2007 DEFINED BENEFIT INTERIM AMENDMENT FOR DATAIR MASS-SUBMITTER PROTOTYPES

Transcription

1 2007 DEFINED BENEFIT INTERIM AMENDMENT FOR DATAIR MASS-SUBMITTER PROTOTYPES Section 1. General Rules 1.1. Adoption and Effective Date. The purpose of this Amendment is to incorporate required changes from the 2006 Cumulative List of Changes in Plan Qualification Requirements described in section 4 of Revenue Procedure as modified by Revenue Procedure DATAIR as the sponsor of the Mass-Submitter Prototype Defined Benefit Basic Plan Document #02 (the Plan ) adopts the following Amendment to the Basic Plan Document #02 effective for Limitation Years beginning on or after January 1, The provisions of this Amendment shall apply as of this date, including any options elected below Precedence. The requirements of this Article will take precedence over any inconsistent provisions of the Plan including any previous amendments adopted by the Employer. Where appropriate, the term "Plan" shall mean the Plan and Trust Requirements of Treasury Regulations Incorporated. All matters addressed under this Article will be determined and made in accordance with the Treasury Regulations sections 1.401(a)-2, 1.401(a)(9)-5, 1.401(k)-1, 1.402(c)-2, 1.415(a)-1, through 1.415(j)-1, , and Grandfather Rule for Preexisting Benefits. The Plan will be considered to satisfy the limitations of section 415(b) of the Internal Revenue Code ("the Code") for a Participant with respect to benefits accrued or payable under the Plan as of the end of the Limitation Year that is immediately prior to the effective date of final regulations under Treasury Regulations section 1.415(a)-1(g)(4) and sections 1.415(b)-1, 1.415(c)-1, 1.415(c)-2, 1.415(d)-1, 1.415(f)-1, 1.415(g)-1, and 1.415(j)-1 (as provided under Treasury Regulations section (g)(1) or (2)) pursuant to Plan provisions (including Plan provisions relating to the Plan's Limitation Year) that were both adopted and in effect before April 5, 2007, but only if such Plan provisions meet the applicable requirements of statutory provisions, regulations, and other published guidance relating to section 415 of the Code in effect immediately before the effective date of final regulations under Treasury Regulations section (g) and sections 1.415(b)-1, 1.415(c)-1, 1.415(c)-2, 1.415(d)-1, 1.415(f)-1, 1.415(g)-1, and 1.415(j)-1 (as provided under Treasury Regulations section (g)(1) or (2)). Plan provisions will not be treated as failing to satisfy these requirements merely because the Plan has not been amended to reflect changes to section 415(b) of the Code made by the Pension Funding Equity Act of 2004, Public Law (118 Stat. 596), and the Pension Protection Act of 2006, Public Law (120 Stat. 780). In addition, Plan provisions will not be treated as failing to satisfy these requirements merely because the Plan's definition of Compensation for a Limitation Year that is used for purposes of applying the limitations of section 415(b)(1)(B) of the Code reflects compensation for a Plan Year that is in excess of the limitation under section 401(a)(17) of the Code that applies to that Plan Year. If benefits under the Plan are accrued after the applicable effective date under Treasury Regulations section (g)(1) or (2), then the sum of the benefits grandfathered under the first sentence of this Paragraph and benefits accrued after the applicable effective date must satisfy the requirements of section 415 of the Code, taking into account the requirements of this Paragraph and Treasury Regulations sections 1.415(b)-1, 1.415(c)-1, 1.415(c)-2, 1.415(d)-1, 1.415(f)-1, 1.415(g)-1, and 1.415(j)-1. Section 2. Normal Retirement and Benefit Accruals. 2.1 Normal Retirement Age. Normal Retirement Age ("NRA") is the age selected in the Plan or below in the Adoption Section. If the Employer enforces a mandatory retirement age, the Normal 2007 DB Interim Amendment for Plan #02 1

2 Retirement Age is the lesser of that mandatory age or the age specified below in the Adoption Section. Under the provisions of Treasury Regulations section 1.401(a)-1(b)(2), a plan's NRA cannot be earlier than what is reasonably representative of the typical retirement age for the industry in which the Participants work. An NRA of 62 or older is deemed to satisfy this requirement. An NRA under 55 is presumed not to satisfy this requirement unless the Commissioner of Internal Revenue determines that the facts and circumstances show otherwise. Whether an NRA between 55 and 62 satisfies this requirement depends on facts and circumstances. 