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EXHIBIT 4.1
FUTURE CARE:
THE AMERICA WEST AIRLINES
401(k) PLAN
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Future Care:
The America West Airlines
401(k) Plan
Table of Contents
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ARTICLE I.................................................................. 1
A. "Account"...................................................... 1
B. "Administrator"................................................ 2
C. "Annuity Starting Date"........................................ 2
D. "Beneficiary".................................................. 2
E. "Code"......................................................... 2
F. "Committee".................................................... 2
G. "Company"...................................................... 2
H. "Compensation"................................................. 2
I. "Determination Year"........................................... 3
J. "Determination Year Calculation Period"........................ 3
K. "Effective Date"............................................... 3
L. "Eligible Employee"............................................ 3
M. "Eligible Spouse".............................................. 4
N. "Employee"..................................................... 5
O. "Employer"..................................................... 5
P. "Employer Matching Contribution"............................... 6
Q. "Employer Matching Contribution Account"....................... 6
R. "Employer Minimum Contribution"................................ 7
S. "Employer Supplemental Contribution"........................... 7
T. "Employer Supplemental Contribution Account"................... 7
U. "Entry Date"................................................... 7
V. "ERISA"........................................................ 7
W. "Family Member"................................................ 7
X. "Financial Hardship"........................................... 8
Y. "Fiscal Year".................................................. 9
AA. "Hour of Service".............................................. 10
AB. "Key Employee"................................................. 12
AC. "Leased Employee".............................................. 13
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AD. "Look-Back Year Calculation Period"............................ 14
AE. "Non-Key Employee"............................................. 14
AF. "Normal Retirement"............................................ 14
AG. "Normal Retirement Age"........................................ 15
AH. "Normal Retirement Date"....................................... 15
AI. "One-Year Break in Service".................................... 15
AJ. "Participant".................................................. 15
AK. "Plan"......................................................... 16
AL. "Plan Year".................................................... 16
AM. "Rollover Account"............................................. 16
AN. "Salary Deferral Account"...................................... 16
AO. "Salary Deferral Contribution"................................. 16
AP. "Salary Deferral Election"..................................... 16
AQ. "Spousal Consent".............................................. 17
AR. "Top-Heavy Plan"............................................... 18
AS. "Total Compensation"........................................... 20
AT. "Total Disability"............................................. 23
AU. "Trust"........................................................ 23
AV. "Trustee"...................................................... 23
AW. "Year of Service".............................................. 23
ARTICLE II................................................................. 24
A. Service Requirement............................................ 24
B. Eligibility Computation Period................................. 24
C. Salary Deferral Election....................................... 25
D. Participation.................................................. 25
E. Leaves of Absence.............................................. 26
F. Suspended Participation........................................ 26
ARTICLE III................................................................ 28
A. Definitions.................................................... 28
B. Salary Deferral Contribution................................... 34
C. Employer Matching Contributions................................ 36
D. Employer Supplemental Contribution............................. 36
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E. Limitations on Salary Deferral Contributions................... 37
F. Correcting Excess Deferrals and Excess Contributions........... 40
G. Limitations on Matching Contributions.......................... 47
H. Correcting Excess Aggregate Contributions...................... 49
I. Employer Minimum Contribution.................................. 54
J. Maximum Contribution........................................... 55
ARTICLE IV................................................................. 56
A. Accounts....................................................... 56
B. Valuation of Accounts.......................................... 56
C. Allocation of Employer Minimum Contributions................... 57
D. Allocation of Salary Deferral Contributions.................... 57
E. Allocation of Employer Matching Contributions.................. 57
F. Allocation of Employer Supplemental Contributions and
Forfeitures.................................................... 58
G. Special Provision for Forfeitures of Subchapter S
Corporation's Contributions.................................... 61
H. Allocation Limitations......................................... 61
I. Transfers From Other Plans..................................... 71
ARTICLE V.................................................................. 74
A. Vesting........................................................ 74
B. Termination of Employment; Forfeitures......................... 77
ARTICLE VI................................................................. 80
A. Methods of Distribution........................................ 80
B. Time of Distribution to Participant............................ 88
C. Time of Distribution to Beneficiary............................ 92
D. Small Account Balances......................................... 94
E. Investment of Deferred Distributions........................... 95
F. Nonliability................................................... 95
G. Missing Persons................................................ 96
H. Distributions Prior to Termination of Employment............... 97
I. Withdrawals on Account of Financial Hardship................... 100
J. Loans to Participants.......................................... 102
K. Direct Rollover Distributions to an Eligible Retirement Plan... 106
ARTICLE VII................................................................ 109
A. Designation.................................................... 109
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B. Absence of Valid Designation of Beneficiaries.................. 109
ARTICLE VIII............................................................... 111
ARTICLE IX................................................................ 112
A. Trust Agreement............................................... 112
B. Trust Agreement Part of Plan.................................. 112
C. Participant Directs Investments............................... 112
D. Direction to Committee........................................ 115
E. Duty to Evaluate Investments.................................. 115
F. Costs of Investments.......................................... 116
G. Rules of Committee............................................ 116
ARTICLE X................................................................. 117
A. Named Fiduciaries............................................. 117
B. Fiduciary Standard............................................ 117
C. Multiple Duties and Advisors.................................. 118
D. Allocation and Delegation of Fiduciary Duties................. 118
E. Indemnification............................................... 118
F. Costs and Expenses............................................ 119
G. Authority to Amend and Terminate.............................. 119
H. Administrative Committee...................................... 119
I. Plan Administration........................................... 120
J. Claims Procedures............................................. 122
K. Agent for Legal Process....................................... 124
ARTICLE XI................................................................ 125
A. Amendment..................................................... 125
B. Termination or Complete Discontinuance of Contributions....... 125
C. Nonreversion.................................................. 126
ARTICLE XII............................................................... 128
A. Limitation of Rights; Employment Relationship................. 128
B. Transfer of Assets of Employer; Transfer of Assets of Plan.... 128
C. Spendthrift Provision......................................... 129
D. Applicable Law; Severability.................................. 130
E. Incorporation of Trust Agreement Provisions................... 130
F. Written Application, Request and Election..................... 131
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Effective as of January 1, 1989, America West Airlines adopted Future
Care: The America West Airlines 401(k) Plan (the "Prior Plan") and executed a
Trust Agreement.
Effective as of January 1, 1989, America West Airlines hereby amends and
restates the Prior Plan and the Trust Agreement established under the Prior Plan
to provide retirement entitlements for the exclusive benefit of its Eligible
Employees and their Beneficiaries in accordance with the terms and conditions
set forth in the Plan, provided, however, that if a later effective date is
specified for a specific provision, version(s) of such provision effective prior
to such date are set forth in the applicable version(s) of the Plan.
The Plan and Trust are intended to meet the requirements for qualification
under Section 401(a) and Section 401(k) and exemption from tax under Section
501(a) of the Internal Revenue Code of 1986, as amended. Moreover,
notwithstanding any provision of this Plan to the contrary, no benefit accrued
under the Prior Plan and protected under Section 411(d)(6) of the Internal
Revenue Code of 1986, as amended, and regulations thereunder, shall be reduced
or eliminated by this Plan.
ARTICLE I
DEFINITIONS
A. "Account" shall mean the aggregate of the following accounts of the
Participant, as established in the books and records of the Plan:
1. Salary Deferral Account;
2. Rollover Account;
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3. Employer Matching Contribution Account; and
4. Employer Supplemental Contribution Account.
B. "Administrator" shall mean the Plan Administrator as specified in
Article X.
