Document:

amendedandrestatedglpens

            THE GLOBE LIFE INC.       AMENDED AND RESTATED PENSION PLAN    GENERALLY EFFECTIVE AS OF JANUARY 1, 2020                                     

 

                                BACKGROUND          Effective  as  of  January  1,  1983, Globe  Life Inc. (the  "Company"),  previously  known  as  “Torchmark Corporation,” established a defined benefit pension plan ("Plan"), which is intended to be  qualified pursuant to the provisions of the Internal Revenue Code of 1986, as amended. The Plan also  is intended to provide eligible non-commissioned employees of the Company, and those of any affiliate  which adopts the Plan, with a supplemental source of retirement income.         Effective as of January 1, 1989, the Plan was amended and restated to comply with the Tax  Reform Act of 1986. The Plan was further amended effective January 1, 1992 and January 1, 1993.         Effective as of January 1, 1993, the Employer adopted Amendments Two and Three to the  Plan.         Effective as of January 1, 1989, the Employer adopted Amendment Four to the Plan. Effective  as of January 1, 1997, The Employer adopted Amendment Five to the Plan. Effective as of January 1,  1998, the Employer adopted Amendment Six to the Plan. Effective as of January 1, 2001, the Employer  adopted Amendment Seven to the Plan.         Effective as of January 1, 1997, the Plan was amended and restated to comply with a number  of  tax  law  changes  generally  described  by  the  acronym  "GUST,"  as  the  second  amendment  and  restatement of the Plan, which constitutes Amendment Eight to the Plan.         Effective as of January 1, 2002, the Employer adopted Amendment Nine to the Plan. Effective  as of January 1, 2001, the Employer adopted Amendment Ten to the Plan. Effective as of January 1,  2004, the Employer adopted  Amendment Eleven to  the Plan. Effective  as of  March 28,  2005,  the  Employer adopted Amendment Twelve to the Plan. Effective as of January 1, 2008, the Employer  adopted Amendment Thirteen to the Plan.         Effective as of the various dates specified therein, the Employer adopted Amendment Fourteen  to the Plan.         Effective as of January 1, 2009, the Plan was amended and restated to comply with a number  of  tax  law  changes  generally  described  by  the  acronym  "EGTRRA,"  as  the  third  amendment  and  restatement of the Plan, which constitutes Amendment Fifteen to the Plan.         Effective as of January 1, 2012, the Employer adopted Amendment Sixteen to the Plan.         Effective  as  of  the  various  dates  specified  therein,  the  Employer  adopted  Amendment  Seventeen to the Plan.                                                                                       i   

 

      The fourth amendment and restatement of the Plan was adopted to comply with a number of  tax law changes generally described by the acronym "PPA." The fourth amendment and restatement  of the Plan was generally effective as of January 1, 2014 and constituted Amendment Eighteen to the  Plan.         Effective as of January 1, 2020, the Employer adopted the 2020 First Amendment to the Plan  which reflected the change in the Company’s name and the change in the Plan’s name.         Effective  as  of  January  1,  2003,  the Employer  adopted  the  Amendment  to  the  Plan  which  constituted the correction approved by the Internal Revenue Service in the VCP Compliance Statement  dated July 16, 2020.         This fifth amendment and restatement of the Plan is adopted to incorporate prior amendments  and to reflect the change in the Company’s name and the change in the Plan’s name, and is effective  January 1, 2020.         The benefit under the Plan of any Participant who terminates employment or becomes disabled  shall be determined in accordance with the provisions of the Plan as in effect on the date of such  termination of employment or Disability.                                             ii   

 

                            TABLE OF CONTENTS  ARTICLE I DEFINITIONS ..................................................................................................... I-1   1.1   Accrued Retirement Benefit .......................................................................................... I-1   1.2   Actuarial Equivalent ...................................................................................................... I-1   1.3   Administrative Committee ............................................................................................ I-2   1.4   Administrator ................................................................................................................ I-2   1.5   Affiliate ......................................................................................................................... I-2   1.6   Beneficiary .................................................................................................................... I-2   1.7   Benefit Commencement Date ....................................................................................... I-2   1.8   Board of Directors or Board .......................................................................................... I-2   1.9   Code .............................................................................................................................. I-2   1.10  Company ....................................................................................................................... I-2   1.11  Comparable Plan ........................................................................................................... I-2   1.12  Compensation ................................................................................................................ I-2   1.13  Covered Compensation ................................................................................................. I-4   1.14  Credited Service ............................................................................................................ I-4   1.15  Deferred Retirement ...................................................................................................... I-4   1.16  Defined Benefit Plan ..................................................................................................... I-4   1.17  Defined Contribution Plan ............................................................................................ I-4   1.18  Disability ....................................................................................................................... I-4   1.19  Early Retirement ........................................................................................................... I-4   1.20  Effective Date ................................................................................................................ I-4   1.21  Eligible Employee ......................................................................................................... I-5   1.22  Employee ....................................................................................................................... I-5   1.23  Employer ....................................................................................................................... I-6   1.24  Employment .................................................................................................................. I-6   1.25  Entry Date ..................................................................................................................... I-6   1.26  ERISA ........................................................................................................................... I-6   1.27  Final Average Compensation ........................................................................................ I-6   1.28  Hour of Service: ............................................................................................................ I-6   1.29  Investment Manager ...................................................................................................... I-8   1.30  Leased Employee .......................................................................................................... I-8   1.31  Liberty National Commissioned Participant ................................................................. I-8   1.32  Liberty National Non-Commissioned Participant ......................................................... I-8                                         iii   

 

 1.33  Liberty National Non-Commissioned Pension Plan ..................................................... I-8   1.34  Liberty National Pension Plan ....................................................................................... I-8   1.35  Non-Vested Separation ................................................................................................. I-8   1.36  Normal Retirement ........................................................................................................ I-8   1.37  Normal Retirement Age ................................................................................................ I-8   1.38  Normal Retirement Date ............................................................................................... I-9   1.39  One Year Break in Service ............................................................................................ I-9   1.40  Participant ...................................................................................................................... I-9   1.41  Participating Affiliates .................................................................................................. I-9   1.42  Plan ................................................................................................................................ I-9   1.43  Plan Year ....................................................................................................................... I-9   1.44  Qualified Joint and Survivor Annuity ........................................................................... I-9   1.45  Qualified Plan ................................................................................................................ I-9   1.46  Qualified Pre-Retirement Survivor Annuity ................................................................. I-9   1.47  Retirement Benefit ........................................................................................................ I-9   1.48  Schroder Plan ................................................................................................................ I-9   1.49  Social Security Offset Percentage ................................................................................. I-9   1.50  Social Security Retirement Age .................................................................................. I-10   1.51  Special Average Earnings ........................................................................................... I-10   1.52  Spouse ......................................................................................................................... I-10   1.53  Surviving Spouse ......................................................................................................... I-10   1.54  Trust or Trust Fund ..................................................................................................... I-11   1.55  Trust Agreement .......................................................................................................... I-11   1.56  Trustee ......................................................................................................................... I-11   1.57  Vested Separation ........................................................................................................ I-11   1.58  Vesting Service ........................................................................................................... I-11   1.59  Year of Service: ........................................................................................................... I-11  ARTICLE II PARTICIPATION ............................................................................................. II-1   2.1   Admission as a Participant .......................................................................................... II-1   2.2   Reemployment ............................................................................................................ II-1   2.3   Termination of Participation ....................................................................................... II-1  ARTICLE III RETIREMENT BENEFIT ............................................................................ III-1   3.1   Retirement Benefit Formula ....................................................................................... III-1   3.2   Rules for Determining Years of Credited Service ..................................................... III-1                                         iv   

 

 3.3   Retirement Benefit Formula with respect to a Liberty National Non-        Commissioned Participant or a Liberty National Commissioned Participant ............ III-3   3.4   Limitation on Benefits ................................................................................................ III-5  ARTICLE IV VESTING PROVISIONS ............................................................................... IV-1   4.1   Determination of Vesting ........................................................................................... IV-1   4.2   Rules for Crediting Vesting Service ........................................................................... IV-1   4.3   Retirement Benefit Forfeitures ................................................................................... IV-1   4.4   TMK Hogan ............................................................................................................... IV-2   4.5   Vesta Insurance Group, Inc. ....................................................................................... IV-2  ARTICLE V AMOUNT AND COMMENCEMENT OF RETIREMENT BENEFITS .... V-1   5.1   Determination of Amount of Retirement Benefits ...................................................... V-1   5.2   Suspension of Payments .............................................................................................. V-2   5.3   Limitation on Commencement of Benefits ................................................................. V-3  ARTICLE VI FORMS OF PAYMENT OF RETIREMENT BENEFIT ........................... VI-1   6.1   Methods of Distribution ............................................................................................. VI-1   6.2   Election of Optional Forms ........................................................................................ VI-2   6.3   Direct Rollovers ......................................................................................................... VI-3   6.4   Notices ........................................................................................................................ VI-4  ARTICLE VII DEATH BENEFITS .................................................................................... VII-1   7.1   Eligibility for Pre-Retirement Death Benefit ........................................................... VII-1   7.2   Form of Pre-Retirement Death Benefit .................................................................... VII-1   7.3   Election to Waive ..................................................................................................... VII-2   7.4   Beneficiaries ............................................................................................................. VII-2   7.5   After-Death Distribution Rules ................................................................................ VII-2  ARTICLE VIII CONTRIBUTIONS AND FORFEITURES ........................................... VIII-1   8.1   Contribution by the Company ................................................................................. VIII-1   8.2   Contributions by Employees ................................................................................... VIII-1   8.3   Forfeitures ............................................................................................................... VIII-1   8.4   Return of Employer Contributions under Special Circumstances........................... VIII-1  ARTICLE IX FIDUCIARIES ................................................................................................ IX-1   9.1   Named Fiduciaries ...................................................................................................... IX-1   9.2   Employment of Advisers ............................................................................................ IX-1   9.3   Multiple Fiduciary Capacities .................................................................................... IX-1   9.4   Reliance ...................................................................................................................... IX-1   9.5   Scope of Authority and Responsibility ...................................................................... IX-1                                         v   

 

 9.6   Trustee Subject to Directions of Named Fiduciary .................................................... IX-2  ARTICLE X TRUSTEE ........................................................................................................... X-1   10.1  Trust Agreement .......................................................................................................... X-1   10.2  Assets in Trust ............................................................................................................. X-1  ARTICLE XI ADMINISTRATIVE COMMITTEE ............................................................ XI-1   11.1  Appointment and Removal of Administrative Committee ........................................ XI-1   11.2  Officers of Administrative Committee ....................................................................... XI-1   11.3  Action by Administrative Committee ........................................................................ XI-1   11.4  Rules and Regulations ................................................................................................ XI-1   11.5  Powers ........................................................................................................................ XI-1   11.6  Information from Participants .................................................................................... XI-2   11.7  Reports ....................................................................................................................... XI-2   11.8  Authority to Act ......................................................................................................... XI-2   11.9  Liability for Acts ........................................................................................................ XI-2   11.10 Compensation and Expenses ...................................................................................... XI-2   11.11 Indemnity ................................................................................................................... XI-3   11.12 Denied Claims ............................................................................................................ XI-3  ARTICLE XII PLAN AMENDMENT OR TERMINATION ........................................... XII-1   12.1  Plan Amendment ...................................................................................................... XII-1   12.2  Limitations on Plan Amendment .............................................................................. XII-1   12.3  Right of the Employer to Terminate Plan ................................................................ XII-1   12.4  Effect of Partial or Complete Termination ............................................................... XII-2   12.5  Allocation of Assets ................................................................................................. XII-2   12.6  Residual Assets ........................................................................................................ XII-2   12.7  Limitations Applicable to Certain Highly Paid Participants .................................... XII-3  ARTICLE XIII MISCELLANEOUS PROVISIONS ....................................................... XIII-1   13.1  Exclusive Benefit of Participants ............................................................................ XIII-1   13.2  Plan Not a Contract of Employment ....................................................................... XIII-1   13.3  Source of Benefits ................................................................................................... XIII-1   13.4  Benefits Not Assignable .......................................................................................... XIII-1   13.5  Domestic Relations Orders ...................................................................................... XIII-1   13.6  Benefits Payable to Minors, Incompetents and Others ........................................... XIII-2   13.7  Merger or Transfer of Assets .................................................................................. XIII-2   13.8  Participation in the Plan by an Affiliate Section 13.8 was amended effective         January 1, 2012 to read as follows .......................................................................... XIII-2                                         vi   

 

 13.9  Action by Employer ................................................................................................ XIII-3   13.10 Provision of Information ......................................................................................... XIII-3   13.11 Controlling Law ...................................................................................................... XIII-3   13.12 Conditional Restatement ......................................................................................... XIII-3   13.13 Rules of Construction .............................................................................................. XIII-3   13.14 USERRA ................................................................................................................. XIII-3  ARTICLE XIV MINIMUM RETIREMENT INCOME................................................... XIV-1   14.1  Prior Plans ............................................................................................................... XIV-1  ARTICLE XV TOP-HEAVY PROVISIONS ...................................................................... XV-1   15.1  Definitions ................................................................................................................ XV-1   15.2  Top Heavy Rules ...................................................................................................... XV-4   15.3  Compensation ........................................................................................................... XV-4   15.4  Benefit ...................................................................................................................... XV-4   15.5  Vesting ..................................................................................................................... XV-5   15.6  Miscellaneous ........................................................................................................... XV-5  ARTICLE XVI BENEFIT RESTRICTIONS .................................................................... XVI-1   16.1  Limitations Applicable If the Plan's Adjusted Funding Target Attainment         Percentage Is Less Than 80 Percent or If the Plan Sponsor Is In Bankruptcy ........ XVI-1   16.2  Provisions Applicable After Limitations Cease to Apply: ...................................... XVI-3   16.6  Definitions ............................................................................................................... XVI-4   16.7  Effective Date .......................................................................................................... XVI-4                                                                                       vii   

 

                                 ARTICLE I                                   DEFINITIONS         Each of the following terms shall have the meaning set forth in this Article I for purposes of  this Plan:         1.1   Accrued Retirement Benefit: As of any date, the Retirement Benefit of a Participant  calculated pursuant to the provisions of Article III (assuming he were to continue accruing Credited  Service until Normal Retirement Age) times a fraction, the numerator of which is the number of years  of Credited Service the Participant has then completed and the denominator of which is the total years  of Credited Service he would have completed if he had continued in covered Employment until his  Normal Retirement Age. In no event shall a Participant's Accrued Retirement Benefit be less than the  Accrued  Retirement  Benefit  to  which  the  Participant  would  have  been  entitled  had  he  terminated  Employment on December 31, 1988 under the provisions of the Plan as then in effect. Notwithstanding  the  preceding paragraph,  the  Accrued  Retirement  Benefit  with  respect  to  a  Liberty  National  Commissioned Participant or a Liberty National Non-Commissioned Participant shall mean as of any  date, the Retirement Benefit of a Participant calculated pursuant to the provisions of Article III as if  the Participant's Employment terminated on such date, but in no event less than the Accrued Retirement  Benefit to which the Participant would have been entitled under the provisions of the Liberty National  Pension  Plan  or  the  Liberty National  Non-Commissioned  Pension  Plan  as  then  in  effect  had  he  terminated Employment on December 31, 1988.         1.2   Actuarial  Equivalent: An  amount  or  a  benefit  of  equivalent  current  value  to  the  Retirement Benefit which would otherwise be provided a Participant, determined on the basis of the  following  actuarial  assumptions  for  all  forms  of  benefit  in  determining  the  amount  payable  to  a  Participant having an annuity starting date in a Plan Year beginning on or after January 1, 2008 (unless  a different assumption is mandated for a specific purpose by the Pension Benefit Guaranty Corporation  (PBGC) or IRS in which case such mandated assumption shall be substituted):               (a)   Applicable  mortality  assumption.  The  applicable  mortality  table  within  the  meaning  of  Code  §  417(e)(3)(B),  as  initially  described  in  Revenue  Ruling  2007-67  (the  "2008  Applicable  Mortality  Table")  and  any  subsequent  mortality  table  promulgated  by  the  IRS  for  this  purpose in place of the 2008 Applicable Mortality Table.               (b)   Applicable  interest  rate. The  rate  of  interest  determined  by  the  applicable  interest rate described by Code § 417(e) after its amendment by the Pension Protection Act of 2006.  Specifically, the applicable interest rate shall be the adjusted first, second, and third segment rates  applied under the rules similar to the rules of Code § 430(h)(2)(C) for the second full calendar month  (lookback month) preceding the calendar quarter in which the annuity starting date occurs (calendar  quarter stability period). For this purpose, the adjusted first, second, and third segment rates are the  first, second, and third segment rates which would be determined under Code § 430(h)(2)(C) if:                     (i)   Code § 430(h)(2)(D) were applied by substituting the average yields  for the month described in the preceding Section 1.2(b) for the average yields for the 24-month period  described in such Code Section; and                     (ii)  Code  §  430(h)(2)(G)(i)(II)  were  applied  by  substituting  "Code  §  417(e)(3)(A)(ii)(II) for "Code § 412(b)(5)(B)(ii)(II)."                                         I-1 

 

      1.3   Administrative Committee: The committee appointed by the Board pursuant to, and  having the responsibilities specified in, Article XI of the Plan.         1.4   Administrator: The Company or Administrative Committee appointed by the Board of  Directors pursuant to, and having the responsibilities specified in, Article XI of the Plan.         1.5   Affiliate: Any  corporation  or  unincorporated  trade  or  business  (other  than  the  Company) while it is:               (a)   A member of a "controlled group of corporations" (within the meaning of Code  § 414(b)) of which the Company is a member;               (b)   A trade or business under "common control" (within the meaning of Code §  414(c)) with the Company;               (c)   A  member  of  an  "affiliated  service  group"  (within  the  meaning  of  Code  §  414(m)) which includes the Company; or               (d)   Any other entity required to be aggregated with the Company under Code §  414(o).         1.6   Beneficiary:  A  person  other  than  a  Participant  entitled  to  receive  any  payment  of  benefits pursuant to the terms of this Plan.         1.7   Benefit Commencement Date: The date, determined under Article V, as of which a  Participant or a Beneficiary receives or begins to receive, as the case may be, payment of his benefits  under the Plan.         1.8   Board of Directors or Board: The Board of Directors of the Company.         1.9   Code: The Internal Revenue Code of 1986, as now in effect or as amended from time  to time. A reference to a specific provision of the Code shall include such provision and any applicable  Regulation pertaining thereto.         1.10  Company: Globe  Life  Inc.  (formerly  known  as Torchmark  Corporation),  or  any  successor thereto by consolidation, merger, transfer of assets or otherwise.         1.11  Comparable Plan: A plan of the same type as described in Regulation § 1.381(c)(11)-  1(d)(4).         1.12  Compensation: The total cash compensation paid to an Employee during a calendar  year by his Employer, including salary, wages, bonuses, any amounts not paid directly and currently  in cash to an Employee but paid for the benefit of an Employee through a "salary reduction" agreement  in conjunction with one or more welfare plans, any qualified transportation fringes of the Employer  and  the  total  amount  deferred  pursuant  to  an  Employee's  election  under  a  "cash  or  deferred  arrangement"  in  conjunction  with  one  or  more  qualified  retirement  plans  of  the  Employer,  but  excluding:               (a)   Any reimbursement of or allowances for expenses;                                         I-2 

 

            (b)   Employer contributions to any form of employee retirement, pension, profit  sharing or thrift plan;               (c)   Director's fees;               (d)   Annual service awards;               (e)   Deferred compensation accrued under any nonqualified deferred compensation  agreement or contract or any amendment or replacement thereof;               (f)   Commissions, other than commissions payable with respect to or on account  of the sale or lease of real property; and               (g)   Payments  made  to any  Employee  after  such  Employee's  separation  from  service, in the form of severance benefits.         The definition of Compensation shall apply as set forth in this Section 1.12 with respect to a  Liberty National Non-Commissioned Participant by replacing Section 1.12(f) in the list of excluded  forms of compensation above, as follows:               (h)   Commissions; and         The definition of Compensation shall apply as set forth in this Section 1.12 with respect to a  Liberty National Commissioned Participant by replacing Sections 1.12(f) and (g) in the list of excluded  forms of compensation above and by adding Section 1.12(h) as follows:               (i)   Renewal  commissions,  other  than  renewal  commissions  paid  to  agents  authorized to solicit applications for both ordinary and home service policies of insurance;               (j)   Any amounts due to or paid to a Participant as a result of the settlement of his  or her commission account balance upon the termination of his or her Employment for any reason; and               (k)   Payments  made  to  any  Employee  after  such  Employee's  separation  from  service, in the form of severance benefits.         The  determination  of  Compensation  will  be  in  accordance  with  records  maintained  by  the  Employer and shall be conclusive. Anything in this definition to the contrary notwithstanding, the  Compensation taken into account for a Participant for Plan purposes for any Plan Year commencing  on or after January 1, 1989 and prior to January 1, 1994 shall not exceed $200,000 (or such adjusted  amount as may be prescribed for such Plan Year pursuant to Code § 401(a)(17)) and for any Plan Year  commencing after December 31, 1993 shall not exceed $150,000 (or such adjusted amount as may be  prescribed for such Plan Year pursuant to Code § 401(a)(17)).         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  Plan  (the  determination  period).  For  purposes of determining benefit accruals in a Plan Year beginning after December 31, 2001, the annual  Compensation limit for determination periods beginning before January 1, 2002, shall be $150.000 for  any  determination period  beginning  in  1996  or  earlier;  $160,000  for  any  determination  period                                        I-3 

