of Code Section 401(a)(31) (including Code
Section 401(a)(31)(B), the notice requirements of Code Section 402(f) or the
mandatory withholding requirements of Code Section 3405(c)).  If a non-spouse
Beneficiary receives a distribution from the Plan, the distribution is not
eligible for a “60-day” rollover.

If the Participant’s named Beneficiary is a trust, the Plan may make a direct
rollover to an individual retirement account on behalf of the trust, provided
the trust satisfies the requirements to be a “designated beneficiary” within the
meaning of Code Section 401(a)(9)(E).

A non-spouse Beneficiary may not roll over an amount which is a required minimum
distribution, as determined under applicable Treasury Regulations and other
Internal Revenue Service guidance.  If the Participant dies before his or her
required beginning date and the non-spouse Beneficiary rolls over to an IRA the
maximum amount eligible for rollover, the Beneficiary may elect to use either
the 5-year rule or the life expectancy rule, pursuant to Treasury Regulation
Section 1.401(a)(9)-3, A-4(c), in determining the required minimum distributions
from the IRA that receives the non-spouse Beneficiary’s distribution.

Part I - 44

84419371\V-5

--------------------------------------------------------------------------------

 

ARTICLE VII

DEATH BENEFITS

7.01     Pre-Retirement Death Benefits.

(a)       General Rules.  The provisions of this Section shall apply to any
Participant or Former Participant provided that such Participant or Former
Participant completes at least one Hour of Service on or after January 1, 1995.

(i)        If a married Participant who has satisfied the eligibility
requirements for an early retirement benefit or normal retirement benefit dies
(regardless of whether the Participant is still working for the Employer) before
beginning to receive such benefits, then the Participant’s surviving spouse will
receive a monthly retirement benefit equal to the sum of:

(A)      the portion of the Accrued Benefit attributable to the Participant’s
Grandfathered Benefit, if any, that would have been payable if the Participant
had retired on the day before his or her death after having elected an immediate
Qualified Joint and Survivor Annuity Option with a 50% continuation of monthly
benefits to be payable to the survivor; and

(B)      the Actuarial Equivalent annuity (payable on the Participant’s death)
of the portion of the vested Accrued Benefit attributable to the Participant’s
Projected Account Balance.

The amount of such benefit shall be payable monthly for the life of the spouse,
with the first payment payable as of the date of the Participant’s death, unless
the spouse requests a later commencement date (consistent with the provisions of
the Part I of the Plan).

(ii)       If a fully or partially vested married Participant dies on or before
attaining eligibility for early retirement, the Participant’s surviving spouse
will receive a monthly retirement benefit equal to the sum of (A) and (B) below.

(A)      The portion of the Accrued Benefit attributable to the Participant’s
Grandfathered Benefit, if any, which would be payable if the Participant had:

(1)       separated from service on the date of death;

(2)       survived to Age 55 (if younger than Age 55 on the date of death);

Part I - 45

84419371\V-5

--------------------------------------------------------------------------------

 

(3)       retired at Age 55 (or retired on the day before his or her death, if
older than Age 55 at the date of death) after having elected an immediate
Qualified Joint and Survivor Annuity Option with a 50% continuation of monthly
benefits to be payable to the survivor; and

(4)       died on the day after retirement.

(B)      The Actuarial Equivalent annuity (payable when the Participant would
have attained age 55) of the portion of the vested Accrued Benefit attributable
to the Participant’s Projected Account Balance.

A surviving spouse entitled to benefits under this Section 7.01(a)(ii) will
begin to receive payments on the first day of the month following the date the
Participant would have attained Age 55 (or on the first day of the month
following the date of death, if the Participant was Age 55 or older on the date
of his or her death), unless the spouse requests an earlier or later
commencement date (consistent with the provisions of Part I of the Plan).

For purposes of this Section 7.01(a)(ii), the “earliest retirement age” is the
earliest date on which, under Part I of the Plan, the Participant could elect to
receive retirement benefits attributable to his or her Grandfathered Benefit.

The surviving spouse of a Participant who is entitled to receive a
pre-retirement death benefit as described in Section 7.01(a)(i) or Section
7.01(a)(ii) may, in lieu of receiving such benefit, elect to receive the portion
of such death benefit which is the Participant’s Account Balance on the
Determination Date in a single sum amount.  Such single sum benefit shall be
distributed as soon as practicable after the date of the Participant’s death (or
at any later date, as elected by the surviving spouse, consistent with the
provisions of Part I of the Plan) and shall be in an amount equal to the Account
Balance as of the Determination Date.  Alternatively, the surviving spouse may
elect to have the Actuarial Equivalent of the pre-retirement death benefit (or
the Actuarial Equivalent of the Grandfathered Benefit, if the Account Balance is
to be paid as a single sum) payable commencing as of the date of the
Participant’s death (or at any later date as elected by the surviving spouse,
consistent with the provisions of Part I of the Plan) in any of the other
optional forms of payment available under Section 6.06.  In the event that a
surviving spouse elects to have the portion of his or her benefit attributable
to the Participant’s Account Balance payable in a lump sum in accordance with
this paragraph, the balance of the death benefit otherwise payable under Part I
of the Plan in accordance with Section 7.01(a)(i) or Section 7.01(a)(ii), shall
consist solely of that portion of such death benefit that is attributable to the
Participant’s Grandfathered Benefit, if any.

Part I - 46

84419371\V-5

--------------------------------------------------------------------------------

 

Any surviving spouse described in the preceding paragraph who elects to receive
the Participant’s Account Balance in a single sum payment may also elect to
receive the present value of the Participant’s Grandfathered Benefit, if any, in
a single sum amount; provided, however, that this option with respect to a
Grandfathered Benefit shall only be available to a surviving spouse if the
present value of the Grandfathered Benefit does not exceed $5,000.  Any such
single sum benefit shall be distributed as soon as practicable after the date of
the Participant’s death. 

If a Participant, on or after the earlier of the first day of the Plan Year in
which he or she attains age 35 or the date of his or her separation from service
and prior to his or her death, elects to waive the pre-retirement death benefit
which is attributable to the Participant’s Projected Account Balance and the
participant’s spouse consents to the waiver in accordance with Section
6.07(b)(i) (as if the pre-retirement death benefit waiver was a waiver of a
Qualified Joint and Survivor Annuity), the Participant may designate a
Beneficiary other than his or her spouse to receive the portion of the
Participant’s pre-retirement death benefit which is attributable to the
Participant’s Projected Account Balance.

Any such designation shall be in writing on a form provided by or satisfactory
to the Plan Administrator, and such designation may include primary and
contingent Beneficiaries.  Such benefit shall be paid in the form of a lump sum
as soon as practicable after the death of the Participant and shall equal the
Participant’s Account Balance at the Determination Date.  In the event that a
portion of a Participant’s benefit under the Plan is payable to a non-spouse
Beneficiary in accordance with this paragraph, the remaining portion of the
death benefit attributable to such Participant shall be paid to the
Participant’s surviving spouse in accordance with Section 7.01(a)(i) or Section
7.01(a)(ii), as applicable.  Before a Participant is permitted to waive the
pre-retirement death benefit which is attributable to the Participant’s Account
Balance, the Plan Administrator shall provide each Participant a written
explanation with respect to the pre-retirement death benefit comparable to the
explanation described in Section 6.07(c)(i).

(b)       Unmarried Participants.  If any unmarried Participant dies in any of
the circumstances described in Section 7.01(a)(i) or Section 7.01(a)(ii) with
respect to married Participants, the Beneficiary (designated in accordance with
the rules described in Section 7.01(a)) of such Participant shall receive a
death benefit in a single sum as soon as practicable after the date of the
Participant’s death.  The amount of such death benefit shall be equal to the
Participant’s Account Balance at the Determination Date.  There shall be no
death benefit payable with respect to the Grandfathered Benefits of any such
Participant.

7.02     Death Benefits for Certain Dependent Spouses (Applicable only to
certain Employees entitled to Special Grandfathered Benefits). 

Part I - 47

84419371\V-5

--------------------------------------------------------------------------------

 

(a)       Eligibility.  The spouse of a deceased Employee (including the spouse
of any such deceased Employee who had become and continuously remained Totally
Disabled [as described in Section 6.05] until death) shall be entitled to a
monthly income as set forth in Section 7.02(b), provided:

(i)        The spouse was married to, living with and was a dependent of the
Employee for at least the three year period immediately preceding the death of
the Employee.  For purposes of this Section 7.02, dependency shall be assumed
only if the average earned income of the spouse during such three year period
was less than the average earned income of the Employee during the same three
year period;

(ii)       The Employee had attained Age 50 prior to the date of death;

(iii)      The Employee was an employee of First Allmerica or a General Agent of
First Allmerica prior to January 1, 1976 and had not thereafter retired or
attained Age 65 and since December 31, 1975 was continuously employed with the
Employer until the date of his or her death;

(iv)      The Employee was eligible to accrue additional Special Grandfathered
Benefits (as described in Section 2.20(b)) on December 31, 2004 (or on the date
of his or her death, if earlier); and 

(v)       The Employee was not a Highly Compensated Employee on the date of his
or her death.

Whether or not a spouse qualifies as a “dependent spouse” shall be determined by
the Plan Administrator, whose determination shall be conclusive and binding on
all persons.  If an Employee or spouse is Totally Disabled (as described in
Section 6.05), the “average earned income” of the disabled person shall be
determined as of the date the Total Disability commenced.  The term “earned
income” for a year means a person’s Compensation as defined in Section 2.08(b)
paid during the year, plus the sum of (i) any salary reduction contributions
allocated during the year on the person’s behalf to any tax sheltered annuity
qualified under Code Section 403(b) or to any defined contribution plan
qualified under Code Section 401(k) maintained by the person’s employer, and
(ii) the amount of any salary reduction contributions contributed on the
person’s behalf during the year to any Code Section 125 plan maintained by the
person’s employer.

(b)       Amount of Benefit.  The benefit to spouses qualifying under Section
7.02(a) shall be a monthly income commencing as of the date of the death of the
Employee, in an amount equal to (i) less (ii) below:

Part I - 48

84419371\V-5

--------------------------------------------------------------------------------

 

(i)        the applicable percentage below of the Special Grandfathered Benefit
which the Employee would have received at his or her Normal Retirement Date had
the Employee lived and remained a Participant in Part I of the Plan until such
date and had the Participant continued to earn monthly one-twelfth of the
Compensation paid to the Participant during the 12 complete months prior to the
month in which occurred the date of his or her death.

﻿

 

 

Number of Completed Years
Over Employee’s Age 49 at
Date of Employee’s Death

Percentage of Grandfathered
Retirement Benefit*

﻿

 

﻿

1

 

10%

﻿

2

 

20%

﻿

3

 

30%

﻿

4

 

40%

﻿

5 and over

 

50%; less

﻿

 

* If death occurs in a month other than the month in which the Participant
attains the specified Age, the percentage shall be determined based on straight
line interpolation.

﻿

(ii)       the amount of any benefits provided to the surviving spouse pursuant
to Section 7.01 attributable to the Employee’s Special Grandfathered Benefit.

ARTICLE VIII

BENEFITS UPON TERMINATION FROM SERVICE

8.01     In General.  In the event that a Participant shall terminate from
service with the Employer for any reason other than death, his becoming Totally
Disabled (as described in Section 6.05) or Normal, Early or Late Retirement, the
interests and rights of such Participant shall be limited to those contained in
this Article.

8.02     Termination Benefits.  Upon any termination of service described in
Section 8.01, a Participant shall be entitled to a benefit under Part I of the
Plan, payable at his or her Normal Retirement Date, equal to the vesting
percentage specified below of the Participant’s Accrued Benefit.  The automatic
form of benefit shall be a Qualified Joint and Survivor Annuity, with the
survivor to receive 100% of the benefit which had been payable during their
joint lives, if the Participant is married at the time of commencement of
benefits, or a single life annuity if the Participant is not married at the time
of commencement.  With spousal consent, the Participant may elect to have his or
her benefit paid in any of the optional forms described in Section 6.06.  The
amount of any annuity attributable to a Participant’s vested Account Balance
shall be the Actuarial Equivalent of such vested Account Balance.

Vesting Percentages

Part I - 49

84419371\V-5

--------------------------------------------------------------------------------

 

(a)       With respect to the portion of the Accrued Benefit attributable to
such Participant’s Grandfathered Benefit, if any:

﻿

 

Completed Years of Service

Nonforfeitable

Percentage

﻿

 

Less than 5

0

5 or more

100

﻿

 

﻿

(b)       With respect to the portion of the Accrued Benefit attributable to
such Participant’s Projected Account Balance:

﻿

 

Completed Years of Service

Nonforfeitable

Percentage

﻿

 

Less than 

2

 

0

﻿

2

 

25

﻿

3

 

50

﻿

4

 

75

﻿

5

 or more

100

﻿

 

﻿

(c)       Notwithstanding the above, if the Plan is a Top Heavy Plan, then the
Plan shall meet the following vesting requirements for such Plan Year and for
all subsequent Plan Years, even if the Plan is not a Top Heavy Plan for such
subsequent Plan Years.

﻿

 

Completed Years of Service

Nonforfeitable

Percentage

﻿

 

Less than 

2

 

0

﻿

2

 

25

﻿

3

 

50

﻿

4

 

75

﻿

5

 or more

100

﻿

 

﻿

(d)       Notwithstanding anything in Part I of the Plan to the contrary,
effective on August 17, 2006, for those Participants employed by the Employer on
or after such date, such Participants shall be 25% vested in their Account
Balance, as defined in Section 4.01, upon completion of two (2) Years of Service
and 100% vested in their Accrued Benefit, as described in Section 2.01, upon
completion of three (3) Years of Service.

For purposes of this Article, “Years of Service” means Plan Years during which
an Employee was credited with at least 1,000 Hours of Service.

Part I - 50

84419371\V-5

--------------------------------------------------------------------------------

 

Notwithstanding the foregoing, a Participant who is entitled to a deferred
Normal Retirement Benefit may elect to receive his or her vested Account Balance
on the Determination Date in a single lump sum.  In addition, if a Participant
makes an election described in the immediately preceding sentence and if the
present value of the portion of the vested Accrued Benefit attributable to such
Participant’s vested Grandfathered Benefit does not exceed $5,000, the
Participant may elect to receive such portion of his or her vested Accrued
Benefit attributable to the Grandfathered Benefit in a lump sum.  Any such
Participant may elect to receive either such lump sum at any time after
separation from service and, in the case of a single lump sum distribution of
his or her vested Account Balance, must receive such benefit no later than the
time at which benefits attributable to the Participant’s Grandfathered Benefit,
if any, commence.  Any such election shall be subject to spousal consent in the
case of a married Participant.  Any spousal consent must satisfy the requirement
of Section 6.07.

Notwithstanding anything in Part I of the Plan to the contrary except Section
6.10, effective for involuntary cashouts paid after December 1, 2012, a Former
Participant (other than a Former Participant who is a participant in The Hanover
Excess Benefit Retirement Plan) who is not an Employee of the Employer or an
Affiliate will be paid the present value of his or her vested Accrued Benefit on
the Determination Date in an immediate lump sum if the present value of his or
her vested Accrued Benefit, if any, on the Determination Date does not exceed
$5,000.  Consent to this involuntary cashout by the Former Participant will not
be required, and spousal consent to this involuntary cashout will not be
required in the case of a married Former Participant.

Notwithstanding anything in Part I of the Plan to the contrary, an actively
employed Participant’s Accrued Benefit shall become 100% vested and
non-forfeitable upon the earliest of (i) the date of such Participant’s death;
(ii) the date such a Participant becomes Totally Disabled (within the meaning of
Section 6.05); or (iii) the date such a Participant attains his or her Normal
Retirement Age.

Any distributions under this Article shall be subject to the requirements of
Sections 6.06 and 6.07, including the requirement that a Participant shall be
eligible to receive any form of distribution provided under Section 6.06 at such
time as he or she is eligible to receive his or her vested Account Balance in a
lump sum, except to the extent expressly provided otherwise in this Section.

8.03     Forfeitures.  The non-vested portion of a Participant’s Accrued Benefit
shall be treated as a forfeiture when the Participant or his or her spouse (or
surviving spouse) receives a distribution of the present value of his or her
vested Accrued Benefit, pursuant to Section 8.02, and the Participant’s service
attributable to such distribution shall be disregarded as provided in Section
8.07.  For purposes of this Section, if the present value of a Participant’s
vested Accrued Benefit is zero, the Participant shall be deemed to have received
a distribution of such vested Accrued Benefit.

Part I - 51

84419371\V-5

--------------------------------------------------------------------------------

 

In the case of a partially vested terminated Participant who does not receive a
distribution pursuant to the above paragraph, the value of the nonvested portion
of his Accrued Benefit shall be treated as a forfeiture at the end of the Plan
Year in which the Participant incurs a One Year Break in Service until the
Participant has completed one Year of Service after he has been re-employed.

Forfeitures will be used to reduce (i) Employer contributions for the Plan Year
following the Plan Year in which the forfeiture occurs; and or (ii) the
Employer’s costs under the Plan.

8.04     Resumption of Service.  A Participant who terminates his or her
participation in Part I of the Plan and who subsequently resumes service with
the Employer will again become a Participant on the entry date determined in
accordance with Section 3.01(b).

8.05     Service with Affiliates.  As provided in Section 2.23, in determining a
Participant’s vesting percentage, Hours of Service completed with an Affiliate
or as a Career Agent or General Agent of First Allmerica shall be deemed to be
Hours of Service completed with the Employer.

8.06     Distribution of Benefits.  On the Former Participant’s Normal
Retirement Date, benefits to which he or she is entitled pursuant to this
Article shall be distributed in accordance with Article VI.

If a Former Participant entitled to a deferred benefit pursuant to this Article
VIII dies prior to his or her Normal Retirement Date, the death benefit, if any,
to which he or she is entitled shall be as is specified in Article VII.

8.07     Cashout Repayment Option.

(a)       Notwithstanding anything in this Article or in Section 2.01 to the
contrary, unless a repayment has been made in accordance with Section 8.07(b)
below, in determining a partially vested Employee’s Grandfathered Benefit (or,
in the case of a Top Heavy Plan, the minimum benefit for Non-Key Employees
described in Section 2.01(b)) after a resumption of participation, periods of
service with respect to which the Employee received a distribution of the
present value of his or her vested Accrued Benefit shall be disregarded.

Part I - 52

84419371\V-5

--------------------------------------------------------------------------------

 

(b)       In the case of the distribution of the present value of a
Participant's or Former Participant's vested Accrued Benefit in accordance with
Sections 6.06 or 8.02, the Participant's Accrued Benefit described in Sections
2.01(a) and (b) (including all optional forms of benefits and subsidies relating
to such benefits) shall be restored if he or she is subsequently an Employee and
repays the amount distributed plus interest, if applicable, compounded annually
from the date of distribution at the rate of five percent.  In determining the
amount of any required repayment, interest shall be charged on the portion of
any distribution attributable to a Participant’s Grandfathered Benefit, if any
or, in the case of a Top Heavy Plan, on the portion of any distribution that is
a minimum benefit for Non-Key Employees described in Section 2.01(b).  No
interest shall be payable with respect to the portion of a Participant’s
distribution attributable to his or her Account Balance.  Such repayment must be
made by the Employee before the earlier of five years after the first date on
which the Employee is subsequently reemployed by the Employer, or the date the
Employee incurs five consecutive One Year Breaks in Service following the date
of distribution.

If an Employee is deemed to receive a distribution pursuant to this Article, and
the Employee resumes employment covered under this Plan before the date the
Participant incurs five consecutive One-Year Breaks in Service, upon the
reemployment of such Employee, the Employer-derived Accrued Benefit will be
restored to the amount of such Accrued Benefit on the date of the deemed
distribution.

﻿

8.08     Early Retirement Election.  Any Participant who terminates service
after having completed at least fifteen Years of Service may elect to retire on
the first day of any month following his or her 55th birthday, as described in
Section 6.02.

8.09     Amendment to Vesting Schedule.  If the Vesting Schedule of the Plan is
amended, or the Plan is amended in any way that directly or indirectly affects
the computation of a Participant’s nonforfeitable percentage, or if the Plan is
deemed amended by an automatic change to or from a top-heavy vesting schedule,
each Participant with at least three Years of Service with the Employer may
elect, within a reasonable period after the adoption of the amendment or change,
to have their nonforfeitable percentage computed under the Plan without regard
to such amendment or change.  The period during which the election may be made
shall commence with the date the amendment is adopted or deemed to be made and
shall end on the latest of:

(i)        60 days after the amendment is adopted;

(ii)       60 days after the amendment becomes effective; or

(iii)      60 days after the Participant is issued written notice of the
amendment by the Employer or Plan Administrator.

Part I - 53

84419371\V-5

--------------------------------------------------------------------------------

 

EXHIBIT A - ADJUSTMENT FACTORS FOR OPTIONAL GRANDFATHERED BENEFITS

Factors for ages not illustrated on the following tables will be computed on an
actuarial basis consistent with that used to compute the factors shown.

﻿

JOINT AND SURVIVOR OPTION PERCENTAGES

(Applicable only if the Participant's age, nearest birthday, on the date monthly
income commences is 65).

Age Nearest Birthday

of Joint Annuitant

on the Date Monthly Income

Commences to the Participant

Percentage of the Adjusted Grandfathered Retirement

Annuity Payments which are to be

Continued to the Surviving

Joint Annuitant

﻿

 

 

 

﻿

100%

66 2/3%

50%

﻿

 

 

 

50

   80.3%

   87.1%

   90.9%

51

80.7

87.5

91.3

52

81.1

87.9

91.8

53

81.5

88.4

92.2

54

82.0

88.8

92.7

55

82.4

89.3

93.2

56

82.9

89.8

93.8

57

83.3

90.3

94.3

58

83.8

90.9

94.9

59

84.3

91.4

95.5

60

84.8

92.0

96.1

61

85.3

92.7

96.8

62

85.9

93.3

97.5

63

86.4

94.0

98.3

64

86.9

94.7

99.1

65

87.5

95.4

100.0

66

88.0

96.2

100.0

67

88.6

97.0

101.9

68

89.1

97.9

102.9

69

89.6

98.7

104.0

70

90.2

99.6

105.1

﻿

 

﻿

1983 Group Annuity Table with Projection H, with mortality rates based on
calendar year of birth of 1930 and interest at the rate of 7% per annum.

﻿

﻿

 

﻿

Life Ann/Opt.

CONTINGENT ANNUITANT OPTION PERCENTAGES

Part I - 54

84419371\V-5

--------------------------------------------------------------------------------

 

(Applicable only if the Participant's age, nearest birthday, on the date monthly
income commences is 65).

﻿

 

 

 

Age Nearest Birthday

of Contingent Annuitant

on the Date Monthly Income

Commences to the Participant

Percentage of the Adjusted Grandfathered Retirement

Annuity Payments which are to be

Continued to the Surviving

Contingent Annuitant

﻿

 

 

 

﻿

100%

66 2/3%

50%

﻿

 

 

 

50

   80.3%

   85.9%

   89.0%

51

80.7

86.2

89.3

52

81.1

86.5

89.6

53

81.5

86.9

89.8

54

82.0

87.2

90.1

55

82.4

87.5

90.4

56

82.9

87.9

90.6

57

83.3

88.2

90.9

58

83.8

88.6

91.2

59

84.3

89.0

91.5

60

84.8

89.3

91.8

61

85.3

89.7

92.1

62

85.9

90.1

92.4

63

86.4

90.5

92.7

64

86.9

90.9

93.0

65

87.5

91.3

93.3

66

88.0

91.7

93.6

67

88.6

92.1

93.9

68

89.1

92.5

94.2

69

89.6

92.9

94.5

70

90.2

93.2

94.8

﻿

 

 

 

﻿

1983 Group Annuity Table with Projection H, with mortality rates based on
calendar year of birth of 1930 and interest at the rate of 7% per annum.

﻿

 

﻿

Life Ann/Opt.

﻿

Part I - 55

84419371\V-5

--------------------------------------------------------------------------------

 

ANNUITY OPTION ADJUSTMENT PERCENTAGES

Percentages to be applied (to the monthly benefit which would be payable to the
Participant on his or her Retirement Date if no Optional Form of Annuity were in
effect) to determine the monthly income benefit commencing on the Participant's
Retirement Date if one of the following options is in effect.

﻿

 

 

 

 

Age Nearest Birthday

on the Date Monthly

Income Commences

Annuity Option for Grandfathered

Benefit

﻿

 

 

 

 

﻿

5C&C

10C&C

15C&C

20C&C

﻿

 

 

 

 

50

   99.8%

   99.2%

   98.3%

   97.2%

51

99.8

99.1

98.1

96.9

52

99.7

99.0

97.9

96.6

53

99.7

98.9

97.7

96.3

54

99.7

98.8

97.5

96.0

55

99.6

98.6

97.3

95.6

56

99.6

98.5

97.0

95.2

57

99.6

98.4

96.8

94.8

58

99.5

98.3

96.5

94.3

59

99.5

98.1

96.2

93.8

60

99.4

98.0

95.9

93.3

61

99.4

97.8

95.5

92.7

62

99.3

97.6

95.0

92.0

63

99.3

97.3

94.5

91.2

64

99.2

97.1

94.0

90.4

65

99.1

96.7

93.3

89.5

66

99.0

96.4

92.6

88.5

67

98.9

95.9

91.8

87.4

68

98.8

95.4

91.0

86.2

69

98.6

94.9

90.0

84.9

70

98.4

94.3

89.0

83.5

﻿

 

﻿

1983 Group Annuity Table with Projection H, with mortality rates based on
calendar year of birth of 1930 and interest at the rate of 7% per annum.

﻿

 

 

 

 

﻿

Life Ann/Opt.

﻿

﻿

 

Part I - 56

84419371\V-5

--------------------------------------------------------------------------------

 

 

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

THE HANOVER INSURANCE GROUP CASH BALANCE
PENSION PLAN

PART II

(As amended and restated generally effective January 1, 2016)

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

 

Part II

84419371\V-5

--------------------------------------------------------------------------------

 

 

THE HANOVER INSURANCE GROUP CASH BALANCE
PENSION PLAN

PART II

TABLE OF CONTENTS

PAGE

﻿

﻿

 

 

﻿ARTICLE I

NAME, PURPOSE AND EFFECTIVE DATE OF PLAN

1 

﻿1.01

General Statement

1 

﻿1.02

Name of Plan

1 

﻿1.03

Purpose

1 

﻿1.04

Restated Plan Effective Date

2 

﻿ARTICLE II

DEFINITIONS

2 

﻿ARTICLE III

PARTICIPATION REQUIREMENTS

14 

﻿3.01

Participation Requirements

14 

﻿3.02

Classification Changes

14 

﻿3.03

Participant Cooperation

14 

﻿ARTICLE IV

EMPLOYER CONTRIBUTIONS

15 

﻿4.01

Employer Contributions

15 

﻿4.02

Plan Contributions to Trustees

15 

﻿4.03

Receipt of Contributions by Trustee

15 

﻿ARTICLE V

RETIREMENT AND DISABILITY BENEFITS

15 

﻿5.01

Normal Retirement Benefit

15 

﻿5.02

Early Retirement Benefit

16 

﻿5.03

Late Retirement Benefit

17 

﻿5.04

Disability Benefit

18 

﻿5.05

Distribution of Benefits

18 

﻿5.06

Qualified Joint and Survivor Annuity for Married Participants

21 

﻿5.07

Supplementary Pension Benefits

23 

﻿5.08

Rollovers to Other Qualified Plans

25 

﻿ARTICLE VI

DEATH BENEFITS

28 

﻿6.01

Pre-Retirement Spouse Benefit for Married Participants

28 

﻿6.02

Minimum Death Benefit

29 

﻿ARTICLE VII

BENEFITS UPON TERMINATION FROM SERVICE

30 

﻿7.01

In General

30 

﻿7.02

Options on Termination of Participation

30 

﻿7.03

Forfeitures

32 

﻿7.04

Resumption of Service

32 

﻿7.05

Distribution of Benefits

32 

﻿7.06

Cashout Repayment Option

33 

﻿7.07

Early Retirement Election

33 

﻿7.08

Amendment to Vesting Schedule

33 

﻿

 

Part II

84419371\V-5

--------------------------------------------------------------------------------

 

ARTICLE I

NAME, PURPOSE AND EFFECTIVE DATE OF PLAN

﻿

1.01     General Statement.  The Hanover Insurance Group Cash Balance Pension
Plan (the “Plan”) consists of three parts, Part I, Part II and Part III.  Part I
of the Plan provides a cash balance and pension benefit, which was formerly
provided under a plan known as “The Allmerica Financial Cash Balance Pension
Plan”.  Part II of the Plan provides a pension benefit, which was formerly
provided under a plan known as “The Allmerica Financial Agents’ Pension
Plan”.  Part III of the Plan contains provisions applicable to each of Part I
and Part II. 

The provisions of Part III of the Plan shall override any provision of Part II
of the Plan as provided in Part III of the Plan. 

The benefits payable to eligible Participants under Part II of the Plan are
governed by the terms and conditions of Part II of the Plan and Part III of the
Plan.  Terms used in this Part II of the Plan are defined in Part I of the Plan,
except as otherwise specifically provided in this Part II of the Plan.