C. "Annuity Starting Date" shall mean the first day of the first period
for which an amount is payable as an annuity or, in the case of a benefit not
payable in the form of an annuity, the first day on which all events have
occurred which entitle the Participant to such benefit. In the case of a
deferred annuity, the Annuity Starting Date shall be the date on which the
annuity payments are scheduled to commence.
D. "Beneficiary" shall mean the person or persons (natural or otherwise)
designated by or for a Participant, entitled under this Plan to receive benefits
after the death of a Participant.
E. "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
F. "Committee" shall mean the administrative committee appointed by, and
acting on behalf of, the Employer in accordance with Article X of this Plan.
G. "Company" shall mean America West Holdings Corporation, a Delaware
corporation, and any successor thereto.
H. "Compensation" shall mean all compensation for the Plan Year (or such
other applicable period specifically designated in the Plan) paid or payable in
cash or in kind by the Employer which is required to be reported as wages on the
Participant's Form W-2 and elective deferrals with respect to employment with
the Employer: (i) under a qualified cash or deferred
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arrangement described in Section 401(k) of the Code; (ii) to a plan qualified
under Section 125 of the Code; (iii) to a tax sheltered annuity described in
Section 403(b) of the Code; or (iv) to a plan qualified under Section 402(h) of
the Code. However, Compensation shall not include any amounts paid or payable by
reason of services performed (i) after the date an Employee ceases to be a
Participant, and (ii) prior to the date an Employee becomes a Participant.
Effective January 1, 1997, Compensation shall not include, with respect to any
Employee in any Plan Year (or such other applicable period specifically
designated in the Plan), any Compensation in excess of $150,000, adjusted
annually for increases in the cost-of-living according Section 401(a)(17)(B) of
the Code. If the Plan Year (or such other applicable period specifically
designated in the Plan), consists of a period of less than twelve (12) months,
the applicable dollar limitation under Section 401(a)(17) of the Code (as
adjusted from time to time) will be multiplied by a fraction, the numerator of
which is the number of months in the Plan Year (or such other applicable period
specifically designated in the Plan), and the denominator of which is twelve
(12). Effective January 1, 1997, for purposes of the Highly Compensated Employee
definition, "Compensation" shall mean Total Compensation as defined in this
Article I including elective and salary reduction contributions made to a
cafeteria plan, cash or deferred arrangement, or a tax-sheltered annuity; such
Compensation shall be determined on the basis of the Determination Year
Calculation Period.
I. "Determination Year" shall mean the Plan Year that is being tested.
J. "Determination Year Calculation Period" shall mean the Determination
Year.
K. "Effective Date" shall mean January 1, 1989.
L. "Eligible Employee" shall mean any Employee, except the following
persons:
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1. A person who is less than twenty-one (21) years of age;
2. A person whose Compensation and conditions of employment are
subject to determination by collective bargaining and whose coverage
hereunder is not required in an agreement entered into by the Employer
with such person's lawful representative or bargaining agent, provided,
however, that if such person (or category of persons) is already a
Participant in the Plan, such person shall remain a Participant unless the
collective bargaining agreement specifically excludes him from this Plan,
and further provided that pursuant to Sections 410(b), 401(a)(4), 401(k)
and 401(m) of the Code, any covered collectively bargained Employee shall
be tested separately for any and all nondiscrimination testing; or
3. A person who is a nonresident alien and who receives no earned
income (within the meaning of Section 911(d) of the Code) from an
Employer, such earned income constituting income from sources within the
United States (within the meaning of Section 861(a)(3) of the Code).
4. A person who is a Leased Employee.
M. "Eligible Spouse" shall mean that spouse to whom a Participant is
married on either the Annuity Starting Date or the date of his death, whichever
occurs earlier. To the extent provided under a "qualified domestic relations
order" as described in Section 414(p) of the Code, the term Eligible Spouse
shall mean a former spouse in addition to or in place of the Participant's
current spouse.
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N. "Employee" shall mean a person currently employed by the Employer, any
portion of whose income is initially treated as subject to withholding of income
tax and/or for whom Social Security or railroad retirement contributions are
initially made by the Employer. "Employee" shall also include any Leased
Employee deemed to be an Employee as provided in Sections 414(n) or 414(o) of
the Code. For purposes of the Highly Compensated Employee, Non-Highly
Compensated Employee, and Family Member definition, "Employee" shall mean any
individual who performs services for the Employer (other than a nonresident
alien who received no earned income as defined under Section 911(d)(2) of the
Code from his Employer that constituted income from sources within the United
States as defined in Code Section 861(a)(3)) and is either a common-law employee
or a self-employed individual as defined in Section 401(c)(1) of the Code.
O. "Employer" shall mean the Company and any other subsidiary, or
affiliate of the Company which, with the approval of the Company, has adopted or
hereafter adopts the Plan. In addition, for purposes of determining an
Employee's Hours of Service, the term "Employer" includes:
1. Any corporation or trade or business which is or was a member of
a controlled group of corporations, a group of businesses under common
control or an affiliated service group (within the meaning of Section
414(b), (c), (m), and (o) of the Code, respectively) of which an Employer
adopting the Plan is a member, but only for such period as the corporation
or trade or business and the adopting Employer are or were considered
members of the group;
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2. Any corporation or trade or business which is a predecessor
employer, if this Plan is a successor plan to the predecessor employer's
qualified plan;
3. Any corporation or trade or business which has been acquired
directly or indirectly by the Company, provided that such corporation or
trade or business shall be treated as an Employer under this Plan only
during such Plan Years as are designated by the Board of Directors of the
Company, and only with respect to those persons employed by such
corporation or trade or business on the date it was acquired by the
Company.
For purposes of the Highly Compensated Employee, Non-Highly Compensated
Employee and Family Member definition, an "Employer" shall mean the corporation,
partnership or sole proprietorship which has adopted this Plan; "Employer" also
shall include any corporation or trade or business which is or was a member of a
controlled group of corporations, a group of businesses under common control, or
an affiliated service group (within the meaning of Sections 414(b), (c), and (m)
of the Code, respectively) of which the entity identified in the preceding
sentence is a member.
P. "Employer Matching Contribution" shall mean the contribution made to
the Plan by the Employer pursuant to Paragraph C of Article III.
Q. "Employer Matching Contribution Account" shall mean the account
maintained for each Participant in the books and records of the Plan for the
purpose of recording Employer Matching Contributions allocated to the
Participant, as adjusted for earnings and losses allocated thereto.
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R. "Employer Minimum Contribution" shall mean the contribution, if any,
made to the Plan by the Employer pursuant to Paragraph I of Article III.
S. "Employer Supplemental Contribution" shall mean the contribution made
to the Plan by the Employer pursuant to Paragraph D of Article III.
T. "Employer Supplemental Contribution Account" shall mean the account
maintained for each Participant in the books and records of the Plan for the
purpose of recording Employer Supplemental Contributions allocated to the
Participant, as adjusted for earnings and losses allocated thereto.
U. "Entry Date" shall mean the date upon which an Eligible Employee
becomes a Participant, which shall be the Effective Date or the first day of the
first, fourth, seventh or tenth month of the Plan Year.
V. "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
W. "Family Member" shall mean an Employee who is, on any one day of the
year, a spouse, lineal ascendant, lineal descendant, or a spouse of an ascendant
or descendant, including a legally adopted individual, of an individual who,
during either or both the Determination Year Calculation Period or the Look-Back
Year Calculation Period, was (i) an active or former Employee and a five percent
(5%) owner within the meaning of Section 416(i)(1)(B)(i) of the Code and the
regulations thereunder, or (ii) one of the ten most highly-paid Highly
Compensated Employees.