2.2 Discontinuing or Reduction of Accruals. (a) Notwithstanding any provision of the Plan to the contrary, the discontinuance or reduction of the accrual of benefits upon the Participant's attainment of any specified age (including NRA) is not permitted effective May 22, (b) Protection of Accrued Benefits (1) General rule. Under section 411(d)(6)(A) of the Code, the Plan will not be a qualified plan (and a trust forming a part of such plan is not a qualified trust) if a Plan amendment decreases the Accrued Benefit of any plan Participant, except as provided in section 412(c)(8) of the Code, section 4281 of the Employee Retirement Income Security Act of 1974 as amended (ERISA), or other applicable law (see, for example, sections 418D and 418E of the Internal Revenue Code, and section 1541(a)(2) of the Taxpayer Relief Act of 1997, Public Law (111 Stat. 788, 1085)). For purposes of this Section, a Plan amendment includes any changes to the terms of the Plan, including changes resulting from a merger, consolidation, or transfer (as defined in section 414(l) of the Code) or a plan termination. The protection of section 411(d)(6) of the Code applies to a Participant's entire Accrued Benefit under the Plan as of the applicable amendment date, without regard to whether the entire Accrued Benefit was accrued before a Participant's Severance from Employment or whether any portion was the result of an increase in the Accrued Benefit of the Participant pursuant to a Plan amendment adopted after the Participant's Severance from Employment. (2) Plan provisions taken into account. (i) Direct or indirect reduction in Accrued Benefit. For purposes of determining whether a Participant's Accrued Benefit is decreased, all of the amendments to the provisions of the Plan affecting, directly or indirectly, the computation of Accrued Benefits are taken into account. Plan provisions indirectly affecting the computation of Accrued Benefits include, for example, provisions relating to Years of Service and compensation. (ii) Amendments effective with the same applicable amendment date. In determining whether a reduction in a Participant's Accrued Benefit has occurred, all Plan amendments with the same applicable amendment date are treated as one amendment. Thus, if two amendments have the same applicable amendment date and one amendment, standing alone, increases Participants' Accrued Benefits and the other amendment, standing alone, decreases Participants' Accrued Benefits, the amendments are treated as one amendment and will only violate section 411(d)(6) of the Code if, for any Participant, the net effect is to decrease Participants' Accrued Benefit as of that applicable amendment date DB Interim Amendment for Plan #02 2

3 (iii) Multiple amendments. (A) General rule. A Plan amendment violates the requirements of section 411(d)(6) of the Code if it is one of a series of Plan amendments that, when taken together, have the effect of reducing or eliminating a section 411(d)(6) of the Code protected benefit in a manner that would be prohibited by section 411(d)(6) of the Code if accomplished through a single amendment. (B) Determination of the time period for combining plan amendments. For purposes of applying the rule in Paragraph (2)(ii)(A) of this Section, generally only Plan amendments adopted within a 3-year period are taken into account. (3) Application of section 411(a) nonforfeitability provisions with respect to section 411(d)(6) of the Code protected benefits. (i) In general. The rules of this Section 2.2(b) apply to a Plan amendment that decreases a Participant's Accrued Benefits, or otherwise places greater restrictions or conditions on a Participant's rights to section 411(d)(6) of the Code protected benefits, even if the amendment merely adds a restriction or condition that is permitted under the vesting rules in section 411(a)(3) through (11) of the Code. However, such an amendment does not violate section 411(d)(6) of the Code to the extent it applies with respect to benefits that accrue after the applicable amendment date. See section 411(a)(10) and Section 1.411(a)-8 of the Code for additional rules relating to changes in the Plan's vesting schedule. (ii) Exception for changes in the Plan's vesting computation period, a Plan amendment that satisfies the applicable requirements under 29 CFR (c) (rules relating to vesting computation periods) does not fail to satisfy the requirements of section 411(d)(6) of the Code merely because the Plan amendment changes the Plan's vesting computation period. 2.3 Break in Service. In the case of a Participant who has had a Severance from Employment with the Employer and who is subsequently rehired, the period of the Participant's high-3 Years of Service is calculated by excluding all years for which the Participant performs no services for and receives no compensation from the Employer (referred to as the break period), and by treating the Year of Service immediately prior to and the Year of Service immediately after the break period as if such Years of Service were consecutive. 2.4 Benefits Paid in a Form to which Section 417(e)(3) of the Code Does Not Apply. For a benefit paid in a form to which section 417(e)(3) of the Code does not apply, the actuarially equivalent Straight Life Annuity benefit is the greater of: (a) 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 form of benefit payable to the Participant; or (b) The annual amount of the Straight Life Annuity commencing at the same Annuity Starting Date that has the same actuarial Present Value as the form of benefit payable to the Participant, computed using a 5 percent interest assumption and the applicable mortality table described in Treasury Regulations section 1.417(e)-1(d)(2) for that Annuity Starting Date DB Interim Amendment for Plan #02 3

