Pension Plan For Non-bargaining Employees

ROC09:120684 1
EXHIBIT 10.17

FRONTIER CORPORATION

PENSION PLAN FOR NON-BARGAINING EMPLOYEES


FRONTIER CORPORATION, a New York corporation (the "Employer"), hereby freezes, renames, amends and restates in its entirety the FRONTIER CORPORATION PENSION PLAN FOR NON-BARGAINING EMPLOYEES (formerly the Frontier Corporation Management Pension Plan) (the "Plan") for the exclusive benefit of Employees of the Employer and of Affiliated Companies who are Participants. By separate agreement with Boston Safe Deposit and Trust Company, as Trustee, the Employer has established a Trust to hold the assets of the Plan.


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Table of Contents
Page


ARTICLE I - Introduction 1 ARTICLE II - Definitions 2 ARTICLE III - Accrued Benefit 9 ARTICLE IV - Retirement Income Benefits 10 ARTICLE V - Form of Benefit Payments 17 ARTICLE VI - Death Benefits 22 ARTICLE VII - Employer Contributions 23 ARTICLE VIII - Trust Fund 24 ARTICLE IX - Employees' Benefit Committee and
Other Fiduciaries 25 ARTICLE X - Amendments 30 ARTICLE XI - Successor Employer and Merger
or Consolidation of Plans 31 ARTICLE XII - Plan Termination 33 ARTICLE XIII - Top-Heavy Provisions 36 ARTICLE XIV - Miscellaneous 39 APPENDIX A - Frontier Corporation APPENDIX B - Frontier Communications of Minnesota, Inc. APPENDIX C - Frontier Communications of New York, Inc. APPENDIX D - Frontier Communications of Pennsylvania, Inc. APPENDIX E - Frontier Communications of Georgia, Inc. APPENDIX F - Frontier Communications of Wisconsin, Inc. APPENDIX G - Frontier Communications - Lakeshore, Inc. APPENDIX H - Frontier Communications of Mondovi, Inc. APPENDIX I - Frontier Communications of Viroqua, Inc. APPENDIX J - Frontier Corporation Subsidiary Telcos APPENDIX K - Frontier Communications of Indiana, Inc. -
Telco Subs Consolidated Pension Plan APPENDIX L - Participating Affiliates and Merged Plans APPENDIX M - Frozen Accrued Benefits


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ARTICLE I
Introduction


The name of this Plan is the Frontier Corporation Pension Plan for Non-Bargaining Employees. Its purpose is to provide retirement benefits to the eligible non-bargaining Employees of Frontier Corporation and its Affiliated Companies.


This Plan was originally established effective as of July 30, 1921 and has been titled most recently the Frontier Corporation Management Pension Plan. The Plan was last restated in its entirety as of January 1, 1994 to comply with the Tax Reform Act of 1986 and to incorporate several amendments made since the previous restatement.


Effective December 31, 1996, the Plan is frozen. In addition, effective as of the same date, several other defined benefit plans of Affiliated Companies have also been frozen and merged into this Plan. The Plan is being continued to pay the frozen Accrued Benefits as Participants become eligible to receive them under the Plan's terms. Lastly, effective December 31, 1996, the name of the Plan is changed to the Frontier Corporation Pension Plan for Non-Bargaining Employees. This restatement is generally effective December 31, 1996, except that in the case of any provision which itself contains a separate effective date, the separate date shall apply.


ARTICLE II
Definitions


SECTION 2.1 "Accrued Benefit" means the annual benefit accrued as of December 31, 1996 for each Participant as set forth in Appendix M or, in the case of a Participant who was a Participant in this Plan before the 1995 and 1996 plan mergers, his benefit as calculated under the formula set forth in Appendix A.


SECTION 2.2 "Actuarial Equivalent" means the equivalent current value of a Participant's Accrued Benefit determined pursuant to the rates set forth in the Appendices.


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SECTION 2.3 "Actuary" means an enrolled actuary selected by the Committee.


SECTION 2.4 "Affiliated Company" means (1) a member of an affiliated service group within the meaning of Code section 414(m) of which the Employer is a member; (2) a member of a controlled group of corporations of which the Employer is a member; (3) an unincorporated business which is part of a group of trades or businesses (whether or not incorporated) under common control with the Employer as determined pursuant to section 414(c) of the Code; or (4) any other entity with which the Employer must be aggregated pursuant to section 414(o) of the Code. For purposes of this Section, a controlled group of corporations means a group defined under section 1563(a) of the Code determined without regard to Code sections 1563(a)(4) and 1563(e)(3)(C).


