Town of Little Compton, RI Article ONE DEFINITIONS

1.1 DEFINITIONS.

[Ord. 5/18/00; Ord. 6/13/02; Ord. 12/19/02]

For purposes of this Plan, unless the context or an alternative definition specified within another Article provides otherwise, the following words and phrases shall have the meanings indicated:

1.1 "ACCRUED BENEFIT" shall mean the amount to which a Participant would be entitled under the benefit formula in Section 4.1 commencing at his Normal Retirement Date, based upon the Participant's Average Compensation, Years of Service and the Plan provisions in effect as of the determination. Notwithstanding the foregoing, in the case of a Participant who is a member of (a) the Police Officers Union and is employed by the Town of Little Compton Police Department or (b) the Firefighters Union and is employed by the Town of Little Compton Fire Department, the Accrued Benefit shall be determined without regard to the fact that, effective July 1,1992, the Participant shall receive a monthly retirement benefit, after twenty-five (25) Years of Service, equal to fifty percent (50%) of his Compensation immediately prior to his termination of Service. In the case of any Participant who is credited with at least one Hour of Service in a Plan Year beginning on or after January 1, 1988, the accrual of benefits may not be discontinued nor may the rate of such accruals be reduced solely on account of the Participant's attainment of any specified age. The treatment of benefit accruals beyond Normal Retirement Date shall be determined in accordance with Section 4.2. Effective for the period from July 1, 1993 through June 30, 1997, Years of Service during which a member of the Firefighters Union declined to make Employee Mandatory Contributions shall be disregarded for purposes of determining such Participant's Accrued Benefit.

Notwithstanding the foregoing provisions of this Section 1.1, effective July 1, 1997, Employee Mandatory Contributions are no longer required to be made to the Plan by members of the Firefighters Union. Effective for the period from July 1, 1994 through June 30, 2000, Years of Service during which a member of the Police Officers Union declined to make Employee Mandatory Contributions shall be disregarded for purposes of determining such Participant's Accrued Benefit.

1.2 "ACTUARIAL EQUIVALENT" shall mean a benefit that has a value equal to any benefit otherwise payable under the Plan as determined by the Actuary.

(a) Equivalence, for all purposes except for determining an Actuarial Equivalent single sum, shall be determined using the following factors:

	Pre-Retirement	Post-Retirement
Interest:	7%	7%
Mortality:	None	1984 Unisex Pension Mortality Table

(b) Effective January 1, 2000, the distribution to a Participant of a benefit under the Plan in the form of an Actuarial Equivalent single sum shall be determined in accordance with (1) and (2) below, whichever produces the greater single sum amount:

(1)	Pre-Retirement	Post-Retirement
Interest:	7%	7%
Mortality:	None	1984 Unisex Pension Mortality Table

(2)	Pre-Retirement	Post-Retirement
Interest:	The "applicable interest rate" defined below	The "applicable interest rate" defined below
Mortality:	The "applicable mortality table" defined below	The "applicable mortality table" defined below

For purposes of this Section 1.2, the term "applicable interest rate" means the annual rate of interest on 30-year Treasury securities for the calendar month that is two (2) months preceding the first day of the Plan Year in which the distribution occurs. The "applicable interest rate" shall remain constant for one calendar month year.

For purposes of this Section 1.2, the term "applicable mortality table" means the table prescribed by the Secretary of the Treasury. Such table shall be based on the prevailing commissioner's standard table, as described in Section 807(d)(5)(A) of the Code, used to determine reserves for group annuity contracts issued on the dates as of which the present value is being determined (without regard to any other subparagraphs of Section 807(d)(5) of the Code). The applicable mortality table is based upon a fixed blend of fifty percent (50%) of the male mortality rates and fifty percent (50%) of the female mortality rates from the 1983 Group Annuity Mortality

Table, which mortality table is set forth in Internal Revenue Service Revenue Ruling 95-6. Notwithstanding the foregoing, effective December 31, 2002, for purposes of this Section 1.2, the term "applicable mortality table" means the mortality table based upon a fixed blend of fifty (50%) percent of the unloaded male mortality rates and fifty (50%) percent of the unloaded female mortality rates underlying the 1994 Group Annuity Reserving Table, projected to 2002, which mortality table is set forth in Internal Revenue Service Revenue Ruling 2001-62.