4 Adjustment to Section 415(b)(1)(A) of the Code Dollar Limit for Commencement Before Age (a) Calculation using statutory factors. For a distribution with an Annuity Starting Date that occurs before the Participant attains the age of 62, the age adjusted section 415(b)(1)(A) of the Code dollar limit generally is determined as the actuarial equivalent of the annual amount of a Straight Life Annuity commencing at the Annuity Starting Date that has the same actuarial Present Value as a deferred Straight Life Annuity commencing at age 62, where annual payments under the Straight Life Annuity commencing at age 62 are equal to the dollar limitation of section 415(b)(1)(A) of the Code (as adjusted pursuant to section 415(d) of the Code and Treasury Regulations section 1.415(d)-1 for the Limitation Year), and where the actuarially equivalent Straight Life Annuity is computed using a 5 percent interest rate and the applicable mortality table under Treasury Regulations section 1.417(e)-1(d)(2) that is effective for that Annuity Starting Date (and expressing the Participant's age based on completed calendar months as of the Annuity Starting Date). However, if the Plan has an immediately commencing Straight Life Annuity payable both at age 62 and the age of benefit commencement, then the age-adjusted section 415(b)(1)(A) of the Code dollar limit is equal to the lesser of: (1) The limit as otherwise determined under this Paragraph 2.5(a); and (2) The amount determined under Paragraph 2.5(b) of this Section. (b) Calculation using Plan factors. The amount determined under this Paragraph 2.5(b) is equal to the section 415(b)(1)(A) of the Code dollar limit (as adjusted pursuant to section 415(d) of the Code and Treasury Regulations section 1.415(d)-1 for the Limitation Year) multiplied by the ratio of the annual amount of the immediately commencing Straight Life Annuity under the Plan to the annual amount of the Straight Life Annuity under the Plan commencing at age 62, with both annual amounts determined without applying the rules of section 415 of the Code. (c) Mortality adjustments: (1) For purposes of determining the actuarially equivalent amount described in Paragraph 2.5(a) of this Section, to the extent that a forfeiture does not occur upon the Participant's death before the Annuity Starting Date, no adjustment is made to reflect the probability of the Participant's death between the Annuity Starting Date and the Participant's attainment of age 62, unless the Plan provides for such an adjustment. To the extent that a forfeiture occurs upon the Participant's death before the Annuity Starting Date, an adjustment must be made to reflect the probability of the Participant's death between the Annuity Starting Date and the Participant's attainment of age 62. (2) No forfeiture deemed to occur where Qualified Preretirement Survivor Annuity payable. For purposes of Paragraphs 2.5(a) and 2.6(c)(1) of this Section, the Plan is permitted to treat no forfeiture as occurring upon a Participant's death if the Plan does not charge Participants for providing a Qualified Preretirement Survivor Annuity (QPSA) (as defined in section 417(c) of the Code) on the Participant's death, but only if the Plan applies this treatment both for adjustments before age 62 and adjustments after age 65. Thus, in such a case, the Plan is permitted to provide that, in computing the adjusted dollar limitation under section 415(b)(1)(A) of the Code, no adjustment is made to reflect the probability of a Participant's death after the Annuity Starting Date and before age 62 or after age 65 and before the Annuity Starting Date DB Interim Amendment for Plan #02 4

