Article 4 BENEFITS

4.1 Player Pension Benefits.

Effective with the date of this Agreement, and continuing until the expiration or termination of this Agreement, the National Basketball Association Players’ Pension Plan, as restated effective February 2, 2009, and as amended by the First, Second, Third and Fourth Amendments thereto (the “Pension Plan”), shall be continued and maintained in full force and effect. All capitalized terms used in this Section 1 not otherwise defined in this Agreement shall have the meanings set forth in the Pension Plan.

Subject to approval by the Internal Revenue Services (the “IRS”) and to the extent permitted by applicable law, and except as provided in Section 1(f) below, the NBA shall provide the following pension benefits to NBA players and former NBA players:

  1. Current Benefit. As of the date of this Agreement, the Normal Retirement Pension payable under Section 3.2 of the Pension Plan shall be $518.92 per month for each year of Credited Service payable in accordance with the provisions of the Pension Plan.
  2. Benefit Increases. Effective for the Plan Year commencing February 2, 2012 and for each subsequent Plan Year beginning during the term of this Agreement, the Normal Retirement Pension payable under Section 3.2 of the Pension Plan shall be adjusted (the monthly benefit amount following any such adjustment, the “New Monthly Benefit”), subject to Section 1(c) below, such that the New Monthly Benefit is equal to the amount that results in the actuarially-determined annual contributions to be made to the Pension Plan to fund for such New Monthly Benefit for the applicable Plan Year to equal the sum of (i) the actuarially-determined annual contributions to be made to the Pension Plan to fund the “Baseline Benefit” (defined below) for such Plan Year and (ii) $10 million; provided, however, that in no event shall the New Monthly Benefit for any Plan Year be less than the New Monthly Benefit in effect for the immediately preceding Plan Year (for purposes of the foregoing, the “New Monthly Benefit” as of the date of this Agreement is $518.92). The “Baseline Benefit” means the Normal Retirement Pension amount in effect under the Pension Plan prior to the additions of the benefit increase amounts set forth in Sections 3.2(z) and 3.2A of the Pension Plan, as adjusted for future increases in the cost-of-living in the manner provided for in Section 415(d)(2) of the Internal Revenue Code of 1986, as amended (the “Code”).
    1. Any increase in the New Monthly Benefit after the date of this Agreement shall be effective as of the first day of the month following the beginning of the Plan Year of the Pension Plan to which the increase relates (the “New Benefit Increase Commencement Date”), shall apply only to any benefit payment or payments to be made on or after the applicable New Benefit Increase Commencement Date, and shall not require the recalculation of any benefit payment or payments made prior to the applicable New Benefit Increase Commencement Date.
    2. The amount of any New Monthly Benefit which exceeds the Baseline Benefit (other than any death benefits payable to a beneficiary pursuant to Article VII of the Pension Plan) shall not be payable in any of the following forms of payment provided for under the Pension Plan: (i) a lump sum payment; (ii) monthly installments of a fixed amount; (iii) monthly installments for a fixed period; and (iv) monthly installments which are temporarily increased based upon the player’s estimated social security benefit.
  3. Limitations on Benefits. Notwithstanding anything contained herein to the contrary:
    1. Neither (a) the benefits accrued or payable to any player or player’s beneficiary under the Pension Plan for a Plan Year nor (b) the New Monthly Benefit for a Plan Year shall exceed the maximum benefit amount permitted under the Code (and the regulations issued thereunder) as in effect for that Plan Year (as adjusted in accordance with the actuarial factors specified in the Pension Plan and as in effect on the date that the benefit accrues or commences (or is paid) or for the Plan Year for which the New Monthly Benefit is determined), as such limits may be adjusted for future increases in the cost-of-living in the manner provided under Section 415(d)(2) of the Code.
    2. Neither (a) the benefits accrued or payable to any player or player’s beneficiary under the Pension Plan for a Plan Year nor (b) the New Monthly Benefit for a Plan Year shall exceed the maximum benefit amount permitted under the Code (and the regulations issued thereunder), as in effect for the February 2, 2010 - February 1, 2011 Plan Year, as such limits may be adjusted for future increases in the cost-of-living in the manner prescribed by Section 415(d)(2) of the Code.
    3. If all or any portion of the actuarially-determined annual contributions to be made to the Pension Plan would not be fully deductible under the Code when paid to the Pension Plan, the New Monthly Benefit shall not exceed the amount which would result in all of such contributions being fully deductible when paid. The Players Association shall be given written notice of any such determination.
  4. Pre-1965 Players. Pre-1965 Players shall continue to be entitled to receive the Normal Retirement Benefit in the amount and on the terms and conditions set forth in Article XX of the Pension Plan. Any benefits that are unable to be paid to Pre-1965 Players under the Pension Plan because of the benefit limitations imposed by Section 415 of the Code shall be paid to such Pre-1965 Players pursuant to the National Basketball Association Excess Benefit Plan for Pre-1965 Players (the “Pre-1965 Players Excess Benefit Plan”).
  5. Pre-1965 Retirees. Pre-1965 Retirees shall continue to be entitled to receive the Retirement Benefit in the amount and on the terms and conditions set forth in Article XXA of the Pension Plan.
  6. Players Employed by Toronto.

    1. Players employed by Maple Leaf Sports & Entertainment Ltd. (or any successor thereto) (“Toronto”) or by an NBA Team located in any other country other than the United States shall receive pension benefits of comparable value. Players employed by Toronto (“Toronto Players”) shall continue to receive such benefits by means of the Pension Plan and a separate pension plan maintained by Toronto (the “Toronto Plan”); provided, however, that a player shall not be eligible to participate (or continue to participate) in the Pension Plan for any period of time during which the player is both a resident of Canada and a Toronto Player (a “Canadian Resident”). Toronto shall provide an alternative arrangement to the Canadian Resident, subject to Section 1(f)(2) below.

      If the participation of Toronto Players in the Pension Plan would, at any time, result in the Pension Plan becoming subject to Canadian Provincial Pension Legislation and/or Canadian Federal Tax Laws (to the extent that the application of such tax laws would result in adverse tax consequences to the Pension Plan, the NBA Teams and/or the Toronto Players) or result in the Toronto Plan’s failure, at any future time, to either be qualified under the Code or registered under Canadian Provincial Pension Legislation and/or Canadian Federal Tax Laws, then any obligation to establish, maintain and/or make contributions to the Pension Plan in respect of Toronto Players and the Toronto Plan pursuant to this Agreement or pursuant to any prior collective bargaining agreement shall terminate; provided, however, that any such termination shall not impair the legally binding effect of any other provision of this Agreement or the legally binding effect (if any) of any other provision of any prior collective bargaining agreement, nor shall it create any right (i) to unilaterally implement during the term of this Agreement any terms concerning the provision of pension benefits to the players, (ii) to lockout, or (iii) to strike. In the event of such termination, Toronto shall provide an alternative arrangement to the Toronto Players, subject to Section 1(f)(2) below.