(c) In the event the factors used to determine Actuarial Equivalent are modified, the value of a Participant's benefit, on or after the effective date of such change, shall be the greater of (1) the Actuarial Equivalent of the Accrued Benefit determined as of the day before the effective date of the change in such factors, or (2) the Actuarial Equivalent of the Accrued Benefit as of the date of determination computed using the new factors. Notwithstanding the foregoing provisions of this Section 1.2(c), this Section does not apply to the modification of the factors used to determine Actuarial Equivalent pursuant to Section 1.2(b)(2) which is effective for distributions on or after January 1, 2000, as permitted by Income Tax Regulation Section 1.417(e)-1(d)(10).

1.3 "ACTUARY" shall mean an actuary appointed by the Administrator under whose supervision valuation reports and benefit calculations are performed for the Plan. The actuary must be enrolled under Federal practice.

1.4 "ADMINISTRATOR" shall mean the Pension Committee appointed in accordance with the provisions of Section 8.1.

1.5 "BENEFICIARY" shall mean any person, trust, organization or estate entitled to receive a death benefit under the Plan on the death of a Participant.

1.6 "BREAK IN SERVICE" shall mean a twelve (12)-month computation period (as used for measuring Years of Service for vesting purposes) in which an Employee or Participant is not credited with more than five hundred (500) Hours of Service.

1.7 "CODE" shall mean the Internal Revenue Code of 1986, as amended from time to time.

1.8 "COMPENSATION" shall mean:

(a) The monthly equivalent of a Participant's base annual compensation paid by the Employer as in effect on July 1 of each Plan Year, but exclusive of bonuses and overtime, and exclusive of any program of deferred compensation, employee benefits, or additional remuneration payable other than in cash. In the case of a Participant whose normal work schedule consists of less than forty (40) hours per week, "Compensation" shall mean the monthly equivalent of a Participant's Compensation paid by the Employer in a Plan Year, but exclusive of any program of deferred compensation, employee benefits, or additional numeration payable other than in cash. Compensation shall include any amounts deferred under a salary reduction agreement in either a Code Section 401(k) plan or under a Code Section 125 plan maintained by the Employer.

(b) Compensation Limitations. Only the first $150,000 (or such larger amount when prescribed by the Secretary of the Treasury or his delegate) of each Participant's Compensation will be considered for all purposes under the Plan. The increase in the $150,000 limit in effect on January 1 of any calendar year is effective for the Plan Year commencing in such calendar year. If a Participant's benefit for the current Plan Year is determined with reference to annual Compensation paid to him in a prior Plan Year, the Compensation for such prior Plan Year shall be limited to $150,000 or the increase in the $150,000 limit in effect for such prior Plan Year.

(1) Decrease in Limit. 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, compensation for any prior determination period shall be limited as provided by the Employer in Section 1.8(b)(3) of this Amendment.

(2) Cost-of-Living Adjustment. The $200,000 limit on annual compensation in Section 1.8(b)(1) shall be adjusted for cost-of-living increases in accordance with Section 401(a)(17)(B) of the Code. 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.

(3) Compensation Limit for Prior Determination Periods. In determining benefit accruals in Plan Years beginning after December 31, 2001, the annual compensation limit in Section 1.8(b)(1), Increase in 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 beginning in 1997, 1998 or 1999; and $170,000 for any determination period beginning in 2000 or 2001.