 

beginning in 1997, 1998, or 1999; and $170,000 for any determination period beginning in 2000 or  2001. The $200,000 limit on annual Compensation shall be adjusted for cost-of-living increases in  accordance with Code § 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.         Compensation  paid  after  "Severance  from  Employment"  for  purposes  of  benefits  shall  be  adjusted in the same manner as 415 Compensation pursuant to Section 3.4.3(a) if those amounts would  have  been  included  in  earnings  if  they  were  paid  prior  to  the  Participant's  "Severance  from  Employment," except in applying Section 3.4.4, the term "Limitation Year" shall be replaced with the  term "Plan Year" and the term "415 Compensation" shall be replaced with the term "Compensation."  Compensation for purposes of benefits does not include any termination or severance pay or final  vacation pay, regardless of when paid. The provisions of this paragraph shall apply for Plan Years  beginning on and after January 1, 2008.         1.13  Covered  Compensation: The  average  of  the  annual  contribution  and  benefits  base  under § 230 of the Social Security Act for each year for the 35 year period ending in the year the  Participant reaches Social Security Retirement Age (SSRA), except for a Participant who separates  before attainment of SSRA the base for the year of separation will be assumed to be the base for all  future years to SSRA without increases or adjustments.         1.14  Credited Service: The Years of Service for computation of the amount of a Participant's  Retirement Benefit as defined in Article III.         1.15  Deferred Retirement: Termination of Employment of a Participant after his Normal  Retirement Date.         1.16  Defined Benefit Plan: A plan of the type defined in Code § 414(j) maintained by the  Company or an Affiliate, as applicable.         1.17  Defined Contribution Plan: A plan of the type defined in Code § 414(i) maintained by  the Company or an Affiliate, as applicable.         1.18  Disability: Total and permanent disability for a period of at least six months as defined  by either (i) the group disability benefit plan maintained by the Participant's Employer, or (ii) the  United States Social Security Administration.         1.19  Early Retirement: Termination of Employment, other than by reason of Disability or  death, of a Participant prior to Normal Retirement Age who has completed at least 10 full years of  Vesting Service and has attained the age of 55.         With  respect  to  a  Liberty  National  Commissioned  Participant  or  a  Liberty  National  Non- Commissioned Participant, Early Retirement shall mean termination of Employment, other than by  reason of Disability or death, of a Participant prior to Normal Retirement Age who has completed at  least 15 full years of Vesting Service and has attained the age of 55.         1.20  Effective Date: The original effective date of the Plan is January 1, 1983, while the  terms and conditions of this restated and amended Plan as herein set forth shall be effective, except as  may otherwise be specified herein, on or after January 1, 2020.                                         I-4 

 

      1.21  Eligible Employee: Section 1.21 was amended effective January 1, 2013 to read as  follows:         Except as  provided in  the  second  paragraph  of  this  Section  1.21, (a) all  Employees  of  the  Company; (b) all Employees of each Affiliate (other than Liberty National Life Insurance Company)  participating  in  the  Plan pursuant to  Section  13.8;  and  (c) all  Employees  of  Liberty  National  Life  Insurance Company who have an initial date of hire after December 31, 2011 on the employment  records  of  Liberty  National  Life  Insurance  Company  (whether  as  a  new  hire  or  a  transfer  of  employment from an Affiliate).         The foregoing paragraph notwithstanding, the following Employees of the Company and of  each  Affiliate  (including  Liberty  National  Life  Insurance  Company)  are  not  included  in  the  term  "Eligible  Employee:"  (d)  Employees  who  are  classified,  treated  or  otherwise  characterized  by  the  Employer as general agents, trainers, agents, branch managers, regional managers, district managers,  brokers, solicitors, unit managers, assistant unit managers or any other individual whose primary duty  involves the direct sale of insurance, regardless of the mode of compensation; (e) Employees included  in a unit of employees covered by a collective bargaining agreement between the Employer and the  employee representatives in the negotiation of which retirement benefits were the subject of good faith  bargaining,  unless  such  bargaining  agreement  provides  for  participation  in  the  Plan;  (f)  Leased  Employees;  and  (g)  an  Employee  of  a  former  "Employer,"  including,  without  limitation,  a  "Participating Employer," as those terms were defined in the Liberty National Pension Plan or the  Liberty National Non-Commissioned Pension Plan if such Employee was first credited with an Hour  of Service on or after January 1, 1995 and before January 1, 2012. The term "Eligible Employee" shall  not  include,  prior  to  January  1,  2004,  Employees  of  a  Participating  Employer  in  the  Plan  if  the  Participating Employer was identified as an "Employer," including, without limitation, a "Participating  Employer," in the Liberty National Pension Plan or the Liberty National Non-Commissioned Pension  Plan prior to January 1, 2004.         For  historical  purposes  only,  Eligible  Employees  under  the  Liberty  National  Non- Commissioned Pension Plan did not include: any individual whose duties include selling products of  Liberty National Life Insurance Company or an Affiliate on a commissioned basis and any Employee  of Liberty National Life Insurance Company who were first credited with an Hour of Service on or  after January 1, 1995; and Eligible Employees under the Liberty National Pension Plan included all  Employees of Liberty National Life Insurance Company who were compensated in whole or in part by  commissions or under contract with an Employer as a District Manager or a Career Agent performing  services for remuneration for the Employer as a full-time life insurance salesman, and did not include  Employees who were first credited with an Hour of Service on or after January 1, 1995. For purposes  of this paragraph, the meaning of the terms used herein shall have the same meaning they had under  the respective former plan.         1.22  Employee: Section 1.22 was amended effective January 1, 2012 to read as follows:         Any  individual  who  is  classified,  treated  or  otherwise  characterized  by  an  Employer  as  a  common  law  employee  of  an  Employer,  and  Leased  Employees  within  the  meaning  of  Code  §  414(n)(2). Notwithstanding the foregoing, if such Leased Employees do not constitute more than 20%  of the Employer's nonhighly compensated work force within the meaning of Code § 414(n)(5)(C)(ii),  the term "Employee" shall not include those Leased Employees covered by a plan described in Code  § 414(n)(5) unless otherwise provided by the terms of this Plan. Any individual who is classified,  treated or otherwise characterized by an Employer as an independent contractor is not included in the                                        I-5 

 

term "Employee." The foregoing determination of whether an individual is an "Employee" for purposes  of this Plan shall be made by an Employer subject to the approval and consent of the Administrator in  its sole discretion. Said determination shall apply for all purposes of this Plan and regardless of whether  such individual is later classified by any governmental agency, court, tribunal, governing body or any  other  person  or  entity  as  a  common  law  employee  of  an  Employer.  It  is  the  intent  hereof  that  an  Employer subject to the approval and consent of the Administrator shall decide in its sole discretion  which individuals are classified as an Employee for purposes of this Plan.         1.23  Employer: The  Company  and  each  Affiliate  participating  in  the  Plan  pursuant  to  Section 13.8.         1.24  Employment: An Employee's employment with the Company or an Affiliate or, to the  extent determined by the Administrator, any predecessor of any of them.         1.25  Entry Date: The first day of the payroll period following the date the Eligible Employee  has satisfied the requirements of Section 2.1.1.         1.26  ERISA: The Employee Retirement Income Security Act of 1974, as amended from  time  to  time.  Reference  to  a  specific  provision of  ERISA  shall  include  such  provision  and  any  applicable regulation pertaining thereto.         1.27  Final Average Compensation: The  highest  average  of  the  Participant's  annual  Compensation for any five consecutive full calendar years of Employment during the 10 consecutive  calendar years of Employment immediately preceding the Participant's termination of Employment,  provided that any service credited for a period of Disability shall be disregarded in determining such  10 consecutive years. In the event the Participant does not have at least five full calendar years of  Employment,  Final  Average  Compensation  shall  mean  the  average  annual  Compensation  for  the  Participant's total number of full years of Employment. A Participant's annual Compensation, without  annualization,  during  the  part  of  the  calendar  year  immediately  preceding  his  termination  of  Employment will be treated as his annual Compensation for a full calendar year for the purpose of this  Section  1.27  if  that  produces  a  higher  average.  If  a  Participant  is  rehired  and  is  entitled  to  the  reinstatement  of  prior  Credited  Service  and  Vesting  Service  and  does  not  have  at  least  five  full  consecutive years of annual Compensation after he is rehired, then his Final Average Compensation  shall mean the average of the annual Compensation for the Participant's last five complete calendar  years of Employment.         1.28  Hour of Service:                (a)   Each  hour  for  which  an  Employee  is  paid,  or  entitled  to  payment,  for  the  performance of duties for an Employer (or (i) for an Affiliate in the case of an Employee who has  transferred his Employment to the Employer from such Affiliate, and (ii) with respect to a person who  became a Participant on January 1, 1985 and who on December 31, 1984 was employed by Schroder  Energy Advisors, for Schroder Energy Advisors or any other participating employers in the Schroder  Plan) during the applicable computation period.               (b)   Each  hour  for  which  an  Employee  is  paid,  or  entitled  to  payment,  by  an  Employer (or (i) by an Affiliate in the case of an Employee who has transferred his Employment to the  Employer from such Affiliate, and (ii) with respect to a person who became a Participant on January  1, 1985 and who on December 31, 1984 was employed by Schroder Energy Advisors, for Schroder                                         I-6 

 

Energy Advisors or any other participating employers in the Schroder Plan) 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),  lay-off,  jury  duty,  military duty or leave of absence. An hour for which an Employee is directly or indirectly paid or  entitled to payment on account of a period during which no duties are performed is not credited to the  Employee if such payment is made or due under a plan maintained solely for the purpose of providing  severance  benefits  or  complying  with  the  applicable  unemployment  compensation  laws.  Hours  of  Service are not credited for a payment which solely reimburses an Employee for medical or medically  related expenses incurred by the Employee.               (c)   Each hour for which back pay, irrespective of mitigation of damages, is either  awarded or agreed to by  an Employer (or (i) by an Affiliate in the case of an Employee who has  transferred his Employment to the Employer from such Affiliate, and (ii) with respect to a person who  became a Participant on January 1, 1985 and who on December 31, 1984 was employed by Schroder  Energy Advisors, for Schroder Energy Advisors or any other participating employers in the Schroder  Plan). The same Hours of Service shall not be credited both under Section 1.28(a) or Section 1.28(b),  as the case may be, and under this Section 1.28(c).               (d)   If,  in  accordance  with  standard  personnel  policies  applied  in  a  non- discriminatory manner to all Employees similarly situated, an Employer determines in writing that an  Employee's approved, unpaid leave of absence furthers the interest of the Employer, each hour for  which the Employee on the approved unpaid leave of absence would normally have received credit  under this Plan if he had been working in his regular Employment for the Employer (or an Affiliate in  the case of an Employee who has transferred his Employment to the Employer from such Affiliate).               (e)   An Employee of the Employer (or an Affiliate in the case of an Employee who  has transferred his Employment to the Employer from such Affiliate) who is regularly employed by  such Employer (or Affiliate) for at least 35 hours a week shall be credited with 45 Hours of Service if  under this Plan he would be credited with at least one Hour of Service during the week.               (f)   An Employee of the Employer (or an Affiliate in the case of an Employee who  has transferred his Employment to the Employer from such Affiliate) who is not regularly employed  by such Employer (or Affiliate) for at least 35 hours a week shall be credited with the actual Hours of  Service for which he is paid or entitled to credit under this Plan.  Provided, however, notwithstanding  anything to the contrary in the preceding sentence, for the period beginning January 1, 2003 and ending  December 31, 2019, an Employee of the Employer (or an Affiliate in the case of an Employee who has  transferred his Employment to the Employer from such Affiliate) who is not regularly employed by  such Employer (or Affiliate) for at least 35 hours a week shall be credited with 45 Hours of Service if  under this Plan he would be credited with at least one Hour of Service during the week.  With respect  to periods after December 31, 2019, the first sentence of this Subsection 1.28(f) shall apply.               (g)   Hours of Service shall be calculated and credited pursuant to § 2530-200b-2 of  the Department of Labor Regulations which are incorporated herein by this reference.               (h)   With respect to a Liberty National Commissioned Participant, Sections 1.28(e)  and (f) shall not apply, and the following shall apply in determining Hours of Service: (i) all references  to Schroder Energy Advisors shall not apply; (ii) for years prior to January 1, 1986, an Employee  whose compensation from an Employer (or an Affiliate in the case of an Employee who has transferred  his  Employment  to  the  Employer  from  such  Affiliate)  with  respect  to  a  week  consists  in  part  of                                        I-7 

 

                                                                      1 commissions, or who is regularly employed by such Employer (or Affiliate) for at least 37 /2 hours a  week shall be credited with 45 Hours of Service if under the Plan he would be credited with at least  one Hour of Service during the week. Effective January 1, 1986, an Employee of the Employer (or an  Affiliate in the case of an Employee who has transferred his Employment to the Employer from such  Affiliate) shall be credited with 45 Hours of Service if under this Plan he would be credited with at  least one Hour of Service during the week; (iii) for years prior to January 1, 1986, an Employee whose  compensation from the Employer (or an Affiliate in the case of an Employee who has transferred his  Employment to the Employer from such Affiliate) with respect to a week does not consist in part of  commissions and who is not regularly employed by such Employer (or Affiliate) for at least 37 '/2  hours a week shall be credited with the actual Hours of Service for which he is paid or entitled to credit  under this Plan.               (i)   With  respect  to  a  Liberty  National  Non-Commissioned  Participant,  all  references to Schroder Energy Advisors shall not apply.         1.29  Investment Manager: Any person appointed pursuant to Section 9.1 having the power  to direct the investment of assets in accordance with that Section.         1.30  Leased Employee: Any individual (who otherwise is not an Employee of the Employer)  who, pursuant to a leasing agreement between the Employer and any other person, has performed  services for the Employer (or for the Employer and any persons related to the Employer within the  meaning of Code §144(a)(3)) on a substantially full time basis for at least one year and who performs  services under the primary direction and control of the Employer.         1.31  Liberty  National  Commissioned  Participant: A  Former  Participant  in  the  Liberty  National Pension Plan who came into the Plan effective January 1, 2004 pursuant to the merger of the  Liberty National Pension Plan with and into the Plan.         1.32  Liberty National Non-Commissioned Participant: A Former Participant in the Liberty  National Non-Commissioned Pension Plan who came into the Plan effective January 1, 2004 pursuant  to the merger of the Liberty National Non-Commissioned Pension Plan with and into the Plan. This  shall  specifically  include  Liberty  National  Non-Commissioned  Participants  who  are  employees  of  United Investors Life Insurance Company.         1.33  Liberty  National  Non-Commissioned  Pension  Plan: The  Liberty  National  Life  Insurance Company Pension Plan for Non-Commissioned Employees, which merged with and into the  Plan on January 1, 2004.         1.34  Liberty National Pension Plan: The Liberty National Life Insurance Company Pension  Plan, which merged with and into the Plan on January 1, 2004.         1.35  Non-Vested Separation: Termination of Employment (other than by reason of death or  Disability) of a Participant whose vested percentage in his Retirement Benefit is zero percent.         1.36  Normal Retirement: Termination of Employment of a Participant at Normal Retirement  Age.         1.37  Normal Retirement Age: Age 65.                                         I-8 

 

      1.38  Normal Retirement Date: The last day of the payroll period of the Employer coinciding  with or next following the date on which the Participant attains age 65.         1.39  One Year Break in Service: Any period of twelve consecutive months, beginning with  the date of an Employee's Employment or any anniversary of the date of such Employment, during  which the Employee has not completed more than 500 Hours of Service; except that effective January  1, 1985, for absences beginning on or after January 1, 1985, a Participant who is absent from work due  to such Participant's pregnancy, the birth of the Participant's child or by reason of the adoption of a  minor child by the Participant for the purpose of caring for such child immediately following its birth  or adoption and who provides timely information establishing to the satisfaction of the Administrator  the reasons for the absence and the number of days of such absence will be treated as performing a  normal schedule (or eight hours per day) up to a maximum of 501 Hours of Service in either the year  in which the absence begins or the year immediately following the year in which the absence begins  as necessary to prevent such Participant from incurring a One Year Break in Service in either (but not  both) the year in which the absence begins or the year immediately following the year in which the  absence begins.         1.40  Participant: An Employee who has commenced, but not terminated, participation in the  Plan as provided in Article II.         1.41  Participating Affiliates: Any Affiliate which in accordance with Section 13.8 by duly  authorized action has adopted the Plan and not withdrawn therefrom.         1.42  Plan: The  Globe  Life  Inc.  Pension  Plan  (formerly  known  as The  Torchmark  Corporation Pension Plan).         1.43  Plan Year: Each twelve consecutive month period ending on December 31, during any  part of which the Plan is in effect.         1.44  Qualified Joint and Survivor Annuity: An annuity for the life of the Participant with a  survivor annuity continuing after the Participant's death to the Participant's Surviving Spouse for the  Surviving Spouse's life in an amount which is equal to 50% of the amount payable during the joint  lives  of  the  Participant  and  such  Surviving  Spouse  and  which  is  the  Actuarial  Equivalent  of  the  Participant's Retirement Benefit.         1.45  Qualified  Plan: A  Defined  Contribution  Plan  or  a  Defined  Benefit  Plan  which  is  qualified under Code § 401(a).         1.46  Qualified Pre-Retirement Survivor Annuity: The pre-retirement death benefit provided  for in Section 7.1.1(2).         1.47  Retirement Benefit: The retirement benefit of a Participant calculated under Article III  in the form of a single life annuity payable monthly commencing on Normal Retirement Date for the  life of the Participant.         1.48  Schroder  Plan: The  Employee's  Retirement  Plan  of  Schroder  Incorporated  and  Associated Companies.         1.49  Social Security Offset Percentage: The percentage factor utilized in determining the  social  security  offset for  a  Participant.  This  offset  percentage  is  based  on  the  Participant's  Social                                        I-9 

 

Security Retirement Age and the age at which the Participant's benefits commence. The appropriate  offset percentages are as follows:              Benefit         Commencement Age                     Social Security Retirement Age                                                      Age 65     Age 66      Age 67                                                   (Interpolate for months)              55                            0.750%      0.688%      0.632%              56                            0.750%      0.703%      0.645%              57                            0.750%      0.706%      0.662%              58                            0.750%      0.708%      0.667%              59                            0.750%      0.711%      0.671%              60                            0.750%      0.712%      0.675%              61                            0.750%      0.682%      0.648%              62                            0.750%      0.688%      0.625%              63                            0.750%      0.692%      0.635%              64                            0.750%      0.696%      0.643%              65                            0.750%      0.700%      0.650%              66                            0.750%      0.750%      0.700%              67                            0.750%      0.750%      0.750%           1.50  Social Security Retirement Age: The earliest age at which a Participant is entitled to  receive his full benefit under the Social Security Act. The appropriate Social Security Retirement Ages  are as follows:         Calendar Year of Birth               Age of Social Security Retirement Age            1937 and Before                              Age 65           1938 to 1954                                 Age 66           1955 and after                               Age 67         1.51  Special Average Earnings: The average of the Participant's annual Compensation for  the  three  completed  consecutive  calendar  year  periods  during  his  last  five  complete  consecutive  calendar  years  of  Employment  which  yields  the  highest  average,  or  if  employed  less  than  three  complete consecutive calendar years the amount obtained by converting his Compensation for the most  recent period of Employment to an annual rate, where Compensation considered for any year cannot  exceed the Social Security contribution and benefits base under § 230 of the Social Security Act for  that  year.  Notwithstanding  the  above,  Special  Average  Earnings  will  not  exceed  the  Participant's  Covered Compensation.         1.52  Spouse: The person lawfully married to a Participant. "Lawfully married" means the  marriage occurred in a jurisdiction that recognized the marriage as legal.         1.53  Surviving Spouse: The Spouse of a Participant on the earlier of:               (a)   The date of the Participant's death; or                                        I-10 

 

            (b)   The Participant's Benefit Commencement Date.         1.54  Trust or Trust Fund: The trust established under the Plan in which Plan assets are held.         1.55  Trust Agreement: The agreement between the Company and the Trustee with respect  to the Trust fund.         1.56  Trustee: The trustee appointed pursuant to Article X, and any successor trustee.         1.57  Vested Separation: Termination of Employment of a Participant for any reason other  than Disability before he is eligible for Early Retirement, with a vested percentage in his Retirement  Benefit.         1.58  Vesting Service: The Years of Service credited to a Participant under Section 4.2 for  purposes of determining the Participant's vested percentage in his Retirement Benefit.         1.59  Year of Service:               (a)   For purposes of determining eligibility to participate under Article II and for  purposes of determining Vesting Service, for Employment, or return to Employment after a One Year  Break in Service, beginning in 1975 or later years, a period of 12 consecutive months beginning with  the date of Employment or return to Employment during which an Employee has not less than 1,000  Hours of Service for an Employer (or (i) for an Affiliate in the case of an Employee who has transferred  his Employment to the Employer from such Affiliate, and (ii) with respect to a person who became a  Participant on January 1, 1985 and who on December 31, 1984 was employed by Schroder Energy  Advisors, for Schroder Energy Advisors or any other participating employer in the Schroder Plan in  employment covered by the Schroder Plan).               (b)   For purposes of determining Credited Service, for Employment, or return to  Employment  after  a  One  Year  Break  in  Service,  beginning  in  1975  or  later  years,  a  period  of  12  consecutive months beginning with the date of Employment or return to Employment during which an  Employee has not less than 2,000 Hours of Service for an Employer in Employment covered by the  Plan (or (i) for an Affiliate in employment covered by such Affiliate's Comparable Plan in the case of  an Employee who has transferred his Employment to the Employer from such Affiliate, and (ii) with  respect to a person who became a Participant on January 1, 1985 and who on December 31, 1984 was  employed  by  Schroder  Energy  Advisors,  for  Schroder  Energy  Advisors  or  any  other  participating  employer  in  the  Schroder  Plan  in employment  covered by  the  Schroder  Plan).  An  Employee  who  completes at least 1,000 Hours of Service but less than 2,000 Hours of Service in a computation period  shall be credited with a fraction of a Year of Service for such period, determined by dividing his Hours  of Service in such period by 2,000.               (c)   With  respect  to  a  Liberty  National  Commissioned  Participant  or  a  Liberty  National Non-Commissioned Participant, the following shall also apply for purposes of determining  eligibility to participate under Article II and for purposes of determining Vesting Service:                     (i)   All references to Schroder Energy Advisors shall not apply;                     (ii)  For  Employment  which  began  before  1975,  with  respect  to  periods  before the 1975 anniversary of such Employment, an aggregate of 52 weeks during each of which an  Employee was employed on a permanent basis for at least 35 hours a week by an Employer (or by an                                        I-11 