1.02     Name of Plan.  The prior version of this Part II of the Plan, known as
The Allmerica Financial Agents’ Pension Plan, was generally effective January 1,
1999 (except for those provisions of the Plan which had an alternative effective
date).  The effective date of the prior version of this Part II of the Plan (the
“Prior Agents’ Plan”) was January 1, 1971.  Effective January 1, 1992, the Prior
Agents’ Plan was merged with and became a part of The Allmerica Financial Cash
Balance Pension Plan, formerly known as The State Mutual Companies’ Pension
Plan.  Thus, the Prior Agents’ Pension Plan became Part II of The Hanover
Insurance Group Cash Balance Pension Plan.  On December 31, 2007, First
Allmerica did not employ any person who was eligible to participate or was
actively participating in The Allmerica Financial Agents’ Pension
Plan.  Effective January 1, 2008, First Allmerica transferred sponsorship of,
and the liabilities and obligations associated with, The Hanover Insurance Group
Cash Balance Plan (including The Allmerica Financial Agents’ Pension Plan) to
Hanover, and Hanover agreed to assume sponsorship of, and the liabilities and
obligations associated with, The Hanover Insurance Group Cash Balance Pension
Plan as of such date.

1.03     Purpose.  This Part II of the Plan has been established for the
exclusive benefit of Participants and their Beneficiaries and as far as possible
shall be interpreted and administered in a manner consistent with this intent
and consistent with the requirements of Section 401 of the Internal Revenue
Code.

Subject to Article IV of Part III of the Plan and to Section 10.04 of Part III
of the Plan, which relates to the return of Employer contributions under special
circumstances, until such time as the Plan has been terminated and all Plan
liabilities have been satisfied, under no circumstances shall any assets of the
Plan, or any contributions made under the Plan, be used for, or diverted to,
purposes other than for the exclusive benefit of the Participants and their
Beneficiaries and to defray reasonable expenses incurred in the administration
of the Plan.

Part II - 1

84419371\V-5

--------------------------------------------------------------------------------

 

1.04     Restated Plan Effective Date.  The effective date of this amended and
restated Part II of the Plan is January 1, 2016 (except for those provisions of
this Part II of the Plan which have an expressly stated alternative effective
date).  Except to the extent otherwise specifically provided in this Part II of
the Plan, (i) the terms and conditions of this amended and restated Part II of
the Plan shall apply only to those eligible Employees actively employed by the
Employer (or to those eligible Career Agents with a Career Agent Contract in
force) on or after January 1, 2016.  The rights and benefits of any Participant
whose employment with the Employer terminated (or whose Career Agent Contract
terminated) prior to January 1, 2016 shall be determined in accordance with the
provisions of this Part II of the Plan as were in effect during the appropriate
time or times prior to January 1, 2016; provided, however, that if the Accrued
Benefit of any such Participant has not been completely distributed before
January 1, 2016, then such Accrued Benefit shall be accounted for and
distributed in accordance with the provisions of this version of Part II of the
Plan, but only to the extent that any such provision is not inconsistent with
Part III of the Plan and subject to the requirements of applicable law and as
otherwise specifically provided herein.

ARTICLE II

﻿

DEFINITIONS

﻿

All section and article references in this Part II are to section and article
references in this Part II, except as otherwise expressly provided.

Except to the extent a word or phrase is specifically defined in this Part II of
the Plan, the words and phrases used in this Part II of the Plan shall have the
meanings set forth in Part I of the Plan, unless a different meaning is clearly
required by the context or is otherwise provided in Part III of the Plan.

2.01    “Accrued Benefit”:

(a)       means, except as provided in Section 2.01(c) or Section 2.01(d) below,
the sum of a Participant’s frozen Grandfathered Benefit (accrued during Years of
Credited Service completed prior to January 1, 1999) and the defined benefit
credited to eligible Participants in accordance with Section 5.01 attributable
to Years of Credited Service completed by the Participant after December 31,
1998.

(b)       No Employee contributions shall be required or permitted for Plan
Years beginning after December 31, 1988.  The portion of a Participant’s Accrued
Benefit derived from required Employee contributions made on or after January 1,
1971 and prior to January 1, 1989 will be determined in accordance with the
rules set forth below:

(i)        STEP ONE - Determine the total amount of such contributions made by a
Participant as a condition of participation in Part II of the Plan;

Part II - 2

84419371\V-5

--------------------------------------------------------------------------------

 

(ii)       STEP TWO - Add to the amount in Step One interest required by the
terms of Part II of the Plan to be credited to such contributions up to the
Plan’s ERISA compliance date;

(iii)      STEP THREE - Add to the sum of the amounts determined in Steps One
and Two interest compounded annually at the rate of 5% from the Plan’s ERISA
compliance date or the date the Participant began participation in Part II of
the Plan, whichever is later, to the end of the last Plan Year beginning before
January 1, 1988 or the Participant’s Normal Retirement Date, whichever is
earlier.

(iv)       STEP FOUR - Add to the sum of the amounts determined in Steps One,
Two and Three interest compounded annually -

(A)      at the rate of 120 percent of the Federal mid-term rate (as in effect
under Code Section 1274 for the first month of the Plan Year) from the beginning
of the first Plan Year beginning after December 31, 1987, and ending with the
date on which the determination is being made, and

(B)      at the interest rate which would be used under Part II of the Plan
under Code Section 417(e)(3) (as of the determination date) for the period
beginning with the determination date and ending on the date on which the
Employee attains his Normal Retirement Date.

Notwithstanding the foregoing, for Plan Years beginning after December 31, 1998,
the interest rate credited in Step Four (A) shall not be less than 5%.

(v)       STEP FIVE - The amount in Step Four will be converted into the normal
form of benefit using the interest rate that would be used under Part II of the
Plan under Code Section 417(e)(3).

The portion of a Participant’s Accrued Benefit derived from Employee
contributions made prior to January 1, 1971 shall be equal to the total amount
of such contributions made by a Participant, plus interest credited
thereon.  For Plan Years beginning prior to January 1, 1999, interest on such
contributions shall be credited at the rate or rates in effect for each Plan
Year under the terms of Part II of the Plan as in effect on December 31,
1998.  For Plan Years beginning after December 31, 1998, interest on such
contributions shall be credited as provided in Steps Four and Five above.

The portion of the Accrued Benefit described in Section 2.01(a) derived from
Employer contributions as of any date is equal to such total Accrued Benefit
less the portion derived from Employee contributions.

Part II - 3

84419371\V-5

--------------------------------------------------------------------------------

 

At all times the portion of a Participant’s Accrued Benefit attributable to
mandatory Employee contributions shall be 100% vested and nonforfeitable.

(c)       means, with respect to the minimum benefit for Non-Key Employee
Participants in a Top Heavy Plan, the sum of such benefits earned by the
Participant, which benefits are payable at the Participant’s Normal Retirement
Date and are described in Section 2.03 of Part III of the Plan.

(d)        (i)       Notwithstanding anything in Sections 2.01(a), (b) or (c) to
the contrary, unless a repayment has been made in accordance with the rules set
forth in Section 2.01(d)(ii) below, in determining the portion of an Employee’s
Accrued Benefit derived from Employer Contributions upon a resumption of
participation, periods of service with respect to which the Employee received a
distribution of the present value of his vested Accrued Benefit shall be
disregarded.

(ii)       In the case of an election of Option 2 described in Section 7.02 or
in the case of an involuntary cash-out of the present value of an Employee’s
Accrued Benefit in accordance with such Section, the Employee’s Accrued Benefit
described in Sections 2.01(a), (b) and (c) (including all optional forms of
benefits and subsidies relating to such benefits) shall be restored if the
Employee repays the amount distributed plus interest, compounded annually from
the date of distribution at the rate of 5 percent.  Such repayment must be made
by the Employee before the earlier of five years after the first date on which
the Employee is subsequently reemployed by the Employer, or the date the
Employee incurs five consecutive One Year Breaks in Service following the date
of distribution;  provided, however, that there shall be no right of repayment
if the Employee was 100% vested on the date of his termination of participation.

Notwithstanding anything in Part II of the Plan to the contrary, for Plan Years
beginning before Code Section 411 is applicable hereto, the Participant’s
Accrued Benefit shall be the greater of that provided by Part II of the Plan, or
½ of the benefit which would have accrued had the provisions of this Section
2.01 been in effect.  In the event the Accrued Benefit as of the effective date
of Code Section 411 is less than that provided hereunder, such difference shall
be accrued in accordance with this Section.

2.02    “Actuarial Equivalent” means a benefit having the same value as the
benefit or benefits otherwise payable.  Except as otherwise provided in this
Section, the present value of any benefit determined under the terms of Part II
of the Plan will be the actuarial equivalent of the no-death benefit life
annuity retirement benefit specified in Section 5.01.

Part II - 4

84419371\V-5

--------------------------------------------------------------------------------

 

Actuarial Equivalent life annuity settlements of optional life annuity Top Heavy
Plan benefits will be computed utilizing (i) the Code Section 417 Mortality
Table for determining the amount payable to a Participant having an annuity
starting date on or after January 1, 2004, and (ii) the Code Section 417
Interest Rate for determining the amount payable to a Participant having an
annuity starting date from January 1, 2004 through December 31, 2007, and the
Code Section 417 Applicable Interest Rate for determining the amount payable to
a Participant having an annuity starting date on or after January 1, 2008.

Optional life annuity benefits will be computed on the basis of the 1983 Group
Annuity Table with Projection H, with mortality rates based on calendar year of
birth of 1930 and interest at the rate of 7% per annum.  Adjustment factors used
to determine optional forms of life annuity benefits are included in Exhibit A,
attached hereto and made a part of Part II of the Plan.  Adjustment factors for
optional life annuity benefits not illustrated will be computed on an actuarial
basis consistent with that used in computing the factors shown in Exhibit A.

The present value of any Plan benefit and the amount of any cash distribution
shall be determined on the basis of (i) the mortality rates specified above and
an interest rate of 7% per annum or (ii) the Code Section 417 Mortality Table
and the Code Section 417 Interest Rate (or for determining the amount payable to
a Participant having an annuity starting date on and after January 1, 2008, the
Code Section 417 Applicable Interest Rate), whichever produces the greater
benefit.

The preceding paragraphs shall not apply to the extent they would cause the Plan
to fail to satisfy the requirements of Article IV of Part III of the Plan or
Section 2.03 of Part III of the Plan.

For purposes of Part II of the Plan,

(a)        the “Code Section 417 Mortality Table” means the applicable mortality
table prescribed by the Secretary of the Treasury pursuant to Code Section
417(e)(3), as in effect from time to time; provided, however, that
notwithstanding the preceding provisions of this paragraph, for distributions
commencing on or after December 31, 2002 and prior to January 1, 2008, the Code
Section 417 Mortality Table means the Table set forth in Revenue Ruling 2001-62
and for purposes of determining the amount payable to a Participant with an
annuity starting date on or after January 1, 2008, the Code Section 417
Mortality Table means the Table set forth in Revenue Ruling 2007-67 or such
other Table as may be prescribed by the Secretary of the Treasury pursuant to
Code Section 417(e)(3);

(b)       for periods beginning on and after January 1, 2004, the “Code Section
417 Interest Rate” means, for the Plan Year which contains the annuity starting
date for the distribution, the annual rate of interest on a 30-year Treasury
securities in effect for the second month immediately preceding the first day of
the Plan Year (e.g., November 2006 for the 2007 Plan Year); and

Part II - 5

84419371\V-5

--------------------------------------------------------------------------------

 

(c)       for periods beginning on and after January 1, 2008, the “Code Section
417 Applicable Interest Rate” means, for the Plan Year which contains the
annuity starting date for the distribution, the applicable interest rate
described by Code Section 417(e) after its amendment by the Pension Protection
Act of 2006, which rate more specifically shall be the adjusted first, second,
and third segment rates applied under rules similar to the rules of Code Section
430(h)(2)(C) (without considering any adjustment under Code Section
430(h)(2)(C)(iv)) for the lookback month used to determine the previously
applicable interest rate on 30-year Treasury securities (e.g., November 2009 for
the 2010 Plan Year) or for such other time as the Secretary of the Treasury may
by regulations prescribe.

(d)       For purposes of determining the Code Section 417 Applicable Interest
Rate, the first, second, and third segment rates are the first, second, and
third segment rates which would be determined under Code Section 430(h)(2)(C)
(without considering any adjustment under Code Section 430(h)(2)(C)(iv)) if:

(i)        Code Section 430(h)(2)(D) were applied by substituting the average
yields for the month described in clause (ii) below for the average yields for
the 24-month period described in such Code section, and

(ii)       Code Section 430(h)(2)(G)(i)(II) were applied by substituting
“Section 417(e)(3)(A)(ii)(II) for “Section 412(b)(5)(B)(ii)(II)”, and

(iii)      The applicable percentage under Code section 430(h)(2)(G) is treated
as being 20% in 2008, 40% in 2009, 60% in 2010, and 80% in 2011.

2.03    “Compensation” means:

(a)        For purposes of determining a Participant’s Normal Retirement Benefit
specified in Section 5.01, a Participant’s total calendar year compensation paid
(or deferred pursuant to an unfunded, non-qualified deferred payment
arrangement) on and after the date he becomes a Participant and while he remains
in an eligible class of Employees for (i) and (ii) below:

(i)        services performed in connection with the sale and service of
products of First Allmerica Financial Life Insurance Company.

(ii)       services performed in connection with the sale and service of
products of Allmerica Financial Life Insurance and Annuity Company.

Compensation shall also mean and include:

(iii)      commissions paid to the Participant by Allmerica Investments, Inc.,
and

(iv)       compensation which is not currently includable in the Participant’s
gross income by reason of the application of Code Sections 125, 402(e)(3) or
132(f)(4).

Part II - 6

84419371\V-5

--------------------------------------------------------------------------------

 

Notwithstanding the foregoing, for purposes of Section 2.03(a), renewal
commissions received which are attributable to business sold prior to the date
the Employee became a Career Agent or General Agent of the Employer shall be
excluded.

(b)       For purposes of Section 2.03 of Part III of the Plan and for purposes
of Article IV of Part III of the Plan, the term “Compensation” means a
Participant’s earned income, wages, salaries, 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
the Employer maintaining the plan to the extent that the amounts are includible
in gross income (including, but not limited to, commissions paid salesmen,
compensation for services on the basis of a percentage of profits, commissions
on insurance premiums, tips, bonuses, fringe benefits, and reimbursements or
other expense allowances under a nonaccountable plan (as described in Section
1.62-2(c) of the Treasury Regulations), and excluding the following:

(i)        Employer contributions to a plan of deferred compensation which are
not includible in the Employee’s gross income for the taxable year in which
contributed, or Employer contributions under a simplified employee pension plan
to the extent such contributions are deductible by the employee, or any
distributions from a plan of deferred compensation;

(ii)       Amounts realized from the exercise of a non-qualified stock option,
or when restricted stock (or property) held by the Employee either becomes
freely transferable or is no longer subject to a substantial risk of forfeiture;

(iii)      Amounts realized from the sale, exchange or other disposition of
stock acquired under a qualified stock option; and

(iv)      Other amounts which received special tax benefits.

For Plan Years commencing after December 31, 1997, Compensation for purposes of
Section 2.03 of Part III of the Plan and Article IV of Part III of the Plan
shall also include Employee elective deferrals under Code Section 402(g)(3),
amounts contributed or deferred by the Employer at the election of the Employee
and not includable in the gross income of the Employee by reason of Code Section
125, and elective amounts that are not includable in the gross income of the
Employee by reason of Code Section 132(f)(4).

Part II - 7

84419371\V-5

--------------------------------------------------------------------------------

 

(c)        Notwithstanding Sections 2.03(a) and (b) above, for Plan Years
beginning on or after January 1, 1994 and prior to January 1, 2002, the annual
Compensation of each Participant taken into account for determining all benefits
provided under Part II of the Plan for any determination period shall not exceed
$150,000.  This limitation shall be adjusted for inflation by the Secretary
under Code Section 401(a)(17)(B) in multiples of $10,000 by applying an
inflation adjustment factor and rounding the result down to the next multiple of
$10,000 (increases of less than $10,000 are disregarded).  The cost-of-living
adjustment in effect for a calendar year applies to any period, not exceeding 12
months, over which Compensation is determined beginning in such calendar
year.  If Compensation is being determined over a period of time that contains
fewer than 12 calendar months, then the annual Compensation limit is an amount
equal to the annual Compensation limit for the calendar year in which the
Compensation period begins multiplied by the ratio obtained by dividing the
number of full months in the period by 12.

If Compensation for any prior determination period is taken into account in
determining a Participant’s benefits for the current Plan Year, the Compensation
for such prior determination period is subject to the applicable annual
Compensation limit in effect for that prior period.  For this purpose, in
determining benefits in Plan Years beginning on or after January 1, 1989, the
annual compensation limit in effect for determination periods beginning before
that date is $200,000.  In addition, in determining benefits in Plan Years
beginning on or after January 1, 1994, the annual Compensation limit in effect
for determination periods beginning before that date is $150,000.

(d)       Notwithstanding the foregoing, the annual Compensation of each
Participant taken into account in determining benefit accruals in any Plan Year
beginning after December 31, 2001, shall not exceed $200,000.  Annual
Compensation means Compensation during the Plan Year or such other consecutive
12-month period over which Compensation is otherwise determined under Part II of
the Plan (the “determination period”).  For purposes of determining benefit
accruals in a Plan Year beginning after December 31, 2001, the annual
Compensation for any prior determination period shall be limited to $200,000.

The $200,000 limit on annual Compensation for determination periods beginning
after December 31, 2001 shall be adjusted for cost-of-living increases in
accordance with Code Section 401(a)(17)(B).  The cost-of-living adjustment in
effect for a calendar year applies to annual Compensation for the determination
period that begins with or within such calendar year.

2.04    “Career Agent Contract” means that form of contract between a life
insurance agent and the Employer whereby the agent agrees to sell insurance and
annuity policies on a full-time basis.

Part II - 8

84419371\V-5

--------------------------------------------------------------------------------

 

2.05    “Credited Interest” means interest utilized in determining the minimum
death benefit specified in Section 6.02.  Such interest shall be at the rate
determined in accordance with the Group Annuity Contract, but not less than 3%
per annum compounded annually from the January 1st next following the date such
contributions were made to the first day of the month as of which the Credited
Interest is being determined for periods prior to January 1, 1976, plus 5% per
annum compounded annually for periods beginning on or after January 1, 1976 and
prior to January 1, 1988, plus the greater of (i) 5% per annum compounded
annually or (ii) the interest rate which would be credited under Part II of the
Plan under Step Four (A) of Section 2.01(b) for periods beginning on or after
January 1, 1988.

2.06    “Credited Service”

(a)        Except as provided in Section 2.06(c) and except for Hours of Service
excluded under Sections 2.12(b), (c), and (g), Credited Service means and shall
include all Hours of Service completed with the Employer on and after the date
the Employee becomes a Participant in Part II of the Plan, completed while the
Participant remains in an eligible class of Employees.

(b)       A Participant shall receive a year of Credited Service for each Plan
Year in which he is credited with 1,000 or more Hours of Service with the
Employer.

Additionally, for Plan Years beginning after 1998, a Participant shall receive a
Year of Credited Service for the Plan Year he retires or dies, and a Former
Participant shall receive a Year of Credited Service for the Year he again
becomes a Participant upon a rehire, in each case regardless of the number of
Hours of Service completed in such Year.  In no event will a Participant receive
more than one Year of Credited Service for any one Plan Year.

(c)        Notwithstanding anything in this Section to the contrary, Credited
Service shall not include periods of service with respect to which any Employee
has received a distribution described in Section 2.01(d) unless a repayment has
been made pursuant to the rules set forth in paragraph (ii) of such Section.

(d)       For purposes only of determining a Participant’s eligibility for the
Disability Benefit specified in Section 5.04, the following periods of service
shall be counted:

(i)        periods of prior service with an Affiliate during which he was a
participant in a qualified pension or profit sharing plan sponsored by the
Affiliate;

(ii)       periods of prior service with the Employer in a position in which he
was not eligible to participate in this Plan during which he was a participant
in another qualified pension or profit sharing plan sponsored by the Employer;
and

(iii)      the number of full years and completed months during which a General
Agent or former General Agent made contributions under Part II of his General
Agent’s Contract.

Part II - 9

84419371\V-5

--------------------------------------------------------------------------------

 

2.07    “Employee” means any General Agent or life insurance agent who is a
common-law employee of the Company or any life insurance agent who holds a
Career Agent’s Contract with the Employer.

2.08    “Employee Contributions” means contributions made by a Participant prior
to January 1, 1989 as a condition of participation in Part II of the Plan.

2.09    “Employer” means First Allmerica; provided that on and after January 1,
2008, the term “Employer” shall also mean the Plan Sponsor.

2.10    “General Agent” means an agent of the Company whose relationship is
determined by a General Agent’s Agreement wherein the General Agent is required
to devote his full-time business activities in the hiring, supervision and
management of life insurance agents who sell, administer and service the
policies and contracts of the Employer.

2.11    “Grandfathered Benefit” means the frozen monthly retirement benefit
payable as a single life annuity to a Participant on his Normal Retirement Date,
calculated in accordance with the benefit formulas set forth in Section 5.01,
and if applicable, Section 2.03 of Part III of the Plan, as in effect on
December 31, 1998.  Such benefit shall be calculated based on the Participant’s
Average Compensation, Final Average Compensation, Credited Service, and the
amount of benefit offset as determined by applying Section 5.06, each determined
as of December 31, 1998, based on the provisions of Part II of the Plan in
effect on such date.

2.12    “Hour of Service” means:

(a)        Each hour for which an Employee is paid, or entitled to payment, for
the performance of duties for the Employer.  For purposes of Part II of the
Plan, a Career Agent shall be credited with 45 Hours of Service for each
complete or partial week his Career Agent’s Contract remains in force, and a
General Agent or life insurance agent who is a common-law employee shall be
credited with 45 Hours of Service for each complete or partial week he performs
duties for the Employer.

(b)       Each hour for which the Employee is paid, or entitled to payment, by
the Employer on account of a period of time during which no duties are performed
(irrespective of whether the employment relationship has terminated) due to
vacation, holiday, illness, incapacity (including disability), layoff, jury
duty, military duty or leave of absence.  Notwithstanding the preceding
sentence:

(i)        Except in the case of a Participant who is eligible for the
Disability Benefit specified in Section 5.04, no more than 1,000 Hours shall be
credited to an Employee under this Section 2.12(b) on account of any single
continuous period during which the Employee performs no duties (whether or not
such period occurs in a single computation period);

Part II - 10

84419371\V-5

--------------------------------------------------------------------------------

 

(ii)       No hours shall be credited under this Section 2.12(b) for any
payments made or due under a plan maintained solely for the purpose of complying
with any applicable workers’ compensation, unemployment compensation or
disability insurance laws; and

(iii)      No hours shall be credited under this Section 2.12(b) for a payment
which solely reimburses an Employee for medical or medically related expenses
incurred by the Employee.

For purposes of this Section 2.12(b), a payment shall be deemed to be made by or
due from the Employer regardless of whether such payment is made by or due from
the Employer directly, or indirectly through, among others, a trust fund or
insurer, to which the Employer contributes or pays premiums.

(c)        Each hour for which back pay, irrespective of mitigation of damages,
is either awarded or agreed to by the Employer.  The same Hours of Service shall
not be both credited under Section 2.12(a) or Section 2.12(b), as the case may
be, and under this Section 2.12(c).  No more than 501 Hours shall be credited
under this Section 2.12(c) for a period of time during which an Employee did not
or would not have performed duties.

(d)       Special rules for determining Hours of Service for reasons other than
the performance of duties.  In the case of a payment which is made or due which
results in the crediting of Hours of Service under Section 2.12(b) or in the
case of an award or agreement for back pay, to the extent that such an award or
agreement is made with respect to a period during which an Employee performs no
duties, the number of Hours of Service to be credited shall be determined as
follows:

(i)        In the case of a payment made or due which is calculated on the basis
of units of time (such as hours, days, weeks or months), the number of Hours of
Service to be credited shall be determined as provided in Section 2.12(a).

(ii)       Except as provided in Section 2.12(d)(iii), in the case of a payment
made or due which is not calculated on the basis of units of time, the number of
Hours of Service to be credited shall be equal to the amount of the payment
divided by the Employee’s most recent hourly rate of compensation (as determined
below) before the period during which no duties are performed.

(A)      In the case of General Agents, the hourly rate of compensation shall be
the Employee’s most recent rate of semi-monthly compensation divided by 80.

(B)      In the case of life insurance agents, the hourly rate of compensation
shall be the minimum wage as established from time to time under Section 6(a)(1)
of the Fair Labor Standards Act of 1938, as amended.

Part II - 11

84419371\V-5

--------------------------------------------------------------------------------

 

(iii)      Rule against double credit.  An Employee shall not be credited on
account of a period during which no duties are performed with more hours than
such Employee would have been credited but for such absence.

(e)       Crediting of Hours of Service to computation periods.

(i)        Hours of Service described in Section 2.12(a) shall be credited to
the Employee for the computation period or periods in which the duties are
performed.

(ii)       Hours of Service described in Section 2.12(b) shall be credited as
follows:

(A)      Hours of Service credited to an Employee on account of a payment which
is calculated on the basis of units of time (such as hours, days, weeks or
months) shall be credited to the computation period or periods in which the
period during which no duties are performed occurs, beginning with the first
unit of time to which the payment relates.

(B)      Hours of Service credited to an Employee by reason of a payment which
is not calculated on the basis of units of time shall be credited to the
computation period in which the period during which no duties are performed
occurs, or if the period during which no duties are performed extends beyond one
computation period, such Hours of Service shall be allocated between not more
than the first two computation periods in accordance with reasonable rules
established by the Employer, which rules shall be consistently applied with
respect to all Employees within the same job classification, reasonably defined.

(iii)      Hours of Service described in Section 2.12(c) shall be credited to
the computation period or periods to which the award or agreement for back pay
pertains, rather than to the computation period in which the award, agreement or
payment is made.

(f)        For purposes of Article III, determining eligibility for early
retirement (Section 5.02) and Article VII, Hours of Service shall also include
Hours of Service determined in accordance with the rules set forth in this
Section 2.12 and which would not have been excluded if such Service had been
performed with the Employer, completed prior or subsequent to the Employee’s
commencement of service with the Employer, completed with an Affiliate, as a
General Agent or with the Employer in a position in which he was not eligible to
participate in this Plan.

Part II - 12

84419371\V-5

--------------------------------------------------------------------------------

 

(g)        Rules for Maternity or Paternity Leaves of Absence.  In addition to
the foregoing rules and solely for purposes of determining whether a One Year
Break in Service for participation and vesting purposes has occurred in a
computation period, an individual who is absent for maternity or paternity
reasons shall receive credit for the Hours of Service which would otherwise have
been credited to such individual but for such absence, or in any case in which
such Hours cannot be determined, eight Hours of Service per day of such
absence;  provided, however, that:

(i)        Hours of Service shall not be credited under both this Section
2.12(g) and one of the other subsections of this Section 2.12;

(ii)       no more than 501 Hours of Service shall be credited for each
maternity or paternity absence; and

(iii)      if a maternity or paternity leave extends beyond one Plan Year, Hours
of Service shall be credited to the Plan Year in which the absence begins to the
extent necessary to prevent a One Year Break in Service, otherwise such Hours of
Service shall be credited to the following Plan Year.  For purposes of this
paragraph, an absence from work for maternity or paternity reasons means an
absence (i) by reason of the pregnancy of the individual, (ii) by reason of a
birth of a child of the individual, (iii) by reason of the placement of a child
with the individual, in connection with the adoption of such child by such
individual, or (iv) for purposes of caring for such child for a period beginning
immediately following such birth or placement.

(h)        Other Federal Law.  Nothing in this Section 2.12 shall be construed
to alter, amend, modify, invalidate, impair or supersede any law of the United
States or any rule or regulation issued under any such law.

2.13    “Normal Retirement Age” means the later of:

(a)       the 65th birthday of the Employee; or

(b)       the fifth anniversary of the time the Participant commenced
participation in Part II of the Plan.

For purposes of the foregoing, the participation commencement date is the first
day of the Plan Year in which the Participant commenced participation in Part II
of the Plan.

2.14    “Normal Retirement Date” means the first day of the month next following
the Participant’s Normal Retirement Age.

2.15     (a)       “One Year Break in Service” means, except for purposes of
Article III of this Part II, any Plan Year during which the Employee has not
completed more than 500 Hours of Service.

Part II - 13

84419371\V-5

--------------------------------------------------------------------------------

 

(b)        For purposes of Article III of this Part II, “One Year Break in
Service” means a twelve consecutive month period, computed with reference to the
date the Employee’s employment commenced, during which the Employee does not
complete more than 500 Hours of Service.

ARTICLE III

﻿

PARTICIPATION REQUIREMENTS

﻿

3.01    Participation Requirements.

﻿

(a)        Employee Participation.  Individuals who were Participants in Part II
of the Plan on December 31, 2015 shall continue as a Participant in this Part II
of the Plan on January 1, 2016.  On and after January 1, 1983, no additional
Employees shall be eligible to become Participants in Part II of the Plan.

(b)       Notwithstanding the rules set forth in Section 3.01(a), a Former
Participant who again becomes eligible to participate in Part II of the Plan
will become a Participant on the date of his recommencement of service with the
Employer.

(c)       Notwithstanding anything in Part II of the Plan to the contrary, for
periods commencing on and after January 1, 2003, a Former Participant who is
re-employed as an Employee shall be reinstated as an active Plan Participant
only for purposes of increasing Plan vesting on his or her frozen Accrued
Benefit and for purposes of determining eligibility for early retirement under
Section 5.02.

3.02     Classification Changes.  In the event of a change in job
classification, such that an Employee, although still in the employment of the
Employer, no longer is an eligible Employee, he shall receive no further
Credited Service under Part II of the Plan, and the Participant’s Accrued
Benefit on the date he becomes ineligible shall continue to vest, become payable
or be forfeited, as the case may be, in the same manner and to the same extent
as if the Employee had remained a Participant.

For periods commencing prior to January 1, 2003, in the event a Participant
becomes ineligible to accrue further Credited Service because he is no longer a
member of an eligible class of Employees, but has not terminated his employment
with the Employer, such Employee shall again be eligible to accrue further
Credited Service immediately upon his return to an eligible class of Employees.