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X. "Financial Hardship" shall mean the existence of a Participant's
immediate and heavy financial need. A need shall exist if it is necessary for:
1. The payment of medical expenses described in Section 213(d) of
the Code incurred by the Participant, his spouse or dependents or, if not
yet incurred, which are necessary in order to obtain such medical care for
the Participant, his spouse or dependents;
2. The payment of tuition and related educational fees for the next
twelve (12) months of post-secondary education for the Participant, his
spouse, children, or dependents;
3. The purchase (excluding mortgage payments) of a Participant's
principal residence;
4. Payments necessary to prevent eviction of the Participant from
his principal residence or foreclosure on his principal residence;
5. Amounts necessary to pay any federal, state or local income taxes
or penalties reasonably anticipated to result from a distribution on
account of Financial Hardship pursuant to Paragraph I of Article VI; or
6. Other expenses which the Commissioner of the Internal Revenue
Service indicates will be deemed to be made on account of such need.
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Y. "Fiscal Year" shall mean the accounting period used by the Company on
the Effective Date for federal income tax purposes which currently is the twelve
(12) month period ending December 31st of each year.
"Highly Compensated Employee" shall mean any Employee who performed
services for the Employer during the Determination Year and who (a) was a five
percent (5%) owner within the meaning of Section 416(i)(1)(B)(i) of the Code and
the regulations thereunder at any time during the current year or the preceding
year, or (b) effective January 1, 1997, received more than $80,000 in
Compensation indexed at the same time and in the same manner as the dollar limit
in Section 415(d) of the Code is indexed ($80,000 for 1997 and was a member of
the Top-Paid Group for the preceding year).
For purposes of this Paragraph X, the following definitions shall apply:
1. "Excluded Employees" shall mean Employees who, during the
relevant Calculation Period:
(a) had not completed six months of service by the end of the
particular Calculation Period being tested;
(b) normally worked less than 17-1/2 hours per week;
(c) normally worked less than six months during any year;
(d) had not had their twenty-first birthday by the end of the
particular Calculation Period being tested; or
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(e) were included in a unit of employees covered by a
collective bargaining agreement if ninety percent (90%) or more of
the Employer's Employees were covered by collective bargaining
agreements and the Plan covered only those Employees who were not
covered by such agreement.
2. "Top-Paid Group" shall mean Employees (except Excluded Employees
described in subparagraph Z-1 above) who performed services during the
Determination Year and the particular Calculation Period being tested,
identified in the order of Compensation they received during that
Calculation Period from highest to lowest.
AA. "Hour of Service" shall mean each hour for which an Employee is:
1. Directly or indirectly paid or entitled to payment by the
Employer for the performance of duties;
2. Directly or indirectly paid or entitled to payment by the
Employer on account of a period of time during which no duties were
performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty, or leave of absence
authorized under Paragraph E of Article II. However, no more than 501
Hours of Service shall be credited under this subparagraph 2 on account of
any single continuous period during which the Employee performs no duties
(whether or not such period occurs in a single computation period).
Payments made or due under a plan maintained by the Employer solely to
comply with applicable workers' compensation, unemployment compensation,
or disability insurance law, or to reimburse an Employee for medical or
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medically-related expenses shall not be considered as payments by the
Employer for purposes of this subparagraph;
3. Absent from work by reason of the pregnancy of the Employee, the
birth of a child of the Employee, the placement of a child with the
Employee in connection with the adoption of the child by the Employee, or
the care of such child by the Employee for a period immediately following
birth or placement. No more than 501 Hours of Service shall be credited
under this subparagraph 3 by reason of any one pregnancy or placement.
Hours of Service credited under this subparagraph 3 shall be credited
solely for purposes of determining whether a One-Year Break in Service has
occurred in a computation period. All Hours of Service credited under this
subparagraph 3 shall be credited only in the computation period in which
the absence from work begins if any of such Hours of Service are required
in that computation period to avoid a One-Year Break in Service. If none
of the Hours of Service credited under this subparagraph 3 are required to
avoid a One-Year Break in Service in the computation period in which the
absence begins, then the Hours of Service will be credited to the next
computation period. An Employee will be credited with 8 Hours of Service
for each day of absence covered by this subparagraph. Credit shall be
given pursuant to this subparagraph 3 only after the Employee furnishes to
the Administrator such timely information as the Administrator may
reasonably require to establish that the absence is for a reason described
in this subparagraph; or
4. Either awarded back pay or for which the Employer agrees to pay
such back pay, irrespective of mitigation of damages. An Hour of Service
received under this subparagraph 4 shall be credited to that computation
period for which the award was
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granted. The same Hours of Service shall not be credited both under either
subparagraph 1 or 2, as the case may be, and under this subparagraph 4.
Hours of Service for which back pay is awarded or agreed to with respect
to periods described in subparagraph 2 shall be subject to the limitations
set forth in that paragraph.
For purposes of subparagraphs 2 and 4 of this Paragraph AA, and for
purposes of subparagraphs 1 in the case of an Employee for whom records of hours
worked are not required by applicable law to be kept, an Employee shall be
credited with 10 Hours of Service for each day for which he would have been
required to be credited with an Hour of Service. Hours of Service shall be
credited to the applicable computation period in accordance with Department of
Labor Regulation Section 2530.200b-2(b) and (c).
AB. "Key Employee" shall mean an Employee or former Employee and their
Beneficiaries who, within the meaning of Section 416(i) of the Code and the
regulations thereunder, is or at any time during the four preceding Plan Years
has been:
1. An officer of the Employer whose annual compensation exceeds 50%
of the amount in effect under Section 415(b)(1)(A) of the Code for any
such Plan Year;
2. One of the ten Employees whose annual compensation from the
Employer exceeds the limitation in effect under Section 415(c)(1)(A) and
who owns or is considered as owning more than a one-half percent (1/2%)
ownership interest and one of the ten largest percentage ownership
interests in the Employer;
3. A five percent (5%) owner of the Employer; or
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4. A one percent (1%) owner of the Employer having an annual
compensation of more than $150,000.
For purposes of this definition, no more than fifty employees (or, if less
than fifty, either three employees or ten percent of all employees, whichever is
greater) shall be treated as officers. In addition, for purposes of determining
ownership percentages hereunder, the constructive ownership rules of Section 318
of the Code shall apply as provided by Section 416(i)(1)(B) of the Code. For
purposes of subparagraph 2, if two Employees have the same interest in the
Employer, the Employee having greater annual compensation from the Employer
shall be treated as having a larger interest. For purposes of determining the
number of officers taken into account under subparagraph AB-1 above, employees
described in Section 414(q)(8) of the Code shall be excluded. For purposes of
determining compensation, Total Compensation shall be used in addition to
elective and salary-reduction contributions made to any 401(k) plan of the
Employer, a simplified employee pension plan, a cafeteria plan, and a
tax-sheltered annuity.
AC. "Leased Employee" shall mean, effective January 1, 1997, a person
(other than an Employee) who has performed services (i) under the primary
direction or control by the employer, (ii) on a substantially full time basis
for a period of at least one (1) year, (iii) either directly or indirectly for
the Employer (or for the Employer and related persons determined in accordance
with Section 414(n)(6) of the Code), and (iv) pursuant to a written or oral
agreement between the Employer and any other person. For purposes of this Plan,
Leased Employees shall be treated as follows:
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1. Contributions and benefits provided to the Leased Employee by the
person who has entered into the agreement with the Employer, which are
attributable to services performed for the Employer, shall be treated as
provided by the Employer.
2. Service provided by the individual who becomes a Leased Employee
to the person who has entered into the agreement with the Employer, which
are attributable to services performed for the Employer, shall be treated
as performed under this Plan.