 

Affiliate in the case of an Employee who has transferred his Employment to the Employer from such  Affiliate);                     (iii) For  Employment  which  began  before  1975,  with  respect  to  periods  after the 1975 anniversary of such Employment, a period of 12 consecutive months beginning with the  date of such anniversary in 1975 or later years during which an Employee has not less than 1,000 Hours  of  Service  for  an  Employer  (or  an  Affiliate  in  the  case  of  an  Employee  who  has  transferred  his  Employment to the Employer from such Affiliate); and                     (iv)  For Employees who are former employees of Peninsular Life Insurance  Company and whose employment with Liberty National Life Insurance Company began on May 20,  1985 as a result of the acquisition by Liberty National Life Insurance Company of the Home Service  Division of Peninsular Life Insurance Company, a period of twelve consecutive months beginning with  the date of employment or return to employment with Peninsular Life  Insurance Company during  which such individuals had not less than 1,000 Hours of Service with either or both Peninsular Life  Insurance Company and Liberty National Life Insurance Company.               (d)   With  respect  to  a  Liberty  National  Commissioned  Participant  or  a  Liberty  National Non-Commissioned Participant, the following shall also apply for purposes of determining  Credited Service:                     (i)   All references to Schroder Energy Advisors shall not apply;                     (ii)  For  Employment  which  began  before  1975,  with respect  to  periods  before the 1975 anniversary of such Employment, an aggregate of 52 weeks during each of which an  Employee was employed in Employment covered by the Plan on a permanent basis for at least 35 hours  a week by an Employer (or by an Affiliate in employment covered by such Affiliate's Comparable Plan  in the case of an Employee who has transferred his Employment to the Employer from such Affiliate);                     (iii) For Employment which began before 1975 with respect to periods after  the 1975 anniversary of such Employment, a period of 12 consecutive months beginning with the date  of such anniversary in 1975 or later years during which an Employee has not less than 2,000 Hours of  Service  in  Employment  covered  by  the  Plan  for  an  Employer  (or  for  an  Affiliate  in  employment  covered  by  such  Affiliate's  Comparable  Plan  in  the  case  of  an  Employee  who  has  transferred  his  Employment to the Employer from such Affiliate);                     (iv)  For Employees who are former employees of Peninsular Life Insurance  Company and whose Employment with Liberty National Life Insurance Company began on May 20,  1985 as a result of the acquisition by Liberty National Life Insurance Company of the Home Service  Division  of  Peninsular  Life  Insurance  Company  and  who  are  employed  by  Liberty  National  Life  Insurance Company for the period beginning on May 20, 1985 and ending on a date which is no earlier  than May 20, 1988, a period of 12 consecutive months beginning with the date of employment or return  to employment with Peninsular Life Insurance Company during which such individuals had not less  than  2,000  Hours  of  Service  with  either  or  both  Peninsular  Life  Insurance  Company  and  Liberty  National Life Insurance Company; and                     (v)   For purposes of Section 1.59(d)(iii), an Employee who completes at  least 1,000 Hours of Service but less than 2,000 Hours of Service in a computation period shall be                                         I-12 

 

credited with a fraction of a Year of Service for such period, determined by dividing his Hours of  Service in such period by 2,000.                                         I-13 

 

                                  ARTICLE II                                  PARTICIPATION         2.1   Admission as a Participant                     An Eligible Employee shall become a Participant on the first day of the payroll  period next following the later of his completion of one Year of Service or his attainment of age 21.                     An  Employee  who  did  not  become  a Participant  on  the  Entry  Date  next  following the date on which he met the eligibility requirements of Section 2.1.1 because he was not  then an Eligible Employee shall become a Participant as of the first day on which he becomes an  Eligible Employee.                     If an Employee has not completed 1,000 Hours of Service for the Employer by  the anniversary of his Employment, the next 12-month period for determining a Year of Service shall  begin on the January 1 next following his date of Employment and thereafter any subsequent 12-month  period shall begin on the anniversary of his Employment.                     Notwithstanding any other provision of this Article II, an Employee who was  an employee of an "Employer" or a "Participating Employer" in the Liberty National Pension Plan or  the Liberty National Non-Commissioned Pension Plan (as those terms were therein defined) prior to  January  1,  2004  and  who  was  excluded  from  participation  in  those  plans  shall  not  be  eligible  to  participate in the Plan.         2.2   Reemployment         An individual who has ceased to be a Participant and who again becomes an Eligible Employee  shall become a Participant as of the first date on which he again becomes an Eligible Employee, unless  he has had a One Year Break in Service. If an individual again becomes an Eligible Employee after a  One Year Break in Service, he shall become a Participant upon completion of one Year of Service  retroactive to a date which is not later than the date he again became an Eligible Employee.         2.3   Termination of Participation          A Participant shall cease to be such:               (a)   Upon the payment to him of all nonforfeitable benefits due to him under the  Plan at a time when he is no longer eligible for any future benefit accrual;               (b)   Upon his Non-Vested Separation;               (c)   Upon his death; or               (d)   Upon the transfer of his Accrued Benefit to another Qualified Plan.                                         II-1 

 

                                  ARTICLE III                               RETIREMENT BENEFIT         3.1   Retirement Benefit Formula                     A Participant's monthly Retirement Benefit shall be an amount equal to 1/12 of  the excess of (a) over the sum of (b) and (c) below, where:                     (a)   Is 1% of the Participant's Final Average Compensation for each year of  Credited Service up to 40 years plus 2% of the Participant's Final Average Compensation (not to exceed  40%) for each year of Credited Service after the Participant's attainment of age 45;                     (b)   Is the social security offset which is equal to the smaller of:                           (i)   50% of the basic benefit calculated above in paragraph (a), but  substituting Special Average Earnings for Final Average Compensation in the formula; or                           (ii)  The Social Security Offset Percentage times the Participant's  Special Average Earnings times each year of Credited Service not to exceed 35 years;                     (c)   Is the Participant's annual retirement income (expressed in the form of  a single life annuity commencing at Normal Retirement Date) under (i) the Comparable Plan of an  Affiliate of the Employer or any corporation merged into the Employer or whose assets were acquired  by the Employer, (ii) any non-comparable plan of such Affiliate to the extent that such benefit is an  offset under any Comparable Plan of such Affiliate and (iii) for a person who became a Participant on  January 1, 1985 and who on December 31, 1984 was employed by Schroder Energy Advisors, the  Schroder Plan; provided, however, that if (iv) the assets and liabilities from any plan referred to in this  paragraph (c) have been transferred to the Plan pursuant to a trustee-to-trustee transfer of assets and  liabilities, and (v), such transfer of assets and liabilities was made for the benefit of the Participant, the  reduction in the monthly Retirement Benefit otherwise required by this paragraph (c) shall not apply.                     However, in no case shall the monthly Retirement Benefit for any Participant  described in Article XIV be less than the monthly normal retirement benefit set forth in Article XIV.                     The amount of Retirement Benefit calculated under this Section 3.1 shall be  subject to actuarial adjustment if it is payable in any other form of payment authorized by this Plan.                     The  Retirement  Benefit  of  a  Participant  who  terminated  Employment  or  incurred a Disability prior to the Effective Date shall be determined in accordance with the provisions  of the Plan as in effect on the date of termination of Employment or Disability.                     The provisions of this Section 3.1 shall not apply  with respect to a Liberty  National Commissioned Participant or a Liberty National Non-Commissioned Participant.         3.2   Rules for Determining Years of Credited Service                     Subject to Sections 3.2.2 through 3.2.7 below, Credited Service shall mean the  sum of a Participant's Years of Service, expressed in full years and fractions thereof, except for the  following:                                         III-1 

 

                  (a)   Any  period  of  Employment  prior  to  the  first  anniversary  of  the  Participant's Employment following his 20th birthday (or 24th birthday for years prior to January 1,  1985); and                     (b)   Any period of Employment in a classification in which the Participant  does not qualify as an Eligible Employee.                     If an Employee is on an authorized unpaid leave of absence granted by his  Employer,  his  period  of  absence  shall  be  counted  as  Credited  Service  upon  his  return  to  active  Employment  only  if his  Employer  determines  in  writing,  in  accordance  with  standard  personnel  policies applied in a non-discriminatory manner to all Employees similarly situated, that such absence  furthers the interest of the Employer.                     If  an  Employee  is  on  an  authorized  military  leave  while  his  reemployment  rights are protected by law and provided that he directly entered military service from his Employer's  service and shall not have voluntarily reenlisted after the date of first entering active military service,  his period of absence shall be counted as Credited Service upon his return to active Employment.                     If an Employee is on an authorized leave of absence on account of Disability,  he shall continue to receive Credited Service from the date of Disability until the earlier of: (i) his Early  Retirement Date; (ii) his Normal Retirement Date; or (iii) his recovery from Disability.                     An Employee who terminates Employment with no vested percentage in his  Retirement Benefit shall, if he returns to Employment, have no credit for Credited Service prior to such  termination of Employment if (i) for years prior to January 1, 1985, the total of his consecutive One  Year  Breaks  in  Service  immediately  preceding  his  reemployment  exceed  his  aggregate  years  of  Vesting Service (whether or not consecutive, but excluding Vesting Service previously disregarded  under Section 4.2.4) prior to the termination; or (ii) for years on or after January 1, 1985, the total of  his  consecutive  One  Year  Breaks  in  Service  immediately  preceding  his  reemployment  exceed  the  greater  of  five  years  or  his  aggregate  years  of  Vesting  Service  (whether  or  not  consecutive,  but  excluding  Vesting  Service  previously  disregarded  under  Section 4.2.4)  prior  to  the  termination.  A  Participant who had a Vested Separation and returns to Employment will retain credit for his prior  years of Credited Service unless he received a distribution of his Accrued Retirement Benefit at the  time of such Vested Separation.                     No  Participant  shall  receive  Credited  Service  during  a  period  when  such  Participant is accruing benefits under another Defined Benefit Plan of the Employer or an Affiliate  unless the Retirement Benefit under this Plan is reduced or offset by the full amount of benefits accrued  by such Participant under such other Defined Benefit Plan; provided, however, that if (i) the assets and  liabilities from such other Defined Benefit Plan have been transferred to the Plan pursuant to a trustee- to-trustee transfer of assets and liabilities, and (ii), such transfer of assets and liabilities was made for  the benefit of the Participant, the reduction in the monthly Retirement Benefit otherwise required by  this Section 3.2.6 shall not apply.                     By appropriate corporate action exercised in a uniform and nondiscriminatory  manner  and,  where  applicable  consented  to  by  the  Company,  each  Employer  may  grant  Credited  Service for any Employment with such Employer prior to the time it became an Employer.                                         III-2 

 

      3.3   Retirement Benefit Formula with respect to a Liberty National Non-Commissioned  Participant or a Liberty National Commissioned Participant                      Section 3.3.1 was amended effective January 1, 2012 to read as follows:               A Participant's monthly Retirement Benefit shall be an amount equal to 1/12 of the  excess of (a) over the sum of (b), (c) and (d) below, where:                     (a)   Is 2% of the Participant's Final Average Compensation for each year of  Credited Service up to 30 years plus 1% of the Participant's Final Average Compensation for each year  of Credited Service in excess of 30 years (not exceeding 10%);                     (b)   Is the social security offset which is equal to the smaller of:                           (i)   50% of the basic benefit calculated above in paragraph (a), but  substituting Special Average Earnings for Final Average Compensation in the formula; or                           (ii)  The Social Security Offset Percentage times the Participant's  Special Average Earnings times each year of Credited Service not to exceed 35 years;                     (c)   Is the Participant's "Profit Sharing and Retirement Plan Annuity;"                     (d)   Is the Participant's annual retirement income (expressed in the form of  a single life annuity commencing at Normal Retirement Date) under the Comparable Plan or Plans of  the Company or any affiliate of the Company or any other corporation merged into the Company, or  whose assets were acquired by the Company.                     A "Profit Sharing and Retirement Plan Annuity" shall mean the annual single  life annuity, without death benefit, which can be provided by that portion of the Participant's account  under the Profit Sharing and Retirement Plan attributable to the Company contributions and earnings  thereon. Effective March 28, 2011, the Profit Sharing and Retirement Plan was merged into the Globe  Life Inc. Savings and Investment Plan (formerly, the “Torchmark Corporation Savings and Investment  Plan”) and thereafter the Profit Sharing and Retirement Plan account is maintained under the Globe  Life  Inc.  Savings and Investment  Plan .  In  determining  the  amount  attributable  to  the  Company  contributions and earnings thereon for this purpose no deduction shall be made for the amount of any  loans outstanding.  There  shall  be  added  to  the  amount  attributable  to  Company  contributions  and  earnings thereon:                           (1)   The amount of any withdrawal(s) by, and prior distribution(s)  to, the Participant to the extent such withdrawals and prior distributions exceed the amount of the  Participant's contributions and earnings thereon; and                           (2)   The amount of the earnings of the Plan which would have been  allocated to the amount(s) described in the preceding paragraph (1) from the date of such withdrawals  or distributions.                     A Participant's Profit Sharing and Retirement Plan Annuity shall be calculated  as of his termination of Employment, based upon the Participant's attained age and the Company's rate  basis  for  annuities  purchasable  under  the  Profit  Sharing  and  Retirement  Plan  on  such  date.  A  Participant's Profit Sharing and Retirement Plan Annuity may be calculated on either an immediate or                                        III-3 

 

deferred basis as indicated in the context of this Plan, but, in any case, one shall be the Actuarial  Equivalent of the other.                     Notwithstanding Section 3.3.1, for Participants who were participating in the  Liberty National Pension Plan on April 5, 1982, the monthly Retirement Benefit of any such Participant  retiring after April 5, 1982, shall not be less than 1/12 of (a) or (b) below, whichever is greater, where:                     (a)   Is (i) plus (ii) less (iii), where:                           (i)   Applies only to Participants with less than 30 years of Credited  Service on the anniversary of employment preceding April 5, 1982, and is 1/12 of 2% times the Final  Average Compensation times the number of complete months of service for benefit accrual purposes  from March 6, 1982, through the earlier of the 30th year of Credited Service or the date of termination  of Employment;                           (ii)  Is 1/12 of 1% times the Final Average Compensation times the  number of complete months of service for benefit accrual purposes from March 6, 1982, or from the  30th year of Credited Service, if later, through the earlier of the date of termination of Employment  or the 40th year of Credited Service for benefit accrual purposes;                           (iii) Applies only to Participants with less than 35 years of Credited  Service on the anniversary of Employment immediately preceding April 5, 1982, and is the lesser of  (x) 1/12 of the Social Security Offset Percentage times the Participant's Special Average Earnings  times the number of complete months of service for benefit accrual purposes from March 6, 1982,  through the earlier of the 35th year of Credited Service for benefit accrual purposes, or the date of  termination of Employment or (y) 50% of the sum in the amounts in (a)(i) plus (a)(ii) but substituting  Special Average Earnings for Final Average Compensation in those formulas.                     (b)   Is (i) plus (ii) less (iii), where:                           (i)   Is 1/12 of 2% times the Final Average Compensation times the  number of complete months of service for benefit accrual purposes from April 5, 1982, through the  earlier of April 4, 1987 or the date of termination of Employment;                           (ii)  Is 1/12 of 1.5% times the Final Average Compensation times  the number of complete months of service for benefit accrual purposes from April 5, 1987, through  the earlier of April 4, 1992 or the date of termination of Employment;                           (iii) Is the amount calculated above in paragraph (a)(iii).         Any benefit provided under this Section shall be based solely on Credited Service for benefit  accrual purposes for an Employer participating in the Liberty National Pension Plan or the Liberty  National Non-Commissioned Plan prior to January 1, 2004.                     The amount of Retirement Benefit calculated under this Section shall be subject  to actuarial adjustment if it is payable in any other form of payment authorized by this Plan.                     The Retirement Benefit of a Liberty National Commissioned Participant or a  Liberty National Non-Commissioned Participant who terminated Employment or incurred a Disability  prior to January 1, 2004 shall be determined in accordance with the provisions of, respectively, the                                        III-4 

 

Liberty National Pension Plan or the Liberty National Non-Commissioned Pension Plan as in effect  on the date of termination of Employment or Disability.         3.4   Limitation on Benefits                      Notwithstanding  any  other  provisions  of  the  Plan,  a  Participant's  Accrued  Retirement Benefit shall not exceed the limitations of Code § 415 which are hereby incorporated by  reference, except to the extent the limitations are specifically addressed below.                     Effect  on  Participants.  Benefit  increases  resulting  from  the  increase  in  the  limitations of Code § 415 will be provided to all Employees participating in the Plan who have one  Hour of Service on or after the first day of the first limitation year ending after December 31, 2001.                     415  Compensation  paid  after  "Severance  from  Employment."  415  Compensation shall be adjusted, as set forth herein, for the following types of compensation paid after  a Participant's "Severance from Employment" with the Employer maintaining the Plan (or any other  entity that is treated as the Employer pursuant to Code § § 414(b), (c), (m) or (o)). However, amounts  described in Sections 3.4.3(a), (b) and (c) below may only be included in 415 Compensation to the  extent such amounts are paid by the later of 2 '/2 months after "Severance from Employment" or by  the end of the "Limitation Year" that includes the date of such "Severance from Employment." Any  other payment of compensation paid after "Severance from Employment" that is not described in the  following types of compensation is not considered 415 Compensation within the meaning of Code §  415(c)(3), even if payment is made within the time period specified above.                     (a)   Regular  pay.  415  Compensation  shall  include  regular  pay after  "Severance from Employment" if:                           (1)   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                           (2)   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.                     (b)   Leave  cashouts.  Leave  cashouts  shall  not  be  included  in  415  Compensation. Leave cashouts are amounts in payment for unused accrued bona fide sick, vacation,  or other leave.                     (c)   Deferred Compensation. 415 Compensation will not include deferred  compensation received pursuant to a nonqualified unfunded deferred compensation plan.                     (d)   Salary  continuation  payments  for  military  service Participants.  415  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 § 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.                                         III-5 

 

                  (e)   Salary  continuation  payments  for  disabled  Participants.  415  Compensation does not include compensation paid to a Participant who is permanently and totally  disabled (as defined in Code § 22(e)(3)).                     Administrative  delay  ("the  first  few  weeks")  rule.  415  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."                     Inclusion of certain nonqualified deferred compensation amounts. If the Plan's  definition of Compensation for purposes of Code § 415 is the definition in Regulation § 1.415(c)-2(b)  and  the  simplified  compensation  definition  of  Regulation  §  1.415(c)  2(d)(2)  is  not  used,  then  415  Compensation shall include amounts that are includible in the gross income of a Participant under the  rules of Code § 409A or Code § 457(f)(1)(A) or because the amounts are constructively received by  the Participant.                     Back Pay. Payments awarded by an administrative agency or court or pursuant  to  a  bona  fide  agreement  by  an  Employer  to compensate  an  Employee  for  lost  wages are 415  Compensation for the "Limitation Year" to which the back pay relates, but only to the extent such  payments represent wages and compensation that would otherwise be included in 415 Compensation  under this Section 3.4.                     “Annual  Benefit.” The "Annual  Benefit"  otherwise  payable  to a  Participant  under the Plan at any time shall 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," then the benefit shall be limited (or the rate of accrual  reduced) to a benefit that does not exceed the "Maximum Permissible Benefit."                     Adjustment if in two Defined Benefit Plans. If the Participant is, or has ever  been, a Participant in another qualified Defined Benefit Plan (without regard to whether the plan has  been terminated) maintained by the Employer or a "Predecessor Employer," the sum of the Participant's  "Annual Benefits" from all such plans may not exceed the "Maximum Permissible Benefit." Where the  Participant's employer-provided benefits under all such defined benefit plans (determined as of the  same age) would exceed the "Maximum Permissible Benefit" applicable at that age, the Employer shall  limit a Participant's benefit in accordance with the terms of the Plans.                     Grandfather of limits prior to January 1, 2008. The application of the provisions  of this Section 3.4 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 December 31, 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 § 415  in effect as of December 31, 2007, as described in Regulations § 1.415(a)-1(g)(4).                     Other rules applicable. The limitations of Section 3.4.7 through 3.4.9 shall be  determined and applied taking into account the rules in Section 3.4.12 hereof.                     Definitions.  For  purposes  of  Sections  3.4.3  through  3.4.12,  the  following  definitions apply.                                         III-6 

 