3.03     Participant Cooperation.  Each eligible Employee who becomes a
Participant thereby agrees to be bound by all of the terms and conditions of
this Plan.  Each eligible Employee, by becoming a Participant, agrees to
cooperate fully with the Insurer, including completion and signing of such forms
as are required by the Insurer under the Group Annuity Contract.

Part II - 14

84419371\V-5

--------------------------------------------------------------------------------

 

ARTICLE IV

﻿

EMPLOYER CONTRIBUTIONS

﻿

4.01     Employer Contributions.  Each Employer shall pay to the Trustee for
each Plan Year such amount which, when combined with required Employee
Contributions, shall be necessary in the opinion of the Plan’s enrolled actuary
to provide the benefits of Part II of the Plan.

4.02     Plan Contributions to Trustees.  The Employer shall make payment of all
contributions directly to the Trustee to be held, managed and invested in one or
more Group Annuity Contracts and in other investments permitted under the Trust,
but subject to Section 4.03.

4.03     Receipt of Contributions by Trustee.  The Trustee shall accept and hold
under the Trust Indenture such contributions of money, or other property
approved for acceptance by the Trustee, on behalf of the Employer and its
Employees and Beneficiaries, as it may receive from time to time, other than
cash it is instructed to remit to the Insurer for deposit with the
Insurer.  However, the payor may pay contributions directly to the Insurer and
such payment shall be deemed a contribution to the Trust to the same extent as
if payment had been made to the Trustee.  All such contributions shall be
accompanied by written instructions from the Plan Administrator accounting for
the manner in which they are to be credited.

Notwithstanding the foregoing, for periods commencing on and after January 1,
1992, Plan contributions will also be used to fund costs and provide benefits
under the merged State Mutual Companies’ Pension Plan, which plan was merged
with The Allmerica Financial Agents’ Pension Plan on such date.

ARTICLE V

﻿

RETIREMENT AND DISABILITY BENEFITS

﻿

5.01     Normal Retirement Benefit.  (Applicable to all Employees who are active
Participants on or after January 1, 1999).

Except as provided in Section 2.03 of Part III of the Plan and Section 5.06,
each Participant who retires on his Normal Retirement Date shall be entitled to
receive a monthly retirement income, commencing on his Normal Retirement Date
and terminating on the last regular payment date prior to his death, which
monthly retirement income will be equal to the sum of (a) and, if applicable,
(b) below:

(a)        The Participant’s Grandfathered Benefit; and

(b)        For those Participants whose Participant Number is listed on Exhibit
B, attached hereto and made a part hereof, an amount equal to 1/12 of the
Participant’s Post-1998 Annual Accrued Benefit.

Part II - 15

84419371\V-5

--------------------------------------------------------------------------------

 

For purposes of Part II of the Plan, a Participant’s “Post-1998 Annual Accrued
Benefit” shall be equal to the Participant’s total Compensation paid during all
Years of Credited Service completed after December 31, 1998 multiplied by the
Participant’s individual accrual percentage.  Each eligible Participant’s
accrual percentage is set forth in Exhibit B.

5.02     Early Retirement Benefit.

An actively employed Participant in Part II of the Plan who has completed at
least 15 Years of Service may retire on the first day of any month after his
55th birthday, in which event, except as provided in Section 5.06, he shall
receive a monthly retirement benefit equal to the appropriate percentage set
forth below of his Accrued Benefit.

Notwithstanding the above, if the Plan is top heavy and the minimum benefit for
Non-Key Employees described in Section 2.03 of Part III of the Plan is to be
provided to the Participant, the Participant’s early retirement benefit shall be
equal to the appropriate percentage set forth below of the Participant’s Accrued
Benefit (as described in Section 2.03 of Part III of the Plan) earned as of the
date of his early retirement.

In the event of early retirement, benefits shall be determined as of the date of
retirement and shall be equal to the following percentage of the benefit payable
at Age 65:

﻿

 

 

            

Retirement Age*

Percentage of

Monthly Accrued Benefit

﻿

 

 

﻿

65

100%

﻿

64

97

﻿

63

94

﻿

62

91

﻿

61

88

﻿

60

85

﻿

59

82

﻿

58

79

﻿

57

76

﻿

56

73

﻿

55

70

﻿

54

67

﻿

53

64

﻿

52

61

﻿

51

58

﻿

50

55

﻿

 

 

﻿

*If benefit payments commence in a month other than the month in which the
Participant attains the specified Age, the percentage shall be determined by
straight line interpolation.

Part II - 16

84419371\V-5

--------------------------------------------------------------------------------

 

If a Participant terminates his employment (or terminates his Career Agent
Contract) after having completed at least 15 Years of Service, he may elect to
retire at any time after the first day of the month next following his 55th
birthday and prior to his Normal Retirement Date and receive a retirement
benefit based on his Credited Service as of the date of termination.  The
benefit to be provided to any such terminee shall be equal to the appropriate
percentage set forth above of his Accrued Benefit.

Notwithstanding anything in this Section to the contrary, any Participant who
was actively employed on June 30, 1977 may elect early retirement on the earlier
of (i) and (ii) below, in which event, except as provided in Section 5.06, he
shall receive a monthly retirement benefit equal to the appropriate percentage
set forth above of his Accrued Benefit.

(i)        the first day of the month following attainment of Age 50, and
completion of at least 20 Years of Service; and

(ii)       the first day of any month following attainment of Age 55 and
completion of at least 15 Years of Service.

5.03     Late Retirement Benefit.

With the consent of the Employer, a Participant may elect to have his retirement
benefit deferred to a late retirement date which may be the first day of any
month after his Normal Retirement Date; provided, however, that Employer consent
shall not be required for Employees protected beyond their Normal Retirement
Date under the Age Discrimination in Employment Act of 1967, as amended or under
applicable state law.  Except as provided in Section 5.06, the monthly benefit
payable to the Participant on his late retirement date shall be equal to the sum
of (a) and (b) below:

(a)        The Participant’s Grandfathered Benefit, which benefit will be
actuarially increased; and

(b)        For those Participants whose Participant Number is listed on Exhibit
B, attached hereto and made a part hereof, an amount equal to 1/12 the
Participant’s Post-1998 Annual Accrued Benefit, which benefit will be
actuarially increased.

For purposes of Section 5.03, and notwithstanding anything in Section 5.01, a
Participant’s “Post-1998 Annual Accrued Benefit” shall be equal to the
Participant’s total Compensation paid during all Years of Credited Service
completed after December 31, 1998, including Years of Credited Service completed
after the Participant’s Normal Retirement Date, multiplied by the Participant’s
individual accrual percentage.  Each eligible Participant’s accrual percentage
is set forth in Exhibit B.

Actuarial increases will be determined as provided in Exhibit A, attached hereto
and made a part hereof.

Part II - 17

84419371\V-5

--------------------------------------------------------------------------------

 

Notwithstanding the above, if the Plan is top heavy and the minimum benefit for
Non-Key Employees described in Section 2.03 of Part III of the Plan is to be
provided to the Participant, the Participant’s late retirement benefit shall be
determined in accordance with Section 2.03 of Part III of the Plan, with
top-heavy minimum benefits being computed for each Year of Service completed
until the Participant’s Late Retirement Date, which resulting benefit shall be
actuarially increased.

5.04     Disability Benefit.

If a Participant becomes Totally Disabled while employed as a General Agent or
while his Career Agent Contract remains in force and if such total disability
commenced after the Participant had completed at least five Years of Credited
Service, it shall be assumed for purposes of this Plan that his employment or
contractual relationship continued unchanged from the date of the commencement
of his total disability to the earliest of his Normal Retirement Date, death,
termination of employment (or, in the case of an Agent, termination of his
Career Agent Contract) or the date that he is no longer Totally Disabled.  While
an Employee is Totally Disabled it shall be assumed for purposes of this Section
that the Employee continued to earn annually an amount determined by dividing by
three the Compensation paid to the Participant during the 36 months prior to the
month in which he became Totally Disabled.

For purposes of this Part II of the Plan “Totally Disabled” means the inability
to perform the duties of any occupation for which the Employee is reasonably
fitted by training, education or experience; provided, however, that during the
first 30 months of any disability an Employee will be considered Totally
Disabled if he is unable to perform the duties of his occupation and is not
working at any other occupation unless such occupation constitutes
rehabilitative employment approved by the Plan Administrator.

5.05     Distribution of Benefits.  The Plan Administrator shall direct the
Insurer to commence payment of benefits provided under this Article V (or
provided to a Former Participant pursuant to Article VII).  Plan benefits will
be paid only on death, disability, termination of employment, Plan termination
or retirement.

Except as otherwise provided in Section 5.06, the requirements of this Section
shall apply to any distribution of a Participant’s interest and will take
precedence over any inconsistent provisions of this Part II of the Plan.

All distributions required under the Plan shall be determined and made in
accordance with the Treasury Regulations under Code Section 401(a)(9),
including, to the extent applicable, the minimum distribution incidental benefit
requirement of Section 1.401(a)(9)-2 of the Treasury Regulations.

Except as provided below and in Section 5.06, a Participant’s retirement benefit
shall be payable as a life annuity for the life of the Participant with no
further benefits payable after the last regular payment date prior to his death.

At any time prior to actual retirement a Participant, with spousal consent if
the Participant is married, may elect to receive his retirement benefit under
one or more of the following settlement options:

Part II - 18

84419371\V-5

--------------------------------------------------------------------------------

 

(a)        An annuity for the joint lives of the Participant and his spouse with
50% or 66 2/3% (whichever is specified when this option is elected) of such
amount payable as an annuity for life to the survivor.  No further benefits are
payable after the death of both the Participant and his spouse.

(b)        An annuity for the life of the Participant and upon his death 100%,
66 2/3%, or 50% (whichever is specified when this option is elected) of the
annuity amount will be continued to his spouse as his contingent annuitant.  No
further annuity benefits are payable after the death of both the Participant and
his spouse.

(c)        An annuity for the life of the Participant with guaranteed
installment payments for a period certain not longer than the life expectancy of
the Participant.

(d)        An annuity for the life of the Participant with guaranteed
installment payments for a period certain not longer than the life expectancy of
the Participant and his spouse.

(e)        A lump sum amount equal to the present value of the portion of the
Participant’s Accrued Benefit described in Section 2.01(b) attributable to
required Employee Contributions.  Additionally, the Participant shall be
entitled to receive a monthly annuity benefit equal to the portion of his
Accrued Benefit described in Section 2.01(a) attributable to Employer
Contributions.  The Participant may elect to receive such monthly annuity
benefit under one or more of the options described in Sections 5.05(a) through
(d) above, subject to spousal consent if the Participant is married.

(f)        An annuity payable for only the life of the Participant that
terminates on the last regular payment date prior to the death of the
Participant.

All optional forms of benefits shall be the Actuarial Equivalent (as of the date
selected) of the normal retirement benefits described in Section 5.01, or
Section 2.03 of Part III of the Plan.  Any spousal consent shall satisfy the
requirements of Section 5.06.

Unless the Participant elects otherwise, distribution of benefits will begin no
later than the 60th day after the later of the close of the Plan Year in which:

(i)        the Participant attains Normal Retirement Age; or

(ii)       the Participant terminates service with the Employer.

Part II - 19

84419371\V-5

--------------------------------------------------------------------------------

 

Notwithstanding anything in Part II of the Plan to the contrary except Section
5.08, effective for involuntary cashouts paid after December 1, 2012, a Former
Participant (other than a Former Participant who is a participant in The Hanover
Excess Benefit Retirement Plan) who is not an Employee of the Employer or an
Affiliate will be paid the present value of his or her vested Accrued Benefit on
the Determination Date in an immediate lump sum if the present value of the
Former Participant’s vested Accrued Benefit, if any, on the Determination Date
does not exceed $5,000.  Consent to this involuntary cashout by the Former
Participant will not be required, and spousal consent to this involuntary
cashout will not be required in the case of a married Former Participant

Notwithstanding the foregoing, the failure of a Participant and spouse (or where
either the Participant or the spouse has died, the survivor) to consent to a
distribution (other than an involuntary cashout) when a benefit is “immediately
distributable” (as described below) shall be deemed to be an election to defer
commencement of payment of any benefit sufficient to satisfy this Section 5.05
(and provisions of Article III of Part III of the Plan).  In no event will
benefits begin to be distributed (other than as an involuntary cashout) prior to
the later of Age 62 or Normal Retirement Age without the consent of the
Participant.  The consent of the Participant’s spouse will also be required for
any such distribution (other than an involuntary cashout) unless the benefit is
paid in the form of a Qualified Joint and Survivor Annuity.

If the Accrued Benefit is immediately distributable, the Participant and the
Participant’s spouse (or where either the Participant or the spouse has died,
the survivor) must consent to any distribution (other than as an involuntary
cashout) of such Accrued Benefit.  Needed consents of the Participant and the
Participant’s spouse shall be obtained in writing within the 90-day period
(180-day period for Plan Years beginning January 1, 2007 and thereafter) ending
on the annuity starting date.  The “annuity starting date” is the first day of
the first period for which an amount is paid as an annuity or any other
form.  The Plan Administrator shall notify the Participant and the Participant’s
spouse of the right to defer any distribution (other than an involuntary
cashout) until the Participant’s Accrued Benefit is no longer immediately
distributable.  Such notification shall include a general description of the
material features, and an explanation of the relative values of, the optional
forms of benefit available under Part II of the Plan in a manner that would
satisfy the notice requirements of Code Section 417(a)(3), and shall be provided
no less than 30 days and no more than 90 days (180 days for Plan Years beginning
January 1, 2007 and thereafter) prior to the annuity starting date;  provided,
however, that the minimum 30 day notice period described in this sentence may be
waived by the Participant’s written waiver given after notice to the Participant
has described that the Participant was allowed at least 30 days to consider his
choice under this Section and that the Participant was allowed to revoke his
waiver under this Section at any time through his or her annuity starting date.

Notwithstanding the foregoing, only the Participant need consent to the
commencement of a distribution in the form of a Qualified Joint and Survivor
Annuity while the Accrued Benefit is immediately distributable.  Neither the
consent of the Participant nor the Participant’s spouse shall be required to the
extent that a distribution is required to satisfy Code Section 401(a)(9) or Code
Section 415.

Part II - 20

84419371\V-5

--------------------------------------------------------------------------------

 

An Accrued Benefit is "immediately distributable" if any part of the Accrued
Benefit could be distributed to the Participant (or surviving spouse) before the
Participant attains (or would have attained if not deceased) the later of Normal
Retirement Age or Age 62.

Notwithstanding the above, the distribution of the entire interest of a
Participant or a Beneficiary must not violate the minimum required distribution
rules set forth in Article III of Part III of the Plan.

5.06     Qualified Joint and Survivor Annuity for Married Participants.

(a)        General Rules.  Notwithstanding anything in this Article to the
contrary, unless a married Participant’s Accrued Benefit has been paid in a lump
sum pursuant to Section 5.05 above, such Participant’s retirement benefit will
be payable to the Participant and his spouse in the form of a Qualified Joint
and Survivor Annuity, with the survivor to receive 100% of the benefit which had
been payable during their joint lives, unless an optional form of benefit is
selected pursuant to a qualified election within the 90-day period (180-day
period for Plan Years beginning January 1, 2007 and thereafter) ending on the
annuity starting date.  In the case of an unmarried Participant, unless the
Participant elects an optional form of benefit the Participant’s retirement
benefit will be paid in the form of a no-death benefit life annuity.

(b)        Definitions.

(i)        Qualified election:  A waiver of a Qualified Joint and Survivor
Annuity.  Any waiver of a Qualified Joint and Survivor Annuity shall not be
effective unless:  (A) the Participant’s spouse consents in writing to the
election; (B) the election designates a specific Beneficiary, including any
class of Beneficiaries or any contingent Beneficiaries, which may not be changed
without spousal consent (or the spouse expressly permits designations by the
Participant without any further spousal consent); (C) the spouse’s consent
acknowledges the effect of the election; and (D) the spouse’s consent is
witnessed by a Plan representative or notary public.  Additionally, a
Participant’s waiver of the Qualified Joint and Survivor Annuity will not be
effective unless the election designates a form of benefit payment which may not
be changed without spousal consent (or the spouse expressly permits designations
by the Participant without any further spousal consent).  If it is established
to the satisfaction of a Plan representative that there is no spouse or that the
spouse cannot be located, a waiver will be deemed a qualified election.

Any consent by a spouse obtained under this provision (or establishment that the
consent of a spouse may not be obtained) shall be effective only with respect to
such spouse.  A consent that permits designations by the Participant without any
requirement of further consent by such spouse must acknowledge that the spouse
has the right to limit consent to a specific Beneficiary, and a specific form of
benefit where applicable, and that the spouse voluntarily elects to relinquish
either or both of such rights. 

Part II - 21

84419371\V-5

--------------------------------------------------------------------------------

 

A revocation of a prior waiver may be made by a Participant without the consent
of the spouse at any time before the commencement of benefits.  The number of
revocations shall not be limited.  No consent obtained under this provision
shall be valid unless the Participant has received notice as provided in Section
5.06(c) below.

(ii)       Spouse (surviving spouse): the person, if any, to whom the
Participant is lawfully married at the date of his death or at his annuity
starting date, whichever is earlier; provided, however, that a former spouse
will be treated as the spouse or surviving spouse to the extent provided under a
Qualified Domestic Relations Order.

(iii)      Annuity starting date:  The first day of the first period for which
an amount is paid as an annuity or under any other form.

(c)        Notice Requirement.

(i)        In the case of a Qualified Joint and Survivor Annuity as described in
Subsection (a), the Plan Administrator shall provide each Participant no less
than 30 days and no more than 90 days (180 days for Plan Years beginning January
1, 2007 and thereafter) prior to the annuity starting date a written explanation
of:  (A) the terms and conditions of a Qualified Joint and Survivor Annuity; (B)
the Participant’s right to make and the effect of an election to waive the
Qualified Joint and Survivor Annuity form of benefit; (C) the rights of a
Participant’s spouse; (D) the right to make, and the effect of, a revocation of
a previous election to waive the Qualified Joint and Survivor Annuity; and (E)
the relative values of the various optional forms of benefit.  Notices given to
Participants pursuant to Code Section 411(a)(11) in Plan Years beginning after
December 31, 2006 shall include a description of how much larger benefits will
be if the commencement of distributions is deferred.

Part II - 22

84419371\V-5

--------------------------------------------------------------------------------

 

(ii)       A Participant may commence receiving a distribution in a form other
than a Qualified Joint and Survivor Annuity less than 30 days after receipt of
the written explanation described in the preceding paragraph provided: (A) the
Participant has been provided with information that clearly indicates that the
Participant has at least 30 days to consider whether to waive the Qualified
Joint and Survivor Annuity and elect (with spousal consent) a form of
distribution other than a Qualified Joint and Survivor Annuity; (B) the
Participant is permitted to revoke any affirmative distribution election at
least until the Distribution Commencement Date or, if later, at any time prior
to the expiration of the 7-day period that begins the day after the explanation
of the Qualified Joint and Survivor Annuity is provided to the Participant; and
(C) the Distribution Commencement Date is after the date the written explanation
was provided to the Participant.  For distributions on or after December 31,
1996, the Distribution Commencement Date may be a date prior to the date the
written explanation is provided to the Participant if the distribution does not
commence until at least 30 days after such written explanation is provided,
subject to the waiver of the 30-day period.  For the purposes of this paragraph,
the “Distribution Commencement Date” is the date a Participant commences
distributions from Part II of the Plan.  If a Participant commences distribution
with respect to a portion of his/her Accrued Benefit, a separate Distribution
Commencement Date applies to any subsequent distribution.  If distribution is
made in the form of an annuity, the Distribution Commencement Date is the first
day of the first period for which annuity payments are made.

(d)       Applicability.  The provisions of this Section 5.06 shall apply to any
Participant who is credited with at least one Hour of Service with the Employer
on or after January 1, 1976.  In addition, any living Participant or Former
Participant not receiving Plan benefits on August 23, 1984 who would otherwise
not receive the benefits prescribed by this Section 5.06 shall be given the
opportunity to elect to have the provisions of this Section apply provided such
Participant or Former Participant was credited with at least one Hour of Service
under this Plan or a predecessor Plan on or after September 2, 1974.

The opportunity to elect a Qualified Joint and Survivor retirement option must
be afforded to the appropriate Participants or Former Participants during the
period commencing on August 23, 1984 and ending on the dates benefits would
otherwise commence to such person.

5.07     Supplementary Pension Benefits.

Effective July 1, 1986, and on each July 1 thereafter, the amount of monthly
retirement benefits payable to eligible retirees (as described below) or their
Beneficiaries shall be increased by a percentage determined in accordance with
the following formula:

Percentage Increase = .8 (M - .07) x 100

Part II - 23

84419371\V-5

--------------------------------------------------------------------------------

 

For Plan Years beginning after December 31, 2008, for purposes of the above
formula, “M” equals the annual coupon return on December 31, 2009 and on each
December 31 thereafter of the Barclays Capital U.S. Government/Credit 5-10 Year
Index, or its successor.

For Plan Years beginning before January 1, 2009, for purposes of the above
formula, “M” equals the earnings rate for the prior Plan Year on assets
representing retired life reserves for retirees under this Plan and retirees
under The Allmerica Financial Cash Balance Pension Plan as adopted by First
Allmerica (now known as The Hanover Insurance Company Cash Balance Pension
Plan), certain of First Allmerica’s General Agents, retirees of The Hanover
Insurance Company (“Hanover’’) and retirees of Citizens Insurance Company of
America, both Affiliates of First Allmerica.  Additionally, in determining “M’’,
retired life reserve assets attributable to retirees of Beacon Insurance Company
of America, formerly an Affiliate of Hanover, shall be aggregated and combined
with the retired life reserve assets of this Plan.

For the Plan Years for which “M” depended on the returns of designated retired
life reserve assets, the earnings rate on retired life reserve assets was to be
determined by an actuary, using the “investment year block” method of crediting
interest that First Allmerica used to credit interest on its Experience Rated
group annuity contracts that are in force on an active basis. The resulting
earnings rate(s) should neither be associated with nor construed as the
investment yield (all or in part) of the pension fund.

For each Plan Year for which “M” depended on the returns of designated retired
life reserve assets, the retired life reserve assets for newly qualified
retirees to be added to the total retired life assets outstanding was to be
determined using a 7% interest rate and the 1971 GAM mortality table.

The determination of “M” and of the overall earnings rate(s) shall be final and
conclusively binding for all persons.

The effective date for the payment of supplemental pension benefits paid as a
result of this Section shall be each July 1, commencing with July 1, 1986. Those
eligible to receive supplemental pension benefits as a result of this Section
shall be those Plan retirees and their Beneficiaries who were receiving basic
Plan retirement benefits on the July 1 increase effective date, had been retired
for at least 18 months on such increase effective date, and:

(A)      were actively employed Plan Participants who had elected an immediate
early retirement benefit pursuant to Section 5.02 (or its successor, if any):

(B)      had terminated employment after having met the eligibility requirements
for early retirement specified in Section 5.02 (or its successor, if any) and
elected to defer receipt of retirement benefits; or

(C)      had retired on or after their Normal Retirement Age after having
completed at least 15 Years of Service.

Part II - 24

84419371\V-5

--------------------------------------------------------------------------------

 

The Beneficiaries of any retiree meeting the above requirements shall be
entitled to receive a supplemental pension benefit under this Section if the
Beneficiaries were receiving Plan survivor benefits on the July 1 increase
effective date.

A supplemental pension benefit determined under this Section shall be added to
and become a part of the recipient’s basic Plan benefit and shall be payable
during such period and under such option as the basic Plan benefit is being
paid.

5.08     Rollovers to Other Qualified Plans.

(a)        Notwithstanding any provision of Part II of the Plan to the contrary
that would otherwise limit a distributee’s election under this Article or under
Articles VI and VII other than this Section 5.08(a), a distributee may elect, at
the time and in the manner prescribed by the Plan Administrator, to have any
portion of an eligible rollover distribution paid directly to an eligible
retirement plan specified by the distributee in a direct rollover; provided,
however, that if the Actuarial Equivalent present value of a distributee’s
vested Accrued Benefit does not exceed $1,000, the distributee does not have to
be allowed the eligible rollover election described in this sentence.  If the
Actuarial Equivalent present value of a Participant’s Accrued Benefit exceeds
$1,000 and does not exceed $5,000 and the Participant does not elect a
distribution or a rollover, the Plan shall automatically distribute the
Participant’s Accrued Benefit, in a direct rollover, to an eligible individual
retirement plan (a “Rollover IRA”) for the benefit of such Participant and
pursuant to a written agreement with the Rollover IRA provider that provides (i)
the amount rolled over to the Rollover IRA shall be invested in a manner
designed to preserve principal and provide a reasonable rate of return and
liquidity; (ii) all fees and expenses attendant to a Rollover IRA shall not
exceed the fees and expenses charged by the Rollover IRA provider for comparable
IRAs established for reasons other than receipt of a rollover distribution; and
(iii) the Participant on whose behalf the automatic rollover is made under this
Section shall have the right to enforce the terms of the written agreement
establishing the Rollover IRA, with regard to his or her rolled over funds,
against the Rollover IRA provider.  All fees and expenses attendant to the
Rollover IRA shall be allocated to the Rollover IRA.

(b)        Definitions.

Part II - 25

84419371\V-5

--------------------------------------------------------------------------------

 

(i)        Eligible rollover distribution:  An “eligible rollover distribution”
is any distribution of all or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution does not
include:  any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for the life (or life
expectancy) of the distributee or the joint lives (or joint life expectancies)
of the distributee and the distributee’s designated Beneficiary, or for a
specified period of ten years or more; any distribution to the extent such
distribution is required under Code Section 401(a)(9); the portion of any
distribution that is not includible in gross income (determined without regard
to the exclusion for net unrealized appreciation with respect to employer
securities); and any other distribution(s) that is reasonably expected to total
less than $200 during a year.  A portion of a distribution shall not fail to be
an eligible rollover distribution merely because the portion consists of
after-tax employee contributions which are not includible in gross
income.  However, such portion may be transferred only to (i) an individual
retirement account or annuity described in Code Sections 408(a) or (b); (ii) for
taxable years beginning after December 31, 2001 and before January 1, 2007, to a
qualified trust which is part of a defined contribution plan that agrees to
separately account for amounts so transferred, including separately accounting
for the portion of such distribution which is includible in gross income and the
portion of such distribution which is not so includible; or (iii) for taxable
years beginning after December 31, 2006, to a qualified trust or to an annuity
contract described in Code Section 403(b), if such trust or contract provides
for separate accounting for the portion of such distribution which is includible
in gross income and the portion of such distribution which is not so includible.

(ii)       Eligible retirement plan:  An “eligible retirement plan” is an
individual retirement account described in Code Section 408(a), an individual
retirement annuity described in Code Section 408(b), a Roth IRA as pursuant to
in Code Section 408A(e), an annuity plan described in Code Section 403(a), an
annuity contract described in Code Section 403(b), a qualified plan described in
Code Section 401(a) that accepts the distributee’s eligible rollover
distribution, or an eligible plan under Code Section 457(b) 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.  However, in the
case of an eligible rollover distribution to the surviving spouse, an eligible
retirement plan is an individual retirement account or individual retirement
annuity.

Part II - 26

84419371\V-5

--------------------------------------------------------------------------------

 

(iii)      Distributee:  A “distributee” includes an Employee or former
Employee.  In addition, the Employee’s or former Employee’s surviving spouse and
the Employee’s surviving spouse or former spouse who is the alternate payee
under a qualified domestic relations order, as defined in Code Section 414(p),
are distributees with regard to the interest of the spouse or former spouse.

(iv)      Direct rollover:  A “direct rollover” is a payment by the Plan to the
eligible retirement plan specified by the distributee.

(c)        For distributions after June 9, 2009, a non-spouse Beneficiary who is
a “designated beneficiary” under Code Section 401(a)(9)(E) and the regulations
thereunder, by a direct trustee-to-trustee transfer (“direct rollover”), may
roll over all or any portion of his or her distribution to an individual
retirement account the Beneficiary establishes for purposes of receiving the
distribution.  In order to do a direct rollover of the distribution, the
distribution otherwise must satisfy the definition of an eligible rollover
distribution.

Although a non-spouse Beneficiary may roll over directly a distribution as
provided above, any distribution made prior to January 1, 2010 is not subject to
the direct rollover requirements of Code Section 401(a)(31) (including Code
Section 401(a)(31)(B)), the notice requirements of Code Section 402(f) or the
mandatory withholding requirements of Code Section 3405(c)).  If a non-spouse
Beneficiary receives a distribution from the Plan, the distribution is not
eligible for a “60-day” rollover.

If the Participant’s named Beneficiary is a trust, the Plan may make a direct
rollover to an individual retirement account on behalf of the trust, provided
the trust satisfies the requirements to be a “designated beneficiary” within the
meaning of Code Section 401(a)(9)(E).

A non-spouse Beneficiary may not roll over an amount which is a required minimum
distribution, as determined under applicable Treasury regulations and other
Internal Revenue Service guidance.  If the Participant dies before his or her
required beginning date and the non-spouse Beneficiary rolls over to an IRA the
maximum amount eligible for rollover, the Beneficiary may elect to use either
the 5-year rule or the life expectancy rule, pursuant to Treasury Regulation
Section 1.401(a)(9)-3, Q&A-4(c), in determining the required minimum
distributions from the IRA that receives the non-spouse Beneficiary’s
distribution.

Part II - 27

84419371\V-5

--------------------------------------------------------------------------------

 

ARTICLE VI

﻿

DEATH BENEFITS

﻿

6.01     Pre-Retirement Spouse Benefit for Married Participants.

(a)        General Rules.  The provisions of this Section shall apply to any
Participant or Former Participant described in Section 6.01(b).