5 (d) Exception for certain Participants of certain governmental plans. Pursuant to section 415(b)(2)(G) and (H) of the Code, no age adjustment is made to the dollar limit for commencement before age 62 for any qualified Participant. For this purpose, a qualified Participant is a Participant in a defined benefit plan that is maintained by a state, Indian tribal government (as defined in section 7701(a)(40) of the Code), or any political subdivision of a state or Indian tribal government with respect to whom the service taken into account in determining the amount of the benefit under the defined benefit plan includes at least 15 Years of Service of the Participant. Such service includes service: (1) As a full-time employee of any police department or fire department that is organized and operated by the state, Indian tribal government, or political subdivision maintaining such defined benefit plan to provide police protection, firefighting services, or emergency medical services for any area within the jurisdiction of such state, Indian tribal government, or political subdivision; or (2) As a member of the Armed Forces of the United States. (e) Exception for survivor and disability benefits under governmental plans. Pursuant to section 415(b)(2)(I) of the Code, no age adjustment is made to the dollar limit for commencement before age 62 for a distribution from a governmental plan (as defined in section 414(d) of the Code) on account of the Participant's becoming disabled by reason of personal injuries or sickness, or as a result of the death of the Participant. (f) Special rule for commercial airline pilots. Pursuant to section 415(b)(9) of the Code, no age adjustment is made to the dollar limit for early commencement on or after age 60 for a Participant if: (1) The Participant is a commercial airline pilot; (2) The Participant separates from service upon or after attaining age 60; and (3) As of the time of the Participant's retirement, regulations prescribed by the Federal Aviation Administration require an individual to separate from service as a commercial airline pilot after attaining any age occurring on or after age 60 and before age 62. (g) No decrease in age-adjusted section 415(b)(1)(A) of the Code dollar limit on account of age or service. Notwithstanding any other provision of this Paragraph 2.5, the age adjusted section 415(b)(1)(A) of the Code dollar limit applicable to a Participant does not decrease on account of an increase in age or the performance of additional service. 2.6 Adjustment to section 415(b)(1)(A) dollar limit for commencement after age 65. (a) Calculation using statutory factors. For a distribution with an Annuity Starting Date that occurs after the Participant attains the age of 65, the age adjusted section 415(b)(1)(A) of the Code dollar limit generally is determined as the actuarial equivalent of the annual amount of a Straight Life Annuity commencing at the Annuity Starting Date that has the same actuarial Present Value as a Straight Life Annuity commencing at age 65, where annual payments under the Straight Life Annuity commencing at age 65 are equal to the dollar limitation of section 415(b)(1)(A) of the Code (as adjusted pursuant to section 415(d) of the Code and Treasury Regulations section 1.415(d)-1 for the Limitation Year), and where the actuarially equivalent Straight Life Annuity is computed using 2007 DB Interim Amendment for Plan #02 5

6 a 5 percent interest rate and the applicable mortality table under Treasury Regulations section 1.417(e)-1(d)(2) that is effective for that Annuity Starting Date (and expressing the Participant's age based on completed calendar months as of the Annuity Starting Date). However, if the Plan has an immediately commencing Straight Life Annuity payable as of the Annuity Starting Date and an immediately commencing Straight Life Annuity payable at age 65, then the age adjusted section 415(b)(1)(A) of the Code dollar limit is equal to the lesser of: (1) The limit as otherwise determined under this Paragraph 2.6(a); and (2) The amount determined under Paragraph 2.6(b) of this Section. (b) Calculation using plan factors. The amount determined under this Paragraph 2.6(b) is equal to the section 415(b)(1)(A) of the Code dollar limit (as adjusted pursuant to section 415(d) of the Code and Treasury Regulations section 1.415(d)-1 for the Limitation Year) multiplied by the adjustment ratio described in Paragraph 2.6(c)(1) of this Section. (c) Adjustment ratio: (1) For purposes of applying the rule of Paragraph 2.6(b) of this Section, the adjustment ratio is equal to the ratio of the annual amount of the adjusted immediately commencing Straight Life Annuity under the Plan described in Paragraph 2.6(c)(2) of this Section to the adjusted age 65 Straight Life Annuity described in Paragraph 2.6(c)(3) of this Section. (2) Adjusted immediately commencing Straight Life Annuity. The adjusted immediately commencing Straight Life Annuity that is used for purposes of Paragraph 2.6(a) of this Section is the annual amount of the immediately commencing Straight Life Annuity payable to the Participant, computed disregarding the Participant's accruals after age 65 but including actuarial adjustments even if those actuarial adjustments are applied to offset accruals. For this purpose, the annual amount of the immediately commencing Straight Life Annuity is determined without applying the rules of section 415 of the Code. (3) Adjusted age 65 Straight Life Annuity. The adjusted age 65 Straight Life Annuity that is used for purposes of Paragraph 2.6(c)(1) of this Section is the annual amount of the Straight Life Annuity