                  (a)   Annual  Benefit.  "Annual  Benefit"  means  a  benefit  that  is  payable  annually in the form of a "Straight Life Annuity." Except as provided below, where a benefit is payable  in a form other than a "Straight Life Annuity," the benefit shall be adjusted to an actuarially equivalent  "Straight Life Annuity" that begins at the same time as such other form of benefit and is payable on  the first day of each month, before applying the limitations of Section 3.4. For a Participant who has  or will have distributions commencing at more than one annuity starting date, the "Annual Benefit"  shall be determined as of each such annuity starting date (and shall satisfy the limitations of Section  3.4 as of each such date), actuarially adjusting for past and future distributions of benefits commencing  at  the  other  annuity  starting  dates.  For  this  purpose,  the  determination  of  whether  a  new  annuity  starting date has occurred shall be made without regard to Regulations § 1.401(a)-20, Q&A 10(d), and  with regard to Regulations § 1.415(b)1(b)(1)(iii)(B) and (C).                     No actuarial adjustment to the benefit shall be made for (i) survivor benefits  payable to a Surviving Spouse under a Qualified Joint and Survivor Annuity to the extent such benefits  would not be payable if the Participant's benefit were paid in another form; (ii) benefits that are not  directly related to retirement benefits (such as a qualified Disability benefit, preretirement incidental  death benefits, and postretirement medical benefits); or (iii) the inclusion in the form of benefit of an  automatic benefit increase feature, provided the form of benefit is not subject to Code § 417(e)(3) and  would otherwise satisfy the limitations of Section 3.4, and the Plan provides that the amount payable  under the form of benefit in any "Limitation Year" shall not exceed the limits of Section 3.4 applicable  at the annuity starting date, as increased in subsequent years pursuant to Code § 415(d). For this  purpose, an automatic benefit increase feature is included in a form of benefit if the form of benefit  provides for automatic, periodic increases to the benefits paid in that form.                     The  determination  of  the  "Annual  Benefit"  shall  take  into  account  Social  Security supplements described in Code § 411(a)(9) and benefits transferred from another defined  benefit plan, other than transfers of distributable benefits pursuant Regulations § 1.411(d)-4, Q&A- 3(c), but shall disregard benefits attributable to Employee contributions or rollover contributions.                     The determination of actuarial equivalence of forms of benefit other than a  "Straight Life Annuity" shall be made in accordance with (1) or (2) below.                           (1)   Benefit forms not subject to Code § 417(e)(3). The "Straight  Life Annuity" that is actuarially equivalent to the Participant's form of benefit shall be determined  under this Section 3.4.11(a)(1) if the form of the Participant's benefit is either (I) a nondecreasing  annuity (other than a "Straight Life Annuity") payable for a period of not less than the life of the  Participant (or, in the case of a Qualified Pre-Retirement Survivor Annuity, the life of the Surviving  Spouse), or (II) an annuity that decreases during the life of the Participant merely because of (A) the  death of the survivor annuitant (but only if the reduction is not below 50% of the benefit payable  before  the  death  of  the  survivor  annuitant),  or  (B)  the  cessation  or  reduction  of  Social  Security  supplements  or  qualified  disability  payments  (as  defined  in  Code  §  401(a)(11)).  The  actuarially  equivalent "Straight Life Annuity" is equal to the greater of (C) the annual amount of the "Straight  Life Annuity" (if any) payable to the Participant under the Plan commencing at the same annuity  starting date as the Participant's form of benefit; and (D) the annual amount of the "Straight Life  Annuity" commencing at the same annuity starting date that has the same actuarial present value as  the Participant's form of benefit, computed using a 5% interest rate assumption and the applicable  mortality table defined in the Plan for that annuity starting date.                                         III-7 

 

                        (2)   Benefit Forms Subject to Code § 417(e)(3). The "Straight Life  Annuity" that is actuarially equivalent to the Participant's form of benefit shall be determined under  this Section 3.4.11(a)(2) if the form of the Participant's benefit is other than a benefit form described  in Section 3.4.11(a)(1) above. In this case, the actuarially equivalent "Straight Life Annuity" is equal  to the greatest of (I) the annual amount of the "Straight Life Annuity" commencing at the same annuity  starting date that has the same actuarial present value as the Participant's form of benefit, computed  using the interest rate and mortality table (or other tabular factor) specified in the Plan for adjusting  benefits in the same form; (II) the annual amount of the "Straight Life Annuity" commencing at the  same annuity starting date that has the same actuarial present value as the Participant's form of benefit,  computed using a 5.5 percent interest rate assumption and the applicable mortality table defined in the  Plan; and (III) the annual amount of the "Straight Life Annuity" commencing at the same annuity  starting date that has the same actuarial present value as the Participant's form of benefit, computed  using the applicable interest rate and applicable mortality table defined in the Plan, divided by 1.05.                     (b)   Defined  Benefit  Compensation  Limitation.  "Defined  Benefit   Compensation Limitation" means 100% of a Participant's "High Three-Year Average Compensation,"  payable in the form of a "Straight Life Annuity." In the case of a Participant who has had a "Severance  from Employment" with the Employer, the "Defined Benefit Compensation Limitation" applicable to  the Participant in any "Limitation Year" beginning after the date of severance shall be automatically  adjusted by multiplying the limitation applicable to the Participant in the prior "Limitation Year" by  the annual adjustment factor under Code § 415(d) that is published in the Internal Revenue Bulletin.  The adjusted compensation limit shall apply to "Limitation Years" ending with or within the calendar  year of the date of the adjustment, but a Participant's benefits shall not reflect the adjusted limit prior  to January 1 of that calendar year.                     In  the  case  of  a  Participant  who  is  rehired  after  a  "Severance  from  Employment,"  the  "Defined  Benefit  Compensation  Limitation"  is  the  greater  of  100%  of  the  Participant's "High Three-Year Average Compensation," as determined prior to the "Severance from  Employment,"  as  adjusted  pursuant  to  the  preceding  paragraph,  if  applicable;  or  100%  of  the  Participant's "High Three-Year Average Compensation," as determined after the "Severance from  Employment."                     (c)   Defined  Benefit  Dollar  Limitation.  "Defined  Benefit  Dollar  Limitation" means $160,000, automatically adjusted under Code § 415(d), effective January 1 of each  year,  as  published  in  the  Internal  Revenue  Bulletin,  and  payable  in  the  form  of  a  "Straight  Life  Annuity." The new limitation shall apply to "Limitation Years" ending with or within the calendar  year of the date of the adjustment, but a Participant's benefits shall not reflect the adjusted limit prior  to January 1 of that calendar year. The automatic annual adjustment of the "Defined Benefit Dollar  Limitation"  under  Code  415(d)  shall  not  apply  to  Participants  who  have  had  a  "Severance  from  Employment."                     (d)   Employer. "Employer" means, for purposes of this Section 3.4, the  Employer that has adopted the Plan, and all members of a controlled group of corporations (as defined  in Code § 414(b), as modified by Code § 415(h)), all commonly controlled trades or businesses (as  defined  in  Code  §  414(c),  as  modified,  except  in  the  case  of  a  brother-sister  group  of  trades  or  businesses under common control, by Code § 415(h)), or affiliated service groups (as defined in Code  § 414(m)) of which the adopting Employer is a part, and any other entity required to be aggregated  with the Employer pursuant to Code § 414(o).                                         III-8 

 

                  (e)   Formerly Affiliated Plan of the Employer. "Formerly Affiliated Plan  of the Employer" means a plan that, immediately prior to the cessation of affiliation, was actually  maintained  by  the  Employer  and,  immediately  after  the  cessation  of  affiliation,  is not  actually  maintained by the Employer. For this purpose, "cessation of affiliation" means the event that (i) causes  an entity to no longer be considered the Employer, such as the sale of a member of a controlled group  of  corporations,  as  defined  in  Code §  414(b),  as  modified  by  Code  §  415(h),  to  an  unrelated  corporation, or (ii) causes a plan to not actually be maintained by the Employer, such as transfer of  plan sponsorship outside a controlled group.                     (f)   High Three-Year Average Compensation. "High Three-Year Average  Compensation" means the average 415 Compensation for the three consecutive Years of Service (or,  if the Participant has less than three consecutive Years of Service, the Participant's longest consecutive  period of service, including fractions of years, but not less than one year) with the Employer that  produces the highest average. A Participant's 415 Compensation for a Year of Service shall not include  415 Compensation in excess of the limitation under Code § 401(a)(17) that is in effect for the calendar  year in which such Year of Service begins. For purposes of this definition, a Year of Service with the  Employer is the 12-consecutive month period defined in the Plan which is used to determine 415  Compensation under the Plan.                     In the case of a Participant who is rehired by the Employer after a "Severance  from 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  415  Compensation from the Employer (the break period) and by treating the years immediately preceding  and following the break period as consecutive.                     (g)   Limitation Year.  "Limitation Year" means the Plan Year. The   "Limitation Year" may only be changed by a Plan amendment. Furthermore, if the Plan is terminated  effective as of a date other than the last day of the Plan's "Limitation Year," then the Plan is treated as  if the Plan had been amended to change its "Limitation Year."                     (h)   Maximum  Permissible  Benefit.  "Maximum  Permissible  Benefit"  means the lesser of the "Defined Benefit Dollar Limitation" or the "Defined Benefit Compensation  Limitation" (both adjusted where required, as provided below).                           (i)  Adjustment for Less Than 10 Years of Participation or Service. If  the  Participant  has  less  than  10  years  of  participation  in  the  Plan,  the  "Defined  Benefit  Dollar  Limitation" shall be multiplied by a fraction — (1) the numerator of which is the number of "Years of  Participation" in the Plan (or part thereof, but not less than one year), and (2) the denominator of which  is 10. In the case of a Participant who has less than ten Years of Service with the Employer, the  "Defined Benefit Compensation Limitation" shall be multiplied by a fraction —(3) the numerator of  which is the number of "Years of Service" with the Employer (or part thereof, but not less than one  year), and (4) the denominator of which is 10.                           (ii)  Adjustment of "Defined Benefit Dollar Limitation" for Benefit  Commencement Before Age 62 or after Age 65. The "Defined Benefit Dollar Limitation" shall be  adjusted if the annuity starting date of the Participant's benefit is before age 62 or after age 65. If the  annuity starting date is before age 62, the "Defined Benefit Dollar Limitation" shall be adjusted under  Section 3.4.11(h)(ii)(1), as modified by Section 3.4.11(h)(ii)(3). If the annuity starting date is after                                         III-9 

 

age 65, the "Defined Benefit Dollar Limitation" shall be adjusted under Section 3.4.11(h)(ii)(2), as  modified by Section 3.4.11(h)(ii)(3).                                 (1)  Adjustment  of  "Defined  Benefit  Dollar  Limitation"  for  Benefit Commencement Before Age 62:                                     (I)  Plan  Does  Not  Have  Immediately  Commencing  "Straight Life Annuity" Payable at both Age 62 and the Age of Benefit Commencement. If the annuity  starting date for the Participant's benefit is prior to age 62 and occurs in a "Limitation Year" beginning  on or after January 1, 2008, and the Plan does not have an immediately commencing "Straight Life  Annuity" payable at both age 62 and the age of benefit commencement, the "Defined Benefit Dollar  Limitation" for the Participant's annuity starting date is the annual amount of a benefit payable in the  form of a "Straight Life Annuity" commencing at the Participant's annuity starting date that is the  actuarial equivalent of the "Defined Benefit Dollar Limitation" (adjusted under Section 3.4.11(h)(i)  for years of participation less than 10, if required) with actuarial equivalence computed using a 5%  interest rate assumption and the applicable mortality table for the annuity starting date as defined in  the Plan (and expressing the Participant's age based on completed calendar months as of the annuity  starting date).                                     (II)  Plan Has Immediately Commencing "Straight Life  Annuity" Payable at both Age 62 and the Age of Benefit Commencement. If the annuity starting date  for the Participant's benefit is prior to age 62 and the Plan has an immediately commencing "Straight  Life Annuity" payable at both age 62 and the age of benefit commencement, the "Defined Benefit  Dollar Limitation" for the Participant's annuity starting date is the lesser of the limitation determined  under Section 3.4.11(h)(ii)(1)(I) and the "Defined Benefit Dollar Limitation" (adjusted under Section  3.4.11(h)(i) for years of participation less than 10, if required) multiplied by the ratio of the annual  amount of the immediately commencing "Straight Life Annuity" under the Plan at the Participant's  Annuity Starting Date to the annual amount of the immediately commencing "Straight Life Annuity"  under the Plan at age 62, both determined without applying the limitations of Section 3.4.                                 (2)  Adjustment  of  "Defined  Benefit  Dollar  Limitation"  for  Benefit Commencement After Age 65:                                     (I)  Plan  Does  Not  Have  Immediately  Commencing  "Straight Life Annuity" Payable at both Age 65 and the Age of Benefit Commencement. If the annuity  starting date for the Participant's benefit is after age 65 and the Plan does not have an immediately  commencing "Straight Life Annuity" payable at both age 65 and the age of benefit commencement,  the "Defined Benefit Dollar Limitation" at the Participant's annuity starting date is the annual amount  of a benefit payable in the form of a "Straight Life Annuity" commencing at the Participant's annuity  starting date that is the actuarial equivalent of the "Defined Benefit Dollar Limitation" (adjusted under  Section 3.4.11(h)(i) for years of participation less than 10, if required), with actuarial equivalence  computed  using  a  5%  interest  rate  assumption  and  the  applicable  mortality  table  for  that  annuity  starting date as defined in the Plan (and expressing the Participant's age based on completed calendar  months as of the annuity starting date).                                     (II)  Plan Has Immediately Commencing "Straight Life  Annuity" Payable at both Age 65 and the Age of Benefit Commencement. If the annuity starting date  for the Participant's benefit is after age 65 and the Plan has an immediately commencing "Straight  Life Annuity" payable at both age 65 and the age of benefit commencement, the "Defined Benefit                                       III-10 

 

Dollar Limitation" at the Participant's annuity starting date is the lesser of the limitation determined  under Section 3.4.11(h)(ii)(2)(I) and the "Defined Benefit Dollar Limitation" (adjusted under Section  3.4.11(h)(i) for years of participation less than 10, if required) multiplied by the ratio of the annual  amount  of  the  adjusted  immediately  commencing  "Straight  Life  Annuity"  under  the  Plan  at  the  Participant's  annuity  starting  date  to  the  annual  amount  of  the adjusted immediately  commencing  "Straight Life Annuity" under the Plan at age 65, both determined without applying the limitations of  this Section 3.4. For this  purpose, the adjusted immediately commencing "Straight Life Annuity"  under the Plan at the Participant's annuity starting date is the annual amount of such annuity payable  to the Participant, computed disregarding the Participant's accruals after age 65 but including actuarial  adjustments  even  if  those  actuarial  adjustments  are  used  to  offset  accruals;  and  the  adjusted  immediately commencing "Straight Life Annuity" under the Plan at age 65 is the annual amount of  such annuity that would be payable under the Plan to a hypothetical Participant who is age 65 and has  the same accrued benefit as the Participant.                                 (3)  Notwithstanding  the other  requirements  of  this  Section  3.4.11(h)(ii), in adjusting the "Defined Benefit Dollar Limitation" for the Participant's annuity starting  date except for Sections 3.4.11(h)(ii)(1)(I) or 3.4.11(h)(ii)(3)(I), no adjustment shall be made to reflect  the probability of a Participant's death between the annuity starting fate and age 62, or between age  65 and the annuity  starting date, as applicable, if benefits are not forfeited upon the death of the  Participant prior to the annuity starting date. To the extent benefits are forfeited upon death before the  annuity starting date, such an adjustment shall be made. For this purpose, no forfeiture shall be treated  as  occurring  upon  the  Participant's  death  if  the  Plan  does  not  charge  Participants  for  providing  a  qualified pre-retirement survivor annuity, as defined in Code § 417(c), upon the Participant's death.                           (iii) Minimum benefit permitted. Notwithstanding anything else in  this Section to the contrary, the benefit otherwise accrued or payable to a Participant under this Plan  shall be deemed not to exceed the "Maximum Permissible Benefit" if:                                 (1)  The retirement benefits payable for a "Limitation Year"  under any form of benefit with respect to such Participant under this Plan and under all other defined  benefit plans (without regard to whether a plan has been terminated) ever maintained by the Employer  do not exceed $10,000 multiplied by a  fraction — (I) the numerator of which is the Participant's  number of Years (or part thereof, but not less than one year) of Service (not to exceed 10) with the  Employer, and (II) the denominator of which is 10; and                                 (2)  The Employer (or a "Predecessor Employer") has not at  any time maintained a defined contribution plan in which the Participant participated (for this purpose,  mandatory Employee contributions under a Defined Benefit Plan, individual medical accounts under  Code  §  401(h),  and  accounts  for  post-retirement  medical  benefits  established  under  Code  §  419A(d)(1) are not considered a separate defined contribution plan).                     (i)   Predecessor Employer. "Predecessor Employer" means, with respect  to a Participant, a former employer of such Participant if the Employer maintains a Plan that provides  a benefit which the Participant accrued while performing services for the former employer. A former  entity that antedates the Employer is also a "Predecessor Employer" with respect to a Participant if,  under the facts and circumstances, the Employer constitutes a continuation of all or a portion of the  trade or business of the former entity. For this purpose, the formerly affiliated plan rules in Regulations  § 1.415(f) 1(b)(2) apply as if the Employer and "Predecessor Employer" constituted a single employer  under the rules described in Regulations § 1.415(a) 1(f)(1) and (2) immediately prior to the cessation                                       III-11 

 

of  affiliation  (and  as  if  they  constituted  two,  unrelated  employers  under  the  rules  described  in  Regulations § 1.415(a) l(f)(1) and (2) immediately after the cessation of affiliation) and cessation of  affiliation was the event that gives rise to the "Predecessor Employer" relationship, such as a transfer  of benefits or plan sponsorship.                     (j)   Severance from Employment. "Severance from Employment" means,  with respect to any individual, cessation from being an Employee of the Employer maintaining the  Plan. An Employee does not have a "Severance from Employment" if, in connection with a change of  employment, the Employee's new employer maintains the Plan with respect to the Employee.                     (k)   Straight  Life  Annuity.  "Straight  Life  Annuity"  means  an  annuity  payable in equal installments for the life of a Participant that terminates upon the Participant's death.                     (1)   Year of Participation. "Year of Participation" means, with respect to a  Participant, each accrual computation period (computed to fractional parts of a year) 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. A Participant  who is permanently and totally disabled within the meaning of Code § 415(c)(3)(C)(i) for an accrual  computation period shall receive a "Year of Participation" with respect to that period.                     In  addition,  for  a  Participant  to  receive  a  "Year  of  Participation"  (or  part  thereof) for an accrual computation period, the Plan must be established no later than the last day of  such accrual computation period. In no event shall more than one "Year of Participation" be credited  for any 12-month period.                     (m)   Year  of  Service.  "Year  of  Service" means,  for  purposes  of  Section  3.4.11(f),  each  accrual  computation  period  (computed  to  fractional  parts  of  a  year)  for  which  a  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,  taking into account only service with the Employer or a "Predecessor Employer."                     Other rules.                     (a)   Benefits under terminated plans. If a defined benefit plan maintained  by  the  Employer  has  terminated  with  sufficient  assets  for  the  payment  of  benefit  liabilities  of  all  Participants and a Participant in the Plan has not yet commenced benefits under the Plan, the benefits  provided pursuant to the annuities purchased to provide the Participant's benefits under the terminated  Plan at each possible annuity starting date shall be taken into account in applying the limitations of  Section 3.4. If there are not sufficient assets for the payment of all Participants' benefit liabilities, the  benefits taken into account shall be the benefits that are actually provided to the Participant under the  terminated Plan.                     (b)   Benefits transferred from the Plan. If a Participant's benefits under a  Defined Benefit Plan maintained by the Employer  are transferred to another Defined Benefit Plan  maintained  by  the  Employer  and  the  transfer  is  not  a  transfer  of  distributable  benefits  pursuant                                        III-12 

 

Regulations § 1.411(d)-4, Q&A-3(c), then the transferred benefits are not treated as being provided  under the transferor plan (but are taken into account as benefits provided under the transferee plan). If  a Participant's benefits under a Defined Benefit Plan maintained by the Employer are transferred to  another defined benefit plan that is not maintained by the Employer and the transfer is not a transfer of  distributable benefits pursuant to Regulations § 1.411(d)-4, Q&A-3(c), then the transferred benefits  are treated by the Employer's Plan as if such benefits were provided under annuities purchased to  provide benefits under a plan maintained by the Employer that terminated immediately prior to the  transfer with sufficient assets to pay all Participants' benefit liabilities under the plan. If a Participant's  benefits under a Defined Benefit Plan maintained by the Employer are transferred to another defined  benefit plan in a transfer of distributable benefits pursuant to Regulations § 1.411(d)-4, Q&A-3 (c), the  amount transferred is treated as a benefit paid from the transferor plan.                     (c)   Formerly affiliated plans of the Employer. A "Formerly Affiliated Plan  of an Employer" shall be treated as a plan maintained by the Employer, but the formerly affiliated plan  shall be treated as if it had terminated immediately prior to the cessation of affiliation with sufficient  assets to pay Participants' benefit liabilities under the Plan and had purchased annuities to provide  benefits.                     (d)   Plans  of  a  "Predecessor  Employer."  If  the  Employer  maintains  a  Defined Benefit Plan that provides benefits accrued by a Participant while performing services for a  "Predecessor Employer," then the Participant's benefits under a plan maintained by the "Predecessor  Employer" shall be treated as provided under a plan maintained by the Employer. However, for this  purpose, the plan of the "Predecessor Employer" shall be treated as if it had terminated immediately  prior to the event giving rise to the "Predecessor Employer" relationship with sufficient assets to pay  Participants' benefit liabilities under the plan, and had purchased annuities to provide benefits; the  Employer  and  the  "Predecessor  Employer"  shall  be  treated  as  if  they  were  a  single  employer  immediately prior to such event and as unrelated employers immediately after the event; and if the  event giving rise to the predecessor relationship is a benefit transfer, the transferred benefits shall be  excluded in determining the benefits provided under the plan of the "Predecessor Employer."                     (e)   Special rules. The limitations of Section 3.4 shall be determined and  applied taking into account the rules in Regulations § 1.415(0-1(d), (e) and (h).                     (f)   Aggregation with Multiemployer Plans.                           (i)   If the Employer maintains a multiemployer plan, as defined in  Code § 414(0, and the multiemployer plan so provides, only the benefits under the multiemployer plan  that are provided by the Employer shall be treated as benefits provided under a plan maintained by the  Employer for purposes of Section 3.4.                           (ii)  A  multiemployer  plan  shall  be  disregarded  for  purposes  of  applying the compensation limitation of Sections 3.4.11(b) and 3.4.11 (h)(i) to a plan which is not a  multiemployer plan.                                        III-13 