(i)        If an eligible married Participant:

(A)      dies after attaining eligibility for early retirement but before
actually retiring;

(B)      dies on or after his Normal Retirement Age while still working for the
Employer; or

(C)      separates from service on or after his Normal Retirement Age (or after
attaining the age necessary for early retirement) and after satisfying the
eligibility requirements for the payment of benefits under Part II of the Plan
and thereafter dies before beginning to receive such benefits;

then the Participant’s surviving spouse will receive a monthly retirement
benefit equal to the benefit that would have been payable if the Participant had
retired on the day before his death after having elected an immediate Qualified
Joint and Survivor Annuity option with a 50% continuation of monthly benefits to
be payable to the survivor.  The amount of such 50% continuation shall be
payable monthly for the life of such spouse, with the first payment payable as
of the date of the Participant’s death, unless the spouse requests a later
commencement date (consistent with the provisions of Part II of the Plan).

(ii)       If a fully or partially vested eligible married Participant dies on
or before the earliest retirement age, the Participant’s surviving spouse will
receive the same benefit that would be payable if the Participant had:

(A)      separated from service on the date of death;

(B)      survived to the earliest retirement age;

(C)      retired at the earliest retirement age after having elected an
immediate Qualified Joint and Survivor Annuity option with a 50% continuation of
monthly benefits to be payable to the survivor; and

(D)      died on the day after the earliest retirement age.

Part II - 28

84419371\V-5

--------------------------------------------------------------------------------

 

A surviving spouse entitled to benefits under this Section 6.01(a)(ii) will
begin to receive payments at the earliest retirement age unless the spouse
requests an earlier or later commencement date (consistent with the provisions
of Part II of the Plan).

For purposes of this Section 6.01(a)(ii) the “earliest retirement age” is the
earliest date on which, under Part II of the Plan, the Participant could elect
to receive retirement benefits.

In the case of a partially vested Participant, benefits under this Section
6.01(a)(ii) will be based on the Participant’s vested Accrued Benefit computed
on the date of his death.

(b)        Applicability.  The provisions of Section 6.01(a)(i) shall apply to
all Participants or Former Participants who were credited with an Hour of
Service on or after January 1, 1976 who meet the eligibility requirements
described in such Section 6.01(a)(i) and thereafter die before actually
retiring.  The provisions of Section 6.01(a)(ii) shall apply to any Participant
who is credited with at least one Hour of Service on or after August 23, 1984
and to any Participant or Former Participant living on August 23, 1984 not
receiving Plan benefits on such date who was credited with at least one Hour of
Service on or after January 1, 1976 and who had at least ten years of vesting
service when he separated from service.

6.02     Minimum Death Benefit.  If no optional form of retirement benefit has
been elected by a Participant pursuant to Section 5.05, a death benefit, as
described below, shall be payable.  If the death benefit is payable as a result
of the Participant’s death, any such death benefit shall be payable to the
Participant’s Beneficiary or, if no Beneficiary survives the Participant, to the
executors or administrators of the Participant’s estate.  If the Participant was
survived by his spouse and (i) if the joint and survivor benefit described in
Section 5.06 was in effect on the date of the spouse’s death, or (ii) the
pre-retirement spouse benefit described in Section 6.01 was being paid to the
spouse, any such death benefit shall be payable to the Participant’s
Beneficiary, or if such Beneficiary does not survive the spouse, to the
executors or administrators of the spouse’s estate.

The amount of this minimum death benefit will be equal to the Participant’s
unrefunded required Contributions with Credited Interest to the first day of the
month in which the earlier of the Participant’s death or retirement occurred
reduced by (i), (ii) and (iii) below:

(i)        the amount of monthly retirement payments which had been paid to the
Participant;

(ii)       the amount of monthly payments which had been paid to the Participant
and his spouse, if the joint and survivor benefit described in Section 5.06 was
being paid; and

(iii)      the amount of retirement benefits which had been paid to the spouse,
if the pre-retirement spouse benefit described in Section 6.01 was being paid.

Part II - 29

84419371\V-5

--------------------------------------------------------------------------------

 

ARTICLE VII

﻿

BENEFITS UPON TERMINATION FROM SERVICE

﻿

7.01     In General.  In the event that an Employee shall terminate from service
(or, in the case of a Career Agent, the agent terminates his Career Agent’s
Contract) for any reason other than death, his becoming Totally Disabled (as
described in Section 5.04), or Normal, Early or Late Retirement, the interests
and rights of such Participant shall be limited to those contained in this
Article.

7.02     Options on Termination of Participation.  Upon any termination of
service described in Section 7.01, a Participant shall have the right, subject
to any required spousal consent, to elect either Option 1 or Option 2 described
below.

For purposes of determining the Actuarial Equivalent present value of benefits,
values shall be calculated using the interest rate(s) specified in Section 2.02.

Any distributions made pursuant to this Article shall be subject to the
requirements of Sections 5.05 and 5.06 (and Article III of Part III of the
Plan).

Option 1 - Deferred Benefit - Under this Option the Participant will receive a
monthly retirement benefit commencing on his Normal Retirement Date equal to the
sum of (a) and, if applicable, (b) below:

(a)        1/12 of the annual deferred benefit described in Section 2.01(b),
which deferred benefit is attributable to required Employee contributions.

(b)        In addition, if as of his date of termination of participation the
Employee has completed at least the minimum Years of Service required for
vesting, he will receive commencing on his Normal Retirement Date, an additional
monthly retirement benefit equal to (i) or (ii) below, whichever is applicable:

(i)        the portion of the Accrued Benefit described in Section 2.01(a)
derived from Employer Contributions, multiplied by the appropriate percentage in
Option 1(b)(iii) below.

(ii)       in the case of a Non-Key Employee Participant in a Top Heavy Plan, if
greater than (i) above, the Accrued Benefit described in Section 2.01(c),
multiplied by the appropriate percentage in Option 1(b)(iii) below.

Part II - 30

84419371\V-5

--------------------------------------------------------------------------------

 

(iii)       

﻿

 

 

                                   

Completed Years of Service

Nonforfeitable Percentage

﻿

 

 

﻿

Less than 5                

   0%

﻿

             5 or more

100%

﻿

 

 

Notwithstanding the above, if the Plan is a Top Heavy Plan for any Plan Year
beginning after December 31, 1983, then the Plan shall meet the following
vesting requirements for such Plan Year and for all subsequent Plan Years, even
if the Plan is not a Top Heavy Plan for such subsequent Plan Years.

﻿

 

 

                                   

Completed Years of Service

Nonforfeitable Percentage

﻿

 

 

﻿

Less than 2                

    0%

﻿

2

20

﻿

3

40

﻿

4

60

﻿

             5 or more

100

﻿

 

 

Notwithstanding anything in Part II of the Plan to the contrary, the portion of
an Employee’s Accrued Benefit derived from Employer Contributions shall be 100%
vested upon completion of three (3) Years of Service.

Option 2 - Cash Option - Under this option, except as provided in Section 5.08,
the Participant will receive an amount equal to (a) below plus, if applicable, a
deferred benefit as described in (b) below:

(a)        an amount equal to the present value of the portion of the
Participant’s Accrued Benefit described in Section 2.01(b) attributable to
required Employee Contributions, and

(b)        In addition, if the Employee is fully or partially vested in the
portion of his Accrued Benefit derived from Employer Contributions, as
determined from the appropriate table above on the date of his termination of
participation, he will receive, commencing on his Normal Retirement Date, a
monthly retirement benefit determined in accordance with Option 1(b).

Option 1 will be deemed to have been elected by an Employee unless he elects
Option 2 within 90 days of his termination of participation in this Plan.

Part II - 31

84419371\V-5

--------------------------------------------------------------------------------

 

For purposes of this Article VII, “Years of Service” means Plan Years during
which an Employee completed at least 1,000 Hours of Service; provided, however,
for purposes of this Article, service shall not be deemed to be interrupted or
employment terminated because employment is transferred to a position or job
with the Employer in which he is no longer eligible to participate in this Plan,
or because the Employee becomes a General Agent who is not a common-law employee
of the Company, but service shall be deemed terminated if the Employee
terminates from the Employer or as a General Agent.

Notwithstanding anything in of Part II of the Plan to the contrary, a
Participant’s Normal Retirement Benefit shall become 100% vested and
nonforfeitable upon the attainment of his Normal Retirement Age.

Notwithstanding anything in Part II of the Plan to the contrary, (i) a
Participant who was actively employed on December 31, 2002 (or an agent whose
Career Agent’s Contract had not been terminated prior to such date), and (ii)
all Former Participants who had not incurred five consecutive One Year Breaks in
Service as of December 31, 2002, shall have a fully vested and non-forfeitable
interest in any Accrued Benefit that had not been distributed to the Participant
or Former Participant prior to December 31, 2002.

7.03     Forfeitures.  The non-vested portion of a Participant’s Accrued Benefit
shall be treated as a forfeiture when the Participant or his or her spouse (or
surviving spouse) receives a distribution of the present value of his or her
vested Accrued Benefit attributable to Employer and Employee Contributions
pursuant to Section 7.02 and the Participant’s service attributable to such
distribution shall be disregarded as provided in Section 7.06.  For purposes of
this Section, if the present value of a Participant’s vested Accrued Benefit is
zero, the Participant shall be deemed to have received a distribution of such
vested Accrued Benefit.

In the case of a partially vested terminated Participant who does not receive a
distribution pursuant to the above paragraph, the value of the nonvested portion
of his Accrued Benefit shall be treated as a forfeiture at the end of the Plan
Year in which the Participant incurs a One Year Break in Service until the
Participant has completed one Year of Service after he has been re-employed.

Forfeitures will be used to reduce (i) Employer contributions for the Plan Year
following the Plan Year in which the forfeiture occurs; and or (ii) the
Employer’s costs under the Plan.

7.04     Resumption of Service.  A Participant who terminates his or her
participation in Part II of the Plan and who subsequently resumes service with
the Employer will again become a Participant, if eligible, on the date of his or
her recommencement of such service.

7.05     Distribution of Benefits.  On the Former Participant’s Normal
Retirement Date, benefits to which he or she is entitled pursuant to this
Article shall be distributed in accordance with Article V.

If a Former Participant entitled to a deferred benefit pursuant to this Article
VII dies prior to his or her Normal Retirement Date, the death benefit, if any,
to which he is entitled shall be as is specified in Article VI.

Part II - 32

84419371\V-5

--------------------------------------------------------------------------------

 

7.06     Cashout Repayment Option.

(a)        Notwithstanding anything in this Article to the contrary, unless a
repayment has been made in accordance with Section 7.06(b) below, in determining
the portion of an Employee’s Accrued Benefit derived from Employer contributions
(or, in the case of a Top Heavy Plan, the minimum benefit for Non-Key Employees
described in Section 2.01(c)) after a resumption of participation, periods of
service with respect to which the Employee received a distribution of the
present value of his vested Accrued Benefit shall be disregarded.

(b)        In the case of the distribution of the present value of a partially
vested Employee’s vested Accrued Benefit in accordance with Sections 5.05 or
7.02, the Employee’s Accrued Benefit described in Sections 2.01(a) and (b)
(including all optional forms of benefits and subsidies relating to such
benefits) shall be restored if he or she is subsequently an Employee and repays
the amount distributed plus interest, compounded annually from the date of
distribution at the rate of five percent.  Such repayment must be made by the
Employee before the earlier of five years after the first date on which the
Employee is subsequently reemployed by the Employer, or the date the Employee
incurs five consecutive One Year Breaks in Service following the date of
distribution.

If an Employee is deemed to receive a distribution pursuant to this Article, and
the Employee resumes employment covered under this Plan before the date on which
the Employee could no longer repay his distribution under the preceding
paragraph, upon the reemployment of such Employee, the Employer-derived Accrued
Benefit will be restored to the amount of such Accrued Benefit on the date of
the deemed distribution.

7.07     Early Retirement Election.  Any Participant who terminates service
after having completed at least fifteen Years of Service may elect to retire on
the first day of any month following his 55th birthday.  Any Participant who was
actively employed on June 30, 1977 who terminates service after having completed
at least twenty Years of Service may elect to retire on the first day of any
month following his 50th birthday.

7.08     Amendment to Vesting Schedule.  If the Vesting Schedule of Part II of
the Plan is amended, or the Plan is amended in any way that directly or
indirectly affects the computation of a Participant’s nonforfeitable percentage,
or if the Plan is deemed amended by an automatic change to or from a top-heavy
vesting schedule, each Participant with at least three Years of Service with the
Employer may elect, within a reasonable period after the adoption of the
amendment or change, to have their nonforfeitable percentage computed under Part
II of the Plan without regard to such amendment or change.  The period during
which the election may be made shall commence with the date the amendment is
adopted or deemed to be made and shall end on the latest of:

(a)        60 days after the amendment is adopted;

(b)        60 days after the amendment becomes effective; or

Part II - 33

84419371\V-5

--------------------------------------------------------------------------------

 

(c)        60 days after the Participant is issued written notice of the
amendment by the Employer or Plan Administrator. 

﻿

﻿

 

Part II - 34

84419371\V-5

--------------------------------------------------------------------------------

 

 

EXHIBIT A
ADJUSTMENT FACTORS FOR OPTIONAL AND LATE RETIREMENT BENEFITS

Factors for ages not illustrated on the following tables will be computed on an
actuarial basis consistent with that used to compute the factors shown.

JOINT AND SURVIVOR OPTION PERCENTAGES

(Applicable only if the Participant’s age, nearest birthday, on the date monthly
income commences is 65).

Age Nearest Birthday
of Joint Annuitant
on the Date Monthly Income
Commences to the Participant

 

Percentage of the Adjusted Retirement
Annuity Payments which are to be
Continued to the Surviving
Joint Annuitant

﻿

 

100%

66 2/3%

50%

﻿

 

 

 

 

50

   80.3%

   87.1%

   90.9%

51

80.7

87.5

91.3

52

81.1

87.9

91.8

53

81.5

88.4

92.2

54

82.0

88.8

92.7

55

82.4

89.3

93.2

56

82.9

89.8

93.8

57

83.3

90.3

94.3

58

83.8

90.9

94.9

59

84.3

91.4

95.5

60

84.8

92.0

96.1

61

85.3

92.7

96.8

62

85.9

93.3

97.5

63

86.4

94.0

98.3

64

86.9

94.7

99.1

65

87.5

95.4

100.0

66

88.0

96.2

100.0

67

88.6

97.0

101.9

68

89.1

97.9

102.9

69

89.6

98.7

104.0

70

90.2

99.6

105.1

﻿

 

 

 

﻿

1983 Group Annuity Table with Projection H, with mortality rates based on
calendar year of birth of 1930 and interest at the rate of 7% per annum.

﻿

﻿

﻿

Part II - 35

84419371\V-5

--------------------------------------------------------------------------------

 

CONTINGENT ANNUITANT OPTION PERCENTAGES

(Applicable only if the Participant’s age, nearest birthday, on the date monthly
income commences is 65).

Age Nearest Birthday of Contingent Annuitant on the Date Monthly Income
Commences to the Participant

 

Percentage of the Adjusted Retirement Annuity Payments which are to be Continued
to the Surviving Contingent Annuitant

﻿

 

 

 

 

﻿

 

100%

66 2/3%

50%

﻿

 

 

 

 

50

   80.3%

   85.9%

     89.0%~

51

80.7

86.2

89.3

52

81.1

86.5

89.6

53

81.5

86.9

89.8

54

82.0

87.2

90.1

55

82.4

87.5

90.4

56

82.9

87.9

90.6

57

83.3

88.2

90.9

58

83.8

88.6

91.2

59

84.3

89.0

91.5

60

84.8

89.3

91.8

61

85.3

89.7

92.1

62

85.9

90.1

92.4

63

86.4

90.5

92.7

64

86.9

90.9

93.0

65

87.5

91.3

93.3

66

88.0

91.7

93.6

67

88.6

92.1

93.9

68

89.1

92.5

94.2

69

89.6

92.9

94.5

70

90.2

93.2

94.8

﻿

 

 

 

﻿

1983 Group Annuity Table with Projection H, with mortality rates based on
calendar year of birth of 1930 and interest at the rate of 7% per annum.

﻿

﻿

﻿

 

 

 

﻿

Life Ann/Opt.

 

 

﻿

 

Part II - 36

84419371\V-5

--------------------------------------------------------------------------------

 

 

ANNUITY OPTION ADJUSTMENT PERCENTAGES

Percentages to be applied (to the monthly benefit which would be payable to the
Participant on his Retirement Date if no Optional Form of Annuity were in
effect) to determine the monthly income benefit commencing on the Participant’s
Retirement Date if one of the following options is in effect.

﻿

 

 

 

 

 

Age Nearest Birthday on
the Date Monthly
Income Commences

 

Annuity Option

﻿

 

 

 

 

﻿

5C&C

10C&C

15C&C

20C&C

﻿

 

 

 

 

 

50

 

   99.8%

   99.2%

   98.3%

   97.2%

51

 

99.8

99.1

98.1

96.9

52

 

99.7

99.0

97.9

96.6

53

 

99.7

98.9

97.7

96.3

54

 

99.7

98.8

97.5

96.0

55

 

99.6

98.6

97.3

95.6

56

 

99.6

98.5

97.0

95.2

57

 

99.6

98.4

96.8

94.8

58

 

99.5

98.3

96.5

94.3

59

 

99.5

98.1

96.2

93.8

60

 

99.4

98.0

95.9

93.3

61

 

99.4

97.8

95.5

92.7

62

 

99.3

97.6

95.0

92.0

63

 

99.3

97.3

94.5

91.2

64

 

99.2

97.1

94.0

90.4

65

 

99.1

96.7

93.3

89.5

66

 

99.0

96.4

92.6

88.5

67

 

98.9

95.9

91.8

87.4

68

 

98.8

95.4

91.0

86.2

69

 

98.6

94.9

90.0

84.9

70

 

98.4

94.3

89.0

83.5

﻿

 

 

 

 

﻿

1983 Group Annuity Table with Projection H, with morality rates based on
calender year of birth of 1930 and interest at the rate of 7% per annum.

﻿

 

 

﻿

Life Ann/Opt.

﻿

 

Part II - 37

84419371\V-5

--------------------------------------------------------------------------------

 

 

LATE RETIREMENT PERCENTAGES

(Applicable only if the Participant’s age, nearest birthday, on his or her
Normal Retirement Date is 65).

The following percentages are applied to retirement benefits determined in
accordance with Part II of the Plan, prior to any actuarial increase with
respect to a Participant whose date of retirement is subsequent to his or her
Normal Retirement Date, to determine actuarially increased retirement benefits
commencing on his or her Late Retirement Date.  If benefits commence in a month
other than the month in which the Participant attains the specified age, the
percentage shall be determined by straight line interpolation.  Percentages for
Late Retirement Dates and ages not illustrated will be computed on an actuarial
basis consistent with that used to compute the factors shown.

﻿

 

 

Number of Years Late
Retirement Date Succeeds
Normal Retirement Date

 

Actuarial Increase
Percentage

﻿

 

 

1

 

111.3%

2

 

124.3%

3

 

139.2%

4

 

156.6%

5

 

176.8%

6

 

200.4%

7

 

228.3%

8

 

261.5%

9

 

301.1%

10

 

348.8%

﻿

 

 

﻿

The actuarial basis increase percentages beyond ten years after Normal
Retirement Date shall be determined based on the 1951 Group Annuity Table with
2/3 of Projection C, with mortality rates based on calendar year of birth of
1910 and interest at a rate of 6% per annum (male rate).

Notwithstanding the foregoing, if late retirement benefits commence after Age
70½, a Participant’s Accrued Benefit shall be actuarially increased to take into
account the period after Age 70½ in which the Participant was not receiving any
benefits under Part II of the Plan.  Any such actuarial increase shall be the
greater of (i) the actuarial increase determined in accordance with the rules
described above, or (ii) such actuarial increase as shall be required under Code
Section 401(a)(9)(C) and regulations promulgated thereunder.

﻿

 

Part II - 38

84419371\V-5

--------------------------------------------------------------------------------

 

Exhibit B

Participant Accrual Percentages

[LEFT BLANK INTENTIONALLY]

﻿

 

Part II - 39

84419371\V-5

--------------------------------------------------------------------------------

 

 

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

THE HANOVER INSURANCE GROUP CASH BALANCE
PENSION PLAN

PART III

(As amended and restated generally effective January 1, 2016)

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

 

PART III

84419371\V-5

--------------------------------------------------------------------------------

 

 

THE HANOVER INSURANCE GROUP CASH BALANCE
PENSION PLAN

PART III

TABLE OF CONTENTS

PAGE

﻿

 

 

﻿ARTICLE I

PURPOSE AND EFFECTIVE DATE OF PLAN

1 

﻿1.01

General Statement

1 

﻿1.02

Effective Date

1 

﻿ARTICLE II

PROVISIONS APPLICABLE TO TOP HEAVY PLANS

1 

﻿2.01

Top Heavy Plan Requirements

1 

﻿2.02

Determination of Top Heavy Status

2 

﻿2.03

Minimum Benefit Requirements for Top Heavy Plans

5 

﻿ARTICLE III

MINIMUM DISTRIBUTION REQUIREMENTS

7 

﻿3.01

General Rules

7 

﻿3.02

Time and Manner of Distribution

9 

﻿3.03

Determination of Amount to be Distributed Each Year

10 

﻿3.04

Requirements for Annuity Distributions That Commence During
Participant’s Lifetime

13 

﻿3.05

Requirements for Minimum Distributions Where Participant Dies
Before Date Distributions Begin

15 

﻿3.06

Definitions

16 

﻿ARTICLE IV

LIMITATIONS ON BENEFITS

17 

﻿4.01

General Limitations

17 

﻿4.02

Additional General Limitations

18 

﻿4.03

Limitation Year beginning after December 31, 1986

18 

﻿4.04

Limitation Year beginning after December 31, 1994

19 

﻿4.05

Definitions

19 

﻿4.06

Final Section 415 Regulations Effective Date

26 

﻿ARTICLE V

PRE‑TERMINATION BENEFIT RESTRICTIONS

29 

﻿5.01

In General

29 

﻿5.02

Exceptions

29 

﻿5.03

Included Benefits

29 

﻿ARTICLE VI

BENEFIT RESTRICTIONS

29 

﻿6.01

Effective Date and Application of Section

29 

﻿6.02

Funding‑Based Limitation on Shutdown Benefits and Other
Unpredictable Contingent Event Benefits

30 

﻿6.03

Limitations on Plan Amendments Increasing Liability for Benefits

30 

﻿6.04

Limitations on Accelerated Benefit Distributions

31 

﻿6.05

Limitation on Benefit Accruals for Plans With Severe Funding 
Shortfalls

32 

﻿6.06

Rules Relating to Contributions Required to Avoid Benefit 
Limitations

33 

﻿6.07

Presumed Underfunding for Purposes of Benefit Limitations

34 

﻿6.08

Treatment of Plan as of Close of Prohibited or Cessation Period

35 

﻿6.09

Definitions

36 

PART III

84419371\V-5

--------------------------------------------------------------------------------

 

﻿

﻿ARTICLE VII

PLAN FIDUCIARY RESPONSIBILITIES

37 

﻿7.01

Plan Fiduciaries

37 

﻿7.02

General Fiduciary Duties

37 

﻿7.03

Duties of the Trustee(s)

38 

﻿7.04

Powers and Duties of the Plan Administrator

38 

﻿7.05

Designation of Fiduciaries

39 

﻿7.06

Delegation of Duties by a Fiduciary

40 

﻿ARTICLE VIII

BENEFITS COMMITTEE

40 

﻿8.01

Appointment of Benefits Committee

40 

﻿8.02

Benefits Committee to Act by Majority Vote

40 

﻿8.03

Records and Reports of the Benefits Committee

41 

﻿8.04

Costs and Expenses of Administration

41 

﻿8.05

Indemnification of the Plan Administrator and Assistants

41 

﻿ARTICLE IX

CLAIMS PROCEDURE

41 

﻿9.01

Claims Fiduciary

41 

﻿9.02

Claims for Benefits

41 

﻿9.03

Duty to Keep Plan Administrator Informed of Current Address

42 

﻿9.04

Failure to Claim Benefits

42 

﻿9.05

Notice of Denial of Claim

42 

﻿9.06

Request for Review of Denial of Claim

43 

﻿9.07

Decision on Review of Denial of Claim

43 

﻿9.08

Disability Claims

43 

﻿9.09

Limitations Periods for Filing Claims and Legal Actions

45 

﻿ARTICLE X

AMENDMENT AND TERMINATION

45 

﻿10.01

Amendment of Plan

45 

﻿10.02

Employer May Discontinue Plan

45 

﻿10.03

Distribution of Benefits Upon Plan Termination

48 

﻿10.04

Return of Employer Contributions Under Special Circumstances.

48 

﻿ARTICLE XI

MISCELLANEOUS

48 

﻿11.01

Protection of Employee Interest

48 

﻿11.02

USERRA Compliance

48 

﻿11.03

Meaning of Words Used in Plan

49 

﻿11.04

Plan Does Not Create or Modify Employment Rights

49 

﻿11.05

Massachusetts Law Controls

49 

﻿11.06

Payments to come from Plan Assets

50 

﻿11.07

Receipt and Release for Payments

50 

﻿11.08

Mandatory Withholding on Eligible Rollover Distributions

50 

﻿11.09

Payment under Qualified Domestic Relations Orders

50 

﻿11.10

Electronic Communications

50 

﻿

﻿

 

Part III

84419371\V-5

--------------------------------------------------------------------------------

 

 

ARTICLE I

PURPOSE AND EFFECTIVE DATE OF PLAN

1.01     General Statement.  The Hanover Insurance Group Cash Balance Pension
Plan (the “Plan”) consists of three parts, Part I, Part II and Part III.  Part I
of the Plan provides a cash balance and pension benefit, which was formerly
provided under a plan known as “The Allmerica Financial Cash Balance Pension
Plan”.  Part II of the Plan provides a pension benefit, which was formerly
provided under a plan known as “The Allmerica Financial Agents’ Pension
Plan”.  This Part III of the Plan contains provisions applicable to each of Part
I and Part II.

The provisions of this Part III of the Plan shall override any provision of Part
I and or Part II of the Plan as provided in Part III of the Plan.

The words and phrases used in this Part III of the Plan shall have the meanings
set forth in Part I of the Plan, unless a different meaning is clearly required
by the context or is otherwise provided in Part III of the Plan.

1.02     Effective Date.  The effective date of this Part III of the Plan is
January 1, 2016 (except for those provisions of this Part of the Plan which have
an expressly stated alternative effective date).

ARTICLE II

PROVISIONS APPLICABLE TO TOP HEAVY PLANS

2.01     Top Heavy Plan Requirements.

(a)        For any Top Heavy Plan Year, the Plan shall provide the following:

(i)        the minimum vesting requirements for Top Heavy Plans set forth in
Section 8.02 of Part I of the Plan and Section 7.02 of Part II of the Plan; and

(ii)       the minimum benefit accruals for Non‑Key Employees set forth in
Section 2.03 of this Part III below.

(b)        Once the Plan has become a Top Heavy Plan, the top heavy vesting
requirements described in Section 8.02 of Part I of the Plan and Section 7.02 of
Part II of the Plan shall be applicable to all subsequent Plan Years, regardless
of whether such years are Top Heavy Plan Years.

(c)        If the Plan is or becomes a Top Heavy Plan, the provisions of this
Article II of this Part III will supersede any conflicting provision in the
Plan.

PART III ‑ 1

84419371\V-5

--------------------------------------------------------------------------------

 

(d)        In determining Top Heavy Plan vesting, the Top Heavy vesting schedule
set forth in Section 8.02 of Part I of the Plan and in Section 7.02 of Part II
of the Plan applies to all benefits within the meaning of Code Section
411(a)(7), including benefits accrued before the effective date of Code Section
416 and benefits accrued before the Plan became top‑heavy.  Further, no
reduction in vested benefits may occur in the event the Plan’s status as top
heavy changes for any Plan Year.  However, this Section does not apply to the
Accrued Benefits of any Employee who does not have an Hour of Service after the
Plan has initially become top‑heavy and such Employee’s Accrued Benefits
attributable to Employer contributions will be determined without regard to this
Section.

2.02     Determination of Top Heavy Status.

(a)        This Plan shall be a Top Heavy Plan for any Plan Year commencing
after December 31, 1983 if any of the following conditions exists:

(i)        The top heavy ratio for this Plan exceeds 60 percent, and this Plan
is not part of any required aggregation group or permissive aggregation group of
plans.

(ii)       This Plan is a part of a required aggregation group of plans (but not
part of a permissive aggregation group), and the top heavy ratio for the group
of plans exceeds 60 percent.

(iii)      This Plan is a part of a required aggregation group and part of a
permissive aggregation group of plans, and the top heavy ratio for the
permissive aggregation group exceeds 60 percent.

(b)        The Plan's “top heavy ratio” shall be determined as follows:

PART III ‑ 2

84419371\V-5

--------------------------------------------------------------------------------

 

(i)        If the Employer maintains one or more defined benefit plans and the
employer has not maintained any defined contribution plan (including any
simplified employee pension, as defined in Code Section 408(k)) which during the
5‑year period ending on the determination date(s) has or has had account
balances, the top‑heavy ratio for this plan alone or for the required or
permissive aggregation group as appropriate is a fraction, the numerator of
which is the sum of the present value of Accrued Benefits of all Key Employees
as of the determination date(s) (including any part of any Accrued Benefit
distributed in the 1‑year period ending on the determination date(s)) (5‑year
period ending on the determination date in the case of a distribution made for a
reason other than severance from employment, death or disability), and the
denominator of which is the sum of the present value of Accrued Benefits
(including any part of any Accrued Benefits distributed in the 1‑year period
ending on the determination date(s)) (5‑year period ending on the determination
date in the case of a distribution made for a reason other than severance from
employment, death or disability), determined in accordance with Code Section 416
and the regulations thereunder.