(c) "AVERAGE COMPENSATION" shall mean the Compensation of a Participant averaged over the five (5) consecutive calendar years in his last ten (10) calendar years as an Employee producing the highest average prior to the earlier of (1) his termination of Service or (2) termination of the Plan. Effective July 1, 2000, "Average Compensation" shall mean the Compensation of a Participant averaged over the three (3) consecutive calendar years in his last ten (10) calendar years as an Employee producing the highest average prior to the earlier of (1) his termination of Service or (2) termination of the Plan. In the event a Participant has completed less than sixty (60) (thirty-six (36), effective July 1, 2000) consecutive complete calendar months as an Employee receiving Compensation from the Employer, his Average Compensation shall be determined based upon all complete calendar months as an Employee. Notwithstanding the foregoing, effective July 1, 1992, in the case of a Participant who is a member of the Police Officers Union and is employed by the Town of Little Compton Police Department, "Average Compensation" shall mean the Compensation of the Participant averaged over the twelve (12)-consecutive-month period from July 1 through June 30 in which the Participant had the highest Compensation prior to his termination of Service. Notwithstanding the foregoing, in the case of a Participant who is a member of the Firefighters Union and is employed by the Town of Little Compton Fire Department, "Average Compensation" shall mean the Compensation of the Participant averaged over the twelve (12)-consecutive-month period from July 1 through June 30 in which the Participant had the highest Compensation prior to his termination of Service.

1.9 "EFFECTIVE DATE" The Plan's initial Effective Date is January 1, 1972. The Effective Date of this restated Plan, on and after which it supersedes the terms of the existing Plan document, is January 1, 2002, except where the provisions of the Plan shall otherwise specifically provide. The rights of any Employee or Participant who separated from the Employer's service prior to that date shall be established under the terms of the Plan and Trust as in effect at the time of his separation, unless he subsequently returns to service with the Employer. Rights of spouses or beneficiaries of such Participants shall also be governed by those documents.

1.10 "EMPLOYEE" shall mean a common law employee of the Employer. Employee shall not include any individual who the Employer has classified as an independent contractor solely on account of his reclassification by the Internal Revenue Service as an employee.

1.11 "EMPLOYEE MANDATORY CONTRIBUTIONS" shall mean contributions made by the Employees as set forth in Section 7.2.

1-12 "EMPLOYER" shall mean the Town of Little Compton.

1-13 "EMPLOYMENT DATE" shall mean the first date as of which an Employee is credited with an Hour of Service, provided that in the case of a Break in Service, his Employment Date shall be the first date thereafter as of which he is credited with an Hour of Service.

1-14 "FIREFIGHTERS UNION" shall mean Local 3957, International Association of Fire Fighters, AFC-CIO.

1.15 "HOUR OF SERVICE" shall mean:

(a) Each hour for which an Employee is paid or entitled to payment for the performance of duties for the Employer. These hours shall be credited to the Employee for the computation period in which the duties are performed; and

(b) Each hour for which an Employee is paid, or entitled to payment, by the Employer on account of a period of time during which no duties are performed (irrespective of whether the employment relationship has terminated) due to vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty or leave of absence. No more than five hundred and one (501) Hours of Service shall be credited under this subsection for any single continuous period (whether or not such period occurs in a single computation period). 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 shall not be credited to the Employee if such payment is made or due under a plan maintained solely for the purpose of complying with applicable worker's compensation, or unemployment compensation or disability insurance laws. Hours of Service shall not be credited for a payment which solely reimburses an Employee for medical or medically related expenses incurred by the Employee. Hours of Service under this subsection shall be calculated and credited pursuant to section 2530.200b-2 of the Department of Labor regulations which is incorporated herein by this reference; and

(c) Each hour for which back pay, irrespective of mitigation of damages, is either awarded or agreed to by the Employer. The same Hours of Service shall not be credited both under subsection (a) or subsection (b), as the case may be, and under this subsection (c). These Hours of Service shall be credited to the Employee for the computation period or periods to which the award or agreement pertains rather than the computation period in which the award, agreement or payment is made.