 

                                  ARTICLE IV                               VESTING PROVISIONS         4.1   Determination of Vesting         In the case of a Participant who performs at least one Hour of Service on or after January 1,  1989, he shall have a vested percentage of 100% in his Retirement Benefit upon: (i) termination of  Employment  due  to  death  or  Disability  or  upon  or  after  attaining  Normal  Retirement  Age;  or  (ii)  completion of five years of Vesting Service.         4.2   Rules for Crediting Vesting Service                     Subject to Sections 4.2.2 through 4.2.4 below, a Participant's Vesting Service  shall mean the sum of a Participant's Years of Service under the Plan, except for Years of Service  before the Participant attained age 18 (or age 22 in the case of Participants who do not complete at  least one Hour of Service on or after January 1, 1985).                     If an Employee is on an authorized unpaid leave of absence granted by his  Employer  in  accordance  with  standard personnel  policies  of  such  Employer  applied  in  a  non- discriminatory  manner  to  all  Employees  similarly  situated,  his  period  of  absence  shall  not  be  considered  a  Break  in  Service  and  shall  be  counted  as  Vesting  Service  upon  his  return  to  active  Employment.                     If  an  Employee  is  on  an  authorized  military  leave  while  his  reemployment  rights are protected by law and provided that he directly entered military service from his Employer's  service and shall not have voluntarily reenlisted after the date of first entering active military service,  his period of absence shall not be considered a Break in Service and shall be counted as Vesting Service  upon his return to active Employment.                     An Employee who terminates Employment with no vested percentage in his  Retirement Benefit shall, if he returns to Employment, have no credit for Vesting Service prior to such  termination of Employment if (i) for years prior to January 1, 1985, the total of his consecutive One  Year  Breaks  in  Service  immediately  preceding  his  reemployment  exceed  his  aggregate  years  of  Vesting Service (whether or not consecutive, but excluding Vesting Service previously disregarded  under this rule) prior to such termination; or (ii) for years on or after January 1, 1985, the total of his  consecutive One Year Breaks in Service immediately preceding his reemployment exceed the greater  of five years or his aggregate years of Vesting Service (whether or not consecutive, but excluding  Vesting Service previously disregarded under this rule) prior to the termination. A Participant who had  a Vested Separation and returns to Employment will retain credit for his prior years of Vesting Service.         4.3   Retirement Benefit Forfeitures         The  unvested  portion  of  the  Retirement  Benefit  of  a  Participant  who  has  terminated  Employment shall be forfeited as of the earliest date on which such Participant's Vesting Service may  be  disregarded  pursuant  to  Section  4.2.4.  Any  forfeitures  shall  be applied  to  reduce  the  Employer  actuarial liability under the Plan.                                         IV-1 

 

      4.4   TMK Hogan         A Participant who terminated employment with the Company on December 31, 1996, and who  became  as  of  January  1,  1997,  an  employee  of  TMK  Hogan,  became  fully  vested  in  his  or  her  Retirement Benefit as of such date.         4.5   Vesta Insurance Group, Inc.          A Liberty National Non-Commissioned Participant who terminated Employment with Liberty  National Life Insurance Company on November 12, 1993, and who became as of that same date an  employee of Vesta Insurance Group, Inc., became fully vested in his Retirement Benefit as of such  date.                                                  IV-2 

 

                                  ARTICLE V            AMOUNT AND COMMENCEMENT OF RETIREMENT BENEFITS         5.1   Determination of Amount of Retirement Benefits                     Normal Retirement Benefits. A Participant's benefits upon Normal Retirement  shall be equal to his Retirement Benefit as of his Normal Retirement Date. The Participant's Benefit  Commencement Date shall be the last day of the payroll period coincident with or next following his  termination of Employment. The Participant shall not be entitled to any benefits under Section 5.1.1  unless he shall survive until his Benefit Commencement Date.                     Deferred  Retirement  Benefits. A  Participant's  benefits  upon  Deferred  Retirement shall be equal to his Retirement Benefit determined as of the date of Deferred Retirement  (without actuarial increase for deferred commencement).  The Participant's Benefit Commencement  Date shall be the last day of the payroll period coincident with or next following his termination of  Employment. The Participant shall not be entitled to any benefits under this Paragraph unless he shall  survive until his Benefit Commencement Date.                     Early Retirement Benefits. A Participant's benefits upon Early Retirement shall  be equal to his Retirement Benefit calculated as of the date of Early Retirement. The Participant's  Benefit Commencement Date shall be his Normal Retirement Date; however if he so elects, the Benefit  Commencement Date shall be the last day of the payroll period coincident with or next following his  Early  Retirement,  or  the  last  day  of  any  payroll  period  thereafter  which  is  prior  to  his  Normal  Retirement  Date.  If  the  Participant  elects  a  Benefit  Commencement  Date  preceding  his  Normal  Retirement  Date,  his  benefit  shall  equal  his  Accrued  Retirement  Benefit  multiplied  by  the  early  retirement factor shown below:         Years by Which the Date of the          Participant's First Benefit             Early Retirement          Payment Precedes His                  Factor to Be Applied          Normal Retirement Date                    to Accrued           (Interpolate for Months)              Retirement Benefit                   10                                   .500                  9                                    .533                  8                                    .567                  7                                    .600                  6                                    .633                  5                                    .667                  4                                    .733                  3                                    .800                  2                                    .867                  1                                    .933                  0                                   1.000    A Participant shall not be entitled to any benefits under this Section 5.13 unless he shall survive until  his Benefit Commencement Date.                                         V-1 

 

                  Vested Separation Benefits. A Participant's benefits upon Vested Separation  shall be equal to his Retirement Benefit calculated as of the date of Vested Separation multiplied by  his vesting percentage. The Participant's Benefit Commencement Date shall be his Normal Retirement  Date; provided, however, that, such a Participant may elect to commence receiving his benefits on or  after the earliest date that he could have been eligible for Early Retirement. If the Participant elects a  Benefit  Commencement  Date  preceding  his  Normal  Retirement  Date,  his  benefit  shall  equal  his  Accrued Retirement Benefit multiplied by the appropriate early retirement factor shown in Section  5.1.3. A Participant shall not be entitled to any benefits under this Section 5.1.4 unless he shall survive  until his Benefit Commencement Date.                     Non-Vested Separation. A Participant shall not be entitled to any Retirement  Benefit upon his Non-Vested Separation. In addition, if a Participant who is zero percent vested in his  Accrued  Retirement  Benefit  terminates  Employment, he  shall  be  deemed  to  have  received  a  distribution of his Accrued Retirement Benefit.         5.2   Suspension of Payments                     If an Employee continues in Employment after his Normal Retirement Date or  if  a  former  Employee  is  receiving  monthly  payment  of  his  Retirement  Benefit,  payment  of  his  Retirement Benefit shall be suspended for each calendar month during which such Employee or former  Employee continues in (or resumes) Employment and performs more than 40 Hours of Service per  calendar month considered as service under ERISA § 203(a)(3)(B).                     No payment shall be withheld by the Plan pursuant to Section 5.2 unless the  Plan notifies the Employee by personal delivery or first class mail during the first calendar month or  payroll period in which the Plan withholds payments that his benefits are suspended. Such notifications  shall  contain  a  description  of  the  specific  reasons  why  benefit  payments  are  being  suspended,  a  description of the Plan provision 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 Title 29  of the Code of Federal Regulations § 2530.203-3. In addition, the notice shall inform the Employee of  the Plan's procedures for affording a review of the suspension of benefits. Requests for such reviews  shall be considered in accordance with the claims procedure adopted by the Administrator.                     If 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 ceases to be  employed in ERISA § 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  ERISA  §  203(a)(3)(B)  service  and  the  resumption  of  payments.                     The Retirement Benefit payable upon resumption of benefit payment shall be  equal  to  the  Participant's  Retirement  Benefit  as  of  the  date  of  his  subsequent  termination  of  Employment  reduced  by  the  Actuarial  Equivalent of  payments  previously  made  to  him; provided,  however, that such Retirement Benefit may not be less than the Retirement Benefit previously payable.                                         V-2 

 

      5.3   Limitation on Commencement of Benefits                     Unless  otherwise elected  by  a  Participant,  the  Participant's  Benefit  Commencement Date shall in no event be later than the 60th day after the close of the Plan Year in  which the latest of the following events occurs:                     (a)   The attainment by the Participant of his Normal Retirement Age;                     (b)   The tenth anniversary of the year in which the Participant commenced  participation in the Plan; or                     (c)   The Participant's termination of Employment.                     If the amount of benefits payable cannot be determined within such 60-day  period, or if it is not possible to pay such benefits within such period because the Administrator has  been  unable  to  locate  the  Participant  after  making  reasonable  efforts  to  do  so,  then  a  payment,  retroactive to such 60th day, shall be made no later than 60 days after the earliest date on which the  amount of such benefits can be determined or the Participant can be located, as the case may be.                     Any  other  provision  of  this  Article  V  to  the  contrary  notwithstanding,  the  Benefit Commencement Date of a Participant must be no later than the first day of April following the                                          1 calendar year in which the Participant attains age 70 /2 even if he continues in Employment after that  date. Notwithstanding the foregoing, if a Participant who is not a "five % owner" (as defined in Code                       1 § 401(a)(9)) attained age 70 /2 before January 1, 1988, the Benefit Commencement Date must be no  later  than the  first  day  of  April  following  the  calendar  year  in  which  the  Participant  terminates  Employment. Effective as of January 1, 1997, in the case of a Participant who is not a five % owner  (as defined above) with respect to the Plan Year ending in the calendar year in which the Participant            1 attains age 70 /2, the Benefit Commencement Date must be no later than the later of (i) the calendar                                        1 year during which the Participant attained age 70 /2, or (ii) the calendar year in which the Participant  retired.         Transitional rule for the 1997, 1998, 1999, 2000 and 2001 Plan Years: If a Participant attains       1 age 70 /2 during the 1997, 1998 or 1999 Plan Years and wishes to receive (or begin receiving) the  required minimum distribution that would have been payable to him but for the Small Business Job  Protection Act of 1996 changes to the immediately preceding paragraph, the Participant may elect,  pursuant to a procedure established by the Administrator, to begin receiving his required minimum  distributions prior to his retirement. If a Participant who has not retired (other than a five % owner)             1 attains  age  70 /2 on  or  after  January  1,  2002,  the  Participant  may  not  begin  to  receive  in-service                                         1 distributions on account of his attainment of age 70 /2.         If a Participant retires in a calendar year after the calendar year in which the Participant attains       1 age 70 /2, his or her benefits under the Plan shall be actuarially increased (with any permitted offsets  or reductions) as provided for in Internal Revenue Service Notice 97-75 or such other written guidance  published by the Internal Revenue Service.                                                                    V-3 

 

      5.4   Minimum Distribution Requirements.                5.4.1 Precedence.  Subject to  Section  6.1.1,  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 plan.                 5.4.2 Requirements  of  Regulations  Incorporated.  All  distributions  required  under  this  Section  shall  be  determined  and  made  in  accordance  with  Code  §  401(a)(9),  including  the  incidental  death  benefit  requirement  in  Code  §401(a)(9)(G),  and  the  Income  Tax  Regulations  thereunder.                5.4.3 Limits  on  Distribution  Periods.  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:                      (a)   the life of the participant,                      (b)   the joint lives of the participant and a designated beneficiary,                      (c)   a  period  certain  not  extending  beyond  the  life  expectancy  of  the  participant, or                      (d)   a period certain not extending beyond the joint life and last survivor  expectancy of the participant and a designated beneficiary.                5.4.4 Required Beginning Date. The participant’s entire interest will be distributed,  or begin to be distributed, no later than the participant’s required beginning date.                5.4.5 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:                      (a)   If the participant’s surviving spouse is the participant’s sole designated  beneficiary, then, 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 701⁄2, if later.                      (b)   If  the  participant’s  surviving  spouse  is  not  the  participant’s  sole  designated  beneficiary,  then,  except  as  provided  in  the  adoption  agreement,  distributions  to  the  designated beneficiary will begin by December 31 of the calendar year immediately following the  calendar year in which the participant died.                      (c)   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 31 of the calendar year containing the fifth anniversary of the Participant’s death.                      (d)   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                                         V-4 

 

spouse are required to begin, this Section, other than Subsection (a), will apply as if the surviving  spouse were the participant.                                        (e)   If  the  Participant  dies  before  distributions  begin  and  there  is  a  designated Beneficiary, distribution to the designated Beneficiary is not required to begin by the date  covered by this Section 5.4.5, but the Participant's entire interest will be distributed to the designated  Beneficiary by December 31 of the calendar year containing the fifth anniversary of the Participant's  death. 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  either  the  Participant or  the  Surviving Spouse begin, this election will apply as if the Surviving Spouse were the Participant. This  Section 5.4.5(e) shall apply to all distributions.         For purposes of this Section 5.4.5 and Sections 5.4.12, 5.4.13 and 5.4.14, distributions are  considered to begin on the Participant's required beginning date (or, if Section 5.4.5(d) applies, the date  distributions are required to begin to the Surviving Spouse under Section 5.4.5(a)). 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 5.4.5(a)), the date distributions are considered to begin is the date distributions  actually commence.               5.4.6 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, as of the first distribution calendar year distributions will be made in accordance with  Sections  5.4.7  through  5.4.14.  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 § 401(a)(9) and the Regulations. Any part of the Participant's interest which is  in  the  form  of  an  individual  account  described  in  Code  §  414(k)  will  be  distributed  in  a  manner  satisfying the requirements of Code § 401(a)(9) and the Regulations that apply to individual accounts.               5.4.7 General Annuity Requirements. If the Participant's interest is paid in the form  of  annuity  distributions  under  the  Plan,  payments  under  the  annuity  will  satisfy  the  following  requirements:                     (a)   The annuity distributions will be paid in periodic payments made at  intervals not longer than one year;                     (b)   The distribution period will be over a life (or lives) or over a period  certain not longer than the period described in Sections 5.4.10 and 5.4.11 or Sections 5.4.12 through  5.4.14.                     (c)   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 permitted;                     (d)   Payments will either be nonincreasing or increase only as follows:                           (i)   By  an  annual  percentage  increase  that  does  not  exceed  the  annual percentage increase in a cost-of-living index that is based on prices of all items and issued by  the Bureau of Labor Statistics;                                         V-5 

 

                        (ii)  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 5.4.10 or 5.4.11 dies or is no longer the  Participant's Beneficiary pursuant to a qualified domestic relations order within the meaning of Code  § 414(p);                           (iii) To provide cash refunds of employee contributions upon the  Participant's death; or                           (iv)  To pay increased benefits that result from a Plan amendment.               5.4.8 Amount Required to be Distributed by Required Beginning Date. 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 Section 5.4.5(a) or  5.4.5(b)) 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,  semi-annually,  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.               5.4.9  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.               5.4.10 Joint Life Annuities Where the Beneficiary Is Not the Participant's Spouse. If  the Participant's interest is being distributed in the form of a joint and survivor annuity for the joint  lives of the Participant and a non-Spouse Beneficiary, annuity payments to be made on or after the  Participant's required beginning date to the designated Beneficiary after the Participant's death must  not at any time exceed the applicable percentage of the annuity payment for such period that would  have been payable to the Participant using the table set forth in Q&A-2 of § 1.401(a)(9)-6T of the  Treasury Regulations. 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 requirement in  the preceding sentence will apply to annuity payments to be made to the designated Beneficiary after  the expiration of the period certain.               5.4.11 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  Regulation §  1.401(a)(9)-9 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  Regulation § 1.401(a)(9)-9 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 5.4.11, or the joint life and last survivor expectancy of the Participant                                        V-6 

 

and  the  Participant's  Spouse  as  determined  under  the  Joint  and  Last  Survivor  Table  set  forth  in  Regulation § 1.401(a)(9)-9, 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.               5.4.12 Participant Survived by Designated Beneficiary. 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 5.4.5(a) or  5.4.5(b), over the life of the designated Beneficiary or over a period certain not exceeding:                     (a)   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                     (b)   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.               5.4.13 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.               5.4.14 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,  Sections  5.4.12  through  5.4.14  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 5.4.5(a).               5.4.15 Designated Beneficiary. The individual who is designated as the Beneficiary  under  Section  7.4  of  the  Plan  and  is  the  "designated  beneficiary"  under  Code  §  401(a)(9)  and  Regulation § 1.401(a)(9)-1, Q&A-4.               5.4.16 Distribution Calendar Year. 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 which 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 5.4.5.               5.4.17 Life expectancy. Life expectancy as computed by use of the Single Life Table  in Regulation § 1.401(a)(9)-9.               5.4.18 Required beginning date. The date specified in Section 5.3.3 of the Plan.                                         V-7 

 

                                  ARTICLE VI                   FORMS OF PAYMENT OF RETIREMENT BENEFIT         6.1   Methods of Distribution                     A Participant's benefits shall be payable in the normal form of a Qualified Joint  and Survivor Annuity if the Participant is married on his Benefit Commencement Date and in the  normal  form  of  an  annuity  for  the  life  of  the  Participant  with  Actuarially  Equivalent  payments  guaranteed for 120 months if the Participant is not married on that date, provided that, and subject to  Sections  6.1.2,  6.1.3  and  6.1.4,  a  Participant  may  within  the  90-day  period  prior  to  the  Benefit  Commencement Date elect, in accordance with Section 6.2, any of the following optional forms of  benefit payment instead of the normal form:                     (a)   A Single Life Annuity, under which monthly payments calculated in  accordance with Section 3.1.1 are made to the Participant during his lifetime with no further payments  from the Plan on his behalf after his death.                                            2                   (b)   A  Joint  and  50%,  66 /3%,  75%  or  100%  Survivor  Annuity,  under  which Actuarially Equivalent monthly payments are made to the Participant for the joint lives of the  Participant and his Beneficiary with payments continuing for the life of the survivor in an amount equal  to 50%, 66 %%, 75% or 100% of the joint life payments (whichever is elected by the Participant). A  Participant may elect to add a period certain of 10 years in which event no reduction in payments will  be  made  for  the  longer  of the  10  year  period  or  the  period during  which  both  the  Participant and  Beneficiary remain alive.                     (c)   A 120 Months Certain and Life Income Annuity, an optional form of  payment for a married Participant, under which reduced Actuarially Equivalent payments are made to  the Participant during the Participant's lifetime, with the provision that if the Participant's death occurs  before he had received 120 monthly payments the value of the remaining number of such payments  shall be paid to his Beneficiary.                     (d)   Lump  Sum,  under  which  the  Actuarially  Equivalent  value  of  the  Participant's Accrued Retirement Benefit as of December 31, 2003 is paid in one single sum. This  optional  form  of  benefit shall  be  eliminated  with respect to  benefits accruing  under  the  Plan  after  December 31, 2003 and a lump sum option shall not be available to an Employee who becomes a  Participant on or after January 1, 2004. Notwithstanding the preceding sentence, if the implementation  of an election of a single sum distribution of a pre-2004 Retirement Benefit would result in monthly  payments of the Participant's Retirement Benefit accrued after 2003 of an amount less than $100, the  present value of the portion of the Participant's Retirement Benefit that accrued after 2003 shall also  be paid in the form of a single sum.                     Anything  in  Section  6.1.1  to  the  contrary  notwithstanding,  if  the  Actuarial  Equivalent value of a Participant's Retirement Benefit is $1,000 or less, his benefit shall be paid in the  form of a lump sum distribution and no optional form of benefit payment shall be available.                     Payment in any form may only be made over one of the following periods (or  a combination thereof):                     (a)   The life of the Participant;                                         VI-1 

 

                  (b)   The life of the Participant and a designated Beneficiary;                     (c)   A  period  certain  not  extending  beyond  the  life  expectancy  of  the  Participant; or                     (d)   A  period  certain  not  extending  beyond  the  joint  and  last  survivor  expectancy of the Participant and a designated Beneficiary.                     If  the  Participant's  Spouse  is  not  his  designated  Beneficiary,  the  method  of  distribution must assure that at least 50% of the present value of the Participant's Retirement Benefit  is paid within the life expectancy of the Participant.         6.2   Election of Optional Forms                     By notice to the Administrator within the 180-day period prior to a Participant's  Benefit Commencement Date, the Participant may elect, in writing and subject to the spousal consent  rules  as  set  forth  in  Section  6.2.4,  not  to  receive  the  normal  form  of  benefit  payment  otherwise  applicable and to receive instead an optional form of benefit payment provided for in Section 6.1.1.                     Within a reasonable period, but in no event later than 30 days before nor earlier  than 180 days (unless the Participant elects to waive the 30 day limitation in favor of a seven day  limitation as permitted under Code § 417(a)(7)(B)) before a Participant's Benefit Commencement Date,  the Administrator shall provide to each Participant a written explanation of:                     (a)   The terms and conditions of the Participant's normal form of benefit  payment;                     (b)   The Participant's right to make, and the effect of, an election to waive  the normal form of benefit payment;                     (c)   The rights of the Participant's Spouse under Section 6.2.4;                     (d)   The right to make, and the effect of, a revocation of a previous election  to waive the normal form of benefit payment; and                     (e)   The relative values of the various optional forms of benefit payment.   The Administrator may, on a uniform and nondiscriminatory basis, provide for such other notices,  information or election periods or take such other action as the Administrator considers necessary or  appropriate in order to comply with Code §§ 401(a)(11) and 417.                     A Participant may revoke his election to take an optional form of benefit at any  time prior to the Participant's Benefit Commencement Date, without the consent of his Spouse.                     The election of an optional form of benefit by a married Participant must be in  the form of a waiver of a Qualified Joint and Survivor Annuity. The election must be in writing and  consented to by the Participant's Spouse. The Spouse's consent to the waiver must specify the form of  benefit  being  elected  and  the  non-Spouse  Beneficiary,  if  any,  and  must  be  witnessed  by  the  Administrator  or  a  notary  public.  Notwithstanding  this  consent  requirement,  if  the  Participant  establishes  to  the  satisfaction  of  the  Administrator  that  such  written  consent  may  not  be  obtained                                        VI-2 