    2. The NBA and the Players Association shall agree upon the type(s) of alternative arrangement to be provided pursuant to this Section 1(f) to either a Toronto Player or Canadian Resident. Such alternative arrangement shall be at an annual cost (as determined on an after-tax basis) to Toronto equal to the annual accrual cost that Toronto would have incurred under the Pension Plan and the Toronto Plan.

  7. Pension Plan Tax-Qualification Status. Notwithstanding anything else in this Agreement: (1) if any change or amendment made to the Code, the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or to any regulations (whether final, temporary or proposed) or rulings issued thereunder; (2) if any interpretation, application or enforcement (or any proposed interpretation, application or enforcement), by a court of competent jurisdiction in the United States or by the IRS, of the Code, ERISA, or any regulations or rulings issued thereunder; (3) if any regulations (whether final, temporary or proposed) or rulings issued by the IRS under the Code or ERISA; or (4) if any provisions of this Agreement, including any of the amendments or benefit increases to be provided under the Pension Plan pursuant to Section 1, would result in the Pension Plan no longer being a tax-qualified plan under Section 401(a) of the Code, or would require NBA Teams to incur costs over and above any costs required to be incurred to implement the provisions of this Agreement or any prior collective bargaining agreement in order for the Pension Plan to maintain its tax-qualified status under Section 401(a) of the Code (provided, however, that such additional costs are incurred solely in connection with the provision of pension benefits to their non-player employees or to non-player employees of affiliates (within the meaning of Sections 414(b), (c) or (m) of the Code) of such Teams), then any obligation to maintain and/or make contributions to the Pension Plan pursuant to this Agreement or pursuant to any prior collective bargaining agreement shall terminate; provided, however, that any such termination shall not impair the legally binding effect of any other provision of this Agreement or the legally binding effect (if any) of any other provision of any prior collective bargaining agreement, nor shall it create any right (i) to unilaterally implement during the term of this Agreement any terms concerning the provision of pension benefits to the players, (ii) to lockout, or (iii) to strike. In the event of such termination, the NBA Teams shall provide an alternative arrangement to the players. The NBA and the Players Association shall agree upon the type(s) of alternative arrangement to be provided. The costs of the alternative arrangement to be provided shall be at an annual cost (as determined on an after-tax basis) to the NBA Teams equal to the annual accrual cost that such Teams would have incurred under the Pension Plan to fund the benefit described in this Section 1, commencing on the date of termination.
  8. Amounts to be Applied Against New Benefit Amount. The following amounts shall be applied against the New Benefit Amount provided for by Section 8 below:
    1. The greater of (A) Fifty (50) percent of the increase in the amount of the actuarially determined annual contributions to be made for any Plan Year to the Pension Plan to fund the difference between (1) the New Monthly Benefit for such Plan Year ($518.92 for the Plan Year commencing February 2, 2011) over (2) the Baseline Benefit (the “New Benefit Cost Increase”) and (B) the New Benefit Cost Increase minus $5 million;
    2. Fifty (50) percent of the increase in the amount of the actuarially-determined annual contributions to be made for a Plan Year to the Pension Plan to fund the Normal Retirement Benefits for Pre-1965 Players described in Section 20.3(a)(v) of the Pension Plan over the amount of the actuarially determined annual contributions that would be required to be made for that Plan Year to the Pension Plan in order to fund the Normal Retirement Benefits for Pre-1965 Players described in Section 20.3(a)(iv) of the Pension Plan had Section 20.3(a)(v) of the Pension Plan never been in effect (the “Pre-1965 Player Cost Increase”);
    3. Fifty (50) percent of the costs incurred for a Plan Year in order to provide the excess portion of the benefit amount described in Pension Plan Section 20.3(a)(v) under the Pre-1965 Players Excess Benefit Plan over the costs that would be incurred for that Plan Year in order to provide for the excess portion of the benefit amount described in Pension Plan Section 20.3(a)(iv) under the Pre-1965 Players Excess Benefit Plan had Section 20.3(a)(v) of the Pension Plan never been in effect (the “Pre-1965 Player Excess Benefit Cost Increase”);
    4. Fifty (50) percent of the amount of the actuarially-determined annual contributions to be made for a Plan Year to the Pension Plan to fund the Retirement Benefits for Pre-1965 Retirees described in Section 20A.3(a) of the Pension Plan (the “Pre-1965 Retiree Cost Increase”); and
    5. One hundred (100) percent of the costs, including the cost of professional fees (e.g., attorneys, accountants, actuaries and consultants) (“Professional Fees”), incurred in connection with the determination and implementation of any alternative benefits pursuant to Sections 1(f) and/or 1(g).
    For purposes of this Section 1(h), in determining the New Benefit Cost Increase, the Pre-1965 Player Cost Increase, the Pre-1965 Player Excess Benefit Cost Increase, and the Pre-1965 Retiree Cost Increase for a Plan Year, the annual contributions relating to such cost increases (and in the case of the Pre-1965 Player Excess Benefit Cost Increase, the costs incurred relating to such cost increase) shall be determined based on the law in effect for that Plan Year, taking into account (i) any new law or change or amendment made to ERISA, the Code and/or other applicable law, or to any regulations (whether final, temporary or proposed), rulings or formal guidance issued thereunder and (ii) any regulations (whether final, temporary or proposed), rulings or formal guidance issued under ERISA or the Code.
  9. Actuarial Determinations.
    1. The parties agree that, for each Plan Year, the determination of the New Monthly Benefit under Section 1(b), the determinations described in Section 1(c)(3), and the determination of the New Benefit Cost Increase, the Pre-1965 Player Cost Increase, the Pre-1965 Player Excess Benefit Cost Increase, and the Pre-1965 Retiree Cost Increase under Section 1(h) shall each be made by the actuaries of the Pension Plan, in all instances using reasonable actuarial assumptions, factors, methods and projections. Any such determinations shall be binding and conclusive.
    2. All relevant actuarial assumptions, factors, methods and projections used in making the determinations described in Section 1(b) shall be the same for both determining the actuarially-determined annual contributions that would have been made to the Plan for a Plan Year in order to fund for the Baseline Benefit and determining the actuarially-determined annual contributions to be made to the Pension Plan for that Plan Year in order to fund for the New Monthly Benefit.