(ii)       If the Employer maintains one or more defined benefit plans and the
employer maintains or has maintained one or more defined contribution plans
(including any simplified employee pension) which during the 5‑year period
ending on the determination date(s) has or has had any account balances, the
top‑heavy ratio for any required or permissive aggregation group as appropriate
is a fraction, the numerator of which is the sum of the present value of accrued
benefits under the aggregated defined benefit plan or plans for all Key
Employees, determined in accordance with Section 2.02(b)(i) of this Part III
above, and the sum of account balances under the aggregated defined contribution
plan or plans for all Key Employees as of the determination date(s), and the
denominator of which is the sum of the present value of accrued benefits under
the defined benefit plan or plans for all participants, determined in accordance
with Section 2.02(b)(i) of this Part III above, and the account balances under
the aggregated defined contribution plan or plans for all participants as of the
determination date(s), all determined in accordance with Code Section 416 and
the regulations thereunder.  The account balances under a defined contribution
in both the numerator and denominator of the top heavy ratio are increased for
any distribution of an account balance made in the 1‑year period ending on the
determination date (5‑year period ending on the determination date in the case
of a distribution made for a reason other than severance from employment, death
or disability).

PART III ‑ 3

84419371\V-5

--------------------------------------------------------------------------------

 

(iii)      For purposes of Sections 2.02(b)(i) and 2.02(b)(ii) of this Part III
above, the value of account balances and the present value of Accrued Benefits
will be determined as of the most recent valuation date that falls within or
ends with the 12‑month period ending on the determination date, except as
provided in Code Section 416 and the regulations thereunder for the first and
second plan years of a defined benefit plan.  The account balances and accrued
benefits of a Participant (1) who is not a Key Employee but who was a Key
Employee in a prior year, or (2) who has not been credited with at least one
Hour of Service with any employer maintaining the Plan at any time during the
1‑year period ending on the determination date will be disregarded.  The
calculation of the top‑heavy ratio and the extent to which distributions,
rollovers, and transfers are taken into account will be made in accordance with
Code Section 416 and the regulations thereunder.  Deductible employee
contributions will not be taken into account for purposes of computing the
top‑heavy ratio.  When aggregating plans, the value of account balances and
Accrued Benefits will be calculated with reference to the determination dates
that fall within the same calendar year.

The Accrued Benefit of a Participant other than a Key Employee shall be
determined under (A) the method, if any, that uniformly applies for accrual
purposes under all defined benefit plans maintained by the Employer, or (B) if
there is no such method, as if such benefit accrued not more rapidly than the
slowest accrual rate permitted under the fractional rule of Code Section
411(b)(1)(C).

(c)        Permissive aggregation group:  “Permissive aggregation group” means
the required aggregation group of plans plus any other plan or plans of the
Employer 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.

(d)        Required aggregation group: “Required aggregation group” means (i)
each qualified plan of the Employer in which at least one Key Employee
participates or participated at any time during the determination period
(regardless of whether the Plan has terminated), and (ii) any other qualified
plan of the Employer which enables a plan described in (i) to meet the
requirements of Code Sections 401(a)(4) or 410.

(e)        Determination date:  “Determination date” means the last day of the
preceding Plan Year.

(f)        Valuation date:  “Valuation date” means the last day of each Plan
Year, as of which Accrued Benefits are valued for purposes of calculating the
top heavy ratio.

(g)        Present value:  “Present value” shall be based on the interest and
mortality rates specified in the definition of Actuarial Equivalent.

PART III ‑ 4

84419371\V-5

--------------------------------------------------------------------------------

 

2.03     Minimum Benefit Requirements for Top Heavy Plans.

(a)        Minimum Benefit Requirements for Top Heavy Plans.

Notwithstanding any other provision in this Plan except Section 2.03(b) and
Section 2.03(c) of this Part III below, for any Plan Year in which this Plan is
a Top Heavy Plan, each Participant who is not a Key Employee and has completed
at least 1,000 Hours of Service will accrue a benefit (to be provided solely by
Employer contributions and expressed as a life annuity commencing at Normal
Retirement Age) of not less than 2% of the Participant’s highest average
Compensation for the five consecutive years in which such Non‑Key Employee had
the highest Compensation (as defined for purposes of Article III of Part III of
the Plan).  The aggregate Compensation for the years during such five‑year
period in which the Participant was credited with a Year of Service will be
divided by the number of such years in order to determine average annual
Compensation.

Provided,  however, that no additional benefit accruals shall be provided
pursuant to this Section to the extent that the total accruals on behalf of the
Participant attributable to Employer contributions will provide a benefit
expressed as a life annuity commencing at Normal Retirement Age that equals or
exceeds 20% of the Participant’s average Compensation for the five consecutive
years in which the Participant had the highest Compensation (as defined for
purposes of Article III of Part III of the Plan).  All accruals of
Employer‑derived benefits, whether or not attributable to years for which the
Plan is Top Heavy, may be used in computing whether the minimum 20% accrual
requirements of this paragraph are satisfied.

The minimum accrual above applies even though under other Plan provisions the
Participant would not otherwise be entitled to receive an accrual, or would have
received a lesser accrual for the Plan Year because (i) the Non‑Key Employee
fails to make mandatory contributions to the Plan, (ii) the Non‑Key Employee’s
Compensation is less than a stated amount, (iii) the Non‑Key Employee is not
employed on the last day of the accrual computation period, or (iv) the Plan is
integrated with Social Security.

The Compensation required to be taken into account under this Section is
Compensation as defined for purposes of Article III of Part III of the Plan that
is not in excess of the applicable dollar limitation imposed by Code Section
401(a)(17).  However, Compensation received by a Non‑Key Employee for Plan Years
beginning after the close of the last year in which the Plan was a Top Heavy
Plan shall be disregarded.  The minimum accrual determined under this Section
shall be determined without regard to any Social Security contribution.

The top‑heavy minimum benefit is a life annuity benefit (with no ancillary
benefits) commencing at Normal Retirement Age.  If the benefit commences at a
date other than Normal Retirement Age, the Employee must receive at least an
amount that is the Actuarial Equivalent of the minimum single life annuity
benefit commencing at Normal Retirement Age.

PART III ‑ 5

84419371\V-5

--------------------------------------------------------------------------------

 

Notwithstanding the foregoing, for Plan Years beginning after December 31, 2001,
for purposes of satisfying the minimum benefit requirements of Code Section
416(c)(1) 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 Code
Section 410(b)) no Key Employee or former Key Employee.

(b)       Notwithstanding anything herein to the contrary, in any Plan Year in
which a Non‑Key Employee participates in both a defined benefit plan and a
defined contribution plan included in a Required or Permissive Aggregation Group
of Top Heavy Plans, the Employer is not required to provide the Non‑Key Employee
with both the full and separate minimum benefit and the full and separate
minimum contribution.  Therefore, if the Employer maintains such a defined
benefit and defined contribution plan, the top‑heavy minimum benefits shall be
provided as follows:

(i)        If a Non‑Key Employee is a participant in any such Top Heavy defined
contribution plan, the minimum benefit described in Section 2.03(a) of this Part
III above shall not be provided to each such Non‑Key Employee who receives at
least the full Top Heavy minimum contribution provided in such defined
contribution plan for Non‑Key Employee participants.

(ii)       If a Non‑Key Employee is not a Participant in any such Top Heavy
defined contribution plan, the minimum and extra minimum benefits, if
applicable, described in Section 2.03(a) of this Part III shall be provided to
each such Non‑Key Employee meeting the requirements of Section 2.03(a) of this
Part III above.

Notwithstanding any provision herein to the contrary, no minimum benefit will be
required (or the minimum benefit will be reduced, as the case may be) for a
Participant under this Plan for any Plan Year if the Employer maintains another
qualified defined benefit plan under which a minimum benefit is being accrued in
whole or in part for the Participant in accordance with Code Section 416(c).

(c)       The minimum accrued benefit described in this Section (to the extent
required to be nonforfeitable under Code Section 416(b)) may not be forfeited
under Code Sections 411(a)(3)(B) or 411(a)(3)(D).

PART III ‑ 6

84419371\V-5

--------------------------------------------------------------------------------

 

ARTICLE III

MINIMUM DISTRIBUTION REQUIREMENTS

3.01     General Rules.

(a)       Effective date.  The provisions of this Article will apply with
respect to distributions under the Plan made for calendar years beginning on or
after January 1, 2006.  With respect to distributions under the Plan made for
calendar years beginning on or after January 1, 2002 and prior to the effective
date of the application of the Treasury Regulations under Code Section 401(a)(9)
that were finalized on June 15, 2004, the Plan used the 1987 proposed
regulations.

(b)       Requirements of Treasury Regulations incorporated.  All distributions
required under this Article of this Part III shall be determined and made in
accordance with Code Section 401(a)(9), including the incidental death benefit
requirement in Code Section 401(a)(9)(G), and the regulations thereunder.

(c)       Precedence.  Subject to the joint and survivor annuity requirements of
the Plan, the requirements of this Article of this Part III will take precedence
over any inconsistent provisions of the Plan.

(d)       TEFRA Section 242(b)(2) elections.

(i)        Notwithstanding the other provisions of this Article and the Plan,
other than the spouse’s right of consent afforded under the Plan, distributions
may be made on behalf of any Participant, including a five percent (5%) owner,
who has made a designation in accordance with Section 242(b)(2) of the Tax
Equity and Fiscal Responsibility Act (“TEFRA”) and in accordance with all of the
following requirements (regardless of when such distribution commences):

(A)      The distribution by the Plan is one which would not have disqualified
such plan under Code Section 401(a)(9) as in effect prior to amendment by the
Deficit Reduction Act of 1984.

(B)      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.

(C)      Such designation was in writing, was signed by the Participant or
beneficiary, and was made before January 1, 1984.

(D)      The Participant had accrued a benefit under the Plan as of December 31,
1983.

PART III ‑ 7

84419371\V-5

--------------------------------------------------------------------------------

 

(E)      The method of distribution designated by the Participant or the
beneficiary specifies the time at which distribution will commence, the period
over which distributions will be made, and in the case of any distribution upon
the Participant’s death, the beneficiaries of the Participant listed in order of
priority.

(ii)       A distribution upon death will not be covered by the transitional
rule of this Section 3.01(d) of this Part III unless the information in the
designation contains the required information described above with respect to
the distributions to be made upon the death of the Participant.

(iii)      For any distribution which commences before January 1, 1984, but
continues after December 31, 1983, the Participant, or the beneficiary, to whom
such distribution is being made, will be presumed to have designated the method
of distribution under which the distribution is being made if the method of
distribution was specified in writing and the distribution satisfies the
requirements in (i)(A) and (i)(E) of Section 3.01(d) of this Part III.

(iv)       If a designation is revoked, any subsequent distribution must satisfy
the requirements of Code Section 401(a)(9) and the regulations thereunder.  If a
designation is revoked subsequent to the date distributions are required to
begin, the Plan must distribute by the end of the calendar year following the
calendar year in which the revocation occurs the total amount not yet
distributed which would have been required to have been distributed to satisfy
Code Section 401(a)(9) and the regulations thereunder, but for the TEFRA Section
242(b)(2) election.  For calendar years beginning after December 31, 1988, such
distributions must meet the minimum distribution incidental benefit
requirements.  Any changes in the designation will be considered to be a
revocation of the designation.  However, the mere substitution or addition of
another beneficiary (one not named in the designation) under the designation
will not be considered to be a revocation of the designation, so long as such
substitution or addition does not alter the period over which distributions are
to be made under the designation, directly or indirectly (for example, by
altering the relevant measuring life).

(v)       In the case in which an amount is transferred or rolled over from one
plan to another plan, the rules in Treasury Regulation Section 1.401(a)(9)-8,
Q&A‑14 and Q&A‑15, shall apply.

(e)        Limits on distribution periods.  To the extent otherwise permitted
under the terms of the Plan, as of the first Distribution Calendar Year,
distributions to a Participant, if not made in a single sum, may only be made
over one of the following periods:

(i)        The life of the Participant;

PART III ‑ 8

84419371\V-5

--------------------------------------------------------------------------------

 

(ii)       The joint lives of the Participant and a Designated Beneficiary;

(iii)      A period certain not extending beyond the Life Expectancy of the
Participant; or

(iv)      A period certain not extending beyond the joint life and last survivor
expectancy of the Participant and a Designated Beneficiary.

3.02     Time and Manner of Distribution.

(a)        Required Beginning Date.  The Participant’s entire interest will be
distributed, or begin to be distributed, to the Participant no later than the
Participant’s Required Beginning Date.

(b)        Death of Participant before distributions begin.  If the Participant
dies before distributions begin, the Participant’s entire interest will be
distributed, or begin to be distributed, no later than as follows:

(i)        Life Expectancy rule, spouse is beneficiary.  If the Participant’s
surviving spouse is the Participant’s sole Designated Beneficiary, then, except
as provided in Section 3.01(d) of this Part III, distributions to the surviving
spouse will begin by December 31 of the calendar year immediately following the
calendar year in which the Participant died, or by December 31 of the calendar
year in which the Participant would have attained age 70½ , if later.

(ii)       Life Expectancy rule, spouse is not beneficiary.  If the
Participant’s surviving spouse is not the Participant’s sole Designated
Beneficiary, then, except as provided in Section 3.01(d) of this Part III,
distributions to the Designated Beneficiary will begin by December 31st of the
calendar year immediately following the calendar year in which the Participant
died.

(iii)      No Designated Beneficiary, 5‑year rule.  If there is no Designated
Beneficiary as of September 30 of the year following the year of the
Participant’s death, the Participant’s entire interest will be distributed by
December 31st of the calendar year containing the fifth anniversary of the
Participant’s death.

(iv)       Surviving spouse dies before distributions begin.  If the
Participant’s surviving spouse is the Participant’s sole Designated Beneficiary
and the surviving spouse dies after the Participant but before distributions to
the surviving spouse begin, Section 3.02(b) of this Part III, other than Section
3.02(b)(i) of this Part III, will apply as if the surviving spouse were the
Participant.

PART III ‑ 9

84419371\V-5

--------------------------------------------------------------------------------

 

For purposes of Section 3.02(b) of this Part III, distributions are considered
to begin on the Participant’s Required Beginning Date (or, if Section
3.02(b)(iv) of this Part III applies, the date distributions are required to
begin to the surviving spouse under Section 3.02(a) of this Part III).  If
annuity payments irrevocably commence to the Participant before the
Participant’s Required Beginning Date (or to the Participant’s surviving spouse
before the date distributions are required to begin to the surviving spouse
under Section 3.02(b)(i) of this Part III), the date distributions are
considered to begin is the date distributions actually commence.

(c)        Form of distribution.  Unless the Participant’s interest is
distributed in the form of an annuity purchased from an insurance company or in
a single sum on or before the Required Beginning Date, distributions will be
made in accordance with Sections 3.03, 3.04 and 3.05 of this Part III as of the
first Distribution Calendar Year.  If the Participant’s interest is distributed
in the form of an annuity purchased from an insurance company, distributions
thereunder will be made in accordance with the requirements of Code Section
401(a)(9) and the regulations thereunder.  Any part of the Participant’s
interest which is in the form of an individual account described in Code Section
414(k) will be distributed in a manner satisfying the requirements of Code
Section 401(a)(9) and the regulations thereunder applicable to individual
accounts.

3.03     Determination of Amount to be Distributed Each Year.

(a)        General annuity requirements.  A Participant who is required to begin
payments as a result of attaining his or her Required Beginning Date and whose
interest has not been distributed in the form of an annuity purchased from an
insurance company or in a single sum before such date may receive such payments
in the form of annuity payments under the Plan.  Payments under such annuity
must satisfy the following requirements:

(i)        The annuity distributions will be paid in periodic payments made at
intervals not longer than one year;

(ii)       The distribution period will be over a life (or lives) or over a
period certain not longer than the period described in Sections 3.04 or 3.05 of
this Part III;

(iii)      Once payments have begun over a period certain, the period certain
will not be changed, even if the period certain is shorter than the maximum
period permitted, unless otherwise elected in Section 3.01(d) of this Part III;

(iv)       Payments will either be non‑increasing or increase only to the extent
permitted by one of more of the following conditions:

PART III ‑ 10

84419371\V-5

--------------------------------------------------------------------------------

 

(A)       By an annual percentage increase that does not exceed the annual
percentage increase in an Eligible Cost‑of‑Living Index for a 12‑month period
ending in the year during which the increase occurs or the prior year;

(B)       By a percentage increase that occurs at specified times (e.g., at
specified ages) and does not exceed the cumulative total of annual percentage
increases in an Eligible Cost‑of‑Living Index since the annuity starting date,
or if later, the date of the most recent percentage increase.  In cases
providing such a cumulative increase, an actuarial increase may not be provided
to reflect the fact that increases were not provided in the interim years;

(C)       To the extent of the reduction in the amount of the Participant’s
payments to provide for a survivor benefit upon death, but only if the
beneficiary whose life was being used to determine the distribution period
described in Section 3.04 of this Part III dies or is no longer the
Participant’s beneficiary pursuant to a qualified domestic relations order
within the meaning of Code Section 414(p);

(D)       To allow a beneficiary to convert the survivor portion of a joint and
survivor annuity into a single sum distribution upon the Participant’s death;

(E)       To pay increased benefits that result from a Plan amendment or other
increase in the Participant’s accrued benefit under the Plan;

(F)       By a constant percentage, applied not less frequently than annually,
at a rate that is less than 5 percent per year;

(G)       To provide a final payment upon the death of the Participant that does
not exceed the excess of the actuarial present value of the Participant’s
accrued benefit (within the meaning of Code Section 411(a)(7)) calculated as of
the annuity starting date using the applicable interest rate and the applicable
mortality table under Code Section 417(e) (or, if greater, the total amount of
employee contributions) over the total of payments before the death of the
Participant; or

(H)       As a result of dividend or other payments that result from Actuarial
Gains, provided:

(1)       Actuarial Gain is measured not less frequently than annually;

PART III ‑ 11

84419371\V-5

--------------------------------------------------------------------------------

 

(2)       The resulting dividend or other payments are either paid no later than
the year following the year for which the actuarial experience is measured or
paid in the same form as the payment of the annuity over the remaining period of
the annuity (beginning no later than the year following the year for which the
actuarial experience is measured);

(3)       The Actuarial Gain taken into account is limited to actuarial gain
from investment experience;

(4)       The assumed interest rate used to calculate such Actuarial Gains is
not less than 3 percent; and

(5)       The annuity payments are not also being increased by a constant
percentage as described in Section 3.03(a)(iv)(F)

(b)        Amount required to be distributed by Required Beginning Date.

(i)        In the case of a Participant whose interest in the Plan is being
distributed as an annuity pursuant to Section 3.03(a) of this Part III, the
amount that must be distributed on or before the Participant’s Required
Beginning Date (or, if the Participant dies before distributions begin, the date
distributions are required to begin under Sections 3.02(b)(i) or 3.02(b)(ii) of
this Part III) is the payment that is required for one payment interval.  The
second payment need not be made until the end of the next payment interval even
if that payment interval ends in the next calendar year.  Payment intervals are
the periods for which payments are received, e.g., bi‑monthly, monthly,
semiannually, or annually.  All of the Participant’s benefit accruals as of the
last day of the first Distribution Calendar Year will be included in the
calculation of the amount of the annuity payments for payment intervals ending
on or after the Participant’s Required Beginning Date.

PART III ‑ 12

84419371\V-5

--------------------------------------------------------------------------------

 

(ii)       In the case of a single sum distribution of a Participant’s entire
accrued benefit during a Distribution Calendar Year, the amount that is the
required minimum distribution for the Distribution Calendar Year (and thus not
eligible for rollover under Code Section 402(c)) is determined under this
Section 3.03(b)(ii) of this Part III.  The portion of the single sum
distribution that is a required minimum distribution is determined by treating
the single sum distribution as a distribution from an individual account Plan
and treating the amount of the single sum distribution as the Participant’s
account balance as of the end of the relevant valuation calendar year.  If the
single sum distribution is being made in the calendar year containing the
Required Beginning Date and the required minimum distribution for the
Participant’s first Distribution Calendar Year has not been distributed, the
portion of the single sum distribution that represents the required minimum
distribution for the Participant’s first and second Distribution Calendar Years
is not eligible for rollover.

(c)        Additional accruals after first Distribution Calendar Year.  Any
additional benefits accruing to the Participant in a calendar year after the
first Distribution Calendar Year will be distributed beginning with the first
payment interval ending in the calendar year immediately following the calendar
year in which such amount accrues.  Notwithstanding the preceding, the Plan will
not fail to satisfy the requirements of this Section 3.03(c) of this Part III
and Code Section 401(a)(9) merely because there is an administrative delay in
the commencement of the distribution of the additional benefits accrued in a
calendar year, provided that the actual payment of such amount commences as soon
as practicable.  However, payment must commence no later than the end of the
first calendar year following the calendar year in which the additional benefit
accrues, and the total amount paid during such first calendar year must be no
less than the total amount that was required to be paid during that year under
this Section 3.03(c) of this Part III.

(d)        Death after distributions begin.  If a Participant dies after
distribution of the Participant’s interest begins in the form of an annuity
meeting the requirements of this Article, then the remaining portion of the
Participant’s interest will continue to be distributed over the remaining period
over which distributions commenced.

3.04     Requirements for Annuity Distributions That Commence During
Participant’s Lifetime.

PART III ‑ 13

84419371\V-5

--------------------------------------------------------------------------------

 

(a)        Joint life annuities where the beneficiary is the Participant’s
spouse.  If distributions commence under a distribution option that is in the
form of a joint and survivor annuity for the joint lives of the Participant and
the Participant’s spouse, the minimum distribution incidental benefit
requirement will not be satisfied as of the date distributions commence unless,
under the distribution option, the periodic annuity payment payable to the
survivor does not at any time on and after the Participant’s Required Beginning
Date exceed the annuity payable to the Participant.  In the case of an annuity
that provides for increasing payments, the requirement of this Section 3.04(a)
of this Part III will not be violated merely because benefit payments to the
beneficiary increase, provided the increase is determined in the same manner for
the Participant and the beneficiary.  If the form of distribution combines a
joint and survivor annuity for the joint lives of the Participant and the
Participant’s spouse and a period certain annuity, the preceding requirements
will apply to annuity payments to be made to the Designated Beneficiary after
the expiration of the period certain.

(b)        Joint life annuities where the beneficiary is not the Participant’s
spouse.  If distributions commence under a distribution option that is in the
form of a joint and survivor annuity for the joint lives of the Participant and
a beneficiary other than the Participant’s spouse, the minimum distribution
incidental benefit requirement will not be satisfied as of the date
distributions commence unless under the distribution option, the annuity
payments to be made on and after the Participant’s Required Beginning Date will
satisfy the conditions of this Section 3.04(b) of this Part III.  The periodic
annuity payment payable to the survivor must not at any time on and after the
Participant’s Required Beginning Date exceed the applicable percentage of the
annuity payment payable to the Participant using the table set forth in
Q&A‑2(c)(2) of Section 1.401(a)(9)-6 of the Treasury Regulations.  The
applicable percentage is based on the adjusted Participant/beneficiary age
difference.  The adjusted Participant/beneficiary age difference is determined
by first calculating the excess of the age of the Participant over the age of
the beneficiary based on their ages on their birthdays in a calendar year.  If
the Participant is younger than age 70, the age difference determined in the
previous sentence is reduced by the number of years that the Participant is
younger than age 70 on the Participant’s birthday in the calendar year that
contains the annuity starting date.  In the case of an annuity that provides for
increasing payments, the requirement of this Section 3.04(b) of this Part III
will not be violated merely because benefit payments to the beneficiary
increase, provided the increase is determined in the same manner for the
Participant and the beneficiary.  If the form of distribution combines a joint
and survivor annuity for the joint lives of the Participant and a non‑spouse
beneficiary and a period certain annuity, the preceding requirements will apply
to annuity payments to be made to the Designated Beneficiary after the
expiration of the period certain.

PART III ‑ 14

84419371\V-5

--------------------------------------------------------------------------------

 

(c)        Period certain annuities.  Unless the Participant’s spouse is the
sole Designated Beneficiary and the form of distribution is a period certain and
no life annuity, the period certain for an annuity distribution commencing
during the Participant’s lifetime may not exceed the applicable distribution
period for the Participant under the Uniform Lifetime Table set forth in Section
1.401(a)(9)-9 of the Treasury Regulations for the calendar year that contains
the annuity starting date.  If the annuity starting date precedes the year in
which the Participant reaches age 70, the applicable distribution period for the
Participant is the distribution period for age 70 under the Uniform Lifetime
Table set forth in Section 1.401(a)(9)-9 of the Treasury Regulations plus the
excess of 70 over the age of the Participant as of the Participant’s birthday in
the year that contains the annuity starting date.  If the Participant’s spouse
is the Participant’s sole Designated Beneficiary and the form of distribution is
a period certain and no life annuity, the period certain may not exceed the
longer of the Participant’s applicable distribution period, as determined under
this Section 3.04(c) of this Part III, or the joint life and last survivor
expectancy of the Participant and the Participant’s spouse as determined under
the Joint and Last Survivor Table set forth in Section 1.401(a)(9)-9 of the
Treasury regulations, using the Participant’s and spouse’s attained ages as of
the Participant’s and spouse’s birthdays in the calendar year that contains the
annuity starting date.

3.05     Requirements for Minimum Distributions Where Participant Dies Before
Date Distributions Begin.

(a)        Participant survived by Designated Beneficiary.  Except as provided
in Section 3.01(d) of this Part III, if the Participant dies before the date
distribution of his or her interest begins and there is a Designated
Beneficiary, the Participant’s entire interest will be distributed, beginning no
later than the time described in Section 3.02(b)(i) or Section 3.02(b)(ii) of
this Part III, over the life of the Designated Beneficiary or over a period
certain not exceeding:

(i)        Unless the annuity starting date is before the first Distribution
Calendar Year, the Life Expectancy of the Designated Beneficiary determined
using the beneficiary’s age as of the beneficiary’s birthday in the calendar
year immediately following the calendar year of the Participant’s death; or

(ii)       If the annuity starting date is before the first Distribution
Calendar Year, the Life Expectancy of the Designated Beneficiary determined
using the beneficiary’s age as of the beneficiary’s birthday in the calendar
year that contains the annuity starting date.

(b)        No Designated Beneficiary.  If the Participant dies before the date
distributions begin and there is no Designated Beneficiary as of September 30 of
the year following the year of the Participant’s death, distribution of the
Participant’s entire interest will be completed by December 31 of the calendar
year containing the fifth anniversary of the Participant’s death.

PART III ‑ 15

84419371\V-5

--------------------------------------------------------------------------------

 

(c)        Death of surviving spouse before distributions to surviving spouse
begin.  If the Participant dies before the date distribution of his or her
interest begins, the Participant’s surviving spouse is the Participant’s sole
Designated Beneficiary, and the surviving spouse dies before distributions to
the surviving spouse begin, this Section 3.05 of this Part III will apply as if
the surviving spouse were the Participant, except that the time by which
distributions must begin will be determined without regard to Section 3.02(b)(i)
of this Part III.

3.06     Definitions.

(a)        Actuarial Gain. “Actuarial Gain” means the difference between an
amount determined using the actuarial assumptions (i.e., investment return,
mortality, expense, and other similar assumptions) used to calculate the initial
payments before adjustment for any increases and the amount determined under the
actual experience with respect to those factors.  Actuarial Gain also includes
differences between the amount determined using actuarial assumptions when an
annuity was purchased or commenced and such amount determined using actuarial
assumptions used in calculating payments at the time the Actuarial Gain is
determined.

(b)        Designated Beneficiary. “Designated Beneficiary” means the individual
who is designated as the beneficiary under the Plan and is the Designated
Beneficiary under Code Section 401(a)(9) and Section 1.401(a)(9)-4, Q&A‑1, of
the Treasury Regulations.

(c)        Distribution Calendar Year. “Distribution Calendar Year” means a
calendar year for which a minimum distribution is required.  For distributions
beginning before the Participant’s death, the first Distribution Calendar Year
is the calendar year immediately preceding the calendar year that contains the
Participant’s Required Beginning Date.  For distributions beginning after the
Participant’s death, the first Distribution Calendar Year is the calendar year
in which distributions are required to begin pursuant to Section 3.02(b) of this
Part III.

(d)        Eligible Cost‑of‑Living Index.  An “Eligible Cost‑of‑Living Index”
means an index described below:

(i)        A consumer price index that is based on prices of all items (or all
items excluding food and energy) and issued by the Bureau of Labor Statistics,
including an index for a specific population (such as urban consumers or urban
wage earners and clerical workers) and an index for a geographic area or areas
(such as a given metropolitan area or state); or

(ii)       A percentage adjustment based on a cost‑of‑living index described in
Section 3.06(d)(i) of this Part III above, or a fixed percentage, if less.  In
any year when the cost‑of‑living index is lower than the fixed percentage, the
fixed percentage may be treated as an increase in an Eligible Cost‑of‑Living
Index, provided it does not exceed the sum of:

PART III ‑ 16

84419371\V-5

--------------------------------------------------------------------------------

 

(A)       The cost‑of‑living index for that year, and

(B)       The accumulated excess of the annual cost‑of‑living index from each
prior year over the fixed annual percentage used in that year (reduced by any
amount previously utilized under this Section 3.06(d)(ii) of this Part III).

(e)        Life Expectancy. “Life Expectancy” means the life expectancy as
computed by use of the Single Life Table in Section 1.401(a)(9)-9 of the
Treasury Regulations.