 

because there is no Spouse or the Spouse cannot be located, the Participant's election will be deemed  effective. Any consent necessary under this provision will be valid only with respect to the Spouse  who signs the consent, or in the event of a deemed effective election, the designated Spouse.                     The election of an optional form of benefit which contemplates the payment of  an annuity shall not be given effect if any person who would receive benefits under the annuity dies  before the Benefit Commencement Date.         6.3   Direct Rollovers                     A  Participant  or  Spouse  may  elect  to  have  all  or  a  portion  of  any  amount  payable to him or her from the Plan which is an "eligible rollover distribution" (as defined in Section  6.3.2 below) transferred directly to an "eligible retirement plan" (as defined in Section 6.3.2 below).  Any  such  election  shall  be  made  in  accordance  with  such  uniform  rules  and  procedures  as  the  Administrator  may  prescribe  from  time  to  time  as  to  the  timing  and  manner  of  the  election  in  accordance with Code § 401(a)(31).                     For purposes of this Section and Section 7.2.4:                     (a)   "Eligible rollover distribution" shall mean any distribution of all or any  portion of the balance to the credit of the distributee other than: (i) 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; (ii) any distribution for a specified period of 10 years or more;  (iii) any distribution to the extent such distribution is required under Code § 401(a)(9); (iv) the portion  of any distribution that is not includable in gross income; or (v) any hardship distribution described in  § 401(k)(2)(B)(i)(iv) received after December 31, 1998.                     (b)   "Eligible retirement plan" shall mean an individual retirement account  or annuity described in Code § 408(a) or 408(b) ("IRA"); a Roth IRA described in Code § 408A(b); an  annuity plan described in Code § 403(a); an annuity contract described in Code § 403(b); an eligible  plan under Code § 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; or a qualified plan described in Code § 401(a),  that accepts the distributee's eligible rollover distribution. The definition of eligible retirement plan  shall also apply in the case of a distribution to a Surviving Spouse, or to a Spouse or former Spouse  who is the alternate payee under a qualified domestic relations order, as defined in Code § 414(p).                     Direct  rollover  to  qualified  plan/403(b)  plan.  Section  6.3.2(a)(4)  notwithstanding, for taxable years beginning after December 31, 2006, a Participant or Spouse may  elect to transfer non-taxable or employee after-tax contributions by means of a direct rollover to a  qualified plan or to a 403(b) plan that agrees to account separately for amounts so transferred (including  interest  thereon),  including  accounting  separately  for  the  portion  of  such  distribution  which  is  includible in gross income and the portion of such distribution which is not includible in gross income.                     Non-Spouse  Beneficiary  rollover  right.  A  non-Spouse  Beneficiary  who  is  a  "designated beneficiary" under Code § 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  (IRA)  the  Beneficiary  establishes  for  purposes  of  receiving  the                                         VI-3 

 

distribution. In order to be able to roll over the distribution, the distribution otherwise must satisfy the  definition of an "eligible rollover distribution" under Code § 401(a) (31). If the Participant's named  Beneficiary is a trust, the Plan may make a direct rollover to an IRA on behalf of the trust, provided  the trust satisfies the requirements to be a "designated beneficiary" within the meaning of Code §  401(a)(9)(E).         If a non-Spouse Beneficiary receives a distribution from the Plan, the distribution is not eligible  for a 60-day (non-direct) rollover. A non-Spouse Beneficiary may not roll over an amount that 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 five-year rule or the life expectancy rule, pursuant to Treasury  Regulations § 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.         6.4   Notices                (a)   Any reference to the 90-day maximum notice period requirements of Code §§  402(f) (the rollover notice), 411(a)(11) (Participant's consent to distribution), and 417 (notice regarding  the joint and survivor annuity rules) is changed to 180 days.               (b)   Notices given to Participants pursuant to Code § 411(a)(11) shall include a  description of how much larger benefits will be if the commencement of distributions is deferred.               (c)   Notices to Participants shall include the relative values of the various optional  forms of benefit, if any, under the Plan as provided in Regulation § 1.417(a)-3.               (d)   Any notice to Participants or election by Participants that the Plan requires to  be made in writing, may, at the option of the Administrator, be provided electronically in accordance  with Regulation § 1.401(a)-21.                                            VI-4 

 

                                ARTICLE VII                                 DEATH BENEFITS         7.1   Eligibility for Pre-Retirement Death Benefit                     A pre-retirement death benefit shall be payable under the Plan in the event of  the death of a Participant prior to his Benefit Commencement Date who, on the date of death, was  either:                     (a)   Actively employed by the Employer;                     (b)   Disabled; or                     (c)   Terminated but eligible for Early Retirement.         The death benefit payable under this Section 7.1.1 shall be the larger of (d) or (e), where:                     (d)   Is the lump sum Actuarial Equivalent, as of the day before the death of  the  Participant,  of  the  Accrued  Retirement  Benefit  that  would  have  been  payable  upon  Normal  Retirement of the Participant;                     (e)   Is  the  lump  sum  Actuarial  Equivalent,  as  of  the  day  before  the  Participant's death, of the monthly benefit which would have been payable to the Participant's Spouse  in the form of an immediate Qualified Joint and Survivor Annuity under the Plan if (i) in the case of a  Participant who dies after having attained the earliest retirement age under the Plan, the Participant had  retired on the day before his death, and (ii) in the case of a Participant who dies before having attained  the earliest retirement age under the Plan, the Participant had separated from service as of his date of  death, survived until his earliest retirement age under the Plan, retired on the day after attainment of  his earliest retirement age under the Plan, and died immediately thereafter.                     A pre-retirement death benefit shall also be payable under the Plan in the event  of the death of a married Participant prior to his or her Benefit Commencement Date who had a Vested  Separation prior to eligibility for Early Retirement. The death benefit payable under this Section 7.1.2  shall be equal to the benefit calculated under Section 7.1.1(e).         7.2   Form of Pre-Retirement Death Benefit                     The pre-retirement death benefit payable under Section 7.1.1 shall be payable  to the Surviving Spouse of such Participant in the form of an Actuarially Equivalent single life annuity  commencing on the date of death unless the Participant has no Surviving Spouse or the Participant has  made an election under Section 7.3, with the Spouse's consent, not to have the benefit paid in such  form. If the Participant has no Surviving Spouse or has made an effective election under Section 7.3,  such benefit shall be paid to the Participant's Beneficiary in the Actuarially Equivalent form elected by  the  Participant  commencing  on  the  date  elected,  or  if  there  is  no  designated  Beneficiary,  to  the  Participant's estate in a single lump sum. The Surviving Spouse or other Beneficiary may elect any  other  Actuarially  Equivalent  form  of payment  permitted  under  Section  6.1.1,  by  an instrument  in  writing filed with the Administrator within 60 days after the Participant's death.                     The pre-retirement death benefit payable under Section 7.1.2 shall be payable  to the Surviving Spouse of such Participant in the form of an Actuarially Equivalent single life annuity                                       VII-1 

 

commencing  on  the  date  the  Participant  would  have  attained  earliest  retirement  age,  unless  the  Surviving Spouse shall elect another Actuarially Equivalent form of payment permitted by Section  6.1.1, by an instrument in writing filed with the Administrator within 60 days after the Participant's  death. No benefit shall be payable under Section 7.1.2 unless the Spouse is alive on such Benefit  Commencement Date.                     Notwithstanding the provisions of Sections 7.2.1 and 7.2.2, if the present value  of the pre-retirement death benefit payable under Section 7.1.1 or 7.1.2 is $1,000 or less, such benefit  shall be distributed in a single lump sum as soon as practicable following the death of the Participant.                     Any lump sum payment payable to a Spouse pursuant to this Section 7.2 shall  be eligible for a direct rollover in accordance with Section 6.3.         7.3   Election to Waive                     An election by a married Participant under Section 7.2.1 must be in the form  of  an  election  to  waive  the  Qualified  Pre-Retirement  Survivor  Annuity.  In  order  for  any  waiver  pursuant to this Section 7.3.1 to be effective, the Participant's Spouse must consent in writing to such  election, and such consent must acknowledge the effect of the election and must be witnessed by the  Administrator  or a  notary  public.  Such  spousal  consent  shall  be effective  only  with  respect  to  the  Spouse giving this consent and, once given, such consent shall be irrevocable. The Participant shall  have  the  right  to  revoke  his  waiver  at  any  time  prior  to  the  earlier  of the  Participant's  Benefit  Commencement Date or death.         7.4   Beneficiaries                      With  respect  to  any  death  benefit  payable  pursuant  to  Section  7.1.1,  a  Participant's  Beneficiary  shall  be  his  Surviving  Spouse  or,  subject  to  the  spousal  consent  rules  in  Section 7.3, other Beneficiary or Beneficiaries designated by the Participant in accordance with rules  established by the Administrator. With respect to any death benefit payable pursuant to Section 7.1.2,  a Participant's Beneficiary shall be his Surviving Spouse.                     With  respect  to  any  form  of  payment  of  a  Retirement  Benefit  pursuant  to  Article V providing for payments after the death of the Participant, a Participant shall designate, in  accordance with the election procedure under Article VI, one or more Beneficiaries to whom amounts  due after his death shall be paid, and the rights of such Beneficiary shall be governed by the terms of  the form of payment so elected.                     No Spouse or other Beneficiary shall have any right to benefits under the Plan  unless he shall survive the Participant. If a Beneficiary fails to survive a Participant for at least 30 days,  it shall be presumed that the Participant survived the Beneficiary.         7.5   After-Death Distribution Rules                     Notwithstanding any Plan provision to the contrary, if a Participant dies after  distribution of his benefits has commenced, the remaining portion of such benefits will continue to be  distributed at least as rapidly as under the method of distribution being used prior to the Participant's  death.                                        VII-2 

 

                  Notwithstanding any Plan provision to the contrary, if a Participant dies before  distribution of his benefits has commenced, the Participant's entire interest will be distributed no later  than 5 years after the Participant's death; provided, however, that if any portion of the Participant's  interest is payable to his Beneficiary, distributions may be made in substantially equal installments  over the life or life expectancy of the Beneficiary, commencing (i) in the case of a Beneficiary other  than a Surviving Spouse, no later than one year after the Participant's death; and (ii) in the case of a  Surviving Spouse, no later than the later of one year after the Participant's death or the date on which                                  1 the Participant would have attained age 70 /2. If the Spouse dies before payments to such Spouse begin,  subsequent distributions shall be made as if the Spouse had been the Participant.                                           VII-3 

 

                                 ARTICLE VIII                        CONTRIBUTIONS AND FORFEITURES         8.1   Contribution by the Company         The Company and each Participating Affiliate will make contributions to the Trust at such  times and in such amounts as the Company may determine.         8.2   Contributions by Employees          Employees are not required or permitted to make contributions under the Plan.         8.3   Forfeitures          Forfeitures under the Plan will be applied to reduce the Company's contributions and will not  be applied to increase the benefits of any person hereunder prior to the termination of the Plan or  complete discontinuance of contributions by the Company.         8.4   Return of Employer Contributions under Special Circumstances         Notwithstanding any provision of this Plan to the contrary, upon timely written demand by an  Employer to the Trustee:               (a)   Any contribution made by the Employer to the Plan under a mistake of fact  shall be returned to the Employer by the Trustee within one year after the payment of the contribution;               (b)   Any contribution made by the Employer incident to the determination by the  Commissioner of Internal Revenue that the Plan is initially a Qualified Plan shall be returned to the  Employer by the Trustee within one year after notification from the Internal Revenue Service that the  Plan is not initially a Qualified Plan; and               (c)   Any contribution made by the Employer conditioned upon the deductibility of  the contribution under Code § 404 shall be returned to the Employer within one year after a deduction  for the contribution under Code § 404 is disallowed by the Internal Revenue Service, but only to the  extent disallowed. Each contribution by an Employer shall be conditioned upon the deductibility of the  contribution under Code § 404 unless the Employer elects otherwise.                                           VIII-1 

 

                                 ARTICLE IX                                   FIDUCIARIES         9.1   Named Fiduciaries         The  named  fiduciaries,  who  shall  have  authority  to  control  and  manage  the  operation  and  administration of the Plan, are as follows:               (a)   The Company, which shall have the sole right to (i) appoint and remove from  office the members of the Administrative Committee, the Trustee and any investment manager; (ii)  establish a funding policy relating to, and the method for achieving the objectives of, the Plan; (iii)  amend or terminate the Plan, and (iv), at its election, direct the Trustee concerning any aspect of the  investment, management, or control of Plan assets;               (b)   The  Administrative  Committee,  which  shall  have  the  authority  and duties  specified in Article XI hereof;               (c)   The Trustee, which shall have the authority and duties specified in Article X  hereof  and  the  Trust  Agreement;  and,  in  addition,  the  authority  and  duties  of  the  Administrative  Committee, in the event that no such Committee shall be appointed or constituted by the Company;  and               (d)   Any investment manager or managers selected by the Company who renders  investment advice with respect to Plan assets.         9.2   Employment of Advisers         A  "named  fiduciary"  with  respect  to  the  Plan  (as  defined  in  ERISA  §  402(a)(2))  and  any  "fiduciary" (as defined in ERISA § 3(21)) appointed by such a "named fiduciary" may employ one or  more  persons  to  render  advice  with  regard  to  any  responsibility  of  such  "named  fiduciary"  or  "fiduciary" under the Plan.         9.3   Multiple Fiduciary Capacities         Any "named fiduciary" with respect to the Plan (as defined in ERISA § 402(a)(2)) and any  other "fiduciary" (as defined in ERISA § 3(21)) with respect to the Plan may serve in more than one  fiduciary capacity.         9.4   Reliance         Any fiduciary with respect to the Plan may rely upon any direction, information or action of  any other fiduciary, acting within the scope of its responsibilities under the Plan, as being proper under  the Plan.         9.5   Scope of Authority and Responsibility         The responsibilities of the Administrative Committee and the Trustee for the operation and  administration of the Plan are allocated between them in accordance with the provisions of the Plan  and the Trust Agreement wherein their respective duties are specified. Each fiduciary shall have only  the authority and duties as are specifically given to it under this Plan, shall be responsible for the proper                                        IX-1 

 

exercise of its own authorities and duties, and shall not be responsible for any act or failure to act of  any other fiduciary.         9.6   Trustee Subject to Directions of Named Fiduciary         In  the  event  the  Company  elects,  pursuant to  Section  9.1(a)(iv),  to  direct  the  Trustee  with  respect to the investment, management, or control of Plan assets, the Company shall serve in such  capacity as a Named Fiduciary of the Plan, and the Trustee shall be subject to such directions from the  Company that are made in accordance with the terms of the Plan and are not contrary to the provisions  of ERISA.                                            IX-2 

 

                                 ARTICLE X                                     TRUSTEE         10.1  Trust Agreement         The Company shall enter into one or more Trust Agreements with the Trustee or Trustees  selected by it in its sole discretion, and the Trustee shall receive the contributions to the Trust Fund  made by the Employer pursuant to the Plan and shall hold, invest, reinvest, and distribute such fund,  as applicable, in accordance with the terms and provisions of the Trust Agreement. The Company will  determine the form and terms of such Trust Agreement and may modify such Trust Agreement from  time to time to accomplish the purposes of this Plan and may, in its sole discretion, remove any Trustee  and select any successor Trustee.         10.2  Assets in Trust         Except as otherwise permitted under the Plan, all assets of the Plan shall be held in trust by the  Trustee  who  upon  acceptance  of  such  office  shall  have  such  authority  as  is  set  forth  in  the  Trust  Agreement.                                            X-1 

 

                                 ARTICLE XI                          ADMINISTRATIVE COMMITTEE         11.1  Appointment and Removal of Administrative Committee         The administration of the Plan shall be vested in an Administrative Committee (hereinafter in  this Article XI, the "Committee") of at least three (3) persons who shall be appointed by the Board,  and may include persons who are not Participants in the Plan. A person appointed a member of the  Committee shall signify his acceptance in writing. The Board may remove or replace any member of  the Committee at any time in its sole discretion, and any Committee member may resign by delivering  his written resignation to the Board, which resignation shall become effective upon its delivery or at  any  later  date  specified  therein.  If  at  any  time  there  shall  be  a  vacancy  in  the  membership  of  the  Committee,  the  remaining  member  or  members  of  the  Committee  shall  continue  to  act  until  such  vacancy is filled by action of the Board.         11.2  Officers of Administrative Committee         The  Committee  shall  appoint  from  among  its  members  a  chairman,  and  shall  appoint  as  secretary a person who may be, but need not be, a member of the Committee or a Participant in the  Plan.         11.3  Action by Administrative Committee         The Committee shall hold meetings upon such notice, at such place or places, and at such times  as its members may from time to time determine. A majority of its members at the time in office shall  constitute a quorum for the transaction of business. All action taken by the Committee at any meeting  shall be by vote of the majority of its members present at such meeting, except that the Committee also  may act without a meeting by a consent signed by a majority of its members. Any member of the  Committee  who  is  a Participant  in the  Plan  shall  not  vote  on  any  question  relating  exclusively  to  himself.         11.4  Rules and Regulations         Subject to the terms of the Plan, the Committee may from time to time adopt such rules and  regulations as it shall deem appropriate for the administration of the Plan and for the conduct and  transaction of its business and affairs.         11.5  Powers         The Committee shall have such powers as may be necessary to discharge its duties under the  Plan, including the power:               (a)   To interpret and construe the Plan in its discretion, to determine all questions  with regard to employment, eligibility, Credited Service, Compensation, Retirement Benefits, and such  factual matters as date of birth and marital status, and similarly related matters for the purpose of the  Plan. The Committee's determination of all questions arising under the Plan shall be conclusive upon  all Participants, the Board, the Company, Employers, the Trustee, and other interested parties;               (b)   To prescribe procedures to be followed by Participants and Beneficiaries filing  application for benefits;                                        XI-1 

 

            (c)   To prepare and distribute to Participants information explaining the Plan;               (d)   To appoint or employ individuals to assist in the administration of the Plan and  any other agents it deems advisable, including legal, accounting and actuarial counsel;               (e)   To instruct the Trustee to make benefit payments pursuant to the Plan;               (f)   To appoint an enrolled actuary and to receive and review the periodic valuation  of the Plan made by such actuary;               (g)   To receive and review reports of disbursements from the Trust Fund made by  the Trustees; and               (h)   To receive and review the periodic audit of the Plan made by a certified public  accountant appointed by the Company.         11.6  Information from Participants         Each Participant shall be required to furnish to the Committee, in the form prescribed by it,  such  personal  data,  affidavits,  authorizations  to  obtain  information,  and  other  information  as  the  Committee may deem appropriate for the proper administration of the Plan.         11.7  Reports         The Committee shall prepare, or cause to be prepared, such periodic reports to the U.S. Labor  Department, the Internal Revenue Service and the Pension Benefit Guaranty Corporation as may be  required pursuant to the Code or ERISA.         11.8  Authority to Act         The Committee may authorize one or more of its members, officers, or agents to sign on its  behalf  any  of  its  instructions,  directions,  notifications,  or  communications  to  the  Trustee,  and  the  Trustee may conclusively rely thereon and on the information contained therein.         11.9  Liability for Acts         The members of the Committee shall be entitled to rely upon all valuations, certificates and  reports furnished by the Plan actuary or accountant and upon all opinions given by any legal counsel  selected by the Committee, and the members of the Committee shall be fully protected with respect to  any action taken or suffered by their having relied in good faith upon such actuary, accountant or  counsel  and  all  action  so  taken  or  suffered  shall  be  conclusive  upon  each  of  them  and  upon  all  Participants and their Beneficiaries. No member of the Committee shall incur any liability for anything  done or omitted by him except only liability for his own willful misconduct.         11.10 Compensation and Expenses         Unless  authorized  by  the  Board,  a  member  or  officer  of  the Committee  shall  not  be  compensated for his service in such capacity, but shall be reimbursed for reasonable expenses incident  to the performance of such duty.                                         XI-2 

 