4.2 Player 401(k) Benefits.

Except as set forth below in this Section 2, and subject to approval by the IRS, effective with the date of this Agreement, and continuing until the expiration or termination of this Agreement, the NBA shall provide the following 401(k) benefits to NBA players:

  1. Benefits in accordance with the NBA-NBPA 401(k) Savings Plan as restated effective November 1, 2009, and as amended by the First and Second Amendments thereto (the “401(k) Plan”). The 401(k) Plan shall continue to provide for (1) deferrals by players pursuant to Section 401(k) of the Code and (2) except as may be limited below, Team matching contributions in respect of player deferrals for a Salary Cap Year, as requested in writing by the Players Association. The request for the matching contributions by the Players Association for a Season shall be made in writing prior to the commencement of that Season. Team matching contributions and player deferrals shall at all times be subject to all applicable limitations under the Code, including, but not limited to, the limitation on contributions under Code Section 415, the maximum limitation on compensation under Code Section 401(a)(17), and the maximum limitation on 401(k) deferrals under Code Section 402(g). The cost of funding all matching contributions made by Teams under the 401(k) Plan (i) shall be applied against the New Benefit Amount provided for by Section 8 below, and (ii) shall be limited to the portion of the New Benefit Amount, if any, that is available for this purpose pursuant to Section 8(b)(2) below. Any matching contributions to be made to the 401(k) Plan in respect of each Season shall be made no later than thirty (30) days following the completion of the BRI Audit Report for the Salary Cap Year covering such Season.

    Notwithstanding the foregoing, the total amount of the deferral contributions to be made by players to the 401(k) Plan and the Team matching contributions to be made to the 401(k) Plan in respect of deferral contributions made by players under the 401(k) Plan shall be limited to an amount that, taking into account only compensation paid to current players by the Teams, would result in all of such deferral contributions and matching contributions being fully deductible under the Code (and, where applicable, Canadian income tax laws) when paid to the 401(k) Plan. If, for any reason, all or a portion of the deferral contributions and/or Team matching contributions to be made to the 401(k) Plan will not, when paid to the 401(k) Plan, be fully deductible under the Code, the parties agree that the contributions shall be reduced to result in all such contributions being fully deductible when paid.

  2. The terms of the 401(k) Plan shall continue to permit participation by Toronto Players on a tax-effective basis under Canadian income tax laws; provided, however, that a player shall not be eligible to participate in the 401(k) Plan for the period of time during which the player is a Canadian Resident. If either (1) the NBA and the Players Association should determine that the 401(k) Plan cannot continue to be provided to Toronto Players on a tax-effective basis under Canadian income tax laws or (2) a Toronto Player is a Canadian Resident, Toronto shall provide an alternative arrangement for Toronto Players or, if applicable, the Canadian Resident, in lieu of the 401(k) Plan. The NBA and the Players Association shall agree upon the type(s) of alternative arrangement to be provided. The costs of the alternative arrangement to be provided shall be at an annual cost (as determined on an after-tax basis) to Toronto equal to the annual cost that Toronto would have incurred under the 401(k) Plan with respect to the Toronto matching contributions. The cost to Toronto of providing for any such alternative arrangement (i) shall be applied against the New Benefit Amount provided for by Section 8 below, and (ii) shall be limited to the portion of the New Benefit Amount, if any, that is available for this purpose pursuant to Section 8(b)(2) below.

  3. All costs, including the cost of Professional Fees, incurred in connection with the determination and implementation of any alternative arrangement pursuant to Section 2(b) and/or Section 2(d) shall be (1) paid by the Teams, (2) applied against the New Benefit Amount provided for by Section 8 below, and (3) limited to the portion of the New Benefit Amount, if any, that is available for this purpose pursuant to Section 8(b)(2).

  4. Notwithstanding anything else in this Agreement: (1) if any change or amendment made to the Code, ERISA, or to any regulations (whether final, temporary or proposed) or rulings issued thereunder; (2) if any interpretation, application or enforcement (or any proposed interpretation, application or enforcement), by a court of competent jurisdiction in the United States or by the IRS, of the Code, ERISA, or any regulations or rulings issued thereunder; (3) if any regulations (whether final, temporary or proposed) or rulings issued by the IRS under the Code or ERISA; or (4) if any provisions of this Agreement would result in the 401(k) Plan no longer being a tax-qualified plan under Section 401(a) of the Code, or would require NBA Teams to incur costs over and above any costs required to be incurred to implement the provisions of this Agreement or any prior collective bargaining agreement in order for the 401(k) Plan to maintain its tax-qualified status under Section 401(a) of the Code (provided, however, that such additional costs are incurred solely in connection with the provision of benefits to their non-player employees or to non-player employees of affiliates (within the meaning of Sections 414(b), (c) or (m) of the Code) of such Teams), then any obligation to maintain and/or make contributions to the 401(k) Plan pursuant to this Agreement or pursuant to any prior collective bargaining agreement shall terminate; provided, however, that any such termination shall not impair the legally binding effect of any other provision of this Agreement or the legally binding effect (if any) of any other provision of any prior collective bargaining agreement, nor shall it create any right (i) to unilaterally implement during the term of this Agreement any terms concerning the provision of 401(k) benefits to the players, (ii) to lockout, or (iii) to strike. In the event of such termination, the NBA Teams shall provide an alternative arrangement to the players. The NBA and the Players Association shall agree upon the type(s) of alternative arrangement to be provided. The alternative arrangement to be provided shall be at an annual cost (as determined on an after-tax basis) to the NBA Teams equal to the annual cost that such Teams would have incurred under the 401(k) Plan with respect to Team matching contributions commencing on the date of termination. The cost of funding of any such alternative arrangement (x) shall be applied against the New Benefit Amount provided by Section 8 below, and (y) shall be limited to the portion of the New Benefit Amount, if any, that is available for this purpose pursuant to Section 8(b)(2) below.

  5. All capitalized terms used in this Section 2 not otherwise defined in this Agreement shall have the meanings set forth in the 401(k) Plan.

4.3 Player Supplemental Medical Benefits.

Except as set forth below in this Section 3, effective with the date of this Agreement, and continuing until the expiration or termination of this Agreement, the NBA shall provide the following supplemental medical benefits to NBA players:

  1. Benefits in accordance with the terms of the NBPA-NBA Supplemental Benefit Plan as restated June 1, 2008, and as amended from time to time (the “Supplemental Benefit Plan”) and the Agreement and Declaration of Trust of the NBPA-NBA Supplemental Benefit Plan, established July 22, 2004 (the Trust created thereunder to be referred to hereinafter as the “SBP Trust”). The SBP Trust shall continue to be jointly operated and administered by the NBA and Players Association in accordance with Section 302(c)(5) of the Labor Management Relations Act of 1947, as amended, and the provisions of the SBP Trust and the Supplemental Benefit Plan. It is intended by the NBA and Players Association that the Supplemental Benefit Plan and SBP Trust shall continue to constitute (1) a collectively-bargained voluntary employees’ beneficiary association (“VEBA”) that qualifies as a tax exempt organization under the provisions of Section 501(c)(9) of the Code, and (2) a health reimbursement arrangement that is administered and operated in compliance with IRS rules applicable to such arrangements.
    1. The SBP Trust and the Supplemental Benefit Plan shall continue to be operated and administered for the purpose of providing certain health-related benefits to players who played in the NBA during and/or after the 2000-01 Season in accordance with provisions set forth in the Supplemental Benefit Plan.
    2. The Supplemental Benefit Plan shall be operated and administered in accordance with a plan document that is separate and apart from the Summary Plan Description to be prepared with respect to the Supplemental Benefit Plan.
    1. All costs of funding the Supplemental Benefit Plan and (2) all costs, including the cost of Professional Fees, incurred in connection with the operation and administration of the SBP Trust and the Supplemental Benefit Plan, and in connection with the determination and implementation of any alternative arrangement pursuant to Section 3(f) and/or 3(g) shall be (i) paid by the Teams, (ii) applied against the New Benefit Amount provided for by Section 8 below, and (iii) limited to the portion of the New Benefit Amount, if any, that is available for this purpose pursuant to Section 8(b)(7) below. Except as may otherwise be agreed to by the NBA and the Players Association, any contributions to fund the Supplemental Benefit Plan in respect of each Salary Cap Year shall be made no later than ninety (90) days following the completion of the BRI Audit Report for such Salary Cap Year.
  4. The daily operations of the Supplemental Benefit Plan shall continue to be administered by an independent third-party administrator, as selected by the trustees of the SBP Trust, at the administrator’s office. In the exercise of its responsibilities, the independent third-party administrator shall be required to comply with ERISA and all other applicable laws and to act in a manner that is consistent with the provisions of the SBP Trust and the Supplemental Benefit Plan.
  5. The SBP Trust and the Supplemental Benefit Plan shall be operated and administered in a manner that will result in all contributions by the Teams being fully deductible under the Code (and, where applicable, Canadian income tax laws) when paid to the SBP Trust. If any Team is disallowed a deduction (in whole or in part) for such contributions, and unless the NBA determines otherwise, the obligation to maintain the Supplemental Benefit Plan and to make further contributions to the SBP Trust shall immediately terminate; provided, however, that any such termination shall not impair the legally binding effect of any other provision of this Agreement, or the legally binding effect (if any) of any other provision of any prior collective bargaining agreement, nor shall it create any right (1) to unilaterally implement, during the term of this Agreement, any terms concerning the provision of benefits provided or to be provided by the Supplemental Benefit Plan, (2) to lockout, or (3) to strike.
  6. In the event of any termination pursuant to Section 3(e) above, the NBA and the Players Association agree to bargain in good faith with respect to an alternative arrangement designed to provide the benefits described in the Supplemental Benefit Plan. Such alternative arrangement shall, to the extent permitted by applicable law, be funded by such monies as may then remain in the SBP Trust and, if the monies remaining in the SBP Trust may not lawfully be used for, or are insufficient for, such purpose, such alternative arrangement shall be funded, by the NBA Teams; provided that the annual cost incurred by the Teams in connection with such alternative arrangement (as determined on an after-tax basis) shall not exceed the annual cost that such Teams would have incurred to fund the Supplemental Benefit Plan commencing on the date of termination. Any such alternative arrangement shall be operated and administered in a manner that will result in all contributions by the Teams being fully deductible under the Code (and, where applicable, Canadian income tax laws) when paid; and, no matter how funded, the costs offunding for any alternative to the Supplemental Benefit Plan shall be applied against the New Benefit Amount provided for by Section 8 below, shall be limited to the portion of the New Benefit Amount, if any, that is available for this purpose pursuant to Section 8(b)(7) below, and shall be subject to the limitations set forth in this Agreement. If despite good faith negotiations, the NBA and the Players Association fail to agree with respect to an alternative arrangement as described above, such failure to agree shall not create any right (1) to unilaterally implement, during the term of this Agreement, any terms concerning the provision of benefits provided or to be provided by the Supplemental Benefit Plan, (2) to lockout, or (3) to strike.
  7. The terms of the Supplemental Benefit Plan shall permit participation by Toronto Players on the same basis as players who are not Toronto Players; provided, however, that a player shall not be eligible to participate in the Supplemental Benefit Plan for the period of time during which the player is a Canadian Resident. If either (1) the NBA and the Players Association determine that the Supplemental Benefit Plan cannot continue to provide benefits to Toronto Players that are substantially equivalent to the benefits provided to players employed by Teams located in the United States, or (2) a Toronto Player is a Canadian Resident, an alternative arrangement acceptable to both the NBA and the Players Association shall be established for Toronto Players or, if applicable, the Canadian Resident, in lieu of the Supplemental Benefit Plan; provided that the annual cost incurred by the Teams in connection with such alternative arrangement (as determined on an after-tax basis) shall not exceed the annual cost that such Teams would have incurred to fund the Supplemental Benefit Plan for such Toronto Player or Canadian Resident. The cost to Toronto of funding for any such alternative arrangement shall be applied against the New Benefit Amount provided for by Section 8 below, shall be limited to the portion of the New Benefit Amount, if any, that is available for this purpose pursuant to Section 8(b)(7) below, and shall be subject to the limitations set forth in this Agreement.

4.4 New Welfare and Post-Employment Benefit Plan.

Effective with the date of this Agreement, the NBA and the Players Association shall cause to be established for the 2011-12 Season, and continuing until the expiration or termination of this Agreement, a program providing benefits including, but not limited to, new welfare benefits, to be established and operated through a voluntary employees’ beneficiary association and related plan (the “New VEBA”) and, commencing no later than the 2012-13 Season, a post-employment annuity benefit plan (the “PEP”) as described in more detail below.