that would be payable under the plan to a hypothetical Participant who is 65 years old and has the same Accrued Benefit (with no actuarial increases for commencement after age 65) as the Participant receiving the distribution (determined disregarding the Participant's accruals after age 65 and without applying the rules of section 415 of the Code). (d) Mortality adjustments. (1) For purposes of determining the actuarially equivalent amount described in Paragraph 2.6(a) of this Section, to the extent that a forfeiture does not occur upon the Participant's death before the Annuity Starting Date, no adjustment is made to reflect the probability of the Participant's death between the Participant's attainment of age 65 and the Annuity Starting Date. To the extent that a forfeiture occurs upon the Participant's death before the Annuity Starting Date, an adjustment must be made to reflect the probability of the Participant's death between the Participant's attainment of age 65 and the Annuity Starting Date. (2) No forfeiture deemed to occur where QPSA payable. See Paragraph 2.5(c)(1) of this 2007 DB Interim Amendment for Plan #02 6

7 Section for a rule deeming no forfeiture to occur if the Plan does not charge Participants for providing a QPSA on the Participant's death. 2.7 Determination of Annual Benefit in the Case of Multiple Annuity Starting Dates. (a) If a Participant has or will have distributions commencing at more than one Annuity Starting Date, then the limitations of section 415 of the Code must be satisfied as of each of the Annuity Starting Dates, taking into account the benefits that have been or will be provided at all of the Annuity Starting Dates. This will happen, for example, where benefit distributions to a Participant have previously commenced under a plan that is aggregated for purposes of section 415 of the Code with a plan under which the Participant receives current accruals. In determining the annual benefit for such a Participant as of a particular Annuity Starting Date, the Plan must actuarially adjust the past and future distributions with respect to the benefits that commenced at the other Annuity Starting Dates. For Limitation Years to which Treasury Regulations section 1.415(b)-2 applies, these adjustments must be made using the rules of Treasury Regulations section 1.415(b)-2. For purposes of this Paragraph 2.7(a) and Treasury Regulations section 1.415(b)-2, the determination of whether a new Annuity Starting Date has occurred is made without regard to the rule of Treasury Regulations section 1.401(a)-20, Q&A-10(d) (under which the commencement of certain distributions may not give rise to a new Annuity Starting Date). (b) Scope of multiple Annuity Starting Date rules. The rules provided in this Paragraph 2.7(b) and Treasury Regulations section 1.415(b)-2 apply for purposes of determining the annual benefit of a Participant where a new distribution election is effective during the current Limitation Year with respect to a distribution that previously commenced. The rules of this Paragraph 2.7(b) and Treasury Regulations section 1.415(b)-2 also apply for determining the annual benefit of a Participant for purposes of applying the limitations of section 415(b) of the Code and this Section where benefit payments are increased as a result of Plan terms or a Plan amendment applying a cost-of-living adjustment or similar benefit increase, unless the increase is described in Paragraph 2.7(c) of this Section. (c) Safe harbors for certain benefit increases. An increase to benefit payments as a result of Plan terms or a Plan amendment applying a cost-of-living adjustment or similar benefit increase is described in this Paragraph 2.7(c) if the increase: (1) Has previously been accounted for as part of the annual benefit under the rules of Treasury Regulations (c); (2) Is not required to be accounted for as part of the annual benefit, pursuant to the exception for certain automatic benefit increase features under Paragraph 2.9 of this Section; (3) Is pursuant to a plan provision that automatically incorporates section 415(d) of the Code cost-of-living adjustments under Treasury Regulations section 1.415(a)-1(d)(3)(v); or (4) Complies with one of the safe harbors described in Treasury Regulations section 1.415(d)-1(a)(5) or (6) (providing safe harbors for annual and other periodic adjustments to distributions). 2.8 Special Rule for Rehired Employees. If, after having a Severance From Employment with the Employer, an Employee is rehired by the Employer, the Employee's compensation limit under section 415(b)(1)(B) of the Code is the greater of: 2007 DB Interim Amendment for Plan #02 7