The term "Leased Employee" shall not include a person described above who is
covered by a qualified money purchase pension plan of the other person who has
entered into the agreement with the Employer which provides (i) a nonintegrated
employer contribution rate of at least ten percent (10%) of compensation as
defined in Section 415(c)(3) of the Code including amounts contributed pursuant
to a salary reduction agreement which are excludable from his gross income under
Sections 125, 402(e)(3), 402(h) and 403(b) of the Code, (ii) immediate
participation, and (iii) immediate and full vesting.
AD. "Look-Back Year Calculation Period" shall mean the 12-month period
immediately preceding the Determination Year Calculation Period.
AE. "Non-Key Employee" shall mean any Employee who is not a Key Employee.
AF. "Normal Retirement" shall mean retirement on or after the
Participant's Normal Retirement Age. In the case of a Participant who continues
in the employ of the Employer after reaching such Normal Retirement Age, "Normal
Retirement" shall mean retirement on the delayed retirement date, which is the
date of the Participant's actual termination of employment.
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A Participant who attains Normal Retirement Age and who retires on his Normal
Retirement Date shall be entitled to receive distributions in accordance with
Article VI. A Participant who continues in the employ of the Employer after
reaching Normal Retirement Age shall continue to participate in the Plan and to
have contributions allocated to his Account. When such Participant subsequently
retires, he shall then be entitled to have the balance standing in his Account
under the Plan distributed at such retirement date and in the same manner as if
he had retired at his Normal Retirement Date.
AG. "Normal Retirement Age" shall mean age sixty-five (65) (age sixty (60)
if the Participant is employed as a pilot).
AH. "Normal Retirement Date" shall mean the last day of the Plan Year in
which a Participant has attained Normal Retirement Age.
AI. "One-Year Break in Service" shall mean, with respect to any Employee,
a computation period during which the Employee is credited with 500 or fewer
Hours of Service. Except as provided in Paragraph B of Article II, the Plan Year
shall be the computation period.
AJ. "Participant" shall mean any Eligible Employee who has become a
participant of this Plan, in accordance with Article H of this Plan.
Solely for the purposes of allowing a rollover from another
qualified plan (the "Other Plan") and pursuant to Article IV, Section I,
Participant shall mean an Employee who has met 90 days of Active Service with
the Company. Active Service shall mean:
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(1) Any scheduled work day in which the Employee performs regular
work duties on a full or part time basis, either at the Employer's place
of business or at another location to which the Employee is required to
travel for the Employer's business; or
(2) A day which is not one of the Employer's schedule work days if
the Employee was in Active Service on the preceding scheduled work day.
AK. "Plan" shall mean America West Holdings Corporation Future Care
401(k) Plan, as set forth herein, and any amendments hereto.
AL. "Plan Year" shall mean the twelve (12) month period ending
December 31st.
AM. "Rollover Account" shall mean the account established for a
Participant in the books and records of the Plan for the purpose of recording
any funds transferred to the Trustee from, or attributable to, another qualified
plan or an individual retirement account pursuant to Paragraph I of Article IV,
as adjusted for earnings and losses allocated thereto.
AN. "Salary Deferral Account" shall mean the account maintained for each
Participant in the books and records of the Plan for the purpose of recording
any Salary Deferral Contributions allocated to the Participant, as adjusted for
earnings and losses allocated thereto.
AO. "Salary Deferral Contribution" shall mean the contribution, if
any, made to the Plan by the Employer pursuant to Paragraph B of Article III.
AP. "Salary Deferral Election" shall mean an election made by an
Eligible Employee to defer a specified percentage of his Compensation for the
Plan Year pursuant to Paragraph B of Article III.
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AQ. "Spousal Consent" shall mean an Eligible Spouse's written consent
which acknowledges the effect of the Participant's election and is witnessed by
a Plan representative or a notary public. Spousal Consent may be in the form of
a specific consent, general consent or limited general consent:
1. A "specific consent" shall specify the nonspouse Beneficiary, if
any (and, in the case of a Participant's election to waive a qualified
joint and survivor annuity, the alternate form of distribution elected).
2. A "general consent" shall allow the Participant, without further
Spousal Consent, to change the Beneficiary designation (and, in the case
of a Participant's election to waive a qualified joint and survivor
annuity, to elect any alternate form of distribution), if such general
consent indicates that the Eligible Spouse has the right to limit her
consent to a specific Beneficiary (and alternate form of distribution, if
applicable) and that such spouse voluntarily elects to relinquish such
right.
3. A "limited general consent" shall allow the Participant, without
further Spousal Consent, to change the Beneficiary designation to any
person or persons (natural or otherwise) among those set forth in writing
(and, in the case of a Participant's election to waive a qualified joint
and survivor annuity, to elect one or among a list of alternate forms of
distributions set forth in writing, or any combination of the above).
Once made, a general consent shall be irrevocable. A specific or limited general
consent shall be irrevocable unless the Participant changes his Beneficiary
designation or revokes his election to waive the qualified joint and survivor
annuity or the qualified pre-retirement survivor annuity, as
17
<PAGE> 23
applicable; upon such event, a specific consent and a limited general consent
(if the Participant's subsequent Beneficiary designation or election of an
alternate form of benefit is not among those options expressly set forth in the
limited general consent) shall be deemed to be revoked. Notwithstanding the
foregoing, Spousal Consent is not required if the Participant establishes to the
satisfaction of a Plan representative that such written consent may not be
obtained because there is no Eligible Spouse or that the Eligible Spouse cannot
be located. In addition, no Spousal Consent is necessary if the Participant has
been legally separated or abandoned within the meaning of local law and the
Participant provides the Plan representative with a court order to that effect,
so long as such court order does not conflict with a qualified domestic
relations order. If the Eligible Spouse is legally incompetent to consent, the
Eligible Spouse's legal guardian may consent on her behalf, even if the legal
guardian is the Participant. If the Eligible Spouse has consented to the
designation of a trust as the Participant's Beneficiary, Spousal Consent is not
required for the designation of or change in trust beneficiaries.
AR. "Top-Heavy Plan" shall mean (1) a plan in which, as of the
"determination date," the aggregate of "accounts" of Key Employees exceeds sixty
percent (60%) of the aggregate of "accounts" of all employees under the plan;
and (2) each plan which is included in an "aggregation group" if such group is a
top-heavy group, as determined under Section 416(g)(2) of the Code. For purposes
of this Paragraph: (a) "determination date" means the last day of the
immediately preceding Plan Year or, in the case of the first Plan Year, the last
day of such year. Where two or more plans are aggregated, the plans will be
aggregated by adding together the results for each plan as of the determination
dates for such plans which fall in the same calendar year; (b) "accounts" means
the sum of all accounts maintained for the employee determined as of the most
recent valuation date occurring within the twelve-month period ending on the
18
<PAGE> 24
determination date (or, in the case of a defined benefit plan, the present value
of the cumulative accrued benefits determined as of the valuation date used for
computing plan costs for minimum funding purposes), including distributions made
with respect to such employee under the plan during the five (5) year period
ending on the "determination date," but excluding, however, rollover
contributions, the account of a Non-Key Employee who was formerly a Key
Employee, the account of an individual who has not performed services for the
Employer at any time during the five (5) year period ending on the determination
date, and further excluding those amounts attributable to deductible employee
contributions (as defined in Section 72(o)(5)(A) of the Code); and (c)
"aggregation group" means (i) each plan of the Employer in which a Key Employee
participates, and each other plan of the Employer which enables a plan in which
a Key Employee participates to meet the requirements of Section 401(a)(4) or
Section 410 of the Code (including a terminated plan maintained within the last
five (5) year period ending on the "determination date"), and (ii) any other
plan maintained by the Employer which the Company elects to include within the
group, provided the resulting group satisfies Section 401(a)(4) and Section 410
of the Code. In determining the cumulative accrued benefits of a defined benefit
plan for purposes of this Paragraph, the actuarial assumptions specified by the
defined benefit plan for this purpose shall be utilized. If differing actuarial
assumptions are specified for two or more defined benefit plans, then the
actuarial assumptions for the defined benefit plan including the largest number
of employees in the first year any defined benefit plan is included within the
aggregation group shall be utilized. Solely for the purpose of determining if
the Plan, or any other plan in a required aggregation group of which this Plan
is a part, is a Top-Heavy Plan, the accrued benefit of an Employee other than a
Key Employee shall be determined (a) under the method, if any, that uniformly
applies for accrual purposes under all plans maintained by the
19
<PAGE> 25
Employer, or (b) if there is no such method, as if such benefit accrued not more
rapidly than the slowest accrual rate permitted under the fractional accrual
rate of Section 411(b)(1)(C) of the Code.