    1. The New VEBA shall be established and maintained for the purpose of providing benefits as permitted under Section 501(c)(9) of the Code (and the regulations issued thereunder) to eligible vested players (using the same vesting rules as set forth under the Supplemental Benefit Plan) and their dependents, in a manner intended by the NBA and the Players Association to qualify as a tax-exempt organization under the provisions of Section 501(c)(9) of the Code. The terms of, and the benefits to be provided under, the New VEBA shall be negotiated by the NBA and the Players Association. The NBA and the Players Association shall cooperate in seeking qualification of the New VEBA as a tax-exempt organization and the New VEBA shall be operated and administered so as to satisfy the requirements of Section 501(c)(9) of the Code (and the regulations issued thereunder). The daily operations of the New VEBA shall be administered by an independent third-party administrator, as selected by the NBA and the Players Association.
    2. The New VEBA shall be structured and maintained in a manner that will result in all contributions by the Teams being fully deductible under the Code (and, where applicable, Canadian tax laws) when paid to the New VEBA. If any Team is disallowed a deduction (in whole or in part) for such contributions, and unless the NBA determines otherwise, the obligation to maintain and to make further contributions to the New VEBA shall immediately terminate; provided, however, that any such termination shall not impair the legally binding effect of any other provision of this Agreement or the legally binding effect (if any) of any other provision of any prior collective bargaining agreement, nor shall it create any right (i) to unilaterally implement, during the term of this Agreement, any terms concerning the provision of benefits provided or to be provided by the New VEBA, (ii) to lockout, or (iii) to strike.
    3. In the event of any termination pursuant to Section 4(a)(2) above, the NBA shall provide an alternative arrangement for the players. The NBA and the Players Association shall agree upon the type(s) of alternative arrangement to be provided. Such alternative arrangement shall, to the extent permitted by applicable law, be funded by such monies as may then remain in the New VEBA (or any trust holding contributions to such plan); if the monies remaining in the New VEBA may not lawfully be used for, or are insufficient for, such purpose, such alternative arrangement shall be funded, by the Teams; provided the annual cost incurred by the Teams in connection with funding such alternative arrangement (as determined on an after-tax basis) shall not exceed the annual cost that such Teams would have incurred to fund the New VEBA commencing on the date of termination. Any such alternative arrangement shall be operated and administered in a manner that will result in all contributions by the Teams being fully deductible under the Code (and, where applicable, Canadian income tax laws) when paid.
    1. The PEP shall be established and maintained as a funded non-tax-qualified program for the purpose of purchasing annuities on behalf of Eligible Players (defined below) to provide a source of post-employment income (notwithstanding the foregoing, the NBA and the Players Association agree to meet and confer to discuss structuring the PEP as an unfunded non-qualified deferred compensation plan). The daily operations of the PEP shall be administered by an independent third-party administrator, as selected by the NBA and the Players Association.
    2. Eligibility. A player shall be eligible to participate in the PEP for each “PEP Year” (November 1 through October 31) coinciding with a Regular Season in which this Section 4 is in effect (a “Covered Regular Season”), provided that he is eligible to participate in the Supplemental Benefit Plan for that same Regular Season and is on a Team’s Roster for such Regular Season (“Eligible Player”).
    3. PEP Benefit. For each Covered Regular Season, each Eligible Player will receive a benefit under the PEP equal to an amount to be negotiated between the NBA and Players Association for such Covered Regular Season (the “BRI Deferral”). Commencing with the 2012-13 Season, in addition to the BRI Deferral, the Base Compensation of such Eligible Players for such Covered Regular Season shall be reduced by up to a maximum of ten percent (10%); provided, however, that each Eligible Player may elect a Base Compensation reduction of either five percent (5%) or ten percent (10%) (the “Player Deferral” and, collectively, with the BRI Deferral, the “PEP Benefit”); and provided, further, that prior to each Covered Regular Season an Eligible Player may opt out of the Player Deferral for that Covered Regular Season by timely submitting written notice of such election to the Eligible Player’s Team. Notwithstanding the foregoing, following the 2013-14 Season, the NBA and the Players Association shall engage in good faith negotiations over implementing the Player Deferral on a mandatory basis. The NBA and the Players Association shall engage in good faith negotiations over the procedures for implementing the Player Deferral. An Eligible Player’s PEP Benefit is expected to be taxable as income to such Eligible Player and each Team will report, and withhold from, such amount as it deems necessary to satisfy any federal, state, local or other tax of any kind. The PEP Benefit shall be used to purchase annuities for Eligible Players in accordance with the terms and conditions of this Agreement and in accordance with terms and conditions to be set forth in the PEP (“PEP Annuities”). The amount of the PEP Benefit to be applied toward the purchase of the PEP Annuities in respect of an Eligible Player for a Covered Regular Season shall be the PEP Benefit with respect to such Eligible Player for such Covered Season less the amount of the Eligible Player’s portion of any applicable federal, state, local or other withholding taxes of any kind attributable to the PEP Benefit (the “After-Tax PEP Benefit”). Each Eligible Player will be fully vested in the PEP Benefit and the PEP Annuities purchased on his behalf, and the payments pursuant to the PEP Annuities shall become payable to the player on the later of (i) the 12-month anniversary of the last Regular Season game of the player’s last Regular Season or (ii) the 6-month anniversary of the player’s 30th birthday. At the Eligible Player’s election, the PEP Annuities will be payable in the form of either (i) installment payments until the player attains age 50, (ii) a single life annuity over the player’s life, or (iii) a joint life annuity paid over the player’s life and his surviving spouse’s life. In the event of the death of a player prior to the commencement of payments from a PEP Annuity, payments from such PEP Annuity shall be made to the player’s surviving spouse (or to the player’s designated beneficiary, if either the player is not married or the surviving spouse consents to a non-spouse beneficiary) in a lump sum as soon as practicable after the player’s death. In the event of the death of a player following commencement of payments from a PEP Annuity, any remaining payments from such PEP Annuity shall be payable to the player’s surviving spouse (or the player’s designated beneficiary, if either the player is not married or the surviving spouse consents to a non-spouse beneficiary), in accordance with the player’s payment election and the terms of such PEP Annuity.
    4. Team Contributions. The obligation of the Teams to provide benefits under the PEP for Eligible Players for a Covered Regular Season shall be satisfied by the Teams (i) paying sums into the PEP in the aggregate amount of the After-Tax PEP Benefits on behalf of each of its Eligible Players, which shall be made not later than September 1 following the end of the Regular Season to which the PEP Benefit relates, and (ii) by remitting all applicable withholding and payroll taxes attributable to such PEP Benefit to the IRS and/or state and local taxing authorities. For purposes of this Section, the applicable estimated federal, state and local income taxes attributable to the PEP Benefit shall be equal to the amount of the PEP Benefit multiplied by the sum of the maximum federal, state and local income tax rates in effect in the applicable locale for the calendar year in which the PEP Benefit is made.
    5. Limitations on PEP.
      1. Notwithstanding anything else in this Agreement: (A) if any change or amendment made to the Code or ERISA, or to any regulations (whether final, temporary or proposed regulations), or rulings or formal guidance issued thereunder; (B) if any interpretation, application or enforcement (or any proposed interpretation, application or enforcement), by a court of competent jurisdiction in the United States or by the IRS, of the Code, ERISA, or any regulations or rulings issued thereunder; (C) if any regulations (whether final, temporary or proposed regulations), or rulings or formal guidance issued by the IRS under the Code or ERISA; (D) if any provisions of this Agreement, including the provisions of this Section 4(b); or (E) if any other event or occurrence results in the Teams being disallowed a deduction (in whole or in part) for contributions made to the PEP for the tax year to which the PEP Benefit relates, then any obligation to maintain the PEP pursuant to this Agreement shall, at the option of the NBA, terminate; provided, however, that any such termination shall not impair the legally binding effect of any other provision of this Agreement or the legally binding effect (if any) of any other provision of any prior collective bargaining agreement, nor shall it create any right (x) to unilaterally implement during the term of this Agreement any terms concerning the provision of post-employment benefits to the players, (y) to lockout, or (z) to strike.
      2. If the PEP Benefit attributable to Eligible Players would be subject to a federal income tax rate higher than the rate that would apply if the PEP Benefit were paid as Base Compensation, then any obligation to maintain the PEP pursuant to this Agreement shall, at the option of the Players Association, terminate; provided, however, that any such termination shall not impair the legally binding effect of any other provision of this Agreement or the legally binding effect (if any) of any other provision of any prior collective bargaining agreement, nor shall it create any right (x) to unilaterally implement during the term of this Agreement any terms concerning the provision of post-employment benefits to the players, (y) to lockout, or (z) to strike.
      3. In the event of a termination described in Section 4(b)(5)(i) or (ii), the NBA shall provide an alternative arrangement for the players. The NBA and the Players Association shall agree upon the type(s) of alternative arrangement to be provided, which shall be at an annual cost (as determined on an after-tax basis) to the Teams equal to the annual cost that such Teams would have incurred under the PEP on the date of termination.
  3. For each Season, except as provided below, one percent (1%) of BRI for such Season (the “Additional Benefit Amount”) shall be used first to fund the New VEBA (or any alternative arrangement) for that Season and, to the extent any amount remains in the Additional Benefit Amount after funding the New VEBA, to fund the BRI Deferral component of the PEP (or any alternative arrangement) for that Season, unless the NBA and the Players Association agree to a different funding priority between the New VEBA and BRI Deferral component of the PEP. Notwithstanding the preceding sentence, the Additional Benefit Amount for a Season shall be subject to reduction or elimination pursuant to Article VII, Section 12(b)(1). For purposes of all calculations called for under this Agreement of, or relating to, Benefits (including, but not limited to, for purposes of (i) preparing the Audit Report, Interim Audit Report, or Interim Escrow Audit Report, and (ii) calculating Total Benefits, Total Salaries and Benefits, and Projected Benefits), the amount to be included with respect to the Additional Benefit Amount shall be the full Additional Benefit Amount specified in this Section 4(c) and not the reduced Additional Benefit Amount provided for under Article VII, Section 12(b)(1).
  4. All costs of Professional Fees incurred in connection with the implementation, operation and administration of the New VEBA (or any attendant alternative arrangement) and PEP (or any attendant alternative arrangement) shall be (i) paid by the Teams, (ii) applied against the New Benefit Amount provided for by Section 8 below, and (iii) limited to the portion of the New Benefit Amount, if any, that is available for this purpose pursuant to Section 8(b)(6) below.
  5. The New VEBA and PEP shall be established and funded as forth in this Section 4, provided, however that (i) this Section 4 does not by itself create any other rights or obligations, and (ii) the specific benefits to be provided under each such plan shall be governed by a definitive written plan, agreement and/or other documentation implementing such plan(s). Such documentation shall address the eligibility and participation of Toronto Players and Canadian Residents in any such New VEBA and PEP (or in any attendant alternative arrangement).