8 (a) 100 percent of the Participant's average compensation for the period of the Participant's high-3 Years of Service, as determined prior to the Employee's Severance From Employment with the Employer, as adjusted pursuant to Treasury Regulations section 1.415(d)-1(a)(2)(i) (if the Plan so provides); or (b) 100 percent of the Participant's average compensation for the period of the Participant's high-3 Years of Service, with the period of the Participant's high-3 Years of Service determined pursuant to Treasury Regulations section 1.415(b)-1(a)(5)(iii). 2.9 Exception for Certain Automatic Benefit Increase Features. (a) Notwithstanding Treasury Regulations 1.415(b)-1, no adjustment is required to a benefit that is paid in a form that is not a Straight Life Annuity to take into account the inclusion in that form of an automatic benefit increase feature, as described in Paragraph 2.9(b) of this Section, if: (1) The benefit is paid in a form to which section 417(e)(3) of the Code does not apply. (2) The Plan satisfies the requirements of Paragraph 2.9(c) of this Section. (b) Definition of automatic benefit increase feature. An automatic benefit increase feature is included in a form of benefit if that form provides for automatic, periodic increases to the benefits paid in that form, such as a form of benefit that automatically increases the benefit paid under that form annually according to a specified percentage or objective index, or a form of benefit that automatically increases the benefit paid in that form to share favorable investment returns on Plan assets. (c) Requirements. A plan satisfies the requirements of this Paragraph 2.9(c) with respect to a form of benefit that includes an automatic benefit increase feature if the form of benefit without regard to the automatic benefit increase feature satisfies the requirements of section 415(b) of the Code and this Section, and the Plan provides that in no event will the amount payable to the Participant under the form of benefit in any Limitation Year be greater than the section 415(b) of the Code limit applicable at the Annuity Starting Date (which is the lesser of the age-adjusted section 415(b)(1)(A) of the Code dollar limit described in Treasury Regulations section 1.415(b)-1 or the section 415(b)(1)(B) of the Code compensation limit described in Treasury Regulations section 1.415(b)-1), as increased in subsequent years pursuant to section 415(d) of the Code and Treasury Regulations section 1.415(d)-1. If the form of benefit without regard to the automatic benefit increase feature is not a Straight Life Annuity, then the preceding sentence is applied by reducing the section 415(b) of the Code limit applicable at the Annuity Starting Date to an actuarially equivalent amount (determined using the assumptions specified in Paragraph 2.4(b) of this Section) that takes into account the death benefits under the form of benefit (other than the survivor portion of a QJSA) Safe harbor for annual adjustments to distributions. An amendment to the Plan to incorporate adjustments to the section 415(b) of the Code limits that increases a distribution that has previously commenced is described in this Paragraph 2.10 if: (a) The Employee has received one or more distributions that satisfy the requirements of section 415(b) of the Code before the date the adjustment to the applicable limits is effective (as determined under Treasury Regulations section 1.415(d)-1); 2007 DB Interim Amendment for Plan #02 8

9 (b) The increased distribution is solely as a result of the amendment of the Plan to reflect the adjustment to the applicable limits pursuant to section 415(d) of the Code; and (c) The amounts payable to the Employee on and after the effective date of the adjustment (as determined under Treasury Regulations 1.415(d)-1) are not greater than the amounts that would otherwise be payable without regard to the adjustment, multiplied by a fraction determined for the Limitation Year, the numerator of which is the limitation under section 415(b) of the Code (which is the lesser of the applicable dollar limitation under section 415(b)(1)(A) of the Code, as adjusted for age at commencement, and the applicable compensation-based limitation under section 415(b)(1)(B) of the Code) in effect with respect to the distribution taking into account the section 415(d) of the Code adjustment, and the denominator of which is the limitation under section 415(b) of the Code in effect for the distribution immediately before the adjustment Plan Aggregation. Except as provided in Treasury Regulations section 1.415(f)-1(g) (regarding multiemployer plans), and taking into account the rules of Treasury Regulations section 1.415(f)-1 (b)(2) (regarding the break-up of affiliated employers and affiliated service groups), Treasury Regulations section 1.415(f)-1(c) (regarding predecessor employers), and Treasury Regulations section 1.415(f)-1(d)(1) (regarding nonduplication rules), this Paragraph 2.11 requires that for purposes of applying the limitations of sections 415(b) and (c) of the Code for a particular Limitation Year: 3. Vesting. (a) All defined benefit plans (without regard to whether