SECTION 2.5 "Annuity Starting Date" means the first day of the month with respect to which a retirement income payment is payable under the Plan.


SECTION 2.6 "Beneficiary" means, in the case of a married Participant, the Participant's surviving spouse. If the Participant is not married or if the surviving spouse of a married Participant waives the spouse's right to any death benefit, Beneficiary means any person (including a trustee) specified by the terms of this Plan to receive any death benefit which shall be payable under this Plan.


SECTION 2.7 "Board" means the Board of Directors of Frontier Corporation or any committee of the Board of Directors authorized to act on behalf of the Board. Any such Board committee shall be composed of at least three members of the Board of Directors. As used in this Plan the term "Board- appointed committee" means any other committee appointed by the Board which need not be comprised of at least three Board members but may include or consist entirely of management personnel who are not members of the Board.


SECTION 2.8 "Break in Service" means that an Employee fails to complete more than 500 Hours of Service during a Plan Year, whichever is applicable. 5
SECTION 2.9 "Code" means the Internal Revenue Code of 1986, as amended from time to time.


SECTION 2.10 "Committee" means the Employees' Benefit Committee appointed by the Board pursuant to Article IX to administer the Plan.


SECTION 2.11 "Compensation" means the total W-2 income paid by the Employer to an Employee during a Plan Year plus amounts contributed to the Employer's Tel Flex Plan and its Employees' Retirement Savings Plan during a Plan Year on behalf of an Employee pursuant to a salary reduction agreement. Compensation does not include severance pay, amounts earned after December 31, 1996, contributions made to this Plan or to any other plan of deferred compensation (other than ERSP) nor does it include an Employee's compensation in excess of $150,000 (adjusted for cost of living increases under the Code) per year.


SECTION 2.12 "Contingent Annuitant" means the person designated by a Participant to receive lifetime monthly retirement income payments after his death in accordance with Article V.


SECTION 2.13 "Deferred Retirement Date" means the first day of the month coincident with or next following the month in which a Participant actually retires after his Normal Retirement Date.


SECTION 2.14 "Disability" means a disability as defined in the Appendices.


SECTION 2.15 "Early Retirement Date" means the first day of the month coincident with or next following the month in which a Participant retires prior to Normal Retirement Age pursuant to the Appendices.


SECTION 2.16 "Election Period" means the period of time during which a Participant can elect, with the consent of his spouse, to waive the Qualified Joint and Survivor Annuity or the Qualified Pre-Retirement Survivor Annuity or can elect to revoke such a waiver. In the case of a Qualified Joint and Survivor Annuity, the Election Period is the 90 day period preceding the 6 Annuity Starting Date. In the case of a Qualified Pre-Retirement Survivor Annuity the Election Period begins on the first day of the Plan Year in which a Participant attains age 35 and ends on the date of the Participant's death.


SECTION 2.17 "Employee" means any individual who is employed by Frontier Corporation or by its Affiliated Companies which have adopted this Plan.


SECTION 2.18 "Employer" means Frontier Corporation, its predecessor or successor, or any Affiliated Company set forth in Appendix L. The term "Employer" means either one or more of the adopting companies acting individually or collectively as the context requires.


SECTION 2.19 "Employment Date" means the date on which an Employee first performs an Hour of Service for the Employer or an Affiliated Company.


SECTION 2.20 "ERISA" means the Employee Retirement Income Security Act of 1974 as amended from time to time and regulations issued thereunder.


SECTION 2.21 "Former Participant" means a Participant whose employment with the Employer has terminated, and who has a vested benefit under the Plan which has not been paid in full.


SECTION 2.22 "Hour of Service" means each hour for which an Employee is paid, or entitled to payment, during an applicable computation period in accordance with the following:


(a) Performance of Services. An Hour of Service shall be credited for each hour that an Employee is paid or entitled to payment for the performance of services for the Employer.


(b) Leaves of Absence, etc. An Hour of Service shall be credited for each hour during which no duties are performed but for which an Employee is paid or entitled to payment by the Employer (whether or not the employment relationship has terminated) for any other purpose, including without limitation payment due to vacation, holiday, illness, disability, layoff, jury duty or Leave of Absence. Credit shall also be given for 7 any maternity or paternity leave (i.e., pregnancy of the Employee, birth or adoption of the Employee's child, or caring for the Employee's child immediately following birth or adoption) taken by an Employee. No more than 501 Hours of Service shall be credited under this provision, however, to an Employee on account of any single continuous period during which no services are performed for the Employer. In addition, no Hours of Service shall be credited with respect to payments made under a plan maintained by the Employer solely for complying with applicable workers' compensation, or disability insurance laws or to payments which reimburse an Employee for medical or medically-related expenses.