4.5 Labor-Management Cooperation and Education Trust.

  1. Except as set forth below in this Section 5, effective with the date of this Agreement, and continuing for the duration thereof, the National Basketball Players Association/National Basketball Association Labor-Management Cooperation and Education Trust (the “Education Trust”) shall continue to be jointly operated and administered by the NBA and the Players Association in accordance with the provisions of the Agreement and Declaration of Trust Establishing the National Basketball Players Association/National Basketball Association Labor-Management Cooperation and Education Trust (the “Education Trust Agreement”). It is intended by the NBA and the Players Association that, at all times, the Education Trust shall comply with the provisions of Section 302(c)(9) of the Labor Management Relations Act of 1947, as amended, and shall qualify as an exempt organization under the provisions of Section 501(c)(5) or 501(c)(3) of the Code.
  2. The Education Trust shall continue to be operated and administered for the purpose of establishing and providing (i) HIV/AIDS education programs and (ii) education and career counseling programs designed to assist the NBA, NBA Teams and NBA players in solving problems of mutual concern not susceptible to resolution within the collective bargaining process and to enhance the involvement of NBA players in making decisions that affect their working lives.
    1. Except as provided in Section 5(c)(2) below, the costs of funding the Education Trust and the costs attributable to the operation and administration of the Education Trust, including the cost of Professional Fees incurred in connection with the administration of the Education Trust, shall be paid by the Teams, and (i) shall be applied against the New Benefit Amount, provided for by Section 8 below, and (ii) shall be limited to the portion of the New Benefit Amount, if any, that is available for this purpose pursuant to Section 8(b)(5) below. Payment of the amount necessary to fund the Education Trust in respect of each Salary Cap Year shall be made within thirty (30) days following the completion of the BRI Audit Report for such Salary Cap Year. The parties agree that, subject to the limitations set forth in this Section 5, the amount to be paid by the Teams to fund the education and career counseling programs to be operated and administered by the Education Trust for the 2011-12 Salary Cap Year shall be no greater than $1,125,000 and such maximum funding amount shall be increased by five percent (5%) for each subsequent Salary Cap Year.
    2. The costs of funding the HIV/AIDS education programs to be operated and administered by the Education Trust (or any programs that, pursuant to Section 5(f) below, are substituted for the HIV/AIDS education programs) shall be paid by the Teams. Payment of the amount necessary to fund such programs in respect of each Salary Cap Year shall be made within thirty (30) days following the completion of the BRI Audit Report for such Salary Cap Year. The parties agree that, subject to the limitations set forth in this Section 5, the amount to be paid by the Teams to fund the HIV/AIDS education programs (or any programs that, pursuant to Section 5(f) below, are substituted for the HIV/AIDS education programs) to be operated and administered by the Education Trust for the 2011-12 Salary Cap Year shall be no greater than $350,000 and such maximum funding amount shall be increased by five percent (5%) for each subsequent Salary Cap Year.
  4. The Education Trust shall be operated and administered in a manner that will result in all contributions by the Teams being fully deductible under the Code (and, where applicable, Canadian income tax laws) when paid. If any Team is disallowed a deduction (in whole or in part) for such contributions, and unless the NBA determines otherwise, the obligation to maintain the Education Trust and to make further contributions to the Education Trust shall immediately terminate; provided, however, that any such termination shall not impair the legally binding effect of any other provision of this Agreement, and shall not create any right (1) to unilaterally implement, during the term of this Agreement, any terms concerning the provision of education programs provided or to be provided by the Education Trust, (2) to lockout, or (3) to strike.
  5. In the event of any termination pursuant to Section 5(d) above, the parties agree to bargain in good faith with respect to an alternative arrangement designed to provide the programs described in the Education Trust Agreement. Such alternative arrangement shall, to the extent permitted by applicable law, be funded by such monies as may then remain in the Education Trust and, if the monies remaining in the Education Trust may not lawfully be used for, or are insufficient for, such purpose, such alternative arrangement shall be funded, by the NBA Teams; provided, however, that the annual cost incurred by the Teams in connection with such alternative arrangement (as determined on an after-tax basis) shall not exceed the annual cost that such Teams would have incurred to fund the Education Trust commencing on the date of termination. Any such alternative arrangement shall be operated and administered in a manner that will result in all contributions by the Teams being fully deductible under the Code (and, where applicable, Canadian income tax laws) when paid; and, no matter how funded, the costs of funding for any alternative to the Education Trust shall be applied against the New Benefit Amount provided for by Section 8 below, shall be limited to the portion of the New Benefit Amount, if any, that is available for this purpose pursuant to Section 8(b)(5) below, and shall be subject to the limitations set forth in this Agreement. If despite good faith negotiations, the NBA and the Players Association fail to agree with respect to an alternative arrangement as described above, such failure to agree shall not create any right (1) to unilaterally implement, during the term of this Agreement, any terms concerning the provision of programs provided or to be provided by the Education Trust, (2) to lockout, or (3) to strike.
  6. Upon written notice delivered to the NBA at least six (6) months prior to the commencement of any Salary Cap Year, the Players Association may elect to terminate the programs currently provided by the Education Trust and substitute alternative programs; provided, however, that the NBA consents to such substitution, which such consent shall not be unreasonably withheld; and provided, further, that any new programs shall comply with the provisions of Section 302(c)(9) of the Labor Management Relations Act of 1947, as amended.