(f)        Required Beginning Date.  Except as otherwise provided in the Plan,
the “Required Beginning Date” means the April 1st of the calendar year following
the later of the calendar year in which the Participant attains age 70 ½ , or
the calendar year in which the Participant retires, except that benefit
distributions to a “5‑percent owner” must commence by April 1 of the calendar
year following the calendar year in which the Participant attains age 70
½.  Once distributions have begun to a “5‑percent owner” under this Article III,
they must continue to be distributed, even if the Participant ceases to be a
“5‑percent owner” in a subsequent Plan Year.

“5‑percent owner” means a Participant who is a 5‑percent owner as defined in
Code Section 416 at any time during the Plan Year ending with or within the
calendar year in which such owner attains age 70 ½.  Once required minimum
distributions have begun to a 5‑percent owner, they must continue to be
distributed, even if the Participant ceases to be a 5‑percent owner in a
subsequent year.

ARTICLE IV

LIMITATIONS ON BENEFITS

The limitations of Sections 4.01 through 4.05 of this Part III shall be subject
to those of Section 4.06 of this Part III, which shall apply in Limitation Years
beginning on or after July 1, 2007, except as otherwise provided therein.

4.01     General Limitations.  Section 4.01 of this Part III applies regardless
of whether any Participant is or has ever been a participant in another
qualified plan maintained by the Employer.  If any Participant is or has ever
been a participant in another qualified plan, a welfare benefit fund (as defined
in Code Section 419(e)), an individual medical account (as defined in Code
Section 415(1)(2)), or a simplified employee pension (as defined in Code Section
408(k)) maintained by the Employer which provides an Annual Addition, Section
4.02 of this Part III is also applicable to that Participant’s benefits.

(a)        The Annual Benefit otherwise payable to a Participant at any time
will not exceed the Maximum Permissible Benefit.  If the benefit the Participant
would otherwise accrue in a Limitation Year would produce an Annual Benefit in
excess of the Maximum Permissible Benefit, the benefit must be limited (or the
rate of accrual reduced) so that the Annual Benefit does not exceed the Maximum
Permissible Benefit.

PART III ‑ 17

84419371\V-5

--------------------------------------------------------------------------------

 

(b)        If a Participant has made voluntary employee contributions, or
mandatory employee contributions as defined in Code Section 411(c)(2)(C) under
the terms of this Plan, the amount of such contributions is treated as an Annual
Addition to a qualified defined contribution plan, for purposes of Sections
4.01(a) and 4.01(b) of this Part III.

4.02     Additional General Limitations.  Section 4.02 of this Part III applies
if any Participant is also a participant, or has ever participated, in another
plan maintained by the Employer, including a qualified plan, a welfare benefit
fund maintained by the Employer (as defined in Code Section 419(e)) under which
amounts attributable to post‑retirement medical benefits are allocated to
separate accounts of Key Employees (as defined in Code Section 419(A)(d)(3)), an
individual medical account, or a simplified employee pension which provides an
Annual Addition.

(a)        If a Participant is, or has ever been, a participant covered under
more than one defined benefit plan maintained by the Employer, the sum of the
Participant’s Annual Benefits from all such plans may not exceed the Maximum
Permissible Benefit.  If a Participant is or has ever been a participant in more
than one defined benefit plan maintained by an Employer, the rate of accrual in
this Plan will be reduced so that the total Annual Benefits payable at any time
under such plans will not exceed the Maximum Permissible Benefit.

(b)        For Limitation Years beginning before January 1, 2000, if the
Employer maintains, or ever maintained, one or more qualified defined
contribution plans covering any Participant in this Plan, a welfare benefit fund
(as defined in Code Section 419(e)), an individual medical account (as defined
in Code Section 415(1)(2)), or a simplified employee pension(as defined in Code
Section 408(k)), the sum of the Participant’s Defined Contribution Fraction and
Defined Benefit Fraction (the “Combined Limit”) will not exceed 1.0 in any
Limitation Year.  In the event that a Participant’s Combined Limit would
otherwise be exceeded for a Limitation Year, the Participant's rate of accrual
under this Plan will be reduced, to the extent necessary, such that such accrual
plus the Annual Additions credited to any such Participant’s account for the
Limitation Year under the defined contribution plan, welfare benefit fund,
individual medical account or simplified employee pension will not exceed the
Combined Limit.

4.03     Limitation Year beginning after December 31, 1986.  In the case of an
individual who was a participant in one or more defined benefit plans of the
Employer as of the first day of the first Limitation Year beginning after
December 31, 1986, the application of the limitations of this Article shall not
cause the Maximum Permissible Benefit for such individual under all such defined
benefit plans to be less than the individual’s current Accrued Benefit.  The
preceding sentence applies only if all such defined benefit plans met the
requirements of Code Section 415 for all Limitation Years beginning before
January 1, 1987.

PART III ‑ 18

84419371\V-5

--------------------------------------------------------------------------------

 

4.04     Limitation Year beginning after December 31, 1994.  In the case of an
individual who was a participant in one or more defined benefit plans of the
Employer as of the first day of the first Limitation Year beginning after
December 31, 1994, the application of the limitations of this Article shall not
cause the Maximum Permissible Amount for such individual under all such defined
benefit plans to be less than the individual’s Retirement Protection Act of 1994
(“RPA `94”) old law benefit.  The preceding sentence applies only if all such
defined benefit plans met the requirements of Code Section 415 on December 7,
1994.

4.05     Definitions.  For the purposes of this Article, the following words and
phrases shall have the meanings set forth in this Section 4.05 of this Part III,
unless a different meaning is clearly required by the context.

(a)        Annual Additions.  “Annual Additions” means the sum of the following
amounts credited to a Participant’s account for the Limitation Year:

(i)        Employer contributions;

(ii)       Employee contributions;

(iii)      Allocations under a simplified employee pension;

(iv)       Forfeitures; and

(v)       Amounts allocated after March 31, 1984, to an individual medical
account that is part of a pension or annuity plan maintained by the Employer are
treated as Annual Additions to a defined contribution plan.  Also, amounts
derived from contributions paid or accrued after December 31, 1985, in taxable
years ending after such date, which are attributable to post‑retirement medical
benefits allocated to the separate account of a Key Employee, as defined in Code
Section 419A(d)(3), under a welfare benefit fund, as defined in Code Section
419(e), maintained by the Employer, are treated as Annual Additions to a defined
contribution plan.

PART III ‑ 19

84419371\V-5

--------------------------------------------------------------------------------

 

(b)        Annual Benefit.  “Annual Benefit” means a retirement benefit under
the Plan which is payable annually in the form of a straight life annuity.  A
benefit which is payable in a form other than a straight life annuity must be
adjusted to an actuarially equivalent straight life annuity before applying the
limitations of this Article.  In the case of a “GATT Benefit” (which for this
purpose is any benefit unless it is paid in the form of a non‑decreasing annuity
payable over a period not less than the life of the Participant) or a “Non‑GATT
Benefit” (which for this purpose is any benefit other than a GATT Benefit), the
actuarial equivalent straight life annuity commencing as of the benefit
commencement date of such GATT Benefit or Non‑GATT Benefit is the greater of (i)
the equivalent annual life annuity determined by using the interest rate and
mortality table in Section 2.02 in Part I of the Plan (the definition of the
term “Actuarial Equivalent” for the purposes of Part I of the Plan), or Section
2.02 in Part II of the Plan (the definition of the term “Actuarial Equivalent”
for the purposes of Part II of the Plan); and (ii) the equivalent annual life
annuity determined by using the combination of (A) a 5% interest rate in the
case of a Non‑GATT Benefit or the Code Section 417 Interest Rate in the case of
a GATT Benefit; and (B) the Code Section 417 Mortality Table.  The portion of
the actuarial equivalent straight life annuity attributable to the GATT Benefit
is the “GATT Percentage,” and the portion of the actuarial equivalent straight
life annuity attributable to the Non‑GATT Benefit is the “Non‑GATT
Percentage.”  The Annual Benefit does not include any benefits attributable to
Employee contributions or rollover contributions, or the assets transferred from
a qualified plan that was not maintained by the Employer.  No actuarial
adjustment to the benefit is required for (i) the value of a Qualified Joint and
Survivor Annuity, (ii) the value of benefits that are not directly related to
retirement benefits (such as the qualified disability benefit, pre‑retirement
death benefits, and post‑retirement medical benefits), and (iii) the value of
post‑retirement cost‑of‑living increases made in accordance with Code Section
415(d) and Treasury Regulation Section 1.415(c)(2)(iii).

(c)        Defined Benefit Dollar Limitation. The “Defined Benefit Dollar
Limitation” is $90,000.  Effective on January 1 of each year, the $90,000
limitation above will be automatically adjusted by multiplying such limit by the
cost of living adjustment factor prescribed by the Secretary of the Treasury
under Code Section 415(d) in such manner as the Secretary shall prescribe.  The
new limitation will apply to Limitation Years ending within the calendar year of
the date of the adjustment.

Notwithstanding the foregoing, effective for Limitation Years ending after
December 31, 2001, the Defined Benefit Dollar Limitation is $160,000, as
adjusted effective January 1 of each year under Code Section 415(d) in such
manner as the Secretary shall prescribe, and payable in the form of a straight
life annuity.  A limitation as adjusted under Code Section 415(d) will apply to
Limitation Years ending with or within the calendar year for which the
adjustment applies.

PART III ‑ 20

84419371\V-5

--------------------------------------------------------------------------------

 

(d)        Defined Benefit Fraction.  “Defined Benefit Fraction” means a
fraction, the numerator of which is the sum of the Participant’s Projected
Annual Benefits under all the defined benefit plans (whether or not terminated)
maintained by the Employer, and the denominator of which is the lesser of 125
percent of the dollar limitation determined for the Limitation Year under Code
Section 415(b)(1)(A) and Code Section 415(d) or 140 percent of the Highest
Average Compensation, including any adjustments under Code Section 415(b)(5),
both in accordance with Section 4.05(h) of this Part III below.

Notwithstanding the above, if the Participant was a participant as of the first
day of the first Limitation Year beginning after December 31, 1986, in one or
more defined benefit plans maintained by the Employer which were in existence on
May 6, 1986, the denominator of this fraction will not be less than 125 percent
of the sum of the annual benefits under such plans which the Participant had
accrued as of the close of the last Limitation Year beginning before January 1,
1987, disregarding any changes in the terms and conditions of the Plan after May
5, 1986.  The preceding sentence applies only if the defined benefit plans
individually and in the aggregate satisfied the requirements of Code Section 415
for all Limitation Years beginning before January 1, 1987.

Notwithstanding the foregoing, for Limitation Years beginning before January 1,
2000, for any Top Heavy Plan Year, 100 percent shall be substituted for 125
percent unless an extra minimum benefit or contribution is credited pursuant to
Section 2.03(b) of Part III of the Plan.  However, for any such Plan Year in
which this Plan is a super top heavy plan, 100 percent shall be substituted for
125 percent in any event.

(e)        Defined Contribution Fraction.  “Defined Contribution Fraction” means
a fraction, the numerator of which is the sum of the Annual Additions to the
Participant’s account under all the defined contribution plans (whether or not
terminated) maintained by the Employer for the current and all prior Limitation
Years (including the Annual Additions attributable to the Participant’s
nondeductible employee contributions to this and all other defined benefit plans
(whether or not terminated) maintained by the Employer), and the Annual
Additions attributable to all welfare benefit funds (as defined in Code Section
419(e)), individual medical accounts (as defined in Code Section 415(1)(2)), or
simplified employee pensions (as defined in Code Section 408(k)), and the
denominator of which is the sum of the maximum aggregate amounts for the current
and all prior Limitation Years of service with the Employer (regardless of
whether a defined contribution plan was maintained by the Employer).

The maximum aggregate amount in any Limitation Year is the lesser of (i) 125
percent of the dollar limitation under Code Section 415(c)(1)(A) after
adjustment under Section 415(d), or (ii) 35 percent of the Participant’s
Compensation for such year.

PART III ‑ 21

84419371\V-5

--------------------------------------------------------------------------------

 

If the Employee was a participant as of the first day of the first Limitation
Year beginning after December 31, 1986, in one or more defined contribution
plans maintained by the Employer which were in existence on May 6, 1986, the
numerator of this fraction will be adjusted if the sum of this fraction and the
defined benefit fraction would otherwise exceed 1.0 under the terms of this
Plan.  Under the adjustment, an amount equal to the product of (i) the excess of
the sum of the fractions over 1.0 times (ii) the denominator of this fraction,
will be permanently subtracted from the numerator of this fraction.  The
adjustment is calculated using the fractions as they would be computed as of the
end of the last Limitation Year beginning before January 1, 1987, and
disregarding any changes in the terms and conditions of the plans made after May
6, 1986, but using the Code Section 415 limitation applicable to the first
Limitation Year beginning on or after January 1, 1987.

The annual addition for any Limitation Year beginning before January 1, 1987
shall not be recomputed to treat all employee contributions as Annual Additions.

Notwithstanding the foregoing, for Limitation Years beginning before January 1,
2000, for any Top Heavy Plan Year, 100 percent shall be substituted for 125
percent unless an extra minimum allocation is made pursuant to Section 2.03(b)
of Part III of the Plan.  However, for any such Plan Year in which this Plan is
a super top heavy plan, 100 percent shall be substituted for 125 percent in any
event.

(f)        Employer.  “Employer” means the employer that adopt this Plan and all
members of a controlled group of corporations (as defined in Code Section 414(b)
as modified by Code Section 415(h)), all trades or businesses under common
control (as defined in Code Section 414(c) as modified by Code Section 415(h)),
or all members of an affiliated service group (as defined in Code Section
414(m)) of which the adopting Employer is a part, and any other entity required
to be aggregated with the Employer pursuant to regulations under Code Section
414(o).

(g)        Highest Average Compensation. “Highest Average Compensation” means
the average Compensation for the three consecutive years of service with the
Employer that produces the highest average.  A “year of service” with the
Employer is the 12‑consecutive month period defined in Section 2.44 of Part I of
the Plan.

In the case of a Participant who has separated from service, the Participant’s
Highest Average Compensation will be automatically adjusted by multiplying such
compensation by the cost of living adjustment factor prescribed by the Secretary
of the Treasury under Code Section 415(d) in such manner as the Secretary shall
prescribe.  The adjusted compensation amount will apply to Limitation Years
ending within the calendar year of the date of the adjustment.

(h)        Maximum Permissible Benefit. “Maximum Permissible Benefit” means

PART III ‑ 22

84419371\V-5

--------------------------------------------------------------------------------

 

(i)        The lesser of the Defined Benefit Dollar Limitation or 100 percent of
the Participant’s Highest Average Compensation.

(ii)       If the Participant has less than ten years of participation in the
Plan, the Defined Benefit Dollar Limitation is reduced by one‑tenth for each
year of participation (or part thereof) less than ten.

(iii)      If the Participant has less than ten years of service with the
Employer, the Compensation limitation is reduced by one‑tenth for each Year of
Service (or part thereof) less than ten.  The adjustments of this Section
4.05(h)(iii) of this Part III shall be applied in the denominator of the Defined
Benefit Fraction based upon Years of Service.  For purposes of computing the
Defined Benefit Fraction only, Years of Service shall include future years of
service occurring before the Participant’s Normal Retirement Age.  Such future
years of service shall include the year that contains the date the Participant
reaches Normal Retirement Age, only if it can be reasonably anticipated that the
Participant will receive a Year of Service for such year, or the year in which
the Participant terminates employment, if earlier.

(iv)       If the Annual Benefit of the Participant commences before the
Participant’s Social Security Retirement Age, but on or after Age 62, the
Defined Benefit Dollar Limitation as reduced above, if necessary, shall be
determined as follows:

(A)       If a Participant’s Social Security Retirement Age is 65, the Dollar
Limitation for benefits commencing on or after Age 62 is determined by reducing
the Defined Benefit Dollar Limitation by 5/9 of one percent 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 Limitation for benefits commencing on or after Age 62 is determined
by reducing the Defined Benefit Dollar Limitation by 5/9 of one percent for each
of the first 36 months and 5/12 of one percent 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.

PART III ‑ 23

84419371\V-5

--------------------------------------------------------------------------------

 

(v)       If the Annual Benefit of a Participant commences prior to Age 62, the
Defined Benefit Dollar Limitation shall be the actuarial equivalent of an Annual
Benefit beginning at Age 62, as determined above, reduced for each month by
which benefits commence before the month in which the Participant attains Age
62.  The reduced dollar limitation is the sum of the Non‑GATT Limitation and the
GATT Limitation.  For purposes of the immediately preceding sentence, the
“Non‑GATT Limitation” is the product of the Non‑GATT Percentage and the lesser
of the equivalent early retirement dollar amount computed as described in
Section 6.02 of Part I of the Plan or in Section 5.02 of Part II of the
Plan  and the amount computed using an interest rate of 5% and the Code Section
417 Mortality Table in Section 2.02 in Part I of the Plan (the definition of the
term “Actuarial Equivalent” for the purposes of Part I of the Plan) or Section
2.02 in Part II of the Plan (the definition of the term “Actuarial Equivalent”
for the purposes of Part II of the Plan), as appropriate; and the “GATT
Limitation” is the product of the GATT Percentage (as described in Section
4.05(b) of Part III of the Plan) and the lesser of the equivalent early
retirement dollar amount computed as described in Section 6.02 of Part I of the
Plan or in Section 5.02 of Part II of the Plan and the amount computed using the
Code Section 417 Interest Rate and the Code Section 417 Mortality Table (as
described in Section 2.02 in Part I of the Plan (the definition of the term
“Actuarial Equivalent” for the purposes of Part I of the Plan)) or Section 2.02
in Part II of the Plan (the definition of the term “Actuarial Equivalent” for
the purposes of Part II of the Plan).  Any decrease in the Defined Benefit
Dollar Limitation determined in accordance with Section 4.05(h)(v) of this Part
III shall not reflect a mortality decrement to the extent that benefits will not
be forfeited upon the death of the Participant.

(vi)       If the Annual Benefit of a Participant commences after the
Participant’s Social Security Retirement Age, the Defined Benefit Dollar
Limitation as reduced in Section 4.05(h)(ii) of this Part III above, if
necessary, shall be adjusted so that it is the actuarial equivalent of an annual
benefit of such Dollar Limitation beginning at the Participant’s Social Security
Retirement Age.  The increased dollar limitation is the lesser of the equivalent
dollar amount computed using the interest rate and mortality table used for
actuarial equivalence set forth in Part I of the Plan (the definition of the
term “Actuarial Equivalent” for the purposes of Part I of the Plan) or Section
2.02 in Part II of the Plan (the definition of the term “Actuarial Equivalent”
for the purposes of Part II of the Plan) and the amount computed using an
interest rate of 5 percent and the Code Section 417 Mortality Table as described
in Part I of the Plan (the definition of the term “Actuarial Equivalent” for the
purposes of Part I of the Plan) or in Section 2.02 in Part II of the Plan (the
definition of the term “Actuarial Equivalent” for the purposes of Part II of the
Plan).

PART III ‑ 24

84419371\V-5

--------------------------------------------------------------------------------

 

(i)        Projected Annual Benefit.  “Projected Annual Benefit” means the
Annual Benefit, as defined in Section 4.05(b) of this Part III, to which the
Participant would be entitled under the terms of the Plan assuming:

(i)        the Participant will continue employment until Normal Retirement Age
under the Plan (or current Age, if later); and

(ii)       the Participant’s Compensation for the current Limitation Year and
all other relevant factors used to determine benefits under the Plan will remain
constant for all future Limitation Years.

(j)        RPA ‘94 Old Law Benefit.  “RPA '94 Old Law Benefit” means the
Participant’s Accrued Benefit under the terms of the plan as of December 31,
1996, (the “RPA ‘94 freeze date”), for the annuity starting date and optional
form and taking into account the limitations of Code Section 415, as in effect
on December 7, 1994, including the participation requirements under Code Section
415(b)(5).  In determining the amount of a Participant’s RPA ‘94 Old Law
Benefit, the following shall be disregarded;

(i)        any Plan amendment increasing benefits adopted after the RPA ‘94
freeze date; and

(ii)       any cost of living adjustments that become effective after such date.

A Participant’s RPA ‘94 Old Law Benefit is not increased after the RPA ‘94
freeze date, but if the limitations of Code Section 415, as in effect on
December 7, 1994, are less than the limitations that were applied to determine
the Participant’s RPA `94 Old Law Benefit on the RPA ‘94 freeze date, then the
Participant’s RPA ‘94 Old Law Benefit will be reduced in accordance with such
reduced limitation.  If, at any date after the RPA ‘94 freeze date, the
Participant’s total plan benefit, before the application of Code Section 415, is
less than the Participant’s RPA ‘94 Old Law Benefit, the RPA ‘94 Old Law Benefit
will be reduced to the Participant’s total plan benefit.

(k)        Social Security Retirement Age.  “Social Security Retirement Age”
means age 65 in the case of a Participant attaining Age 62 before January 1,
2000 (i.e., born before January 1, 1938), Age 66 for a Participant attaining age
62 after December 31, 1999, and before January 1, 2017 (i.e., born after
December 31, 1937, but before January 1, 1955), and Age 67 for a participant
attaining Age 62 after December 31, 2016 (i.e., born after December 31, 1954).

(l)        TRA ‘86 Accrued Benefit.  “TRA '86 Accrued Benefit” means a
Participant’s Accrued Benefit under the Plan, determined as if the Participant
had separated from service as of the close of the last Limitation Year beginning
before January 1, 1987, when expressed as an annual benefit within the meaning
of Code Section 415(b)(2).  In determining the amount of a Participant’s TRA ‘86
Accrued Benefit, the following shall be disregarded:

PART III ‑ 25

84419371\V-5

--------------------------------------------------------------------------------

 

(i)        any change in the terms and conditions of the Plan after May 5, 1986;
and

(ii)       any cost of living adjustments occurring after May 5, 1986.

(m)      Year of Participation.  “Year of Participation” means the Participant
shall be credited with a year of participation (computed to fractional parts of
a year) for each accrual computation period for which the following conditions
are met: (i) The Participant is credited with at least the number of Hours of
Service for benefit accrual purposes, required under the terms of the Plan in
order to accrue a benefit for the accrual computation period, and (ii) the
Participant is included as a Participant under the eligibility provisions of the
plan for at least one day of the accrual computation period.  If these two
conditions are met, the portion of a year of participation credited to the
Participant shall equal the amount of benefit accrual service credited to the
Participant for such accrual computation period.

4.06     Final Section 415 Regulations Effective Date.  The limitations of this
Section shall apply in Limitation Years beginning on or after July 1, 2007,
except as otherwise provided herein.

(a)        Grandfather Provision.  The application of the provisions of this
Section shall not cause the maximum permissible benefit for any Participant to
be less than the Participant’s accrued benefit under all the defined benefit
plans of the employer or a predecessor employer as of the end of the last
Limitation Year beginning before July 1, 2007 under provisions of the plans that
were both adopted and in effect before April 5, 2007.  The preceding sentence
applies only if the provisions of such defined benefit plans that were both
adopted and in effect before April 5, 2007 satisfied the applicable requirements
of statutory provisions, regulations, and other published guidance relating to
Code Section 415 in effect as of the end of the last Limitation Year beginning
before July 1, 2007, as described in Section 1.415(a)-1(g)(4) of the Treasury
Regulations.

(b)        Incorporation by Reference.  Notwithstanding anything contained in
the Plan to the contrary, the limitations, adjustments, and other requirements
prescribed in the Plan shall comply with the provisions of Code Section 415 and
the final regulations promulgated thereunder, the terms of which are
specifically incorporated herein by reference as of the first Limitation Year
beginning on or after July 1, 2007, except where an earlier effective date is
otherwise provided in the final regulations or in this Section.  However, where
the final regulations permit the Plan to specify an alternative option to a
default option set forth in the regulations, and the alternative option was
available under statutory provisions, regulations, and other published guidance
relating to Code Section 415 as in effect prior to April 5, 2007, and the Plan
provisions in effect as of April 5, 2007 incorporated the alternative option,
said alternative option shall remain in effect as a plan provision for
Limitation Years beginning on or after July 1, 2007.

PART III ‑ 26

84419371\V-5

--------------------------------------------------------------------------------

 

(c)        High Three‑Year Average Compensation.  For purposes of the Plan’s
provisions reflecting Code Section 415(b)(3) (i.e., limiting the annual benefit
payable to no more than 100% of the Participant’s average annual compensation),
a Participant’s average compensation shall be the average compensation for the
three consecutive years of service, during which the Employee had the greatest
aggregate compensation from the Employer, except that a Participant’s
compensation for a year of service shall not include compensation in excess of
the limitation under Code Section 401(a)(17) that is in effect for the calendar
year in which such year of service begins.  If the Participant has less than
three consecutive years of service, compensation shall be averaged over the
Participant’s longest consecutive period of service, including fractions of
years, but not less than one year.  In the case of a Participant who is rehired
by the Employer after a severance of employment, the Participant’s high
three‑year average compensation shall be calculated by excluding all years for
which the Participant performs no services for and receives no compensation from
the Employer (the “break period”), and by treating the years immediately
preceding and following the break period as consecutive.

(d)        Adjustment to dollar limit after date of severance.  In the case of a
Participant who has had a severance from employment with the Employer, the
Defined Benefit Dollar Limitation applicable to the Participant in any
Limitation Year beginning after the date of severance shall be automatically
adjusted under Code Section 415(d).

(e)        Compensation paid after severance from employment.  For Limitation
Years beginning on or after July 1, 2007 compensation for a Limitation Year,
within the meaning of Code Section 415(c)(3), shall also include the following
types of compensation paid by the later of 2½ months after a Participant’s
severance from employment with the employer maintaining the plan or the end of
the Limitation Year that includes the date of the Participant’s severance from
employment with the employer maintaining the plan.  Any other payment of
compensation paid after severance of employment that is not described in the
following types of compensation is not considered compensation within the
meaning of Code Section 415(c)(3), even if payment is made within the time
period specified above.

(i)        Regular pay after severance from employment.  Compensation shall
include regular pay after severance of employment if:

(A)       The payment is regular compensation for services during the
Participant’s regular working hours, or compensation for services outside the
Participant’s regular working hours (such as overtime or shift differential),
commissions, bonuses, or other similar payments; and

PART III ‑ 27

84419371\V-5

--------------------------------------------------------------------------------

 

(B)       The payment would have been paid to the Participant prior to a
severance from employment if the Participant had continued in employment with
the employer.

(ii)       Leave cashouts and deferred compensation.  Leave cashouts and
deferred compensation shall be included in compensation, if those amounts would
have been included in the definition of compensation if they were paid prior to
the Participant’s severance from employment with the Employer maintaining the
Plan, and the amounts are either:

(A)       Payment for unused accrued bona fide sick, vacation, or other leave,
but only if the Participant would have been able to use the leave if employment
had continued; or

(B)       Received pursuant to a nonqualified unfunded deferred compensation
plan, but only if the payment would have been paid to the if the Participant had
continued in employment with the employer and only to the extent that the
payment is includible in the Participant’s gross income.

(iii)      Salary continuation payments for military service
Participants.  Compensation does not include payments to an individual who does
not currently perform services for the employer by reason of qualified military
service (as that term is used in Code Section 414(u)(1)) to the extent those
payments do not exceed the amounts the individual would have received if the
individual had continued to perform services for the employer rather than
entering qualified military service.  Notwithstanding the foregoing, for Plan
Years beginning after December 31, 2008, a differential wage payment, as defined
by Code Section 3401(h)(2), shall be treated as compensation, for purposes of
Code Section 415(c)(3) and Treasury Regulation Section 1.415(c)-2, as provided
Section 11.02 of Part III of the Plan.

(iv)       Salary continuation payments for disabled Participants.  Compensation
does not include compensation paid to a Participant who is permanently and
totally disabled (as defined in Code Section 22(e)(3)) if the Participant is not
a highly compensated employee (as defined in Code Section 414(q)) immediately
before becoming disabled, or to all Participants if the Plan provides for the
continuation of compensation on behalf of all Participants who are permanently
and totally disabled for a fixed or determinable period.

PART III ‑ 28

84419371\V-5

--------------------------------------------------------------------------------

 

(f)        Administrative delay.  Compensation for a Limitation Year shall not
include amounts earned but not paid during the Limitation Year solely because of
the timing of pay periods and pay dates, provided the amounts are paid during
the first few weeks of the next Limitation Year, the amounts are included on a
uniform and consistent basis with respect to all similarly situation
Participants, and no compensation is included in more than one Limitation Year.

(g)        Option to apply compensation provisions early.  The rules in Section
4.06(f) of this Part III shall apply for Limitation Years beginning on or after
July 1, 2007.

ARTICLE V

PRE‑TERMINATION BENEFIT RESTRICTIONS

5.01     In General.  In the event of Plan termination, the benefit of any
Highly Compensated Employee is limited to a benefit that is nondiscriminatory
under Code Section 401(a)(4).

Benefits distributed to any of the 25 most Highly Compensated Employees shall be
restricted such that the annual payments shall be no greater than an amount
equal to the payment that would be made on behalf of the Employee under a single
life annuity that is the Actuarial Equivalent of the sum of the Employee’s
Accrued Benefit and the Employee’s other benefits under the Plan.

5.02     Exceptions.  Section 5.01 of this Part III shall not apply if: (i)
after payment of the benefit to an Employee described in the preceding Section,
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 for an Employee described above is less than 1% of the value of current
liabilities.

5.03     Included Benefits.  For purposes of this Article, benefits include any
periodic income, any withdrawal values payable to a living Employee, and any
death benefits not provided for by insurance on the Employee’s life.