AS. "Total Compensation" shall mean all amounts paid or made available to
an Employee which are treated as compensation under Treasury Regulation Section
1.415-2(d)(2), and are not excluded from compensation under Treasury Regulation
Section 1.415-2(d)(3).
1. Items Includable as Compensation. For purposes of applying the
limitations of Section 415 of the Code, the term "compensation" includes:
(a) The Participant's wages, salaries, fees for professional
services and other amounts received for personal services actually
rendered in the course of employment with an Employer maintaining
the Plan (including, but not limited to, commissions paid to
salesmen, compensation for services on the basis of a percentage of
profits, commissions on insurance premiums, tips, bonuses, fringe
benefits, reimbursements, and expense allowances).
(b) In the case of a Participant who is an employee within the
meaning of Section 401(c)(1) of the Code and the regulations
thereunder, the Participant's earned income (as described in Section
401(c)(2) of the Code and the regulations thereunder).
(c) For purposes of subsections (a) and (b) of this
subparagraph, earned income from sources outside the United States
(as defined in Section
20
<PAGE> 26
911(b) of the Code, whether or not excludable from gross income
under Section 911 of the Code).
(d) Amounts described in Sections 104(a)(3), 105(a) and 105(h)
of the Code, but only to the extent that these amounts are
includable in the gross income of the employee.
(e) Amounts paid or reimbursed by the Employer for moving
expenses incurred by an employee, but only to the extent that these
amounts are not deductible by the employee under Section 217 of the
Code.
(f) The value of a non-qualified stock option granted to an
employee by the Employer, but only to the extent that the value of
the option is includable in the gross income of the employee for the
taxable year in which granted.
(g) The amount includable in the gross income of an employee
upon making the election described in Section 83(b) of the Code.
(h) Effective January 1, 1998, any elective deferrals (as
defined in Section 402(g)(3)).
(i) Effective January 1, 1998, elective contribution to
Section 457 nonqualified deferred compensation plans.
(j) Effective January 1, 1998, salary reduction contributions
to cafeteria plans.
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<PAGE> 27
2. Items Not Includable as Compensation. The term "compensation"
does not include items such as:
(a) Any distributions from a plan of deferred compensation are
not considered as compensation for Code Section 415 purposes,
regardless of whether such amounts are includable in the gross
income of the employee when distributed. However, any amounts
received by an employee pursuant to an unfunded non-qualified plan
may be considered as compensation for Code Section 415 purposes in
the year such amounts are includable in the gross income of the
employee.
(b) Amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property) held by an
employee either becomes freely transferable or is no longer subject
to a substantial risk of forfeiture under Section 83 of the Code and
the regulations thereunder.
(c) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option.
(d) Other amounts which receive special tax benefits, such as
premiums for group term life insurance (but only to the extent that
the premiums are not includable in the gross income of the employee
under Section 72).
Except as otherwise provided in this Plan, Total Compensation shall
be determined on the basis of the Plan Year.
22
<PAGE> 28
AT. "Total Disability" shall mean the mental or physical inability of a
Participant to perform his normal job, as evidenced by either: (1) the
certificate of a medical examiner satisfactory to the Employer, certifying such
inability and certifying that such condition is likely to be permanent, or (2)
the receipt of disability payments from the Social Security Administration.
AU. "Trust" shall mean the trust established pursuant to Article IX of
this Plan.
AV. "Trustee" shall mean the trustee or trustees of the Trust established
pursuant to this Plan.
AW. "Year of Service" shall mean a computation period during which an
Employee is credited with not less than 1,000 Hours of Service with the Employer
for purposes of eligibility under Article II. Except as provided in Paragraph B
of Article II, the computation period shall be the Plan Year. For purposes of
vesting under Article V, "Year of Service" shall mean a period of twelve (12)
consecutive months commencing on an Employee's date of employment or anniversary
of the Employee's date of employment.
23
<PAGE> 29
ARTICLE II
ELIGIBILITY AND PARTICIPATION
An Eligible Employee shall become a Participant of the Plan in accordance
with the following requirements:
A. Service Requirement
1. Each Eligible Employee who has completed one (1) Year of Service
shall be eligible to become a Participant of the Plan as of the Entry Date
coincident with or next following the last day of the Eligibility
Computation Period during which such period of service is completed.
2. An Eligible Employee who satisfies the service requirements of
subparagraph 1 but who is not an Eligible Employee on the Entry Date shall
become a Participant of the Plan immediately upon again becoming an
Eligible Employee.
B. Eligibility Computation Period
For purposes of Article II, the initial Eligibility Computation
Period shall be the twelve (12) consecutive month period commencing with the
date on which an Employee first performs an Hour of Service for the Employer.
Subsequent Eligibility Computation Periods will be the Plan Year, commencing
with the Plan Year which includes the first anniversary of the date the Employee
first performs an Hour of Service.
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<PAGE> 30
C. Salary Deferral Election
An Employee who is eligible to become a Salary Deferral Participant under
Paragraph A of this Article II shall become a Salary Deferral Participant as of
the Entry Date coincident with or next following the date he makes a written
application to become a Salary Deferral Participant and signs a form providing a
Salary Deferral Election. The Employer shall to the extent possible notify each
Eligible Employee of his prospective eligibility to become a Salary Deferral
Participant at least thirty (30) days prior to the date he must file an
application, but such notice shall be given only the first time an Employee is
eligible to become a Salary Deferral Participant, and failure to give such
notice shall not impose any liability upon the Employer or the Committee. At any
time, a Participant may change his Salary Deferral Election, may discontinue
deferral of his Compensation and may restart Salary Deferrals, subject to the
change taking effect as soon as administratively feasible in accordance with
rules prescribed by the Committee.
D. Participation
Participation in the Plan continues until a Participant terminates by
Normal Retirement, by delayed retirement, by reason of Total Disability, or by
death or severs employment with the Employer and has a One-Year Break in
Service. An Employee whose participation in the Plan has terminated shall become
a Participant again on the date he again becomes an Eligible Employee. An
Employee whose participation in the Plan has terminated but who has not received
all benefits under the Plan shall be a "former Participant." For the purpose of
establishing a One-Year Break in Service hereunder, the applicable computation
period shall be the Eligibility Computation Period as defined in Paragraph B of
Article II hereof.