4.6 Additional Player Benefits.

Except as set forth below, effective with the date of this Agreement, and continuing for the duration thereof, the NBA shall provide the following additional benefits to NBA players:

  1. Life insurance and accidental death and dismemberment benefits, as set forth in the Metropolitan Life Insurance Company Policy No. 0122986.

  2. Disability insurance benefits, as set forth in the Houston Casualty Company Policy No. 10/7001769.

  3. Workers’ compensation benefits in accordance with applicable statutes.

    1. Medical and dental insurance benefits in accordance with the terms of the CIGNA HealthCare Policy No. 3211244 (the “CIGNA Policy”), only to the extent permissible by and available under applicable law. With respect to a Veteran Free Agent, such medical and dental benefits shall remain in effect until the August 31 following the last Season of the player’s Contract.
    2. The CIGNA Policy or any subsequent policy or plan providing medical and dental benefits shall be modified or replaced effective as of the commencement of the 2012-2013 Season or as of the commencement of any subsequent Season covered by this Agreement, as requested in writing by the Players Association (a “Player Change”), provided such written request is delivered to the NBA on or before the March 1 preceding such Season. Any Player Change shall be subject to the approval of the NBA, which approval shall not be unreasonably withheld.
    3. In the event that the CIGNA Policy or any subsequent policy or plan providing medical and dental benefits is no longer permissible or available due to applicable laws (a “Regulatory Change”), the NBA Teams shall provide an alternative arrangement to the players as agreed upon between the NBA and the Players Association; provided that the annual cost incurred by the NBA Teams in connection with such alternative arrangement (as determined on an after-tax basis) shall not exceed the annual cost that such Teams would have incurred in providing the CIGNA Policy or any subsequent policy or plan commencing on the date of termination. The unavailability of a medical or dental policy or plan under this Section 6(d)(3) shall not impair the legally binding effect of any other provision of this Agreement or the legally binding effect (if any) of any other provision of any prior collective bargaining agreement, nor shall it create any right (i) to unilaterally implement during the term of this Agreement any terms concerning the provision of medical and dental insurance benefits to the players, (ii) to lockout, or (iii) to strike. The NBA and the Players Association agree that in the event of a Regulatory Change, they shall meet and confer over how to effectuate the intent of the parties as of the date of this Agreement with respect to the provision of medical and dental benefits.
    4. Any additional aggregate costs that might be incurred by the Teams for medical and dental benefits with respect to the 2012-13 Season or any subsequent Season as a result of a Player Change or a Regulatory Change, over the aggregate cost of medical and dental benefits that otherwise would have been incurred by the Teams for the players under the CIGNA Policy with respect to such Season, absent any Player Change or Regulatory Change: (1) shall be applied against the New Benefit Amount provided for by Section 8 below; and (2) shall be limited to the portion of the New Benefit Amount, if any, that is available for this purpose pursuant to Section 8(b)(4) below.

  5. Vision benefits in accordance with the EyeMed Vision Care Policy No. 9756123.

  6. Funding for the annual Players Association High School Basketball Camp (or any substitute program mutually agreed upon by the parties) in the amount of $670,000 for the 2011-12 Season, increasing by seven and one-half percent (7.5%) per Season thereafter for the term of this Agreement.

  7. Player Playoff Pool amounts, as follows:

    2011-12 Season $13 million
    2012-13 Season $13 million
    2013-14 Season $14 million
    2014-15 Season $14 million
    2015-16 Season $15 million
    2016-17 Season $15 million
    2017-18 Season $16 million
    2018-19 Season $16 million
    2019-20 Season $17 million
    2020-21 Season $17 million

    If the NBA increases the number of Teams participating in the playoffs, the Player Playoff Pool shall be increased by $615,000 for each Team added. The NBA will consult with the Players Association with respect to the method of allocation of the Player Playoff Pool.

  8. The employer’s portion of payroll taxes.

  9. The Players Association’s one-half share of the payment of fees and expenses to the Accountants (as defined in Article VII, Section 10(a) below) in connection with any audit conducted under this Agreement, and the Player Association’s one-half share of the payment of fees and expenses payable with respect to the TV Expert (as defined in Article VII, Section 1(a)(7)(ii) below) and any expert selected in accordance with Article VII, Section 1(a)(7)(i).

  10. The Players Association’s share of the costs of the Anti-Drug Program as provided for by Article XXXIII.

    1. The sum of the Compensation paid to each player with three (3) or more Years of Service who signs a one-year, 10-Day or Rest-of-Season Contract for the Minimum Player Salary during a Season, less, for each such player, the Minimum Player Salary for a player with two (2) Years of Service.
    2. The Compensation paid to any player with three (3) or more Years of Service who signs a one-year, 10-Day or Rest-of-Season Contract for the Minimum Player Salary in excess of the Minimum Player Salary for a player with two (2) Years of Service shall be paid by the player’s Team pursuant to the terms of such player’s Uniform Player Contract, and then reimbursed to the Team out of a League-wide fund created and maintained by the NBA. Such reimbursement shall be made at the conclusion of the Season covered by the Contract.

  12. One-half of the annual funding of $1 million for the NBA Legends Foundation that is provided jointly by the NBA and the Players Association.

  13. Any additional contributions that may be required to be made to the Pension Plan because of any new law, change or amendment made to ERISA, the Code and/or any other applicable law or to any regulations (whether final, temporary or proposed), rulings or formal guidance issued thereunder that is effective for a Plan Year that first begins after the effective date of this Agreement.

  14. Costs described in Sections 1(h), 2(c), 3(c)(2), 4(d), and/or 5(c) above to the extent such costs are not paid as New Benefit Amounts pursuant to the provisions of Section 8 below due to the unavailability of any New Benefit Amount for payment of such costs (provided that as to Section 5(c), solely those costs attributable to the operation and administration of the Education Trust, including Professional Fees, shall be included in this Section 6(n)).