ARTICLE VI

BENEFIT RESTRICTIONS

6.01     Effective Date and Application of Section.

(a)        Effective Date.  The provisions of this Section 6.01 of this Part III
apply to Plan Years beginning after December 31, 2007.

(b)        Notwithstanding anything in this Section to the contrary, the
provisions of Code Section 436 and the regulations thereunder are incorporated
herein by reference.

(c)        For Plans that have a valuation date other than the first day of the
Plan Year, the provisions of Code Section 436 and this Article will be applied
in accordance with the regulations under Code Section 436.

PART III ‑ 29

84419371\V-5

--------------------------------------------------------------------------------

 

6.02     Funding‑Based Limitation on Shutdown Benefits and Other Unpredictable
Contingent Event Benefits.

(a)        In general.  If a Participant is entitled to an “unpredictable
contingent event benefit” payable with respect to any event occurring during any
Plan Year, then such benefit may not be provided if the “adjusted funding target
attainment percentage” for such Plan Year (i) is less than sixty percent (60%)
or, (ii) would be less than sixty percent (60%) percent taking into account such
occurrence.

(b)        Exemption.  Section 6.02(a) of this Part III shall cease to apply
with respect to any Plan Year, effective as of the first day of the Plan Year,
upon payment by the Employer of a contribution (in addition to any minimum
required contribution under Code Section 430) equal to:

(i)        in the case of Section 6.02(a)(i) of this Part III above, the amount
of the increase in the funding target of the Plan (under Code Section 430) for
the Plan Year attributable to the occurrence referred to in Section 6.02(a) of
this Part III, and

(ii)       in the case of Section 6.02(a)(ii) of this Part III above, the amount
sufficient to result in an “adjusted funding target attainment percentage” of
sixty percent (60%).

(c)        Unpredictable contingent event benefit.  For purposes of this
subsection, the term “unpredictable contingent event benefit” means any benefit
payable solely by reason of:

(i)        a plant shutdown (or similar event, as determined by the Secretary of
the Treasury), or

(ii)       an event other than the attainment of any age, performance of any
service, receipt or derivation of any compensation, or occurrence of death or
disability.

6.03     Limitations on Plan Amendments Increasing Liability for Benefits.

(a)        In general.  No amendment which has the effect of increasing
liabilities of the Plan by reason of increases in benefits, establishment of new
benefits, changing the rate of benefit accrual, or changing the rate at which
benefits become nonforfeitable may take effect during any Plan Year if the
“adjusted funding target attainment percentage” for such Plan Year is:

(i)        less than eighty percent (80%), or

(ii)       would be less than eighty percent (80%) taking into account such
amendment.

PART III ‑ 30

84419371\V-5

--------------------------------------------------------------------------------

 

(b)        Exemption.  Section 6.03(a) of this Part III above shall cease to
apply with respect to any Plan Year, effective as of the first day of the Plan
Year (or if later, the effective date of the amendment), upon payment by the
Employer of a contribution (in addition to any minimum required contribution
under Code Section 430) equal to -

(i)        in the case of Section 6.03(a)(i) of this Part III above, the amount
of the increase in the funding target of the Plan (under Code Section 430) for
the Plan Year attributable to the amendment, and

(ii)       in the case of Section 6.03(a)(ii) of this Part III above, the amount
sufficient to result in an “adjusted funding target attainment percentage” of
eighty percent (80%).

(c)        Exception for certain benefit increases.  Section 6.03(a) of this
Part III shall not apply to any amendment which provides for an increase in
benefits under a formula which is not based on a Participant’s compensation, but
only if the rate of such increase is not in excess of the contemporaneous rate
of increase in average wages of Participants covered by the amendment.

6.04     Limitations on Accelerated Benefit Distributions.

(a)        Funding percentage less than sixty percent (60%).  If the Plan’s
“adjusted funding target attainment percentage” for a Plan Year is less than
sixty percent (60%), then the Plan may not pay any “prohibited payment” after
the valuation date for the Plan Year.

(b)        Bankruptcy.  During any period in which the Employer is a debtor in a
case under title 11, United States Code, or similar Federal or State law, the
Plan may not pay any “prohibited payment.” The preceding sentence shall not
apply on or after the date on which the enrolled actuary of the Plan certifies
that the “adjusted funding target attainment percentage” of the Plan is not less
than one hundred percent (100%).

(c)        Limited payment if percentage at least sixty percent (60%) but less
than eighty percent (80%) percent.

(i)        In general.  If the Plan’s “adjusted funding target attainment
percentage” for a Plan Year is sixty percent (60%) or greater but less than
eighty percent (80%), then the Plan may not pay any “prohibited payment” after
the valuation date for the Plan Year to the extent the amount of the payment
exceeds the lesser of:

(A)       fifty (50) percent of the amount of the payment which could be made
without regard to this subsection, or

PART III ‑ 31

84419371\V-5

--------------------------------------------------------------------------------

 

(B)       the present value (determined under guidance prescribed by the Pension
Benefit Guaranty Corporation, using the interest and mortality assumptions under
Code Section 417(e)) of the maximum guarantee with respect to the participant
under ERISA Section 4022.

(ii)       One‑time application.

(A)       In general.  Only 1 “prohibited payment” meeting the requirements of
Section 6.04(c)(i) of this Part III may be made with respect to any Participant
during any period of consecutive Plan Years to which the limitations under
Section 6.04(a) or Section 6.04(b) or this Section 6.04(c)(ii)(A) of this Part
III applies.

(B)       Treatment of beneficiaries.  For purposes of this subparagraph, a
Participant and any Beneficiary (including an alternate payee, as defined in
Code Section 414(p)(8)) shall be treated as one Participant.  If the Accrued
Benefit of a Participant is allocated to such an alternate payee and one or more
other persons, the amount under Section 6.04(c)(i) of this Part III shall be
allocated among such persons in the same mariner as the Accrued Benefit is
allocated unless the qualified domestic relations order (as defined in Code
Section 414(p)(1)(A)) provides otherwise.

(d)        Exception.  Section 6.04 of this Part III shall not apply for any
Plan Year if the terms of the Plan (as in effect for the period beginning on
September 1, 2005, and ending with such Plan Year) provide for no benefit
accruals with respect to any Participant during such period.

(e)        “Prohibited payment.” For purpose of Section 6.04 of this Part III,
the term “prohibited payment” means:

(i)        any payment, in excess of the monthly amount paid under a single life
annuity (plus any Social Security supplements described in the last sentence of
Code Section 411(a)(9)), to a Participant or Beneficiary whose Annuity Starting
Date occurs during any period in which a limitation under Section 6.04(a) or
Section 6.04(b) of this Part III is in effect,

(ii)       any payment for the purchase of an irrevocable commitment from an
insurer to pay benefits, and

(iii)      any other payment specified by the Secretary by regulations under
Code Section 436.

Such term shall not include the payment of a benefit which under Code Section
411(a)(11) may be immediately distributed without the consent of the
Participant.

6.05     Limitation on Benefit Accruals for Plans With Severe Funding
Shortfalls.

PART III ‑ 32

84419371\V-5

--------------------------------------------------------------------------------

 

(a)        In general.  If the Plan’s “adjusted funding target attainment
percentage” for a Plan Year is less than sixty percent (60%), benefit accruals
under the Plan shall cease as of the valuation date for the Plan Year.

(b)        Exemption.  Section 6.05(a) of this Part III shall cease to apply
with respect to any Plan Year, effective as of the first day of the Plan Year,
upon payment by the Employer of a contribution (in addition to any minimum
required contribution under Code Section 430) equal to the amount sufficient to
result in an “adjusted funding target attainment percentage” of sixty percent
(60%).

(c)        Temporary modification of limitation.  In the case of the first Plan
Year beginning during the period beginning on October 1, 2008, and ending on
September 30, 2009, the provisions of Section 6.05(a) of this Part III above
shall be applied by substituting the Plan’s “adjusted funding target attainment
percentage” for the preceding Plan Year for such percentage for such Plan Year,
but only if the “adjusted funding target attainment percentage” for the
preceding year is greater.

6.06     Rules Relating to Contributions Required to Avoid Benefit Limitations.

(a)        Security may be provided.

(i)        In general.  For purposes of this section, the “adjusted funding
target attainment percentage” shall be determined by treating as an asset of the
Plan any security provided by the Employer in a form meeting the requirements of
Section 6.06(a)(ii) of this Part III.

(ii)       Form of security.  The security required under Section 6.06(a)(i) of
this Part III shall consist of:

(A)       a bond issued by a corporate surety company that is an acceptable
surety for purposes of ERISA Section 412;

(B)       cash, or United States obligations which mature in three (3) years or
less, held in escrow by a bank or similar financial institution; or

(C)       such other form of security as is satisfactory to the Secretary and
the parties involved.

(iii)      Enforcement.  Any security provided under Section 6.06(a)(i) of this
Part III may be perfected and enforced at any time after the earlier of:

(A)      the date on which the Plan terminates;

(B)      if there is a failure to make a payment of the minimum required
contribution for any Plan Year beginning after the security is provided, the due
date for the payment under Code Section 430(j); or

PART III ‑ 33

84419371\V-5

--------------------------------------------------------------------------------

 

(C)      if the “adjusted funding target attainment percentage” is less than
sixty percent (60%) for a consecutive period of 7 years, the valuation date for
the last year in the period.

(iv)       Release of security.  The security shall be released (and any amounts
thereunder shall be refunded together with any interest accrued thereon) at such
time as the Secretary may prescribe in regulations under Code Section 436,
including regulations for partial releases of the security by reason of
increases in the “adjusted funding target attainment percentage.”

(b)        Prefunding balance or funding standard carryover balance may not be
used.  No prefunding balance under Code Section 430(f) or funding standard
carryover balance may be used under Sections 6.02, 6.03, or 6.05 of this Part
III to satisfy any payment an Employer may make under any such subsection to
avoid or terminate the application of any limitation under such subsection.

(c)        Deemed reduction of funding balances:

(i)        In general.  In any case in which a benefit limitation under Sections
6.02, 6.03, 6.04, or 6.05 of this Part III would (but for this Section 6.06(c)
of this Part III and determined without regard to Sections 6.02(b), 6.03(b), or
6.05(b) of this Part III) apply to such Plan for the Plan Year, the Employer
shall be treated for purposes of this title as having made an election under
Code Section 430(f) to reduce the prefunding balance or funding standard
carryover balance by such amount as is necessary for such benefit limitation to
not apply to the Plan for such Plan Year.

(ii)       Exception for insufficient funding balances.  Section 6.06(a)(i) of
this Part III shall not apply with respect to a benefit limitation for any Plan
Year if the application of Section 6.06(a)(i) of this Part III would not result
in the benefit limitation not applying for such Plan Year.

6.07     Presumed Underfunding for Purposes of Benefit Limitations.

(a)        Presumption of continued underfunding.  In any case in which a
benefit limitation under Sections 6.02, 6.03, 6.04, or 6.05 of this Part III has
been applied to a Plan with respect to the Plan Year preceding the current Plan
Year, the “adjusted funding target attainment percentage” of the Plan for the
current Plan Year shall be presumed to be equal to the “adjusted funding target
attainment percentage” of the Plan for the preceding Plan Year until the
enrolled actuary of the Plan certifies the actual “adjusted funding target
attainment percentage” of the Plan for the current Plan Year.

PART III ‑ 34

84419371\V-5

--------------------------------------------------------------------------------

 

(b)        Presumption of underfunding after 10th month.  In any case in which
no certification of the “adjusted funding target attainment percentage” for the
current Plan Year is made with respect to the Plan before the first day of the
10th month of such year, for purposes of Sections 6.02, 6.03, 6.04, and 6.05 of
this Part III; such first day shall be deemed, for purposes of such subsection,
to be the valuation date of the Plan for the current Plan Year and the Plan’s
“adjusted funding target attainment percentage” shall be conclusively presumed
to be less than sixty percent (60%) as of such first day.

(c)        Presumption of underfunding after 4th month for nearly underfunded
plans.  In any case in which:

(i)        a benefit limitation under Sections 6.02, 6.03, 6.04, or 6.05 of this
Part III did not apply to a Plan with respect to the Plan Year preceding the
current Plan Year, but the “adjusted funding target attainment percentage” of
the Plan for such preceding Plan Year was not more than ten (10) percentage
points greater than the percentage which would have caused such subsection to
apply to the Plan with respect to such preceding Plan Year, and

(ii)       as of the first day of the 4th month of the current Plan Year, the
enrolled actuary of the Plan has not certified the actual “adjusted funding
target attainment percentage” of the Plan for the current Plan Year, until the
enrolled actuary so certifies, such first day shall be deemed, for purposes of
such subsection, to be the valuation date of the Plan for the current Plan Year
and the “adjusted funding target attainment percentage” of the Plan as of such
first day shall, for purposes of such subsection, be presumed to be equal to ten
(10) percentage points less than the “adjusted funding target attainment
percentage” of the Plan for such preceding Plan Year.

6.08     Treatment of Plan as of Close of Prohibited or Cessation Period.  The
following provisions apply for purposes of applying this Article.

(a)        Operation of Plan after period.  Payments will resume effective as of
the day following the close of the period for which any limitation of payment of
benefits under Section 6.04 of this Part III applies.  If a limitation on
benefit accruals under Section 6.05 of this Part III applies to the Plan as of a
“Section 436 measurement date,” but that limit no longer applies to the Plan as
of a later “Section 436 measurement date,” then that limitation shall not apply
to benefit accruals that are based on service on or after that later “Section
436 measurement date,” except to the extent that the Plan does then not provide
for such benefit accruals or provides that benefit accruals will not resume when
the limitation ceases to apply.  A “Section 436 measurement date” is the date
that is used to determine when the limitations of Code Sections 436(d) and
436(e) apply or cease to apply.

PART III ‑ 35

84419371\V-5

--------------------------------------------------------------------------------

 

(b)        Treatment of affected benefits.  Nothing in this Section 6.08 of this
Part III shall be construed as affecting the Plan’s treatment of benefits which
would have been paid or accrued but for this Article.

6.09     Definitions.

(a)        The term “funding target attainment percentage” has the same meaning
given such term by Code Section 430(d)(2), except as otherwise provided
herein.  However, in the case of Plan Years beginning in 2008, the “funding
target attainment percentage” for the preceding Plan Year may be determined
using such methods of estimation as the Secretary may provide.

(b)        The term “adjusted funding target attainment percentage” means the
“funding target attainment percentage” which is determined under paragraph (a)
by increasing each of the amounts under subparagraphs (A) and (B) of Code
Section 430(d)(2) by the aggregate amount of purchases of annuities for
employees other than highly compensated employees (as defined in Code Section
414(q)) which were made by the Plan during the preceding two (2) Plan Years.

(c)        Application to plans which are fully funded without regard to
reductions for funding balances.

(i)        In general.  In the case of a Plan for any Plan Year, if the “funding
target attainment percentage” is one hundred percent (100%) or more (determined
without regard to this paragraph and without regard to the reduction in the
value of assets under Code Section 430(l)(4)(A)), the “funding target attainment
percentage” for purposes of Sections 6.09(a) and (b) of this Part III shall be
determined without regard to such reduction.

(ii)       Transition rule.  Section 6.09(c)(i) of this Part III shall be
applied to Plan Years beginning after 2007 and before 2011 by substituting for
“one hundred percent (100%)” the applicable percentage determined in accordance
with the following table:

PART III ‑ 36

84419371\V-5

--------------------------------------------------------------------------------

 

﻿

﻿

 

 

                                   

In the case of a Plan Year beginning in calendar year:

The applicable percentage is:

﻿

 

 

﻿

2008

92%

﻿

2009

94%

﻿

2010

96%

﻿

(iii)      Section 6.09(c)(ii) of this Part III shall not apply with respect to
any Plan Year after 2008 unless the “funding target attainment percentage”
(determined without regard to Section 6.09(c)(iii) of this Part III) of the Plan
for each preceding Plan Year after 2007 was not less than the applicable
percentage with respect to such preceding Plan Year determined under Section
6.09(c)(ii) of this Part III.

ARTICLE VII

PLAN FIDUCIARY RESPONSIBILITIES

7.01     Plan Fiduciaries.  The Plan Fiduciaries shall be:

(a)        the Trustee(s) of the Plan;

(b)        the Plan Administrator; and

(c)        such other person or persons as may be designated by the Plan
Administrator as a fiduciary in accordance with the provisions of this Article.

7.02     General Fiduciary Duties.  Each Plan Fiduciary shall discharge his or
her or her duties solely in the interest of the Participants and their
Beneficiaries and act:

(a)        for the exclusive purpose of providing benefits to Participants and
their Beneficiaries and defraying reasonable expenses of administering the Plan;

(b)        with the care, skill, prudence and diligence under the circumstances
then prevailing that a prudent person acting in a like capacity and familiar
with such matters would use in the conduct of an enterprise of a like character
and with like aims;

(c)        by diversifying the investments of the Plan so as to minimize the
risk of large losses, unless under the circumstances it is clearly prudent not
to do so, if the Fiduciary has the responsibility to invest plan assets; and

(d)        in accordance with the documents and instruments governing the Plan
insofar as such documents and instruments are consistent with the provisions
only Title I of ERISA.

PART III ‑ 37

84419371\V-5

--------------------------------------------------------------------------------

 

Each Plan Fiduciary shall perform the duties specifically assigned to him or
her.  No Plan Fiduciary shall have any responsibility for the performance or
non‑performance of any duties not specifically allocated to him or her.

7.03     Duties of the Trustee(s).  The specific responsibilities and duties of
the Trustee(s) are set forth in the Trust Indenture among the Plan Sponsor, the
Plan Administrator, and the Trustee(s).  In general, the Trustee(s) shall:

(a)        invest Plan assets, subject to directions from the Plan Administrator
or from any duly appointed investment manager;

(b)        maintain adequate records of receipts, disbursements, and other
transactions involving the Plan; and

(c)        prepare such reports, statements, tax returns and other forms as may
be required under the Trust Indenture or applicable laws and regulations.

7.04     Powers and Duties of the Plan Administrator.  The “Plan Administrator”
is the Benefits Committee.  The Plan Administrator shall have the power,
discretionary authority, and duty to interpret the provisions of the Plan and to
make all decisions and take all actions that shall be necessary or proper in
order to carry out the provisions of the Plan.  Without limiting the generality
of the foregoing, the Plan Administrator shall:

(a)        monitor compliance with the provisions of ERISA and other applicable
laws with respect to the Plan;

(b)        establish an investment policy and funding method consistent with
objectives of the Plan and with the requirements of applicable laws and
regulations;

(c)        invest Plan assets except to the extent that the Plan Administrator
has delegated such investment duties to an investment manager;

(d)        evaluate from time to time investment policy and the performance of
any investment manager or investment advisor appointed by it;

(e)        be solely responsible to, and shall, interpret and construe the Plan
and resolve any ambiguities therein, with any such interpretations or
constrictions to be conclusively binding and final, to the extent permitted by
applicable law, upon all persons interested or claiming under the Plan;

(f)        determine, in its sole discretion, all questions concerning the
eligibility of any person to participate in the Plan, the right to and the
amount of any benefit payable under the Plan to or on behalf of an individual
and the date on which any individual ceases to be a Participant, with any such
determination to be conclusively binding and final, to the extent permitted by
applicable law, upon all persons interested or claiming an interest in the Plan;

PART III ‑ 38

84419371\V-5

--------------------------------------------------------------------------------

 

(g)        establish guidelines as required for the orderly and uniform
administration of the Plan;

(h)        exercise overall control of the operation and administration of the
Plan in matters not allocated to some other Fiduciary by the terms of this Plan.

(i)        administer the Plan on a day‑to‑day basis in accordance with the
provisions of this Plan and all other pertinent documents;

(j)        retain and maintain Plan records, including Participant census data,
participation dates, compensation records, and such other records necessary or
desirable for proper Plan administration;

(k)        prepare and arrange for delivery to Participants of such summaries,
descriptions, announcements and reports as are required to be given to
participants under applicable laws and regulations;

(l)        file with the U.S. Department of Labor, the Internal Revenue Service
and other regulatory agencies on a timely basis all required reports, forms and
other documents;

(m)      prepare and furnish to the Trustee(s) sufficient records and data to
enable the Trustee(s) to properly perform its obligations under the Trust
Indenture; and

(n)        to take appropriate actions required to correct any errors made in
determining the eligibility of any employee for benefits under the Plan or the
amount of benefits payable under the Plan, including as part of correcting any
error made in computing the benefits of any Participant or Beneficiary, making
equitable adjustments (an increase or decrease) in the amount of any future
benefits payable under the Plan and including the recovery of any overpayment of
benefits paid from the Plan as provided in Treasury Regulation Section
1.401(a)-13(c)(2)(iii).

The Plan Administrator may appoint or employ such advisers or assistants as the
Plan Administrator deems necessary and may delegate to any one or more of its
members any responsibility it may have under the Plan or designate any other
person or persons to carry out any responsibility it may have under the Plan.

Notwithstanding any provisions elsewhere to the contrary, the Plan Administrator
shall have total discretion to fulfill the above responsibilities as the Plan
Administrator sees fit on a uniform and consistent basis and as the Plan
Administrator believes a prudent person acting in a like capacity and familiar
with such matters would do.

7.05     Designation of Fiduciaries.  The Plan Administrator shall have the
authority to appoint and remove Trustee(s) in accordance with the Trust
Indenture.  The Plan Administrator may appoint and remove an investment manager
and delegate to said investment manager power to manage, acquire or dispose of
any assets of the Plan.

PART III ‑ 39

84419371\V-5

--------------------------------------------------------------------------------

 

While there is an investment manager, the Plan Administrator shall have no
obligation under this Plan with regard to the performance or non‑performance of
the duties delegated to the investment manager.

The Plan Administrator shall appoint all other Fiduciaries of this Plan.  In
making its appointment or delegation of authority, the Plan Administrator may
designate all of the responsibilities to one person or it may allocate the
responsibilities, on a continuing basis or on an ad hoc basis, to one or more
individuals either jointly or severally.  No individual named a Fiduciary shall
have any responsibility for the performance or non‑performance of any
responsibilities or duties not allocated to him or her.

The appointing authority of a Fiduciary shall periodically, but not less
frequently than annually, review the performance of each Fiduciary appointed in
order to carry out the general fiduciary duties specified in Section 7.02 of
this Part III and, where appropriate, in its sole discretion, take or recommend
remedial action.

7.06     Delegation of Duties by a Fiduciary.  Except as provided in this Plan
or in the appointment as a Fiduciary, no Fiduciary may delegate his or her or
her fiduciary responsibilities.  If authorized by the appointing authority, a
Fiduciary may appoint such agents as may be deemed necessary and delegate to
such agents any non‑fiduciary powers or duties, whether ministerial or
discretionary.  No Fiduciary or agent of a Fiduciary who is a full‑time employee
of the Employer will receive any compensation from the Plan for his or her or
her services, but the Employer or the Plan shall pay all expenses that such
employee reasonably incurs in the discharge of his or her duties.

ARTICLE VIII

BENEFITS COMMITTEE

8.01     Appointment of Benefits Committee.  The Benefits Committee (the
“Benefits Committee”) shall consist of three or more members appointed from time
to time by the President of the Employer (the “President”), who shall also
designate one of the members as chairperson.  Each member of the Benefits
Committee and its chairperson shall serve at the pleasure of the appointing
authority.

8.02     Benefits Committee to Act by Majority Vote.  The Benefits Committee
shall act by majority vote of all members.  All actions, determinations,
interpretations and decisions of the Benefits Committee with respect to any
matter within its jurisdiction will be conclusive and binding on all
persons.  Any person may rely conclusively upon any action if certified by the
Benefits Committee.

Notwithstanding the above, a member of the Benefits Committee who is also a
Participant shall not vote or act upon any matter relating solely or primarily
to himself or herself.

PART III ‑ 40

84419371\V-5

--------------------------------------------------------------------------------

 

8.03     Records and Reports of the Benefits Committee.  The Benefits Committee
shall keep a record of all of its proceedings and acts, and shall keep such
books of account, records and other data as may be necessary for the proper
administration of the Plan and file or deliver to Participants and their
Beneficiaries whatever reports are required by any regulatory authority.

8.04     Costs and Expenses of Administration.  Notwithstanding any provisions
of the Plan to the contrary, all clerical, legal and other expenses of the Plan
and the Trust, including Trustee’s fees, shall be paid by the Plan, except to
the extent the Employer elects to pay such amounts; provided, however, that if
the Employer pays such amounts, it shall be reimbursed by the Trust for such
amounts unless the Employer elects not to be so reimbursed.

8.05     Indemnification of the Plan Administrator and Assistants.  The Employer
shall indemnify and defend, to the extent permitted under the By‑Laws of the
Employer, any Employee or former Employee (i) who serves or has served as a
member of the Benefits Committee, (ii) who has been appointed to assist the
Benefits Committee in administering the Plan, or (iii) to whom the Benefits
Committee has delegated any of its duties or responsibilities against any
liabilities, damages, costs and expenses (including attorneys’ fees and amounts
paid in settlement of any claims approved by the Employer) occasioned by any act
or omission to act in connection with the Plan, if such act or omission to act
is in good faith and without gross negligence; provided that such Employee or
former Employee is not otherwise indemnified or saved harmless under any
liability insurance or other indemnification arrangement.

ARTICLE IX

CLAIMS PROCEDURE

9.01     Claims Fiduciary.  The Plan Administrator will act as “Claims
Fiduciary,” except to the extent that the Plan Administrator has delegated the
function to some other person or persons, committee or entity.

Notwithstanding anything in the Plan to the contrary, the Claims Fiduciary shall
have total and complete discretion to fulfill its fiduciary responsibilities as
it sees fit on a uniform and consistent basis and as it believes a prudent
person acting in a like capacity and familiar with such matters would do.

9.02     Claims for Benefits.  Claims for benefits or to enforce or clarify
rights under the Plan, under any provision of law, whether statutory or not, may
be filed with the Plan Administrator using forms supplied by the Employer.  For
the purpose of this procedure, “claim” means a request for a Plan benefit or to
enforce or clarify rights under the Plan, under any provision of law, whether
statutory or not, by a Participant or a Beneficiary of a Participant.  If the
basis of the claim includes documentation not a part of the records of the Plan
or of the Employer, all such documentation must be included with the claim.

PART III ‑ 41

84419371\V-5

--------------------------------------------------------------------------------

 

9.03     Duty to Keep Plan Administrator Informed of Current Address.  Each
Participant and Beneficiary must file with the Plan Administrator from time to
time his or her post office address and each change thereof. Any communication,
statement or notice addressed to a Participant or Beneficiary at his or her last
post office address filed with the Plan Administrator, or if no address is filed
with the Plan Administrator, then at his or her last post office address as
shown on the Employer’s records, will be binding on the Participant and
Beneficiary for all purposes of the Plan.  Neither the Plan Administrator nor
the Employer shall be required to search for or locate a Participant or
Beneficiary.

9.04     Failure to Claim Benefits.  If the Plan Administrator notifies a
Participant or Beneficiary by registered or certified mail at his or her last
known address that he or she is entitled to a distribution and also notifies him
or her of the provision of this Section, and the Participant or Beneficiary
fails to claim his or her benefits under the Plan, the Plan Administrator shall
make reasonable efforts to locate such Participant or Beneficiary.  If the
Participant or Beneficiary fails to claim his or her benefits under the Plan or
fails to make his or her or her current address known to the Plan Administrator
within three years after such notification, the Plan Administrator, at the end
of such three‑year period, shall direct that benefits which would have been
payable to such Participant or Beneficiary shall be forfeited.  In the event
that the Participant or Beneficiary is subsequently located, the benefits which
were forfeited shall be reinstated, and such reinstatement shall be taken into
account in determining the Employer contribution for the Plan Year of the
reinstatement.

9.05     Notice of Denial of Claim.  If a claim is wholly or partially denied,
the Plan Administrator shall notify the claimant of the denial of the claim
within a reasonable period of time.  Such notice of denial (i) shall be in
writing, (ii) shall be written in a manner calculated to be understood by the
claimant, and (iii) shall contain (A) the specific reason or reasons for denial
of the claim, (B) a specific reference to the pertinent Plan provisions upon
which the denial is based, (C) a description of any additional material or
information necessary for the claimant to perfect the claim, along with an
explanation why such material or information is necessary, and (D) an
explanation of the Plan’s claim review procedure.  Unless special circumstances
require an extension of time for processing the claim, the Plan Administrator
shall notify the claimant of the claim denial no later than 90 days after the
Plan Administrator’s receipt of the claim.  If such an extension is required,
written notice of the extension shall be furnished to the claimant prior to the
termination of the initial 90‑day period.  The extension notice shall indicate
the special circumstances requiring the extension of time and the date by which
the Plan Administrator expects to render the final decision, which date will not
be later than 180 days after the Plan Administrator’s receipt of the claim.

PART III ‑ 42

84419371\V-5

--------------------------------------------------------------------------------

 

9.06     Request for Review of Denial of Claim.  Within 120 days of the receipt
by the claimant of the written notice of the denial of the claim, or such later
time as shall be deemed reasonable in the sole discretion of the Plan
Administrator, taking into account the nature of the benefit subject to the
claim and any other attendant circumstances, or if the claim has not been
granted within a reasonable period of time, the claimant may file a written
request with the Plan Administrator to conduct a full and fair review of the
denial of the claimant’s claim for benefits.  In connection with the claimant’s
appeal of the denial of his or her benefit, the claimant may review pertinent
documents and may submit issues and comments in writing.

9.07     Decision on Review of Denial of Claim.  The Plan Administrator shall
deliver to the claimant a written decision on the claim promptly, but not later
than 60 days, after the receipt of the claimant’s request for review, except
that if there are special circumstances which require an extension of time for
processing, the aforesaid 60‑day period may be extended to 120 days.  Such
decision shall (i) be written in a manner calculated to be understood by the
claimant, (ii) include specific reasons for the decision, and (iii) contain
specific references to the pertinent Plan provisions upon which the decision is
based.