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<PAGE> 31
E. Leaves of Absence
A Participant's employment is not considered terminated for purposes of
the Plan while he is on leave of absence with the consent of the Employer,
provided that he returns to the employ of the Employer at the expiration of such
leave. Leaves of absence shall mean leaves granted by the Employer, in
accordance with written rules uniformly applied to all Employees, for reasons of
health or public service or for reasons determined by the Employer to be in its
best interests. A Participant's employment shall also not be deemed to have
terminated while he is a member of the Armed Forces of the United States,
provided that he returns to the employment of the Employer within ninety (90)
days (or such longer period as may be prescribed by law) from the date he first
became entitled to his discharge. Participants who do not return to the employ
of the Employer within sixty (60) days following the end of the leave of
absence, or within the required time in case of service with the Armed Forces,
shall be deemed to have terminated their employment as of the date when their
leaves of absence began, unless such failure to return was the result of Normal
Retirement, delayed retirement, Total Disability or death.
F. Suspended Participation
A Participant who ceases to be an Eligible Employee, but who has not
separated from the service of the Employer, shall become a suspended
Participant. During the period of suspension, no amounts which are based on his
Compensation or Total Compensation from and after the date of suspension shall
be credited to his Account. Notwithstanding the foregoing, salary deferrals made
during the period the Participant was an Eligible Employee and matching
contributions thereon may be credited to the Participant's Account during the
period of suspension. However, amounts previously credited to a Participant's
Account shall continue to vest, and the Participant
26
<PAGE> 32
shall be entitled to benefits in accordance with the other provisions of the
Plan while he is a suspended Participant.
27
<PAGE> 33
ARTICLE III
EMPLOYER CONTRIBUTIONS
A. Definitions
For purposes of this Article III, the following definitions shall apply
unless indicated otherwise:
1. "Average Contribution Percentage" shall mean the average
(expressed as a percentage to the nearest one-hundredth of one percent)
of the Contribution Percentages of the Eligible Participants in a
group.
2. "Actual Deferral Percentage" shall mean the ratio
(expressed as a percentage to the nearest one-hundredth of one percent)
of the sum of Elective Deferrals and Qualified Employer Deferral
Contributions made on behalf of an Eligible Participant for the Plan
Year to the Eligible Participant's Compensation for the Plan Year. The
Actual Deferral Percentage of an Eligible Participant who makes no
Elective Deferrals and is allocated no Qualified Employer Deferral
Contributions shall be zero (0).
3. "Average Actual Deferral Percentage" shall mean the average
(expressed as a percentage to the nearest one-hundredth of one percent)
of the Actual Deferral Percentages of the Eligible Participants in a
group.
4. "Contribution Percentage" shall mean the ratio (expressed
as a percentage to the nearest one hundredth of one percent) of the sum
of the Matching Contributions (other than Qualified Matching
Contributions) and Qualified Employer Contributions made under this
Plan on behalf of the Eligible Participant for the Plan Year to the
Eligible
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<PAGE> 34
Participant's Compensation for the Plan Year. Such Contribution
Percentage shall not include forfeitures of Matching Contributions
allocated to the Eligible Participant's Account for the Plan Year in
which the allocation is made. The Contribution Percentage of an
Eligible Participant who neither makes nor receives such contributions
shall be zero (0).
5. "Elective Deferrals" shall mean Salary Deferral
Contributions and any other contributions made by the Employer to this
Plan and any other qualified plans that are maintained by the Employer
which are aggregated with this Plan under subparagraph F-6 of this
Article III for the Plan Year at the election of the Eligible
Participant, in lieu of cash compensation (that either would have been
received by the Eligible Participant in the Plan Year or is
attributable to services performed by the Eligible Participant within
the Plan Year and would have been received by the Eligible Participant
within 2-1/2 months after the close of the Plan Year but for a deferral
election), and shall include contributions made pursuant to a salary
reduction agreement. Such "Elective Deferrals" shall be taken into
account for a Plan Year only if they are allocated to the Eligible
Participant's account as of a date within that Plan Year, were not
distributed to such Eligible Participant pursuant to subparagraph H-6
of Article IV, the allocation is not contingent on the Eligible
Participant's participation in the plan or performance of services for
the Employer after such date, and the Elective Deferrals are paid to a
trust no later than twelve (12) months after the close of the Plan Year
to which they relate. Elective Deferrals shall include Excess Deferral
Amounts distributed to Highly Compensated Employees but shall not
include Excess Deferral Amounts attributable to
29
<PAGE> 35
this Plan or another plan of the Employer that are distributed to
Non-Highly Compensated Employees.
6. "Eligible Participant" for purposes of Paragraphs E and F
of this Article III shall mean any Employee who is otherwise authorized
under this Plan and any other qualified plans that are maintained by
the Employer which are aggregated with this Plan under subparagraph F-6
of this Article III to have Elective Deferrals or Qualified Employer
Deferral Contributions allocated to his account for the Plan Year,
including an Employee who is not permitted to make Elective Deferrals
because of a prior hardship withdrawal. "Eligible Participant" for
purposes of Paragraphs G and H of this Article III shall mean any
Employee who is otherwise authorized under this Plan to have Matching
Contributions or Qualified Employer Contributions allocated to his
Account for the Plan Year.
7. "Excess Deferral Amount" shall mean the amount of Excess
Deferrals for a calendar year which the Participant allocates to this
Plan pursuant to the procedure set forth in subparagraph F-1 of this
Article III; provided that the "Excess Deferral Amounts" shall first be
reduced, in accordance with regulations prescribed by the Secretary of
the Treasury, by the amount of Excess Contributions previously
distributed to the Participant under subparagraph F-2 of this Article
III for the Plan Year beginning with or within the Participant's
taxable year.
8. "Matching Contributions" shall mean any Employer Matching
Contributions and contributions made by the Employer to the Plan for
the Plan Year and allocated to an Eligible Participant's Account by
reason of the Eligible Participant's
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<PAGE> 36
Elective Deferrals; provided, however, that such Matching Contributions
must be allocated to the Eligible Participant's Account as of a date
within that Plan Year and actually be paid to the Trust no later than
twelve (12) months after the close of the Plan Year to which they
relate.
9. "Qualified Employer Contributions" shall mean Qualified
Nonelective Contributions and Elective Deferrals which are taken into
account under the Plan in determining an Eligible Participant's
Contribution Percentage; provided, however, that in order for Elective
Deferrals to be taken into account, all Elective Deferrals must satisfy
the limitations in subparagraph E-2 of this Article III by including
and excluding such Elective Deferrals, and the Qualified Nonelective
Contributions and Elective Deferrals taken into account must satisfy
the other requirements of Treasury Regulation Section 1.401(m)-1(b)(2).
Qualified Nonelective Contributions taken into account under this
subparagraph A-9 cannot be used in determining an Eligible
Participant's Actual Deferral Percentage.
10. "Qualified Employer Deferral Contributions" shall mean
Qualified Nonelective Contributions and Qualified Matching
Contributions which are taken into account under this Plan and any
other qualified plans that are maintained by the Employer which are
aggregated with this Plan under subparagraph F-6 of this Article III in
determining an Eligible Participant's Actual Deferral Percentage which
satisfy the requirements of Treasury Regulation Section
1.401(k)-1(b)(3). Qualified Nonelective Contributions taken into
account under this subparagraph A-10 cannot be used in determining an
Eligible Participant's Contribution Percentage.
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<PAGE> 37
11. "Qualified Matching Contributions" shall mean Matching
Contributions which are taken into account under the Plan in
determining an Eligible Participant's Actual Deferral Percentage. In
order for Matching Contributions to be considered as Qualified Matching
Contributions, the Matching Contributions must be one hundred percent
(100%) vested and nonforfeitable when made and must not be
distributable under the Plan to Eligible Participants or their
Beneficiaries earlier than the earliest of:
(a) The Eligible Participant's separation from
service, death or disability;
(b) The termination of the Plan without establishment
or maintenance of another defined contribution plan (other
than an employee stock ownership plan as defined in Section
4975(e)(7) of the Code or a simplified employee pension plan
as defined in Section 408(k) of the Code);
(c) The sale or other disposition by a corporation of
substantially all of its assets (within the meaning of Section
409(d)(2) of the Code) used by such corporation in a trade or
business of such corporation with respect to an Eligible
Participant who continues employment with the corporation
acquiring such assets;
(d) The sale or other disposition by a corporation of
such corporation's interest in a subsidiary (within the
meaning of Section 409(d)(3) of the Code) with respect to an
Eligible Participant who continues employment with such
subsidiary; or
(e) The Eligible Participant's attainment of age
59-1/2.