  15. The benefits funded by the New Benefit Amount set forth in Section 8 below.

4.7 Insurance Carriers.

At any time during the term of this Agreement, the NBA may change the carrier of any of the foregoing insurance programs, subject to the Players Association’s prior written approval, which approval shall not be unreasonably withheld. In no event shall any change in insurance carrier result in a change in the types or levels of any of the benefits provided for above, except as otherwise requested by the Players Association under Section 6(d) above. In the event that a type of or level of benefit is not commercially available, the NBA may substitute a type of or level of benefit of comparable value, subject to the Players Association’s approval, which approval shall not be unreasonably withheld.

4.8 New Benefits Funding.

    1. For each Salary Cap Year during the term of this Agreement, an aggregate amount (the “New Benefit Amount”) equal to $1.1 million multiplied by the number of Teams in the NBA during the Covered Season shall be provided by the Teams to fund the benefits described in Section 8(b) below, unless the Players Association designates a lesser amount with respect to a Salary Cap Year, by notice in writing to the NBA delivered on or before the March 15 prior to the commencement of such Salary Cap Year.
    2. Notwithstanding subsection (a)(1) above, the New Benefit Amount for each Salary Cap Year shall be subject to reduction pursuant to Article VII, Section 12(b)(1). For purposes of all calculations called for under this Agreement of, or relating to Benefits (including, but not limited to, for purposes of (i) preparing the Audit Report, Interim Audit Report, or Interim Escrow Audit Report, and (ii) calculating Total Benefits, Total Salaries and Benefits, and Projected Benefits), the amount to be included with respect to the New Benefit Amount shall be the full New Benefit Amount specified in Section 8(a)(1) above and not the reduced New Benefit Amount provided for under Article VII, Section 12(b)(1).
  2. Subject to Section 8(c) below, the New Benefit Amount, after taking into account the reduction provided for in Section 8(a)(2) above, shall be utilized in the following manner for each Salary Cap Year:
    1. The New Benefit Amount shall first be utilized, to the extent necessary, to fund any pension contribution increases and costs described in Article IV, Section 1(h) above. If the New Benefit Amount is insufficient for these purposes, the shortfall, over as short a period of time as is reasonably possible, shall be offset against: (i) the amounts owed to the Players Association pursuant to the Group License Agreement; (ii) the New Benefit Amount for the next Salary Cap Year; and/or (iii) the NBA’s obligation to provide Benefits (other than Benefits funded via the New Benefit Amount) under this Article IV. The determination of the allocation of and type(s) of offset(s) to be applied (as among (i), (ii) and/or (iii) above) shall be made by the Players Association, subject to the NBA’s consent, which shall not be unreasonably withheld.
    2. Subject to the provisions of Section 2 above, and after taking into account the expenditure described in Section 8(b)(1) above, the remainder of the New Benefit Amount, if any, shall be utilized, to the extent necessary, to fund the cost of matching contributions with respect to players under the 401(k) Plan (and, if applicable, to fund the cost of any alternative arrangement described in Section 2(b) and (d) above) and to pay the costs described in Section 2(c) above.
    3. After taking into account the expenditures described in Section 8(b)(1) and (2) above, the remainder of the New Benefit Amount, if any, shall be utilized, to the extent necessary, to fund $582,000 of the cost of the life insurance and accidental death and dismemberment benefits described in Section 6(a) above.
    4. After taking into account the expenditures described in Section 8(b)(1) – (3) above, the remainder of the New Benefit Amount, if any, shall be utilized, to the extent necessary, to fund an incremental cost of changes in the medical and dental benefits made pursuant to a Player Change or Regulatory Change in accordance with provisions of Section 6(d) above.
    5. After taking into account the expenditures described in Section 8(b)(1) – (4) above, the remainder of the New Benefit Amount, if any, shall be utilized, to the extent necessary, to fund the education and career counseling programs to be operated and administered by the Education Trust (or any programs that, pursuant to Section 5(f) above, are substituted for such education and career counseling programs) described in Section 5 above and to pay the costs described in Section 5(c) above.
    6. After taking into account the expenditures described in Section 8(b)(1) – (5) above, the remainder of the New Benefit Amount, if any, shall be utilized to pay the Professional Fees of the New VEBA and PEP in accordance with the provisions of Section 4(d) above.
    7. After taking into account the expenditures described in Section 8(b)(1) – (6) above, the remainder of the New Benefit Amount, if any, shall be utilized to fund the Supplemental Benefit Plan (and, if applicable, to fund the cost of any alternative arrangement described in Section 3(f) and (g) above) in accordance with the provisions of Section 3 above and to pay the costs described in Section 3(c) above.
  3. Notwithstanding anything to the contrary in this Article IV:
    1. In no event shall the Teams (or the NBA) pay amounts for any Salary Cap Year with respect to the benefits described in Section 8(b) above in excess of the New Benefit Amount for such Salary Cap Year.
    2. Until the final Audit Report (or, if applicable, the Interim Escrow Audit Report) for a Salary Cap Year is completed, the NBA shall not be required to spend, or commit to spend, any portion of the New Benefit Amount for such Salary Cap Year.

4.9 Projected Benefits.

  1. For purposes of computing the Tax Level, Salary Cap and Minimum Team Salary in accordance with Article VII, “Projected Benefits” shall mean the projected amounts, as estimated by the NBA in good faith, to be paid or accrued by the NBA or the Teams, other than Expansion Teams during their first two Salary Cap Years, for the upcoming Salary Cap Year with respect to the benefits to be provided for such Salary Cap Year. In the event that the amount of any benefit for the upcoming Salary Cap Year is not reasonably calculable, then, for purposes of computing Projected Benefits, such amount shall be projected to be one hundred four and one-half percent (104.5%) of the amount attributable to the same benefit for the prior Salary Cap Year, provided, however, that in computing Projected Benefits for the 2012-13 Salary Cap Year, any benefit for the 2011-12 Salary Cap Year shall be extrapolated to the amount the benefit would have been if an 82-game Regular Season had been played.
  2. For purposes of computing Projected Benefits, the amount to be included with respect to players with three (3) or more Years of Service who receive the Minimum Player Salary shall be the same amount included in Benefits with respect to such players for the immediately preceding Season, except that with respect to the 2011-12 Cap Year, the amount to be included with respect to such players shall be such amount as may be agreed upon by the NBA and the Players Association, or, absent such agreement, the amount included in Benefits with respect to the 2010-11 Salary Cap Year.
  3. For purposes of computing Projected Benefits with respect to a Salary Cap Year, the amount to be included with respect to the new welfare and post-employment benefit plans described in Section 4 above shall be one percent (1%) of Projected BRI for such Salary Cap Year.
  4. For purposes of computing Projected Benefits with respect to a Salary Cap Year, there shall be taken into account any reduction in the New Benefit Amount with respect to a Salary Cap Year as designated by the Players Association, by notice in writing to the NBA delivered on or before the March 15 immediately preceding the commencement of such Salary Cap Year.