9.08     Disability Claims.  Notwithstanding anything in this Article IX of Part
III of the Plan to the contrary, when a claim under this Article is made in
connection with a benefit payable under Section 6.05 of Part I (as a result of a
qualifying Participant’s being Totally Disabled under Part I) or is made in
connection with a benefit payable under Section 5.04 of Part II (as a result of
a qualifying Participant’s being Totally Disabled under Part II), solely for
purposes of processing such a claim, (i) all references in Sections 9.05 and
9.07 of this Part III to “90 days” and “60 days” are deemed to have been
replaced with “45 days”, (ii) the reference to “180 days” in Section 9.05 of
this Part III is deemed to have been replaced with “75 days”, (iii) the
reference to “120 days” in Section 9.07 of this Part III is deemed to have been
replaced with “90 days”, (iv) a second, maximum 30 day extension of time will be
allowed only under Section 9.05 of this Part III in the case of a claim within
this Section, but only if the other requirements for an extension of time to
respond described in Section 9.05 of this Part III are satisfied with respect to
this second extension, and (v) the claimant will be allowed at least 45 days
within which to provide any needed additional information sought in connection
with any extension under Sections 9.05 and 9.08 of this Part III.

PART III ‑ 43

84419371\V-5

--------------------------------------------------------------------------------

 

9.09     Limitations Periods for Filing Claims and Legal Actions.  To be
considered timely filed under the Plan's claims procedures and notwithstanding
anything in this Part III to the contrary, a claim for benefits filed after 2015
must be filed with the appropriate Claims Fiduciary under Sections 9.02 or 9.08
of this Part III before the first (1st) anniversary of the date on which
claimant knew or reasonably should have known of the principal facts upon which
the claim is based. Notwithstanding anything in this Part III to the contrary, a
legal action to recover Plan benefits or to enforce or clarify rights under the
Plan under ERISA Section 502, ERISA Section 510 or under any other provision of
law, whether statutory or not, may not be brought after 2015 by any claimant on
any matter pertaining to this Plan unless the legal action is initiated in the
proper forum before the earlier of (i) the expiration of thirty (30) completed
calendar months after the date on which the claimant knew or reasonably should
have known of the principal facts on which the claim is based, or (ii) the
expiration of six (6) completed calendar months after the claimant has exhausted
the applicable claims procedures under this Plan. For the purpose of applying
this Section, knowledge of all facts that the Participant knew or reasonably
should have known will be imputed to every claimant who is, or who purports to
be, a Beneficiary of the Participant or otherwise purports to derive an
entitlement to a Plan benefit or a Plan right by reference to the Participant.

Exhaustion of the Plan's claims procedures is mandatory for every claim and
dispute of whatever nature or from whatever source and arising under this
Plan.  As to such claims and disputes, no claimant shall be permitted to
commence any legal action to recover Plan benefits or to enforce or clarify
rights under the Plan under ERISA Section 502, ERISA Section 510 or under any
other provision of law, whether or not statutory, until the applicable claims
procedures set forth in the Plan have been exhausted in their entirety.

In any legal action described in this Section, all explicit and implicit
determinations by the Plan Administrator, any Claims Fiduciary and all other
persons determining or reviewing claims in such legal action (including, but not
limited to, determinations as to whether the claim, or a request for a review of
a denied claim, was timely filed) shall be afforded the maximum deference
permitted by law.  Any interpretation, determination or other action of such
persons shall be subject to change only if it was arbitrary or capricious or a
more serious abuse of discretion.  Any external review of a final decision or
action by such persons reviewing a claim under this Part III shall be based only
on such evidence presented to or considered by such persons at the time they
made the decision or decisions that are the subject of review.

PART III ‑ 44

84419371\V-5

--------------------------------------------------------------------------------

 

ARTICLE X

AMENDMENT AND TERMINATION

10.01   Amendment of Plan.  The right is reserved to the Employer to amend the
Plan at any time and from time to time and all parties or any person claiming
any interest hereunder shall be bound thereby; except no person having an
already vested interest in the Plan shall be deprived of any interest already
existing nor have such interest adversely affected.  No such amendment shall
have the effect of vesting in the Employer any right, title or interest to any
assets of the Plan.  The decision of the Employer shall be binding upon the
Participants and all other persons and parties interested as to whether or not
any amendment does deprive a Participant or any other person or adversely
affects such interest.  No amendment to the Plan (including a change in the
actuarial basis for determining optional or early retirement benefits) shall
decrease a Participant’s Accrued Benefit or eliminate an optional form of
distribution.  Notwithstanding the preceding sentence, a Participant’s Accrued
Benefit may be reduced to the extent permitted under Code Section
412(c)(8).  For purposes of this paragraph, a Plan amendment which has the
effect of (i) eliminating or reducing an early retirement benefit or a
retirement‑type subsidy, or (ii) eliminating an optional form of benefit with
respect to benefits attributable to service before the amendment shall be
treated as reducing accrued benefits.  In the case of a retirement‑type subsidy,
the preceding sentence shall apply only with respect to a Participant who
satisfies (either before or after the amendment) the pre‑amendment conditions
for the subsidy.  In general, a retirement‑type subsidy is a subsidy that
continues after retirement, but does not include a qualified disability benefit,
a medical benefit, or a social security supplement that does not continue after
retirement age.  Furthermore, no amendment to the Plan shall have the effect of
decreasing a Participant’s vested interest determined without regard to such
amendment as of the later of the date such amendment is adopted, or becomes
effective.  Participants shall be notified of any Plan amendments.

In the case of any merger, consolidation with or transfer of assets or
liabilities by the Employer to another Plan, each Participant in the Plan on the
date of the transaction shall have a benefit in the surviving Plan (determined
as if such Plan were terminated immediately after the transaction) at least
equal to the benefit to which he or she would have been entitled to receive
immediately prior to the transaction if the Plan had been terminated.  However,
this provision shall not be construed to be a termination or discontinuance of
the Plan or to be a guarantee of a specific level of benefits from this Plan.

Notwithstanding the foregoing, a transfer of amounts from this Plan or its
related trust to a nonqualified foreign trust as described in Revenue Ruling
2008‑40 shall be treated as a distribution from the Plan.

10.02   Employer May Discontinue Plan.  The Employer reserves the right at any
time to reduce its annual payments, to partially terminate its Plan or to
terminate its Plan in its entirety.

PART III ‑ 45

84419371\V-5

--------------------------------------------------------------------------------

 

In the event of the liquidation of the Employer or the bona fide sale of the
controlling interest thereof, the Employer or its successors or assigns shall
not be obligated to continue the Plan.

Upon termination of the Employer’s Plan or upon a partial termination of the
Plan, each affected Participant shall have a 100% vested and non‑forfeitable
right to his or her Accrued Benefit to the extent then funded.

In the event of termination or partial termination of the Employer’s Plan, the
assets of the Plan then available to provide benefits shall be applied in
accordance with ERISA Section 4044 and regulations promulgated thereunder, in
accordance with the following order of priority; provided, however, that no
benefits being provided to former Participants or their Beneficiaries by the
Insurer shall be canceled.

(a)        First, to provide that portion of each affected Participant’s Accrued
Benefit which is derived from any mandatory Employee contributions.

(b)        Second, to provide, in the case of retirement income benefits of each
affected Participant or Beneficiary:

(i)        Annuity benefits which were in pay status for at least the three‑year
period ending on the date of Plan termination; and

(ii)       Annuity benefits which would have been in pay status during the
three‑year period ending on the date of Plan termination, had a Participant
eligible to retire at the beginning of such three‑year period retired on the
date of Plan termination.

The level of benefits allocated to this priority class shall be determined on
the basis of the Plan’s provisions which were in effect at any time during the
five‑year period ending on the date of Plan termination under which the annuity
benefits would be the least.  Additionally, the level of such benefits is
limited to the lowest level which was, or could have been, in pay status during
the three‑year period ending on the date of Plan termination (but, in the case
of a benefit which would have been in pay status, the amount of the benefit, but
not the entitlement to the benefit, shall be determined using the age, service
and other relevant factors for computing the benefit under the Plan with respect
to the Participant as of the date of Plan termination).

(c)        Third, to provide all other benefits guaranteed to affected
Participants under Title IV of ERISA and regulations promulgated thereunder
(determined as if the insurance limits provided under the Act for benefits
payable to one person with respect to more than one Participant or from more
than one terminated Plan and the insurance limits on benefits payable to a
substantial owner all were not applicable).

(d)        Fourth, to provide all other non‑forfeitable benefits accrued by
affected Participants under the Plan.

PART III ‑ 46

84419371\V-5

--------------------------------------------------------------------------------

 

(e)        Fifth, to provide all other benefits accrued by affected Participants
under the Plan.

(f)        Any residual assets of the Plan remaining after distribution in
accordance with this Article shall be distributed to the Employer provided that
all liabilities of the Plan to Participants and their Beneficiaries have been
satisfied.

Notwithstanding anything in this Section to the contrary, in the event of a
partial termination of the Plan, this Section shall be applicable only to those
Participants and their Beneficiaries affected by the partial termination.

Notwithstanding anything in the Plan to the contrary, the following special
rules will apply to adjust Account Balances after the effective date of a
termination of the Plan under this Section and Treasury Regulation Section
1.411(b)(5)-1(e)(2)(iv)(E) (the “termination date”):

(x)        The interest crediting rate used to credit interest to Account
Balances under Section 4.03 of Part I of the Plan for all periods ending after
the termination date will be the arithmetic average of the actual rate used to
add interest credits to Account Balances for each of the five interest crediting
periods that ended within the 60 month period ending on the termination date.

(y)        Whether an Account Balance has been converted to an Actuarial
Equivalent annuity after the termination date will be determined by applying the
arithmetic average of the Code Section 417 Applicable Interest Rates (or its
successor) actually used during the 60 months ending on the termination date and
the Code Section 417 Mortality Table (or its successor) specified for such
conversions in Section 2.02 of Part I of the Plan, as appropriate, on the
termination date. If tabular factors have been substituted for the Code Section
417 Applicable Interest Rate and the Code Section 417 Mortality Table for these
annuity conversions prior to the termination date, the average of the tabular
factors used during the 60 months ending on the Plan's termination date will be
substituted and used to calculate conversions of Account Balances to an annuity
after the termination date. If neither of the preceding two options in Section
10.02(y) of this Part III applies, the actuarial assumptions to be used to
convert an Account Balance to an annuity after the termination date will be
determined using guidance issued under Code Section 411(b)(5) and the
regulations thereunder.

PART III ‑ 47

84419371\V-5

--------------------------------------------------------------------------------

 

10.03   Distribution of Benefits Upon Plan Termination.  Subject to Article IV
of Part III and upon approval of the Pension Benefit Guaranty Corporation
(“PBGC”), when required, upon a termination or partial termination of the Plan,
benefits shall be distributed to affected Participants in any manner which the
Plan Administrator deems to be in the best interests of the Participants which
is acceptable under applicable PBGC and Internal Revenue Code statutes and
regulations.  Any such distribution may include a lump sum payment, deferment of
the distribution or the distribution of an annuity contract without life
insurance, immediate or deferred, which by its terms may not be sold, assigned
discounted or pledged as collateral for a loan or as security for the
performance of an obligation or for any other purpose to any party other than
the issuer thereof.  Spousal consent shall be required for distributions made on
account of Plan termination.  In no event shall the payment of benefits be
deferred beyond the Participant’s Normal Retirement Date.

10.04   Return of Employer Contributions Under Special Circumstances.

Notwithstanding any provisions of this Plan to the contrary:

(a)        Any monies or other Plan assets attributable to any contributions
made by the Employer to the Plan because of a mistake of fact must be returned
to the Employer within one year after the date of contribution.

(b)        Any monies or other Plan assets attributable to any contribution made
by the Employer which is conditional on the deductibility of such contribution
must be refunded to the Employer, to the extent the deduction is disallowed,
within one year after the date of such disallowance.

ARTICLE XI

MISCELLANEOUS

11.01   Protection of Employee Interest.  No Participant or Beneficiary shall
have the right to assign, pledge, alienate or convey any right, benefit or
payment to which he or she shall be entitled in accordance with the provisions
of the Plan, and any such attempted assignment, pledge, alienation or conveyance
shall be null and void and of no effect.  To the extent permitted by law, none
of the benefits, payments, proceeds or rights herein created and provided for
shall in any way be subject to any debts, contracts or engagements of any
Participant or Beneficiary, as herein before described, nor to any suits,
actions or other judicial process to levy upon or attach the same for the
payment thereof; provided, however, that this provision does not preclude the
Plan Administrator from complying with the terms of a Qualified Domestic
Relations Order.

11.02   USERRA Compliance.  Notwithstanding any provisions of this Plan to the
contrary, contributions, benefits and service credit with respect to qualified
military service will be provided in accordance with the rules and requirements
of the Uniformed Services Employment and Reemployment Rights Act of 1994
(“USERRA”) and Code Section 414(u).

PART III ‑ 48

84419371\V-5

--------------------------------------------------------------------------------

 

(a)        Differential Wage Payments.  For Plan Years beginning after December
31, 2008, (i) an individual receiving a differential wage payment (as defined by
Code Section 3401(h)(2)), shall be treated as an employee of the employer making
the payment, (ii) the differential wage payment shall be treated as
compensation, the differential wage payment shall be treated as compensation,
for purposes of Code Section 415(c)(3) and Treasury Regulation Section
1.415(c)-2 (e.g., for purposes of Code Section 415, top‑heavy provisions of Code
Section 416, determination of highly compensated employees under Code Section
414(q), and applying the 5% gateway requirement under the Code Section 401(a)(4)
regulations), and (iii) the Plan shall not be treated as failing to meet the
requirements of any provision described in Code Section 414(u)(1)(C) by reason
of any contribution or benefit which is based on the differential wage
payment.  Section 11.02(a)(iii) of this Part III shall apply only if all
employees of the Employer performing service in the uniformed services described
in Code Section 3401(h)(2)(A) are entitled to receive differential wage payments
(as defined in Code Section 3401(h)(2)) on reasonably equivalent terms and, if
eligible to participate in a retirement plan maintained by the employer, to make
contributions based on the payments on reasonably equivalent terms (taking into
account Code Sections 410(b)(3), (4), and (5)).

(b)        Death Benefits Under USERRA.  Effective for deaths occurring on or
after January 1, 2007, in the case of a Participant who dies while performing
qualified military service as defined in Code Section 414(u), the survivors of
the Participant are entitled to any additional benefits (other than benefit
accruals relating to the period of qualified military service) provided under
the Plan had the Participant resumed and then terminated employment on account
of death.  Moreover, the Plan will credit the Participant’s qualified military
service as service for vesting purposes, as though the Participant had resumed
employment under USSERRA immediately prior to the Participant’s death.

11.03   Meaning of Words Used in Plan.  Wherever any words are used herein in
the masculine gender, they shall be construed as though they were also used in
the feminine or neuter gender in all cases where they would so apply.  Wherever
any words are used herein in the singular form, they shall be construed as
though they were also used in the plural form in all cases where they would so
apply.

Titles used herein are for general information only, and this Plan is not to be
construed by reference thereto.

11.04   Plan Does Not Create or Modify Employment Rights.  The Plan shall not be
construed as creating or modifying any contract of employment between the
Employer and any Participant.  All Employees shall be subject to discharge to
the same extent that they would have been if the Plan had never been adopted.

11.05   Massachusetts Law Controls.  This Plan shall be governed by the laws of
the Commonwealth of Massachusetts to the extent that they are not pre‑empted by
the laws of the United States of America.

PART III ‑ 49

84419371\V-5

--------------------------------------------------------------------------------

 

11.06   Payments to come from Plan Assets.  All benefits and amounts payable
under the Plan shall be paid or provided for solely from the assets of the Plan,
and neither the Employer nor the Plan Administrator assumes any liability or
responsibility therefor.

11.07   Receipt and Release for Payments.  Any payment to any Participant, his
or her legal representative, Beneficiary, or to any guardian, custodian or
committee appointed for such Participant or Beneficiary in accordance with the
provisions of this Plan, shall, to the extent thereof, be in full satisfaction
of all claims hereunder against the Employer and the Insurer, any of whom may
require such Participant, legal representative, Beneficiary, guardian, custodian
or committee, as a condition precedent to such payment, to execute a receipt and
release thereof in such form as shall be determined by the Employer or Insurer.

11.08   Mandatory Withholding on Eligible Rollover Distributions.  Except as
provided in Code Section 3405 and in regulations promulgated thereunder, the
Employer is required to withhold 20% on any portion of an eligible rollover
distribution not paid directly to an eligible retirement plan.

11.09   Payment under Qualified Domestic Relations Orders.  Notwithstanding any
provisions of the Plan to the contrary, if there is entered any Qualified
Domestic Relations Order that affects the payment of benefits hereunder, such
benefits shall be paid in accordance with the applicable requirements of such
Order, provided that such Order (i) does not require the Plan to provide any
type or form of benefits, or any option that is not otherwise provided
hereunder, (ii) does not require the Plan to provide increased benefits, and
(iii) does not require the payment of benefits to an alternate payee which are
required to be paid to another alternate payee under another order previously
determined to be a Qualified Domestic Relations Order.

The Plan Administrator shall establish reasonable procedures to determine
whether an order or other decree is a Qualified Domestic Relations Order and to
administer distributions under such orders.

To the extent required or permitted by any such Order, at any time on or after
the date the Plan Administrator has determined that the Order is a Qualified
Domestic Relations Order, the alternate payee shall have the right to request
the Plan Administrator to commence distribution of benefits under the Plan
(including any single sum cash‑out that would be available if the Participant
were the payee and entitled to a benefit payment on account of termination from
service) regardless of whether the Participant is otherwise entitled to a
distribution at such time under the Plan.

11.10   Electronic Communications.  Effective for Plan Years beginning on or
after January 1, 2007, any electronic communications made by the Plan to
Participants in regards to eligible rollover distribution tax notices,
Participant consents to distributions, and tax withholding notices shall comply
with the requirements contained in Treasury Regulation Section 1.401(a)-21, in
addition to all otherwise applicable requirements relating to the specific
communication.

PART III ‑ 50

84419371\V-5

--------------------------------------------------------------------------------

 

[Remainder of the page intentionally left blank]

﻿

 

PART III ‑ 51

84419371\V-5

--------------------------------------------------------------------------------

 

EXECUTED this 17th day of December, 2015.

﻿

 

 

 

﻿

The Hanover Insurance Company

 

﻿

 

 

 

﻿

By:

/s/ Elena Patronas

 

﻿

 

Name: Elena Patronas

 

﻿

 

Title: Vice President

 

 

PART III ‑ 52

84419371\V-5

--------------------------------------------------------------------------------

 

THE HANOVER INSURANCE GROUP
CASH BALANCE PENSION PLAN

FIRST AMENDMENT

This First Amendment is executed by The Hanover Insurance Company, a New
Hampshire corporation (the “Company”).

WHEREAS, the Company sponsors The Hanover Insurance Group Cash Balance Pension
Plan (the “Plan”); and

WHEREAS, the Plan consists of the following three component parts, each of which
is set forth in the same document: (i) Part I, which provides a cash balance and
pension benefit which were formerly provided under a plan known as “The
Allmerica Financial Cash Balance Pension Plan”, and then “The Hanover Insurance
Group Cash Balance Pension Plan”, (ii) Part II, which provides a pension benefit
which was formerly provided under a plan known as “The Allmerica Financial
Agents’ Pension Plan”, and (iii) Part III, which contains Plan terms applicable
to each of Part I and Part II; and

WHEREAS, the Plan was most recently amended and restated generally effective
January 1, 2016; and

WHEREAS, the Company has the authority to amend the Plan at any time pursuant to
Section 10.01 of Part III of the Plan; and

WHEREAS, the Company desires to amend the Plan to require the purchase of a
group annuity contract from an insurance company in order to transfer the
benefit liabilities and obligations to pay the benefits of certain retirees
listed in Appendix A to the Plan, as added by this Amendment, to the insurance
company; and

NOW, THEREFORE, the Plan is amended, effective as provided below, as follows:

Part I is amended as follows:

﻿

 

1.

Effective August 9, 2016, existing Section 6.06 of Part 1 of the Plan is amended
to delete the second paragraph of existing Section 6.06 and to substitute the
following as the new second paragraph of Section 6.06:

“Except as otherwise provided in Sections 6.07 and 6.11, the requirements of
this Section shall apply to any distribution of a Participant's interest and
will take precedence over any inconsistent provisions of Part I of the Plan.”

2.

Effective August 9, 2016 for only the Designated Retirees (as defined in new
Section 6.11 of Part I), the following new Section 6.11 of Part I of the Plan is
added to Part I of the Plan immediately after existing Section 6.10, as follows:

 

84419371\V-5

--------------------------------------------------------------------------------

 

“6.11

Purchase of Annuity Contract.  On or before December 31, 2016 (or as soon as
practicable thereafter) and notwithstanding anything in the Plan to the
contrary, the Plan shall purchase one or more annuity contracts as provided in
this Section (the “Annuity Purchase”).

﻿

(a) 

Designated Retirees.  The annuity contract or contracts purchased under this
Section and Section 5.09 of Part II (the “Annuity Contract”) shall pay the
pension being paid under the Plan to a “Designated Retiree.”  For purposes of
only this Section 6.11, a “Designated Retiree” is a Plan participant,
Beneficiary, or alternate payee (duly qualified under Section 11.09 of Part III
and listed as such on Appendix A to this Amendment) (for this Section and
Section 5.09 of Part II, an “Alternate Payee”) who is listed on Appendix A to
this Amendment and who satisfied the following conditions as of the Annuity
Contract's purchase date: (i) the individual's entire benefit under the Plan was
calculated and was being paid exclusively under Part I of the Plan or a
combination of Parts I and II of the Plan; (ii) the annuity starting date (or
annuity starting dates) for the individual's entire pension benefit under the
Plan (whether paid to the Participant or to his Beneficiary, survivor, or
Alternate Payee) occurred before June 1, 2016; and (iii) as of the date of the
Annuity Purchase under this Section, the individual's entire pension benefit
under the Plan was being paid (whether to a Participant or to his Beneficiary,
survivor, or Alternate Payee) in the form of an annuity or as the term certain
portion of a certain and continuous annuity under Section 6.06(c) or Section
6.06(d).  For purposes of clauses (i) through (iii) above, any benefit earned
under the Plan by the Designated Retiree for which the Plan had no liability
immediately before the Annuity Purchase is disregarded, and any benefit is
disregarded for which, under circumstances specified under the terms of the
Plan, annuity payments to a Designated Retiree may cease and a new benefit
payment form may be selected by a Participant. The  Plan Administrator may, on
behalf of the sponsor of the Plan, make de minimis changes to the list of
Designated Retirees in Appendix A for administrative purposes, but the final
list of Designated Retirees shall be the list of individuals, designated as
“Annuitants” and “Contingent Annuitants” (or by the Annuity Contract's
equivalent designations) and identified by identification number and birthdate,
that was included as an exhibit to an Annuity Contract purchased under this
Section.

 

84419371\V-5

--------------------------------------------------------------------------------

 

(b) 

Required Contract Content.  The Annuity Contract shall fully guarantee and pay
each Designated Retiree's pension benefit (without regard to whether it is being
paid to the Participant or his Beneficiary, survivor or Alternate Payee) in the
same form that was in effect immediately before the Annuity Purchase under the
Plan, including, but not limited to, any named Beneficiary or contingent
annuitant designation and any survivor benefit feature, and under any qualified
domestic relations order.  The Annuity Contract shall provide that the benefits
payable under the Annuity Contract are legally enforceable by the sole choice of
the individual against the insurance company issuing the Annuity Contract.

(c) 

Annuity Provider Selection.  The Benefits Committee shall cause the Plan to
enter into an Annuity Purchase and, acting as a Named Fiduciary, shall select
the annuity provider (or providers) and determine the terms of the Annuity
Contract to be purchased.  A certificate under the Annuity Contract shall be
issued to each Designated Retiree on, or as soon as practicable after, the date
of the Annuity Purchase, except where delivery is impracticable, for example,
because an individual cannot, using reasonable efforts, be located. 

(d) 

Post-Purchase Obligation.  After the Annuity Purchase and notwithstanding in the
Plan anything to the contrary, the Plan shall have no further obligation to make
any payment with respect to any Designated Retiree or to any survivor, alternate
payee, beneficiary, or other person claiming by or through a Designated Retiree.

(e) 

Amendments to this Section.  Notwithstanding anything to the contrary in the
Plan, (i) only an act of the Employer's Board of Directors can amend this
Section, and (ii) only an amendment in writing can amend this Section.”

﻿

Part II is amended as follows:

﻿

 

1.

Effective August 9, 2016, existing Section 5.05 of Part II of the Plan is
amended to delete the second paragraph of existing Section 5.05 and to
substitute the following as the new second paragraph of Section 5.05:

“Except as otherwise provided in Sections 5.06 and 5.09, the requirements of
this Section shall apply to any distribution of a Participant's interest and
will take precedence over any inconsistent provisions of Part II of the Plan.”

2.

Effective August 9, 2016 for only the Designated Part II Retirees (as defined in
new Section 5.09 of Part II), the following new Section 5.09 of Part II of the
Plan is added to Part II of the Plan immediately after existing Section 5.08, as
follows:

 

84419371\V-5

--------------------------------------------------------------------------------

 

“5.09

Purchase of Annuity Contract.  On or before December 31, 2016 (or as soon as
practicable thereafter) and notwithstanding anything in the Plan to the
contrary, the Plan shall purchase one or more annuity contracts as provided in
this Section (the “Annuity Purchase”).

﻿

(a)

Designated Part II Retirees.  The annuity contract or contracts purchased under
this Section and Section 6.11 of Part I (the “Annuity Contract”) shall pay the
pension being paid under the Plan to a Designated Part II Retiree.  For purposes
of only this Section 5.09, a “Designated Part II Retiree” is a Plan participant,
Beneficiary, or alternate payee (duly qualified under Section 11.09 of Part III
and listed as such on Appendix A to this Amendment) (for this Section and
Section 6.11 of Part I, an “Alternate Payee”) who is listed on Appendix A to
this Amendment and who satisfied the following conditions as of the Annuity
Contract's purchase date: (i) the individual's entire benefit under the Plan was
calculated and was being paid exclusively under Part II of the Plan; (ii) the
annuity starting date (or annuity starting dates) for the individual's entire
pension benefit under the Plan (whether paid to the Participant or to his
Beneficiary, survivor, or Alternate Payee) occurred before June 1, 2016; and
(iii) as of the date of the Annuity Purchase under this Section, the
individual's entire pension benefit under the Plan was being paid (whether to a
Participant or to his Beneficiary, survivor, or Alternate Payee) in the form of
an annuity or as the term certain portion of a certain and continuous annuity
under Section 5.05(c) or Section 5.05(d).  For purposes of clauses (i) through
(iii) above, any benefit earned under the Plan by the Designated Part II Retiree
for which the Plan had no liability immediately before the Annuity Purchase is
disregarded, and any benefit is disregarded for which, under circumstances
specified under the terms of the Plan, annuity payments to a Designated Part II
Retiree may cease and a new benefit payment form may be selected by a
Participant.  The  Plan Administrator may, on behalf of the sponsor of the Plan,
make de minimis changes to the list of Designated Part II Retirees in Appendix A
for administrative purposes, but the final list of Designated Part II Retirees
shall be the list of individuals, designated as “Annuitants” and “Contingent
Annuitants” (or by the Annuity Contract's equivalent designations) and
identified by identification number and birthdate, that was included as an
exhibit to an Annuity Contract purchased under this Section.

 

84419371\V-5

--------------------------------------------------------------------------------

 

(b)

Required Contract Content.  The Annuity Contract shall fully guarantee and pay
each Designated Part II Retiree's pension benefit (without regard to whether it
is being paid to the Participant or his Beneficiary, survivor or Alternate
Payee), in the same form that was in effect immediately before the Annuity
Purchase under the Plan, including, but not limited to, any named Beneficiary or
contingent annuitant designation and any survivor benefit feature, and under any
qualified domestic relations order.  The Annuity Contract shall provide that the
benefits payable under the Annuity Contract are legally enforceable by the sole
choice of the individual against the insurance company issuing the Annuity
Contract.

(c)

Annuity Provider Selection.  The Benefits Committee shall cause the Plan to
enter into an Annuity Purchase and, acting as a Named Fiduciary, shall select
the annuity provider (or providers) and determine the terms of the Annuity
Contract to be purchased.  A certificate under the Annuity Contract shall be
issued to each Designated Part II Retiree on, or as soon as practicable after,
the date of the Annuity Purchase, except where delivery is impracticable, for
example, because an individual cannot, using reasonable efforts, be located. 

(d)

Post-Purchase Obligation.  After the Annuity Purchase and notwithstanding
anything in the Plan to the contrary, the Plan shall have no further obligation
to make any payment with respect to any Designated Part II Retiree or to any
survivor, alternate payee, beneficiary, or other person claiming by or through a
Designated Part II Retiree.

(e)

Amendments to this Section.  Notwithstanding anything to the contrary in the
Plan, (i) only an act of the Employer's Board of Directors can amend this
Section, and (ii) only an amendment in writing can amend this Section.”

﻿

This First Amendment shall supersede the provisions of the Plan to the extent
those provisions are inconsistent with the provisions of this Amendment, and
except as amended by this Amendment, the Plan shall remain in full force and
effect. 

﻿

 

84419371\V-5

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, this First Amendment has been executed this 10th day of
August, 2016.

THE HANOVER INSURANCE COMPANY

/s/ Elena N. Patronas

_____________________________________
Authorized Representative

﻿

 

84419371\V-5

--------------------------------------------------------------------------------