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<PAGE> 38
Notwithstanding the foregoing, any distribution made pursuant to
subparagraphs A-11(b), A-11(c) and A-11(d), above must meet the
requirements of Section 401(k)(10) of the Code.
12. "Qualified Nonelective Contributions" shall mean Employer
Supplemental Contributions and contributions made by the Employer to
this Plan and to any other qualified plans that are maintained by the
Employer which are aggregated with this Plan (other than Elective
Deferrals and Matching Contributions) which are allocated to the
Eligible Participant's account and which the Eligible Participant may
not elect to receive in cash until distributed from the Plan. In order
for such contributions to be considered as Qualified Nonelective
Contributions, they must be one hundred percent (100%) vested and
nonforfeitable when made and must not be distributable under the terms
of the Plan to Eligible Participants or their Beneficiaries earlier
than the earliest of:
(a) The Eligible Participant's separation from
service, death or disability;
(b) The termination of the Plan without establishment
or maintenance of another defined contribution plan (other
than an employee stock ownership plan as defined in Section
4975(e)(7) of the Code or a simplified employee pension plan
as defined in Section 408(k) of the Code);
(c) The sale or other disposition by a corporation of
substantially all of its assets (within the meaning of Section
409(d)(2) of the Code) used by such
33
<PAGE> 39
corporation in a trade or business of such corporation with
respect to an Eligible Participant who continues employment
with the corporation acquiring such assets;
(d) The sale or other disposition by a corporation of
such corporation's interest in a subsidiary (within the
meaning of Section 409(d)(3) of the Code) with respect to an
Eligible Participant who continues employment with such
subsidiary; or
(e) The Eligible Participant's attainment of age
59-1/2.
Notwithstanding the foregoing, any distribution made pursuant to
subparagraphs A-12(b), A-12(c) and A-12(d), above must meet the
requirements of Section 401(k)(10) of the Code.
13. "Total Contributions" shall mean the dollar amount of all
contributions made by or on behalf of a Highly Compensated Employee.
B. Salary Deferral Contribution
1. A Participant electing to participate in the Plan shall
make a Salary Deferral Election for the Plan Year electing to defer not
less than 1% and not greater than 15% of his Compensation. In no event
shall such deferral exceed $7,627 in 1989 (or, in later years, such
amount as adjusted by the Secretary of the Treasury at the same time
and in the same manner as the dollar limit set forth in Section 415(d)
of the Code is adjusted).
2. At any time, a Participant may change his Salary Deferral
Election, may discontinue deferral of his Compensation and may restart
Salary Deferrals, subject to the
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<PAGE> 40
change taking effect as soon as administratively feasible in accordance
with rules prescribed by the Committee.
3. Subject to the provisions of Paragraphs E through H of this
Article III, for each Plan Year the Employer shall make a Salary
Deferral Contribution to the Plan for each Participant in an amount
equal to the amount of Compensation which the Participant has elected
to defer pursuant to his Salary Deferral Election. The Employer shall
pay over all Salary Deferral Contributions to the Trustee on the
earliest date on which such contributions can reasonably be segregated
from the Employer's general assets, but in any event, within thirty
(30) days of the date on which such amounts would otherwise have been
payable to the Employee in cash.
4. All Salary Deferral Elections, changes in Salary Deferral
Elections or discontinuances of Salary Deferral Elections shall be made
in writing on such forms and in such manner as may be established by
the Committee.
5. With the exception of Employer Matching Contributions, no
other Employer provided benefit, including, but not limited to,
benefits under a defined benefit plan, nonelective employer
contributions to a defined contribution plan, the availability, cost or
amount of health benefits, vacations or vacation pay, life insurance,
dental plans, legal service plans, loans (including plan loans),
financial planning services, subsidized retirement benefits, stock
options, property subject to Code Section 83, and dependent care
assistance, shall be directly or indirectly conditioned upon any
Employee's election to make a Salary Deferral Election under this
Article III.
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<PAGE> 41
C. Employer Matching Contributions
1. Subject to the provisions of Paragraphs E through H of this
Article III, for each Plan Year the Employer shall contribute at the
discretion of the Board of Directors, without regard to current or
accumulated earnings and profits for the taxable year or years ending
with or within such Plan Year, a matching contribution. Such
contribution shall be determined annually, but shall not be less than
twenty-five percent (25%) of the first six percent (6%) of the Salary
Deferral Contribution elected by Participants. The sum of the Employer
Matching Contribution and the Salary Deferral Contribution for any
Fiscal Year shall not exceed an amount equal to fifteen percent (15%)
of the total Compensation (after any salary reductions) otherwise paid
or accrued to all Participants employed by the Employer for such year.
In no event shall the Employer Matching Contribution attributable to
any Plan Year be so large as to cause the Annual Addition for any
Participant to exceed the amount permitted under Section 415 of the
Code. In no event shall the Employer Matching Contribution for any
Fiscal Year exceed an amount which the Employer estimates will be
deductible under Section 404(a)(3) of the Code.
2. The Employer Matching Contribution shall be reduced by the
amount of any forfeitures arising during the Plan Year.
D. Employer Supplemental Contribution
Subject to the provisions of Paragraphs E through H of this Article
III, for each Plan Year in which this Plan is in effect the Employer may make an
Employer Supplemental Contribution to the Trust in one or more installments in
such amounts as the Employer may determine. The Plan Year for which each
contribution is made shall be designated at the time of the contribution.
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<PAGE> 42
E. Limitations on Salary Deferral Contributions
Effective January 1, 1997, the following limitations shall apply to
Salary Deferral Contributions:
1. No Participant shall receive a Salary Deferral Contribution
under this Plan which, when combined with any other Elective Deferrals
of the Participant under any other qualified plan in which the
Participant participates for the calendar year, exceeds $7,627 in 1989
(or, in later years, such amount as adjusted by the Secretary of the
Treasury at the same time and in the same manner as the dollar limit
set forth in Section 415(d) of the Code is adjusted).
2. The Average Actual Deferral Percentage for Eligible
Participants who are Highly Compensated Employees for the Plan Year
shall not exceed the Average Actual Deferral Percentage for Eligible
Participants who were considered Non-Highly Compensated Employees
(whether or not currently Non-Highly Compensated or currently an
Employee) for the prior Plan Year multiplied by 1.25; or
3. The Average Actual Deferral Percentage for Eligible
Participants who are Highly Compensated Employees for the Plan Year
shall not exceed the Average Actual Deferral Percentage for Eligible
Participants who were considered Non-Highly Compensated Employees
(whether or not currently Non-Highly Compensated or currently an
Employee) for the prior Plan Year multiplied by two (2), provided that
the Average Actual Deferral Percentage for Eligible Participants who
are Highly Compensated Employees does not exceed the Average Actual
Deferral Percentage for
37
<PAGE> 43
Eligible Participants who were considered Non-Highly Compensated
Employees by more than two (2) percentage points.