      11.11 Indemnity         The Company shall indemnify the members of the Committee and any of their agents acting in  behalf of the Plan against any and all liabilities or expenses, including all legal fees related thereto, to  which they may be subjected as members of the Committee by reason of any act or failure to act which  constitutes a breach or an alleged breach of fiduciary responsibility under ERISA or otherwise, except  that due to a person's own willful misconduct.         11.12 Denied Claims         The claims procedures set forth in ERISA Regulation § 2560.503-1 are hereby incorporated  into the Plan except as otherwise provided in this Section 11.12. If any application for payment of a  benefit under the Plan shall be denied, the Committee shall with the denial write the claimant setting  forth the specific reasons for the denial and explaining the Plan's claim review procedure. If a claimant  whose claim has been denied wishes further consideration of his claim, he may appeal to the Committee  to review his claim in a written statement of the claimant's position filed with the Committee no later  than 60 days after the claimant receives such denial (180 days in the case of a Disability claim). The  Committee shall make a full review of the claim and the denial, giving the claimant written notice of  its  decision  within  the  next  60  days  (45  days  in  the  case  of  a  Disability  claim).  Due  to  special  circumstances, if no decision has been made within the first 60 days (45 days in the case of a Disability  claim) and notice of the need for additional time has been furnished within such period, the decision  may be made within the following 60 days (45 days in the case of a Disability claim). A claimant shall  be required to exhaust the administrative remedies provided by this Section 11.12 prior to seeking any  other form of relief, including a civil action under ERISA, provided that any such action must be filed  no later than the 180th day after the date of the denial of the appeal.                                            XI-3 

 

                                 ARTICLE XII                       PLAN AMENDMENT OR TERMINATION         12.1  Plan Amendment          The Company shall have the right at any time to amend the Plan, which amendment shall be  evidenced  by  an  instrument  in  writing  signed  by  an  authorized  officer  of  the  Company,  effective  retroactively or otherwise. No such amendment shall have any of the effects specified in Section 12.2.         12.2  Limitations on Plan Amendment           No Plan amendment shall:               (a)   Authorize any part of the Trust to be used for, or diverted to, purposes other  than for the exclusive benefit of Participants or their Beneficiaries;               (b)   Decrease the accrued benefits of any Participant or his Beneficiary under the  Plan (except to the extent permitted under Code § 412(c)(8)); or               (c)   Change  the  vesting  schedule,  either  directly  or  indirectly,  unless  each  Participant having not less than three years of Vesting Service is permitted to elect, within a reasonable  period  specified  by  the  Administrator  after  the  adoption  of  such  amendment,  to  have  his  vested  percentage computed without regard to such amendment. The period during which the election may  be made shall commence with the date the amendment is adopted and shall end as the later 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  by  the  Administrator.         No amendment to the Plan (including a change in the actuarial basis for determining optional  or  early  retirement  benefits)  shall  be  effective  to  the  extent  that  it  has  the  effect  of  decreasing  a  Participant's accrued benefit. For purposes of this paragraph, a Plan amendment that has the effect of  (1) eliminating or reducing an early retirement benefit or a retirement-type subsidy, or (2) 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. Notwithstanding the preceding sentences, a Participant's  accrued benefit, early retirement benefit, retirement-type subsidy, or optional form of benefit may be  reduced  to  the  extent  permitted  under  Code  §  412(c)(8)  (for  Plan  Years  beginning  on  or  before  December 31, 2007) or Code § 412(d)(2) (for Plan Years beginning after December 31, 2007), or to  the extent permitted under Regulation §§ 1.411(d)-3 and 1.411(d)-4. For purposes of this paragraph, a  retirement-type subsidy is the excess, if any, of the actuarial present value of a retirement-type benefit  over the actuarial present value of the accrued benefit commencing at Normal Retirement Age or at  actual commencement date, if later, with both such actuarial present values determined as of the date  the retirement-type benefit commences.         12.3  Right of the Employer to Terminate Plan                                       XII-1 

 

      The Company intends and expects that from year to year it will be able to and will deem it  advisable to continue this Plan in effect and to make contributions as herein provided. The Company  reserves the right, however, to terminate the Plan at any time which termination shall be evidenced by  an instrument in writing signed by an authorized officer of the Company delivered to the Administrator  and the Trustee.         12.4  Effect of Partial or Complete Termination                     Determination  of  Date  of  Complete  or  Partial  Termination.  The  date  of  complete  or  partial  termination  shall  be  established  by  the  Administrator  in  accordance  with  the  directions of the Company in accordance with applicable law.                     Effect of Termination.                     (a)   As of the date of a partial termination of the Plan:                           (i)   The accrued benefit of each affected Participant who is then an  Employee, to the extent funded, shall become nonforfeitable;                           (ii)  No affected Participant shall be granted Credited Service based  on Years of Service after such date; and                           (iii) Compensation paid to affected Participants after such date shall  not be taken into account.                     (b)   As of the date of the complete termination of the Plan:                           (i)   The  accrued  benefit  of  each  Participant  who  is  then  an  Employee, to the extent funded, shall become non-forfeitable;                           (ii)  No  Participant  shall  be  granted Credited  Service  based  on  Years of Service after such date;                           (iii) Compensation  paid  after  such  date  shall  not  be  taken  into  account;                           (iv)  No  Eligible  Employee  shall  become  a  Participant  after  such  date; and                           (v)   Except  as  may  otherwise  be  required  by  applicable  law,  all  Employer obligations to fund the Plan shall terminate.         12.5  Allocation of Assets         At any time as the Company determines to distribute the Trust, the Trust shall be applied to the  payment of or provision for benefits in accordance with the priority classes established by ERISA §  4044. The respective amounts allocated to such priority classes shall be distributed to or set aside for  the benefit of the persons entitled thereto in such manner as is determined by the Administrator.         12.6  Residual Assets                                       XII-2 

 

      Any amounts remaining in the Trust after the satisfaction of all liabilities of the Trust with  respect to all Participants and their Beneficiaries shall revert to the Employer.         12.7  Limitations Applicable to Certain Highly Paid Participants         Notwithstanding  any  provision  in  the  Plan  to  the  contrary,  in  any  Plan  Year  the  annual  payments to a Participant who is among the 25 "highly compensated employees" (as defined in Code  § 414(q)) with the greatest Compensation for the Plan Year shall not exceed the amount which would  be payable to such Participant in the form of a single life annuity which is the Actuarial Equivalent of  the sum of the Participant's accrued benefit and other Plan benefits, unless:               (a)   After payment of all Plan benefits to such Participant, the value of the Plan's  assets equals  or  exceeds  110%  of  the  value  of  the  Plan's  "current  liabilities"  (as  defined  in  Code  § 412(1)(7)); or               (b)   The value of such Participant's Plan benefits is less than 1% of the value of the  Plan's current liabilities.                                                                                    XII-3 

 

                                 ARTICLE XIII                           MISCELLANEOUS PROVISIONS         13.1  Exclusive Benefit of Participants         The Trust shall be held for the benefit of all persons who shall be entitled to receive payments  under the Plan. It shall be prohibited at any time for any part of the Trust (other than such part as is  required to pay expenses) to be used for, or diverted to, purposes other than for the exclusive benefit  of Participants or their Beneficiaries.         13.2  Plan Not a Contract of Employment         The Plan is not a contract of Employment, and the terms of Employment of any Employee shall  not be affected in any way by the Plan or related instruments except as specifically provided therein.         13.3  Source of Benefits         Benefits under the Plan shall be paid or provided for solely from the Trust, and neither the  Company, an Employer, the Administrator, Trustee or Investment Manager shall assume any liability  therefor.         13.4  Benefits Not Assignable         Benefits  provided  under  the  Plan  may  not  be  assigned  or  alienated,  either  voluntarily  or  involuntarily. The preceding sentence shall also apply to the creation, assignment or recognition of a  right to any benefit payable with respect to a Participant pursuant to a "domestic relations order" (as  defined in Code § 4-14(p)) unless such order is determined by the Administrator to be a "qualified  domestic relations order" (as defined in Code § 414(p)) or, in the case of a "domestic relations order"  entered before January 1, 1985, if either payment of benefits pursuant to the order has commenced as  of that date or the Administrator decides to treat such order as a "qualified domestic relations order"  within the meaning of Code § 414(p) even if it does not otherwise qualify as such.         Exception for Certain Judgments on or after August 5, 1997: Effective as of August 5, 1997,  the Plan will recognize and comply with an order, judgment, decree, or settlement agreement that  satisfies the requirements of Code § 401(a)(13) (relating to crimes involving the plan or certain civil  actions relating to breaches of fiduciary duty under ERISA.)         13.5  Domestic Relations Orders         Any other provision of the Plan to the contrary notwithstanding, the Administrator shall have  all powers necessary with respect to the Plan for the proper operation of Code § 414(p) with respect to  "qualified domestic relations orders" (or "domestic relations orders" treated as such) referred to in  Section  13.4,  including,  but  not  limited  to,  the  power  to  establish  all  necessary  or  appropriate  procedures,  to  authorize  the  establishment  of  new  accounts  with  such  assets  and  subject  to  such  restrictions as the Administrator may deem appropriate, and the Administrator may decide upon and  direct appropriate distributions therefrom.         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                                        XIII-1 

 

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.         13.6  Benefits Payable to Minors, Incompetents and Others         In the event any benefit is payable to a minor or an incompetent or to a person otherwise under  a legal disability, or who, in the sole discretion of the Administrator, is by reason of advanced age,  illness or other physical or mental incapacity incapable of handling and disposing of his property, or  otherwise is in such position or condition that the Administrator believes that he could not utilize the  benefit for his support or welfare, the Administrator shall have discretion to apply the whole or any  part of such benefit directly to the care, comfort, maintenance, support, education or use of such person,  or pay the whole or any part of such benefit to the parent of such person, the guardian, committee,  conservator or other legal representative, wherever appointed, of such person, the person with whom  such person is residing, or to any other person having the care and control of such person. The receipt  by any such person to whom any such payment on behalf of any Participant or Beneficiary is made  shall be a sufficient discharge therefor.         13.7  Merger or Transfer of Assets                     The merger or consolidation of the Company with any other person, or the  transfer of the assets of the Company to any other person, shall not constitute a termination of the Plan,  if provision is made for the continuation of the Plan.                     The Plan may not merge or consolidate with, or transfer any assets or liabilities  to,  any  other  plan,  unless  each  Participant  would  (if  the Plan  then  terminated)  receive  a  benefit  immediately after the merger, consolidation or transfer which is equal to or greater than the benefit he  would have been entitled to receive immediately before the merger, consolidation or transfer (if the  Plan had then terminated).                     The Liberty National Life Insurance Company Pension Plan and the Liberty  National Life Insurance Company Pension Plan for Non-Commissioned Employees were merged with  and into the Plan, effective as of January 1, 2004 pursuant to Section 13.7 of the Plan.         13.8  Participation in the Plan by an Affiliate Section 13.8 was amended effective January 1,  2012 to read as follows:                     Subject to the approval of the Board of Directors of the Company, an Affiliate,  by duly authorized action of its board of directors, may adopt the Plan and determine the classes of its  Employees who shall be Eligible Employees. Such Affiliate shall make such contributions to the Plan  on behalf of such Employees as is determined by the Company. If no such action is taken, the Eligible  Employees and the amount of Retirement Benefit shall be determined in accordance with the Plan  provisions applicable to an Employer.                     By duly authorized action of its board of directors, an Affiliate may terminate  its participation in the Plan or withdraw from the Plan and the Trust.                     An Employer other than the Company shall have no power with respect to the  Plan except as specifically provided by this Section 13.8.                                        XIII-2 

 

      13.9  Action by Employer         Any action required to be taken by an Employer pursuant to the terms of the Plan shall be taken  by the Board of Directors of the Employer or any person or persons duly empowered to exercise the  powers of the Employer with respect to the Plan.         13.10 Provision of Information         For  purposes  of  the  Plan,  each  Employee  shall  execute  such  forms  as  may  be  reasonably  required by the Administrator and the Employee shall make available to the Administrator and the  Trustee any information they may reasonably request in this regard.         13.11 Controlling Law         The Plan is intended to qualify under Code § 401(a) and to comply with ERISA, and its terms  shall be interpreted accordingly. Otherwise, to the extent not preempted by ERISA, the laws of the  State of Alabama shall control the interpretation and performance of the terms of the Plan.         13.12 Conditional Restatement         Anything in the foregoing to the contrary notwithstanding, the Plan has been restated on the  express condition that it will be considered by the Internal Revenue Service as qualifying under the  provisions of Code § 401(a) and the Trust qualifying for exemption from taxation under Code § 501(a).  If the Internal Revenue Service determines that the Plan or Trust does not so qualify, the Plan shall be  amended or terminated as decided by the Company.         13.13 Rules of Construction         Masculine pronouns used herein shall refer to men or women or both and nouns and pronouns  when stated in the singular shall include the plural and when stated in the plural shall include the  singular, unless qualified by the context. Titles of Articles and Sections of the Plan are for convenience  of reference only and are to be disregarded in applying the provisions of the Plan. Any reference in  this Plan to an Article or Section is to the Article or Section so specified of the Plan.         13.14 USERRA         Notwithstanding any provisions of the Plan to the contrary, contributions, benefits, and service  credit with respect to qualified military service will be provided in accordance with Code §414(u).         In the case of a death or disability occurring on or after January 1, 2007, if a Participant dies  while  performing  qualified  military  service  (as  defined  in  Code  §  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  as  if  the  Participant  had  resumed  and  then  terminated Employment on account of death.         An individual receiving a differential wage payment, as defined by Code § 3401(h)(2), shall  be treated as an Employee of the Employer making the payment, the differential wage payment shall  be treated as compensation, and the Plan shall not be treated as failing to meet the requirements of any  provision described in Code § 414(u)(1)(C) by reason of any contribution or benefit which is based on  the differential wage payment.                                       XIII-3 

 

                 XIII-4 

 

                                 ARTICLE XIV                          MINIMUM RETIREMENT INCOME         14.1  Prior Plans                     In no case, shall the monthly Retirement Benefit for any Participant who was a  Participant  in  either  the  Retirement  Plan  for  Employees  of  Globe  Life  and  Accident Insurance  Company  and  Its  Affiliates  or  the  Retirement  Plan  for  Employees  of  United  American  Insurance  Company ("the Prior Plans") whichever is applicable, on December 31, 1982, be less than (a) below  or (b) plus (c), whichever is greater, where:               (a)   Is  the  monthly  normal  retirement  income  which  had  accrued  to  such  Participant on December 31, 1982, under the applicable Prior Plan, which shall be:               For the prior Globe Retirement Plan, an amount equal to 1/12 of (i) times .0115 times  (ii) plus (iii) times ((ii) - $5,520) where:                     (i)   Is the Participant's number of years of credited service (as defined in  such Prior Plan) (with a maximum of 35);                     (ii)  Is average salary (5 years of highest salary out of last 10 years with a  maximum of $35,000);                     (iii) Is the Participant's number of years of credited service as defined in  such Prior Plan times .02, with a maximum of .3.               For the prior United American Plan, an amount equal to 1/12 of (i) plus (ii), where:                     (i)   Is  an  amount  equal  to  the  number  of  years  of  credited  service  as  defined in such prior plan (up to 30) multiplied by 1 '/2% of average annual compensation during the  five consecutive calendar years (of the last 10) of highest average compensation; and                     (ii)  Is an amount equal to the number of years of credited service after age  40  (up  to  18 years)  times  1  '/2%  of  that  portion  of  average  annual  compensation,  during  the  five  consecutive calendar years (of the last 10 calendar years) of highest average compensation, which is  in excess of the maximum Social Security wage base.               (b)   Is the normal retirement income accrued to the Participants under such Prior  Plans on December 31, 1982 pursuant to (a) above.               (c)   Is  the  additional  normal  retirement  income  such  Participants  could  have  accrued up to December 31, 1988 under either of such Prior Plans, whichever is applicable, if such  Prior Plans had continued in effect without amendment until December 31, 1988.                     For Participants who were participating in the Liberty National Life Insurance  Company Pension Plan on April 5, 1982, the amount of annual Retirement Benefit commencing on the  Normal Retirement Date of any such Participant retiring under this Plan after April 5, 1982, shall not  be less than the amount calculated in (a) or (b) below, (whichever is greater), where:                     (a)   Is (i) plus (ii) less (iii), where:                                       XIV-1 

 

                        (i)   Applies only to Participants with less than 30 years of Credited  Service on the anniversary of Employment immediately preceding April 5, 1982, and is 1/12 of .02  times Final Average Compensation times the number of complete months of service for benefit accrual  purposes for an Employer participating in this Plan from March 6, 1982, through the earlier of the 30th  Year of Service for benefit accrual purposes, or the date of separation from service;                           (ii)  Is  1/12  of  .01  times  Final  Average  Compensation  times the  number of complete months of service for benefit accrual purposes for an Employer participating in  this Plan from March 6, 1982, or the 30th Year of Service for benefit accrual purposes, through the  earlier of the date of separation from service or the 40th Year of Service for benefit accrual purposes;                           (iii) Applies only to Participants with less than 30 years of Credited  Service on the anniversary of Employment immediately preceding April 5, 1982, and is the smaller of  (x) 1/12 of the Social Security Offset Percentage times the Participant's Special Average Earnings  times  the  number  of  complete  months  of  service  for  benefit  accrual  purposes  for  an  Employer  participating in this Plan from March 6, 1982, through the earlier of the 35th Year of Service for benefit  accrual purposes, or the date of separation from service or (y) 50% of the sum of the amounts in (a)(i)  plus  (a)(ii)  but  substituting  Special  Average  Earnings  for  Final  Average  Compensation  in  those  formulas.                     (b)   Is (i) plus (ii) less (iii), where:                           (i)   Is 1/12  of  .02  times  Final  Average  Compensation  times  the  number of complete months of service for benefit accrual purposes for an Employer participating in  this Plan from April 5, 1982, through April 4, 1987;                           (ii)  Is 1/12 of .015 times Final Average Compensation times the  number of complete months of service for benefit accrual purposes for an Employer participating in  this Plan from April 5, 1987, through April 4, 1992;                           (iii) Is the amount calculated in (a)(iii), above.               Any  benefit  provided  under  this  Section  14.1.2  shall  be  based  solely  on  Credited  Service for benefit accrual purposes for an Employer participating in this Plan.                                           XIV-2 

 

                                 ARTICLE XV                              TOP-HEAVY PROVISIONS         15.1  Definitions         As used in this Article XV, each of the following terms shall have the meanings for that term  set forth below:               (a)   Defined  Benefit  Plan  means,  a  plan  of  the  type  defined  in  Code  §  414(j)  maintained by the Company or an Affiliate, as applicable.               (b)   Defined Contribution Plan means, a plan of the type defined in Code § 414(i)  maintained by the Company or an Affiliate, as applicable.               (c)   Determination Date means, for any Plan Year subsequent to the first Plan Year,  the last day of the preceding Plan Year. For the first Plan Year of the Plan, Determination Date means  the last day of that year.               (d)   Determination Period means the Plan Year containing the Determination Date  and the four preceding Plan Years.               (e)   Key Employee means any Employee or former Employee (including deceased  Employee) who at any time during the Plan Year that includes the Determination Date was an officer  of  the  Employer  having  annual  compensation  greater  than  $130,000  (as  adjusted  under  Code  §  416(i)(1)), a five-percent owner of the Employer, or a one-percent owner of the Employer having an  annual  compensation  of  more  than  $150,000.  For  this  purpose,  annual  compensation  means  compensation within the meaning of Code § 415(c)(3). The determination of who is a Key Employee  will be made in accordance with Code § 416(i)(1) and the applicable Regulations and other guidance  of general applicability issued thereunder.               (f)   Limitation  Compensation  means,  for  an  Employee,  the  Employee's  earned  income, wages, salaries, fees for professional services and other amounts received for personal services  actually  rendered  in  the  course  of  Employment  (including,  but  not  limited  to,  commissions  paid  salesmen, compensation for services on the basis of a percentage of profits, commissions on insurance  premiums, tips and bonuses); amounts described in Code §§ 104(a)(3), 105(a) and 105(h) to the extent  includable  in  the  Employee's  gross  income;  amounts  described  in  Code  §  105(d)  whether  or  not  excludable from the Employee's gross income; reimbursed non-deductible moving expenses; the value  of nonqualified stock options to the extent includable in the Employee's gross income in the year of  grant; the amount includable in the Employee's gross income pursuant to an election under Code §  83(b); distributions from an unfunded, non-qualified plan of deferred compensation; and excluding the  following:                     (i)   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 contributions  under  a "simplified  employee  pension"  (within the  meaning  of  Code  §  408(k))  to  the  extent  such  contributions  are  deductible  by  the  Employee,  or  any  distributions  from  a  plan  of  deferred  compensation (other than an unfunded non-qualified plan);                                        XV-1 

 

                  (ii)  Amounts realized from the exercise of a non-qualified stock option, or  when restricted stock (or other property) held by the Employee either becomes freely "transferable" or  is no longer subject to a "substantial risk of forfeiture" (both quoted terms within the meaning of Code  § 83(a));                     (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,  or  contributions  made (whether or not under a salary reduction agreement) towards the purchase of an annuity described  in Code § 403(b) (whether or not the amounts are actually excludable from the gross income of the  Employee).         Notwithstanding the above provisions, a Participant's Limitation Compensation will include  any elective deferrals (as defined in Code §402(e)(3)), any amount which is contributed or deferred at  the election of the Participant and which is not includable in the gross income of the Participant by  reason of Code §125 or Code §457, and a Participant's elective deductions for "qualified transportation  fringes" under Code §132(0(4).               (g)   Non-Key Employee means any Employee who is not a Key Employee.               (h)   Permissive  Aggregation  Group  means  the  Required  Aggregation  Group  of  plans plus any other plan or plans of the Company or an Affiliate which, when considered as a group  with the Required Aggregation Group, would continue to satisfy the requirements of Code §§ 401(a)(4)  and 410.               (i)   Required Aggregation Group means (i) each qualified plan of an Employer in  which at least one Key Employee participates, and (ii) any other qualified plan of an Employer which  enables a plan described in clause (i) to meet the requirements of Code §§ 401(a)(4) and 410.               (j)   Super Top-Heavy Plan means the Plan, if any Top-Heavy Ratio as determined  under the definition of Top-Heavy Plan exceeds 90%.               (k)   Top-Heavy Plan means the Plan, if any of the following conditions exists:                     (i)   If the Top-Heavy Ratio for the Plan exceeds 60% and the Plan is not  part of any Required Aggregation Group or Permissive Aggregation Group of plans.                     (ii)  If the 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 Required Aggregation Group  of plans exceeds 60%.                     (iii) If the 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%.               (l)   Top-Heavy Ratio means:                     (i)   If the Company or an Affiliate maintains one or more Defined Benefit  Plans and the Company or an Affiliate has never maintained any defined contribution Plan (including                                       XV-2 