(c) Back pay. To the extent not credited for either of the preceding purposes, an Employee shall be credited with an Hour of Service for each hour for which back pay, irrespective of mitigation of damages, is either awarded or agreed to by the Employer. If back pay is made with respect to one of the purposes set forth in provision (b) above, the number of creditable Hours of Service shall be subject to the limitations set forth in that provision.


(d) Computation and Crediting of Hours. The Committee shall determine the number of creditable Hours of Service in any computation period on the basis of any records kept by the Employer that accurately reflect Hours of Service. If any payments (including back pay awards) relate to any period for which no duties are performed, the number of creditable Hours of Service shall equal the number of regularly scheduled working hours upon which the payment is based. If the payment is not calculated on the basis of units of time for which the hours may be determined, the number of creditable Hours of Service shall be equal to the amount of the payment divided by the Employee's most recent hourly rate of compensation before the period during which no duties are performed. In no event, however, shall an Employee be credited with a greater number of Hours of Service than the number of regularly scheduled hours for the performance of services during the applicable period.


Hours of Service shall be credited to the computation period in which the services were performed, the period to which payments are made when no services are performed, 8 or the period to which back pay awards relate, whichever is applicable. Hours of Service pursuant to maternity/paternity leave shall be credited to the Employee in the Plan Year in which the absence from work begins only if the additional hours afforded would prevent the Participant from incurring a one year Break in Service; otherwise these hours shall be credited to the Participant in the Plan Year immediately following the date the Participant begins his absence from work. The crediting of Hours of Service for reasons other than the performance of services and the crediting of Hours of Service to computation periods shall be made in accordance with 29 C.F.R. sections 2530.200b-2(b) and (c) which are hereby incorporated by this reference.


(e) Alternative Method of Crediting Hours. In lieu of counting an Employee's actual number of Hours of Service during any computation period, the Committee shall credit each Employee who earns at least one Hour of Service during any week of employment with 45 Hours of Service for each such week.


(f) Military Service. An Hour of Service shall be credited for each hour of the normally scheduled work hours for each day during any period the Employee is on leave of absence from the Employer or any Affiliated Company for military service with the Armed Forces of the United States, but not to exceed the period required under the law pertaining to veterans' re- employment rights; provided that if he fails to report for work at the end of such leave during which he has employment rights, he shall not receive credit for hours on such leave. Notwithstanding any provision of this plan to the contrary, contributions, benefits and service credit with respect to qualified military service will be provided in accordance with 414(u) of the Internal Revenue Code.


SECTION 2.23 "Investment Manager" means any individual or corporation selected by the Board or by any Board-appointed committee having the authority to select such person who (i) is registered as an investment adviser under the Investment Advisers Act of 1940; or (ii) is a bank, as defined in that Act; or (iii) is an insurance company qualified to manage, acquire or dispose of plan assets under the laws of more than one state and each individual or corporation acknowledges in writing that he or the


9 corporation, as the case may be, is a fiduciary with respect to the Plan.


SECTION 2.24 "Leave of Absence" means any leave formally granted in conformity with the rules of the Employer, as adopted from time to time, and leave on account of continued Disability following the expiration of a period of disability benefits. A Leave of Absence for a period not exceeding one month, except a leave following the expiration of disability benefits, will be granted automatically in accordance with the rules of the Employer without approval of the Committee. The period of absence shall be credited in computing the Employee's Hours of Service and the Employee shall be eligible for all benefits during his absence. A Leave of Absence for any period in excess of one month shall not be effective unless approved in writing by the Committee and in any case in which approval is given, the Committee shall indicate the effect of such leave on the Employee's entitlement to benefits. An Employee's absence following the expiration of a period of disability benefits shall be considered as a separation from service unless the Employee is granted a Leave of Absence by the Committee. The Committee may deem such absence to be an approved Leave of Absence, however, if satisfactory evidence is furnished that a Disability was continuous during the entire period of absence.


SECTION 2.25 "Normal Retirement Age" means normal retirement age as defined in the Appendices.


SECTION 2.26 "Normal Retirement Date" means the first day of the month coincident with or next following a Participant's Normal Retirement Age.


SECTION 2.27 "Participant" means an Employee who has an Accrued Benefit listed on Appendix M or any Participant who was in the Frontier Corporation Management Pension Plan prior to the 1995 and 1996 mergers..


SECTION 2.28 "Plan" means the Frontier Corporation Pension Plan for Non-Bargaining Employees as set forth herein, as amended from time to time.