a plan has been terminated) ever maintained by the Employer (or a predecessor employer within the meaning of Treasury Regulations section 1.415(f)-1(c)(1) and (c)(2)) under which a Participant has accrued a benefit are treated as one defined benefit plan; (b) All defined contribution plans (without regard to whether a plan has been terminated) ever maintained by the Employer (or a predecessor employer within the meaning of Treasury Regulations section 1.415(f)-1(c)(1) and (c)(2)) under which the Participant receives annual additions are treated as one defined contribution plan; and (c) All annuity contracts under section 403(b) of the Code purchased by an employer (including plans purchased through salary reduction contributions) for the Participant are treated as one 403(b) annuity contract under section 403(b) of the Code Severance from Employment and Defined Benefit Limitations. (a) Unless otherwise elected in the Adoption Section, 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 under section 415(d) of the Internal Revenue Code. (b) Unless otherwise elected in the Adoption Section, in the case of a Participant who has had a Severance from Employment with the Employer, the Defined Benefit Dollar Limitation applicable to the Participant in any Limitation Year beginning after the date of severance shall be automatically adjusted under 415(d) of the Internal Revenue Code. 3.1 Amendment of Vesting Schedule. If the Plan's vesting schedule is amended or the Plan is amended in any way that directly or indirectly affects the computation of a Participant's nonforfeitable percentage, or if the Plan is deemed amended by an automatic change to or from a Top-Heavy vesting 2007 DB Interim Amendment for Plan #02 9

10 schedule, in the case of an Employee who is a Participant as of the later of the date such amendment or change is adopted or the date it becomes effective, the nonforfeitable percentage (determined as of such date) of such Employee's Employer-provided Accrued Benefit will not be less than the percentage computed under the Plan without regard to such amendment or change. 3.2 Participant Elections. Furthermore, each Participant with at least 3 Years of Service with the Employer may elect within a reasonable period after the adoption of the amendment or change, to have his nonforfeitable percentage computed under the Plan without regard to such amendment or change. For Participants who do not have at least one Hour of Service in any Plan Year beginning after December 31, 1988, the preceding sentence shall be applied by substituting "5 years of service" for "3 Years of Service" where such language appears. The period during which the election may be made shall commence with the date the amendment is adopted or deemed to be made and shall end on the latest of: (a) 60 days after the amendment is adopted; (b) 60 days after the amendment becomes effective; or (c) 60 days after the Participant is issued written notice of the amendment by the Employer or Plan Administrator. With respect to benefits accrued as of the later of the adoption or effective date of the amendment, the vested percentage of each Participant will be the greater of the vested percentage under the old vesting schedule or the vested percentage under the new vesting schedule. Section 4. Compensation 4.1 Limitation on Compensation. The definition of Compensation used in applying the limitations of section 415 of the Code shall not reflect compensation for a year that is in excess of the limitation of section 401(a)(17) of the Code that applies to that year. 4.2 Limitation on Compensation in Prior Years. The Plan will not be treated as failing to satisfy Section 4.1 merely because, under provisions of the Plan adopted and in effect before April 5, 2007, the Plan's definition of Compensation used for purposes of the limitations of section 415(b)(1)(B) of the Code reflects compensation for a year in excess of the limitation of section 401(a)(17) of the Code that applies to that year.) 4.3 Section 415 Compensation. (a) Except as otherwise provided in this Section 4.3 and the Adoption Section, in order to be taken into account for a Limitation Year, compensation within the meaning of section 415(c)(3) of the Code must be actually paid or made available to an Employee (or, if earlier, includible in the gross income of the Employee) within the Limitation Year. For this purpose, compensation is treated as paid on a date if it is actually paid on that date or it would have been paid on that date but for an election under Section 401(k), 403(b), 408(k), 408(p)(2)(A)(i), 457(b), 132(f), or 125 of the Code. (b) Payment prior to Severance from Employment. In order to be taken into account for a Limitation Year, compensation within the meaning of section 415(c)(3) of the Code must be paid or treated as paid to the Employee (in accordance with the rules of Section 4.3(a) of this Amendment) prior to Severance from Employment (within the meaning of section 401(k)(2)(B)(i)(I) of the Code) with the Employer maintaining the Plan DB Interim Amendment for Plan #02 10