 

any "simplified employee pension" within the meaning of Code § 408(k)) which during the five-year  period ending on the Determination Date has or has had account balances, the Top-Heavy Ratio for  the 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 values of accrued benefits under the aggregated Defined  Benefit Plans of all Key Employees as of the respective Determination Date for each plan (including  any part of any accrued benefit distributed in the five-year period ending on the Determination Date),  and  the  denominator  of  which  is  the  sum  of  the  present  values  of  all  accrued  benefits  under  the  aggregated Defined Benefit Plans as of the respective Determination Date for each plan (including any  part  of  any  accrued  benefit  distributed  in  the  five-year  period  ending  on  the  Determination  Date)  determined in accordance with Code § 416.                     (ii)  If the Company or an Affiliate maintains one or more Defined Benefit  Plans and the Company or an Affiliate maintains or has maintained one or more Defined Contribution  Plans  (including  any  "simplified employee  pension"  within the meaning  of  Code  §  408(k))  which  during the five-year period ending on the Determination Date 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 Plans for all Key Employees, determined in accordance with (i) above, plus the sum of account  balances under the aggregated Defined Contribution Plans for all Key Employees as of the respective  Determination Date for each plan, and the denominator of which is the sum of the present value of all  accrued benefits under the aggregated Defined Benefit Plans, determined in accordance with (i) above,  plus  the  sum  of  all  account  balances  under  the  aggregated  Defined  Contribution  Plans  for  all  Participants as of the respective Determination Date for each plan, all determined in accordance with  Code § 416.         The present values of accrued benefits of an Employee as of the determination date shall be  increased  by  the  distributions  made  with  respect  to  the  Employee  under  the  Plan  and  any  plan  aggregated  with  the  Plan  under  Code  §  416(g)(2)  during  the  one-year  period  ending  on  the  Determination Date. The preceding sentence shall also apply to distributions under a terminated plan  which,  had  it  not  been  terminated,  would  have  been  aggregated  with  the  Plan  under  Code  § 416(g)(2)(A)(i).  In  the  case  of  a  distribution  made  for  a  reason  other  than  severance  from  Employment, death, or Disability, this provision shall be applied by substituting "five-year period" for  "one-year period."                     (iii) For purposes of (i) and (ii) 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  § 416 for the first and second plan year of a Defined Benefit Plan. The account balances and accrued  benefits of a Participant (1) who is a Non-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 at any time  during the one-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 § 416. 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  respective  Determination Dates for the aggregated plans that fall within the same calendar year.                     (iv)  Solely  for the purpose of determining if the Plan, or any other plan  included in a Required Aggregation Group of which this Plan is a part, is Top-Heavy (within the                                       XV-3 

 

meaning  of  Code  §  416(g))  such  determination  shall  be  made  under  (1)  the  method,  if  any,  that  uniformly applies for accrual purposes under all plans maintained by the Employer, or (2) if there is  no such method, as if such benefit accrued not more rapidly than the slowest accrual rate permitted  under the fractional accrual rate of Code § 411(b)(1)(C).               (m)   Valuation  Date  means,  the  date  as  of  which  account  balances,  or  accrued  benefits are valued for purposes of calculating the Top-Heavy Ratio.         15.2  Top Heavy Rules         If  the  Plan  is determined  to  be  a  Top-Heavy  Plan  or  a  Super  Top-Heavy  Plan  as  of  any  Determination Date, then it shall be subject to the rules set forth in this Article XV, beginning with the  first Plan Year commencing after such Determination Date. Even if, as of a subsequent Determination  Date, the Plan is determined to no longer be a Top-Heavy Plan or a Super Top-Heavy Plan, the rules  set forth in these Sections will continue to apply.         15.3  Compensation         If the Plan is a Top-Heavy Plan or a Super Top-Heavy Plan, Compensation for the purpose of  this Plan shall be limited to the first $150,000 (or such larger amounts as may be prescribed for the  Plan  Year  involved  pursuant  to  Code  §  416(d)(2))  of  the  amount that  would  otherwise  have  been  Compensation.         15.4  Benefit         Except as provided in subparagraphs (a) and (b) below, for any Plan Year in or after which the  Plan is a Top-Heavy Plan, each Participant who is a Non-Key Employee and has completed one Year  of Service will accrue a Retirement Benefit (to be provided solely by Employer contributions) and  expressed as a single life annuity commencing at normal retirement age (within the meaning of Code  § 411(a)(8)) of not less than 2% of his or her average Limitation Compensation for the five consecutive  years for which the Participant had the highest Limitation Compensation. The aggregate Limitation  Compensation for the years during such five-year period in which the Participant was credited with  one  Year  of  Service  will  be  divided  by  the  number  of  such  years  in  order  to  determine  average  Limitation Compensation. The minimum accrual is determined without regard to any Social Security  contribution. The minimum accrual 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. The suspension of benefits provisions of this Plan shall not apply to the minimum benefits  hereunder.               (a)   No additional benefit accruals shall be provided pursuant to 15.4 above to the  extent that the total accruals on behalf of the Participant attributable to Employer contributions will  provide a Retirement Benefit expressed as a single life annuity commencing at normal retirement age  (within  the  meaning  of  Code  §  411(a)(8))  that  equals  or  exceeds  20%  of  the Participant's  highest  average  Limitation  Compensation  for  the  five  consecutive  years  for  which  the  Participant  had  the  highest  Limitation  Compensation.  All  accruals  of  Employer  derived  benefits,  whether  or  not  attributable to years for which the Plan is a Top-Heavy Plan, may be used in computing whether the  minimum accrual requirement of the preceding sentence is satisfied.                                        XV-4 

 

            (b)   The provision in 15.4 above shall not apply to any Participant to the extent that  the Participant is covered under any other plan or plans of an Employer and the Employer has provided  in that plan that the minimum allocation or benefit requirement applicable to this Top-Heavy Plan will  be met in the other plan or plans.               (c)   For  purposes  of  satisfying  the  minimum  benefit  requirements  of  Code §  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 § 410(b)) no Key Employee or former Key Employee.         15.5  Vesting         Beginning with the Plan Year in which this Plan is Top-Heavy, the following vesting schedule  will apply:          Completed Years of Vesting Service              Vested Percentage                     2                                         20%                    3                                         40%                    4                                         60%                    5                                         100%          15.6  Miscellaneous          In the event that any provision of this Article XV is no longer required to qualify the Plan under  the Code, then such provision shall thereupon be void without the necessity of further amendment of  the Plan.                                           XV-5 

 

                                 ARTICLE XVI                              BENEFIT RESTRICTIONS         16.1  Limitations Applicable If the Plan's Adjusted Funding Target Attainment Percentage  Is Less Than 80 Percent or If the Plan Sponsor Is In Bankruptcy:               (a)   Limitations  Applicable  If  the  Plan's  Adjusted  Funding  Target  Attainment  Percentage  Is  Less  Than  80  Percent,  But  Not  Less  Than  60  Percent: Notwithstanding  any  other  provisions of the Plan, if the Plan's adjusted funding target attainment percentage for a Plan Year is  less than 80 percent (or would be less than 80 percent to the extent described in Section 16.1(a)(ii)) but  is not less than 60 percent, then the limitations set forth in Section 16.1(a)(i) apply.                     (i)   50  Percent  Limitation  on  Single  Sum  Payments,  Other  Accelerated  Forms of Distribution, and Other Prohibited Payments: A Participant or Beneficiary is not permitted  to elect, and the Plan shall not pay, a single sum payment or other optional form of benefit that includes  a prohibited payment with an annuity starting date on or after the applicable section 436 measurement  date, and the Plan shall not make any payment for the purchase of an irrevocable commitment from an  insurer to pay benefits or any other payment or transfer that is a prohibited payment, unless the present  value of the portion of the benefit that is being paid in a prohibited payment does not exceed the lesser  of:                           (1)   50 % of the present value of the benefit payable in the optional  form of benefit that includes the prohibited payment; or                           (2)   100 % of the PBGC maximum benefit guarantee amount (as  defined in Regulation § 1.436-1(d)(3)(iii)(C)).         The limitation set forth in this Section 16.1(a)(i) does not apply to any payment of a benefit  which under Code § 411(a)(11) may be immediately distributed without the consent of the Participant.  If an optional form of benefit that is otherwise available under the terms of the Plan is not available to  a  Participant  or  Beneficiary  as  of  the  annuity  starting  date  because  of  the  application  of  the  requirements of this Section 16.1(a)(i), the Participant or Beneficiary is permitted to elect to bifurcate  the benefit into unrestricted and restricted portions (as described in Regulation § 1.436-1(d)(3)(iii)(D)).  The Participant or Beneficiary may also elect any other optional form of benefit otherwise available  under the Plan at that annuity starting date that would satisfy the 50 percent/PBGC maximum benefit  guarantee amount limitation described in this Section 16.1(a)(i), or may elect to defer the benefit in  accordance with any general right to defer commencement of benefits under the Plan.         During a period when Section 16.1(a)(i) applies to the Plan, Participants and beneficiaries are  permitted to elect payment in any optional form of benefit otherwise available under the Plan that  provides for the current payment of the unrestricted portion of the benefit (as described in Regulation  § 1.436-1(d)(3)(iii)(D)), with a delayed commencement for the restricted portion of the benefit (subject  to other applicable qualification requirements, such as Code §§ 411(a)(11) and 401(a)(9)).                     (ii)  Plan Amendments Increasing Liability for Benefits: No amendment to  the Plan that  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 shall take effect in a Plan Year if the adjusted funding target attainment  percentage for the Plan Year is:                                        XVI-1 

 

                        (1)   Less than 80 %; or                           (2)   80 % or more, but would be less than 80 percent if the benefits  attributable  to  the  amendment  were  taken  into  account  in  determining  the  adjusted  funding  target  attainment percentage.         The limitation set forth in this Section 16.1(a)(ii) does not apply to any amendment to the Plan  that provides a benefit increase under a Plan formula that is not based on compensation, provided that  the rate of such increase does not exceed the contemporaneous rate of increase in the average wages  of Participants covered by the amendment.               (b)   Less Than 60 Percent: Notwithstanding any other provisions of the Plan, if the  Plan's adjusted funding target attainment percentage for a Plan Year is less than 60 percent (or would  be less than 60 percent to the extent described in Section 16.1(b)(ii)), then the limitations in Section  16.1(b)(i) apply.                     (i)   Single  Sums,  Other  Accelerated  Forms  of  Distribution,  and  Other  Prohibited Payments Not Permitted: A Participant or Beneficiary is not permitted to elect, and the Plan  shall not pay, a single sum payment or other optional form of benefit that includes a prohibited payment  with an annuity starting date on or after the applicable section 436 measurement date, and the Plan  shall not make any payment for the purchase of an irrevocable commitment from an insurer to pay  benefits or any other payment or transfer that is a prohibited payment. The limitation set forth in this  Section 16.1(b)(i) does not apply to any payment of a benefit which under Code § 411(a)(11) may be  immediately distributed without the consent of the Participant.                     (ii)  Shutdown  Benefits  and  Other  Unpredictable  Contingent  Event  Benefits Not  Permitted  to  Be  Paid: An  unpredictable  contingent  event  benefit  with  respect  to  an  unpredictable contingent event occurring during a Plan Year shall not be paid if the adjusted funding  target attainment percentage for the Plan Year is:                           (1)   Less than 60 %; or                           (2)   60  %  or  more,  but  would  be  less  than 60  %  if  the  adjusted  funding  target  attainment  percentage  were  redetermined  applying  an  actuarial  assumption  that  the  likelihood of occurrence of the unpredictable contingent event during the Plan Year is 100 %.                     (iii) Benefit Accruals Frozen: Benefit accruals under the Plan shall cease as  of the applicable section 436 measurement date. In addition, if the Plan is required to cease benefit  accruals under this Section 16.1(b)(iii), then the Plan is not permitted to be amended in a manner that  would increase the liabilities of the Plan by reason of an increase in benefits or establishment of new  benefits.               (c)   Limitations Applicable If the Plan Sponsor Is In Bankruptcy: Notwithstanding  any other provisions of the Plan, a Participant or Beneficiary is not permitted to elect, and the Plan  shall not pay, a single sum payment or other optional form of benefit that includes a prohibited payment  with an annuity starting date that occurs during any period in which the Plan sponsor is a debtor in a  case under title 11, United States Code, or similar Federal or State law, except for payments made  within a Plan Year with an annuity starting date that occurs on or after the date on which the Plan's  enrolled actuary certifies that the Plan's adjusted funding target attainment percentage for that Plan                                        XVI-2 

 

Year is not less than 100 percent. In addition, during such period in which the Plan sponsor is a debtor,  the Plan shall not make any payment for the purchase of an irrevocable commitment from an insurer  to pay benefits or any other payment or transfer that is a prohibited payment, except for payments that  occur on a date within a Plan Year that is on or after the date on which the Plan's enrolled actuary  certifies that the Plan's adjusted funding target attainment percentage for that Plan Year is not less than  100 percent. The limitation set forth in this Section 16.1(c) does not apply to any payment of a benefit  which under Code § 411(a)(11) may be immediately distributed without the consent of the Participant.         16.2  Provisions Applicable After Limitations Cease to Apply:               (a)   Resumption of Prohibited Payments: If a limitation on prohibited payments  under Section 16.1(a)(i), Section 16.1(b)(i), or Section 16.1(c) applied 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 does not apply to benefits with annuity starting dates that are on or after that  later section 436 measurement date.         In  addition,  after  the  section  436  measurement  date  on  which  the  limitation  on  prohibited  payments under Section 16.1(a)(i) ceases to apply to the Plan, any Participant or Beneficiary who had  an annuity starting date within the period during which that limitation applied to the Plan is permitted  to make a new election (within 90 days after the section 436 measurement date on which the limit  ceases to apply or, if later, 30 days after receiving notice of the right to make such election) under  which the form of benefit previously elected is modified at a new annuity starting date to be changed  to a single sum payment for the remaining value of the Participant or Beneficiary's benefit under the  Plan, subject to the other rules in this Article XVI and applicable requirements of Code § 401(a),  including spousal consent.         In  addition,  after  the  section  436  measurement  date  on  which  the  limitation  on  prohibited  payments under Section 16.1(b)(i) ceases to apply to the Plan, any Participant or Beneficiary who had  an annuity starting date within the period during which that limitation applied to the Plan is permitted  to make a new election (within 90 days after the section 436 measurement date on which the limit  ceases to apply or, if later, 30 days after receiving notice of the right to make such election) under  which the form of benefit previously elected is modified at a new annuity starting date to be changed  to a single sum payment for the remaining value of the Participant's or Beneficiary's benefit under the  Plan,  subject  to  the  other  rules  in  this  Article  XVI  (including  Section  16.1(a)(i))  and  applicable  requirements of Code § 401(a), including spousal consent.                     (iv)  Special Rules Relating to Unpredictable Contingent Event Benefits and  Plan Amendments Increasing Benefit Liability: During any period in which none of the presumptions  under Section 16.5(a) apply to the Plan and the Plan's enrolled actuary has not yet issued a certification  of the Plan's adjusted funding target attainment percentage for the Plan Year, the limitations under  Section 16.1(a)(ii) and Section 16.1(b)(ii) shall be based on the inclusive presumed adjusted funding  target attainment percentage for the Plan, calculated in accordance with the rules of Regulation § 1.436- 1(g)(2)(iii).               (c)   Special Rules Under PRA 2010:                     (i)   Payments  Under  Social  Security  Leveling  Options: For  purposes  of  determining whether the limitations under Section 16.1(a)(i) or 16.1(b)(i) apply to payments under a  social security leveling option, within the meaning of Code § 436(j)(3)(C)(i), the adjusted funding                                        XVI-3 

 

target attainment percentage for a Plan Year shall be determined in accordance with the "Special Rule  for Certain Years" under Code § 436(j)(3) and any Regulation or other published guidance thereunder  issued by the Internal Revenue Service.                     (ii)  Limitation on Benefit Accruals: For purposes of determining whether  the  accrual  limitation  under  Section  16.1(b)(iii)  applies  to  the  Plan,  the  adjusted  funding  target  attainment percentage for a Plan Year shall be determined in accordance with the "Special Rule for  Certain Years" under Code § 436(j)(3) (except as provided under section 203(b) of the Preservation of  Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010, if applicable).               (d)   Interpretation of Provisions: The limitations imposed by this section of the Plan  shall be interpreted and administered in accordance with Code § 436 and Regulation § 1.436-1.         16.6  Definitions: The  definitions  in  the  following  Regulations  apply  for  purposes  of  Sections 16.1 through 16.5: § 1.436-1(j)(1) defining adjusted funding target attainment percentage; §  1.436-1(j)(2)  defining  annuity  starting  date;  §  1.436-1(j)(6)  defining  prohibited  payment;  §  1.436- 1(j)(8)  defining  section  436  measurement  date;  and  §  1.436-1(j)(9)  defining  an  unpredictable  contingent event and an unpredictable contingent event benefit.         16.7  Effective Date: The rules in Sections 16.1 through 16.6 are effective for Plan Years  beginning after December 31, 2007.                                           XVI-4 

 

      IN  WITNESS  WHEREOF, GLOBE  LIFE  INC. has  caused  this  Plan  to  be  amended  and  restated, on this the 4th day of November, 2020, effective generally as of January 1, 2020 (except as  otherwise provided herein).                                       GLOBE LIFE INC.                                       By: /s/ Frank M. Svoboda                                      Its: EVP and Chief Financial Officer    Attest:    By: /s/ Christopher T. Moore     Its: Corporate SVP, Associate Counsel      and Corporate SecretaryDocument

AMENDMENT SEVEN
TO THE
TORCHMARK CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Pursuant to Section 9.1 of the Torchmark Corporation Supplemental Executive Retirement Plan as established effective January 1, 2007 (the “Plan”), Globe Life Inc. (the “Company”) hereby amends the Plan, effective November 1, 2020, as follows:
1.Section 2.2 is removed from the Plan and is replaced by new Section 2.19 which shall read as follows:
Plan Administrative Committee shall mean the committee appointed by the Compensation Committee of the Board pursuant to and having the responsibilities specified in Article 8 of the Plan.
2.The definitions in Article 2 of the Plan shall be renumbered to reflect the action in item Number 1 of this Amendment Seven.
3.All references in the Plan to the phrase “Administrative Committee” shall be removed and replaced with the phrase “Plan Administrative Committee.”
4.All references in the Plan to the capitalized work “Committee” shall be removed and replaced with the phrase “Plan Administrative Committee.”
5.Section 2.17 of the Plan is replaced in its entirety and shall read as follows:
Pension Plan shall mean the Globe Life Inc. Pension Plan, as restated effective January 1, 2020, and as amended from time to time in the future.
6.Section 2.18 of the Plan is replaced in its entirety and shall read as follows:
Plan shall mean the Globe Life Inc. Supplemental Executive Retirement Plan as set forth in its entirety in this document, and as this document may be amended from time to time in the future.
7.The phrase “Torchmark Corporation” is replaced by the phrase “Globe Life Inc.” in Section 2.5 and Section 2.8 of the Plan.  
8.The phrase “separation from service” is replaced with the phrase “Separation from Service” in Section 4.1 and Section 4.6(b) of the Plan.
9.New Section 4.2(h) is added to the Plan and shall read as follows:
(h)    In lieu of the provisions set forth in Section 4.2(b) and Section 4.2(f), and in lieu of the age set forth in Section 5.1, the Compensation Committee, if requested in writing by the Company’s CEO (or Co-CEOs, if applicable), shall have the discretion to, on a case by case basis, establish the early retirement reduction factors, the minimum age for benefit eligibility, the number of full and/or partial years for Vesting Service (as defined 

in the Pension Plan), and the attained age necessary to be eligible for a pre-retirement death benefit, customized for each Employee who becomes a Participant on or after November 1, 2020, provided such customized provisions are set forth in the written minutes of the meeting of the Compensation Committee or by the unanimous written consent of the Compensation Committee at the time the Employee is designated as being eligible to participate in the Plan in accordance with Section 3.1 hereof.  Any such customized provisions shall apply wherever the applicable section is referenced in the Plan.  
10.Section 8.1 of the Plan is replaced in its entirety and shall read as follows:
Appointment and Removal of Plan Administrative Committee.  The administration of the Plan shall be vested in a Plan Administrative Committee of at least three (3) persons who shall be appointed by the Compensation Committee, and may include persons who are not Participants in the Plan.  A person appointed a member of the Plan Administrative Committee shall signify his acceptance in writing.  The Compensation Committee may remove or replace any member of the Plan Administrative Committee at any time in its sole discretion; and any Plan Administrative Committee member may resign by delivering his written resignation to the Compensation Committee, which resignation shall become effective upon its delivery or at any later date specified therein.  If at any time there shall be a vacancy in the membership of the Plan Administrative Committee, the remaining member or members of the Plan Administrative Committee shall continue to act until such vacancy is filled by action of the Compensation Committee.
Done this the 4th day of November, 2020.
Globe Life Inc.

By:  /s/ Frank M. Svoboda        
Its:  EVP and Chief Financial Officer    
2

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