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SECTION 2.29 "Qualified Joint and Survivor Annuity" means a qualified joint and survivor annuity as defined in the Appendices.


SECTION 2.30 "Qualified Pre-Retirement Survivor Annuity" means a qualified pre-retirement survivor annuity as defined in the Appendices.


SECTION 2.31 "Trust" or "Trust Fund" means, effective January 1, 1997, the Frontier Pension Fund maintained in accordance with the terms of the trust agreement, as from time to time amended, which constitutes a part of this Plan. The Trust Fund constitutes a common trust fund for the Employer's Pension Plan for Non-Bargaining Employees, Craft Pension Plan-I and Craft Pension Plan-II, and any other plans that may subsequently be merged into the Trust Fund, all of which funds are available to pay benefits under any of the constituent plans.


SECTION 2.32 "Trustee" means Boston Safe Deposit and Trust Company or any other trustee appointed by the Board to administer the Trust.


SECTION 2.33 "Year" or "Plan Year" means the twelve-consecutive-month period ending each December 31. The Plan Year shall be the accrual computation period, the vesting computation period and the limitation year as these terms are used in regulations issued pursuant to ERISA.


SECTION 2.34 "Year of Participation" means a year of participation as defined in the Appendices.


Notwithstanding any other provision of this Plan, no service with the Employer or any Affiliated Company after December 31, 1996 shall be taken into account under this Plan for the purpose of calculating the amount of a Participant's Accrued Benefit but shall be taken into account for purposes of determining eligibility for benefits.


SECTION 2.35 "Year of Service" means a year of service as defined in the Appendices.


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For purposes of determining a Participant's Accrued Benefit, of applying the Plan's benefit formulae and of determining the length of service needed for receiving an unreduced benefit, the term Year of Service shall include only those periods of time during which the Employer or an Affiliated Company maintained this Plan or any other plan which has been merged into this Plan.


Notwithstanding any other provision of this Plan, no service with the Employer or any Affiliated Company after December 31, 1996 shall be taken into account under this Plan for the purpose of calculating the amount of a Participant's Accrued Benefit but shall be taken into account for purposes of determining eligibility for benefits.


SECTION 2.36 The masculine gender whenever used shall include the feminine and the singular shall include the plural, unless the context clearly indicates the contrary.

ARTICLE III
Accrued Benefit Accrued Benefit - ---------------
SECTION 3.1 A Participant's benefit under this Plan shall be his frozen Accrued Benefit as set forth in Appendix M, except that in the case of a Participant who was a Participant in this Plan before the 1995 and 1996 plan mergers, the Participant's Accrued Benefit shall be determined under the formula set forth in Appendix A.


Transfer Policy - ---------------
SECTION 3.2 In the case of a Participant who has a frozen Accrued Benefit in this Plan as of December 31, 1996 and who transfers employment to another Affiliated Company, such Participant shall continue to be entitled to receive his Accrued Benefit in accordance with the terms of this Plan and its Appendices that were applicable to him on December 31, 1996.


ARTICLE IV
Retirement Income Benefits
Normal Retirement - ----------------- 12
SECTION 4.1 A Participant who retires upon reaching his Normal Retirement Age shall be entitled to receive his Accrued Benefit. This benefit shall commence on the Participant's Normal Retirement Date unless a later date is chosen in accordance with the provisions of Section 5.4 and shall be paid in the form selected pursuant to the provisions of Article V.


Early Retirement Benefit - ------------------------
SECTION 4.2 Eligibility requirements for unreduced and reduced early retirement benefits, and, in the case of reduced early retirement benefits, the reduction factors, are set forth in the Appendices.


Deferred Retirement - -------------------
SECTION 4.3 Provisions for deferred retirement are set forth in the Appendices.


The actual benefit paid to the Participant shall be in the form selected pursuant to the provisions of Article V.


Disability Benefit - ------------------
SECTION 4.4 Provisions for disability benefit payments are set forth in the Appendices.


Deferred Vested Benefit - -----------------------
SECTION 4.5 Provisions for deferred vested benefits are set forth in the Appendices.


Cash out of Accrued Benefit - ---------------------------
SECTION 4.6 If a Participant terminates participation in the Plan at a time when the present value of his non-forfeitable Accrued Benefit attributable to Employer contributions is $3,500 or less, the present value of the benefit shall be paid in a lump sum in cash within one year of termination of participation. 13 Unless the Participant makes a repayment of the cashout distribution as provided below, all years of participation to which the cashout relates shall be disregarded in any subsequent determination of his Accrued Benefit under Article III.