11 (c) Certain de minimis timing differences. Notwithstanding the provisions of 4.3(a) of this Amendment, unless elected otherwise in the Adoption Section compensation for a Limitation Year includes amounts earned during that Limitation Year but not paid during that Limitation Year solely because of the timing of pay periods and pay dates if: (1) These amounts are paid during the first few weeks of the next Limitation Year; (2) The amounts are included on a uniform and consistent basis with respect to all similarly situated Employees; and (3) No compensation is included in more than one Limitation Year. (d) Compensation paid after severance from employment. (1) In general, any compensation described in Paragraph (d)(2) of this Section does not fail to be compensation (within the meaning of section 415(c)(3) of the Code) pursuant to the rule of Paragraph 4.3(a) of this Section merely because it is paid after the Employee's severance from employment with the Employer, provided the compensation is paid by the later of 2-1/2 months after severance from employment with the Employer or the end of the Limitation Year that includes the date of severance from employment with the Employer. In addition, the Plan may provide that amounts described in Paragraph (d)(3) of this Section are included in compensation (within the meaning of section 415(c)(3) of the Code) if: (A) Those amounts are paid by the later of 2-1/2 months after severance from employment with the Employer or the end of the Limitation Year that includes the date of severance from employment with the Employer; and (B) Those amounts would have been included in the definition of Compensation if they were paid prior to the Employee's severance from employment with the Employer. (2) Regular pay after severance from employment. An amount is described in this paragraph (d)(2) if: (A) The payment is regular compensation for services during the Employee's regular working hours, or compensation for services outside the Employee's regular working hours (such as overtime or shift differential), commissions, bonuses, or other similar payments; and (B) The payment would have been paid to the Employee prior to a severance from employment if the Employee had continued in employment with the Employer. (3) Leave cash-outs and deferred compensation. An amount is described in this Paragraph (d)(3) if the amount is either: (A) Payment for unused accrued bona fide sick, vacation, or other leave, but only if the Employee would have been able to use the leave if employment had continued; or (B) Received by an Employee pursuant to a nonqualified unfunded deferred 2007 DB Interim Amendment for Plan #02 11

12 compensation plan, but only if the payment would have been paid to the Employee at the same time if the Employee had continued in employment with the Employer and only to the extent that the payment is includible in the Employee's gross income. (4) Other post-severance payments. Any payment that is not described in Paragraph (d)(2) or (3) of this Section is not considered compensation under Paragraph (d)(1) of this Section if paid after severance from employment with the Employer, even if it is paid within the time period described in Paragraph (d)(1) of this Section. Thus, compensation does not include severance pay, or parachute payments within the meaning of section 280G(b)(2) of the Code, if they are paid after severance from employment with the Employer, and does not include post-severance payments under a nonqualified unfunded deferred compensation plan unless the payments would have been paid at that time without regard to the severance from employment. (e) The Employer may elect in the Adoption Section to include salary continuation payments for military service and Disabled Participants. The rule of Paragraph 4.3(b) does not apply to 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 the Plan 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, but only if the Plan so provides. In addition, the rule of Paragraph 4.3(b) does not apply to compensation paid to a Participant who is permanently and totally Disabled (as defined in section 22(e)(3) of the Code) if either the Participant is not a Highly Compensated Employee (as defined in the Plan immediately before becoming Disabled, or the Plan provides for the continuation of Compensation on behalf of all Participants who are permanently and totally Disabled for a fixed or determinable period, but only if the plan so provides. (f) Compensation shall include amounts that are includible in the gross income of an Employee under the rules of section 409A or section 457(f)(1)(A) of the Code or because the amounts are constructively received by the Employee DB Interim Amendment for Plan #02 12