1.16 "NORMAL RETIREMENT AGE" shall mean a Participant's 62nd birthday or, if later, the fifth anniversary of his initial Employment Date. Notwithstanding the foregoing, effective July 1, 1992, in the case of a Participant who is a member of (a) the Police Officers Union and is employed by the Town of Little Compton Police Department or (b) the Firefighters Union and is employed by the Town of Little Compton Fire Department, "Normal Retirement Age" shall mean the earlier of (1) his 62nd birthday or, if later, the fifth anniversary of his initial Employment Date, or (2) the date he completes twenty-five (25) Years of Service.

Notwithstanding the foregoing provisions of this Section 1.16, in the case of a Participant who is a member of the Police Officers Union and is initially employed by the Town of Little Compton Police Department on or after July 1, 1994, "Normal Retirement Age" shall mean the later of the Participant's 55th birthday or the date he completes twenty-five (25) Years of Service.

"NORMAL RETIREMENT DATE" shall mean a Participant's attainment of Normal Retirement Age.

1.17 "PARTICIPANT" shall mean any Employee who has satisfied the eligibility requirements of Article Three and who is participating under the Plan, and shall include Participants who terminated Service with the Employer but have not received a total distribution of their vested Accrued Benefits.

1.18 "PLAN" shall mean this Plan as set forth herein and as it may be amended from time to time.

1.19 "PLAN YEAR" shall mean the twelve (12)-consecutive-month period beginning July 1 and ending June 30.

1.20 "POLICE OFFICERS UNION" shall mean Local 644, International Brotherhood of Police Officers.

1.21 "TRUST" shall mean the Trust Agreement entered into between the Employer and the Trustee forming part of this Plan, together with any amendments thereto. "Trust Fund" shall mean any and all property held by the Trustee pursuant to the Trust Agreement, together with income therefrom.

1.22 "TRUSTEE" shall mean the Trustee or Trustees appointed by the Employer in accordance with Section 8.2, and any successors thereto.

1.23 "VALUATION DATE" shall mean the annual date selected by the Actuary as of which Plan assets are valued and liabilities determined for purposes of an actuarial valuation.

1.24 "YEAR OF SERVICE" or "SERVICE" shall mean a twelve (12)-consecutive-month computation period in which an Employee is credited with one thousand (1,000) or more Hours of Service. For all purposes other than eligibility to participate in the Plan under Section 3.1, the twelve (12)-consecutive-month period from January 1 to December 31 in which an Employee is credited with one thousand (1,000) or more Hours of Service shall be the computation period. (Special rules with respect to Service in job classifications which are ineligible for Plan participation appear in Article Two.)

If a Year of Service is ever required purposes of eligibility to participate in the Plan under Section 3.1, a Year of Service shall be determined as follows: the first computation period shall be the twelve (12)-consecutive-month period commencing on the Employee's Employment Date. If the Employee is credited with one thousand (1,000) or more Hours of Service in that period he will be credited with a Year of Service for eligibility as of the last day of the twelve (12)-month period. If the Employee does not complete one thousand (1,000) or more Hours of Service in that period he shall be credited with a Year of Service for eligibility when he completes one thousand (1,000) or more Hours of Service in any vesting computation period which starts on or after his Employment Date. For vesting and accrual purposes, credit for a Year of Service shall be given upon the completion of the one thousandth (1,000th) Hour of Service in each computation period. Effective for the period from July 1, 1993 through June 30, 1997, Years of Service during which a member of the Firefighters Union declined to make Employee Mandatory Contributions shall be disregarded for vesting and accrual purposes.

Notwithstanding the foregoing provisions of this Section 1.24, effective July 1, 1997, Employee Mandatory Contributions are no longer required to be made to the Plan by members of the Firefighters Union. Effective for the period from July 1, 1994 through June 30, 2000, Years of Service during which a member of the Police Officers Union who was hired on or after July 1, 1994 and declined to make Employee Mandatory Contributions shall be disregarded for vesting and accrual purposes.