If an individual to whom this cashout provision applies later resumes participation in the Plan, he may repay the full amount of the cashout distribution to the date of repayment, compounded annually at the rate required under Code section 411(c)(2)(C). If such repayment is made before the Participant has five consecutive one year Breaks in Service beginning after the distribution, the Accrued Benefit previously disregarded shall be restored.


Except for certain Participants whose benefits have been merged into this Plan from a Plan of an Affiliated Company as set forth in the Appendices, no cashout shall be permitted under this Plan if the present value of a Participant's Accrued Benefit exceeds $3,500.


Normal Retirement Benefit - -------------------------
SECTION 4.7 The amount of the normal retirement benefit provided shall be the greater of what a Participant or Former Participant could have received under the early retirement provisions of the Plan or the benefit commencing at his Normal Retirement Date.


Benefits Not Affected by Subsequent Social Security Changes - -----------------------------------------------------------
SECTION 4.8 Any benefits which are being paid to a Participant, Former Participant, Beneficiary or Contingent Annuitant under this Plan and the vested benefit of a Participant or Former Participant who has separated from the service of the Employer shall not be decreased by reason of any post-separation increase in the benefit levels or the wage base under Title II of the Social Security Act effective after the later of September 2, 1974, or the date of first receipt of any benefit provided by this Plan. In the case of a Participant who separates from the service of the Employer with a vested benefit and who returns to employment and participation in the Plan, his vested benefit 14 shall not be decreased by reason of any post-separation increase in Social Security benefit levels or the wage base effective after September 2, 1974, and during separation from service which would decrease the benefits to which he would have been entitled had he not returned to service after his separation.


Maximum Benefit - ----------------
SECTION 4.9 The maximum annual benefit (i.e., the benefit computed under Article III) payable under this Plan and all other defined benefit plans of the Employer shall be limited to the maximum amounts permitted under Code section 415. In general, section 415 limits a Participant's annual benefit to the lesser of $90,000 or the Participant's average annual compensation during the three consecutive Years of Service as a Participant affording the highest such average, or during all years if less than three. If the Participant has not completed ten years of participation, such maximum annual dollar benefit shall be reduced in the ratio which the number of his years of participation bears to ten; if the Participant has less than 10 years of service with the Employer, the compensation limit shall be reduced by one-tenth for each year of service (or part thereof) less then ten. The maximum dollar limitation applies to a benefit payable at the Social Security retirement age and shall be adjusted in accordance with cost of living increases in the amount determined by the Commissioner of Internal Revenue.


For any benefit payment which is to commence after the Social Security retirement age, the maximum dollar limitation shall be the actuarial equivalent of the maximum dollar limitation at the Social Security retirement age. In computing actuarial equivalency, the interest assumption shall be the lesser of five percent or the percent specified in the Plan's definition of Actuarial Equivalent.


For any benefit payment which is to commence before the Social Security retirement age, the maximum dollar limitation shall be reduced in accordance with this paragraph. The dollar limitation for a Participant who has reached age 62 but not the Social Security retirement age shall be reduced by 5/9 of 1 percent for each month by which benefits commence before the month in which the Participant attains age 65 (assuming this is 15 the Participant's Social Security retirement age). If the Participant's Social Security retirement age exceeds 65, the dollar limit shall be reduced by 5/9 of one percent for each of the first 36 months and 5/12 of 1 percent for each additional month that the date the Participant's Annuity Starting Date precedes his Social Security retirement age. For persons who retire prior to age 62 pursuant to the early retirement provisions of Section 4.2 the maximum dollar limitation shall be further reduced for months prior to age 62 on an actuarial basis, using for this purpose an interest assumption of 5 percent and the 1984 George B. Buck Mortality Table assuming a blend of 55 percent male and 45 percent female. The dollar limitation for any other benefits paid prior to age 62 shall be reduced actuarially for months prior to age 62 using the Actuarial Equivalent assumptions set forth in Section 2.2 of this Plan.


Notwithstanding the foregoing, if a Participant's annual benefit does not exceed $10,000 and he had not at any time participated in a defined contribution plan maintained by the Employer, he may receive the full amount of such retirement income benefit without regard to the limitations provided in this Section.


For purposes of this Section, a Participant's compensation means the total remuneration paid to the Participant by the Employer during the Plan Year for personal services actually rendered, after the application of any salary reduction agreement the Participant may have entered into with the Employer, excluding Employer contributions to this Plan or any other plan of deferred compensation, amounts realized upon the exercise of a stock option or the lifting of restrictions on restricted stock, amounts realized upon a disqua ...