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VI. VRD/RTD’s Adoption of the STEP Plan
A. Execution of Adoption Agreement
On or about December 20, 1993, Dr. DeAngelis executed an
adoption agreement for the STEP plan on behalf of VRD/RTD, making
VRD/RTD a participating employer in the STEP plan effective as of
January 1, 1993. VRD/RTD consented in the agreement to any
future amendment of the STEP plan.
VRD/RTD elected in the adoption agreement to provide
severance benefits to its eligible employees in the amount of 10
percent of an employee’s compensation for each year of
participation, with no credit for past service. VRD/RTD also
elected not to provide the optional life insurance benefit. Drs.
DeAngelis and Domingo understood that in order for VRD/RTD to
claim deductions for its contributions to STEP they had to couch
any subsequent application for benefits in terms that appeared to
make the severance event nonvolitional.
B. Relevant Provisions in the Adoption Agreement
Eligible employees were defined in the adoption agreement as
all full-time employees, other than controlling owners, who were
21 and had completed 1 year of service and whose job title was
“doctor” or “office administrator/business mgr”. A “controlling
owner” was defined in the adoption agreement as a person who
owned more than a 25-percent voting interest in the participating
employer, unless four or fewer other persons owned in the
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Last modified: March 27, 2008