4. Notwithstanding subparagraphs E-2 and E-3 above, if both
the one hundred twenty-five percent (125%) test set forth in
subparagraph E-2 above and the one hundred twenty-five percent (125%)
test set forth in subparagraph G-1 of this Article III are not
satisfied and one or more Highly Compensated Employees of the Employer
are eligible to have Elective Deferrals and Matching Contributions made
on their behalf under this Plan, the following shall apply. The sum of
the Average Actual Deferral Percent age and the Average Contribution
Percentage for Eligible Participants who are Highly Compensated
Employees shall not exceed the greater of the sum of:
(a) The sum of:
(i) 1.25 multiplied by the greater of:
(1) The Average Actual Deferral
Percentage for Eligible Participants who
were Non-Highly Compensated Employees in the
prior year, or
(2) The Average Contribution
Percentage for Eligible Participants who
were Non-Highly Compensated Employees in the
prior year; and
(ii) Two (2) plus the lesser of:
(1) Subparagraph E-4(a)(i)(1),
or
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<PAGE> 44
(2) Subparagraph E-4(a)(i)(2), which
shall in no event exceed twice the lesser of
subparagraph E-4(a)(i)(1) or E-4(a)(i)(2);
or
(b) The sum of:
(i) 1.25 multiplied by the lesser of:
(1) Subparagraph E-4(a)(i)(1), or
(2) Subparagraph E-4(a)(i)(2); and
(ii) Two (2) plus the greater of:
(1) Subparagraph E-4(a)(i)(1),
or
(2) Subparagraph E-4(a)(i)(2),
which shall in no event exceed twice the
greater of subparagraph E-4(a)(i)(1) or
E-4(a)(i)(2) above.
In the event that the limitation of this subparagraph E-4 is exceeded, the
Average Actual Deferral Percentage or the Average Contribution Percentage shall
be reduced in accordance with the manner described in subparagraph F-3(a) or
subparagraph H-2 of this Article III. For purposes of applying the limitations
of this subparagraph E-4, the Average Actual Deferral Percentage shall be
determined after adjustment under subparagraph F-2 of this Article III and the
Average Contribution Percentage shall be determined after adjustment under
subparagraph H-1 of this Article III.
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<PAGE> 45
F. Correcting Excess Deferrals and Excess Contributions
1. Notwithstanding any other provision of the Plan:
(a) Excess Deferral Amounts shall be distributed to
Participants who claim such Excess Deferral Amounts for the
preceding calendar year no later than the April 15 following
the calendar year in which such Excess Deferral Amounts are
contributed to the Plan. A Participant's claim pursuant to
this subparagraph F-1(a) shall be in writing; shall be
submitted to the Administrator no later than March 1; shall
specify the Participant's Excess Deferral Amount from the
preceding calendar year; and shall be accompanied by the
Participant's written statement that if such amounts are not
distributed, such Excess Deferral Amount, when added to
amounts deferred under other plans or arrangements described
in Section 401(k), 408(k) or 403(b) of the Code, exceeds the
limit imposed on the Participant by Section 402(9) of the Code
for the year in which the deferral occurred.
(b) If the Participant's Excess Deferral Amounts to
this Plan and any other plan of the Employer or the calendar
year exceed the limits contained in subparagraph E-1 of this
Article III, the Participant shall be deemed to have notified
the Administrator of the Excess Deferral Amount and such
Excess Deferral Amount shall be distributed to the
Participant. If the Excess Deferral Amount is attributable to
Elective Deferrals made to more than one plan of the Employer,
the Excess Deferral Amount shall be distributed first from the
plan that received the greatest amount of Elective Deferrals
for the calendar year, and from
40
<PAGE> 46
each other plan of the Employer in the same manner, until no
Excess Deferral Amount remains.
(c) The Excess Deferral Amount distributed to a
Participant with respect to a calendar year shall be adjusted
for income or loss. The income or loss attributable to the
Excess Deferral Amount shall include a pro rata share of
income or loss in the Plan Year in which the Excess Deferral
Amount was made, which shall be determined by multiplying the
income or loss for the Plan Year allocable to the
Participant's Elective Deferrals by a fraction the numerator
of which is the Excess Deferral Amount of the Participant for
the Plan Year and the denominator of which is the total
balance of the Participant's account attributable to Elective
Deferrals, without adjustment for gain or loss during the Plan
Year.
2. In the event that the limitations imposed by subparagraphs
E-2, E-3 and E-4 of this Article III are not satisfied for any Plan
Year, the Plan and any other qualified plans that are maintained by the
Employer which are aggregated with this Plan shall take such remedial
measures as are required under this subparagraph F-2 no later than the
last day of each Plan Year for Eligible Participants whose accounts
such Excess Contributions were allocated for the preceding Plan Year.
(a) In the event that the limitations imposed by
subparagraphs E-2, E-3 and E-4 of this Article III are not
satisfied for any Plan Year, the Employer may, in its sole
discretion, make a Qualified Nonelective Contribution on
behalf of each Eligible Participant who is a Non-Highly
Compensated Employee Participant in order that such limitation
be met. Such additional contribution shall
41
<PAGE> 47
be allocated to the Elective Deferral account of such Eligible
Participants in the proportion that each Eligible
Participant's Compensation bears to the Compensation of all
such Non-Highly Compensated Employee Eligible Participants.
(b) In the event that the Employer does not elect to
make an additional contribution under subparagraph F-2(a)
above, the Employer shall determine the Excess Contributions
under subparagraph F-3 below and distribute such Excess
Contributions, with income or loss attributable thereto under
subparagraph F-4 below, no later than 2-1/2 months following
the last day of the Plan Year for which the Excess
Contributions were made to Eligible Participants to whose
accounts Excess Contributions were allocated for the preceding
Plan Year. But in any event, such distribution shall occur no
later than the last day of the Plan Year following the close
of the Plan Year in which the Excess Contributions were made.
If such excess amounts are distributed more than two and
one-half (2-1/2) months following the close of the Plan Year
in which such excess amounts arose, a ten percent (10%) excise
tax will be imposed on the Employer with respect to such
amounts. Amounts distributed shall first be distributed from
the Eligible Participant's Elective Deferral account and shall
be distributed from the Eligible Participant's Qualified
Nonelective Contribution and Qualified Matching Contribution
accounts, if applicable, only to the extent such Excess
Contributions exceed the balance in the Eligible Participant's
Elective Deferral account.
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<PAGE> 48
(c) The Employer, in its sole discretion, may satisfy
the limitations set forth in subparagraphs H of this Article
III through any combination of subparagraphs F-2(a) and F-2(b)
above.
Any distribution under this subparagraph F-2 may be made without any
notice or consent otherwise required under Article VI. In addition,
such distribution shall not be considered a distribution for purposes
of determining whether the Plan and any other qualified plans that are
maintained by the Employer which are aggregated with this Plan satisfy
the minimum distribution requirements of subparagraph B-6 of Article
VI.
3. Effective January 1, 1997, Excess Contributions shall be
determined as follows:
(a) The Employer shall rank its Eligible Participants
who are Highly Compensated Employees by amount of Total
Contributions in descending order. The Employer shall then
reduce the amount of Elective Deferrals and Qualified Employer
Deferral Contributions made on behalf of the Highly
Compensated Employee with the highest amount of Total
Contributions until the first of the following occurs:
(i) The Plan and any other qualified plans
that are maintained by the Employer which are
aggregated with this Plan satisfy the limitations set
forth in subparagraphs E-2, E-3 and E-4 of this
Article III; or
43
<PAGE> 49
(ii) The amount of Total Contributions for
such Highly Compensated Employee is reduced to a
percentage which equals the amount of Total
Contributions of the Highly Compensated Employee with
the next highest amount of Total Contributions. The
Employer shall then repeat the application of this
subparagraph F-3(a) until the Plan and any other
qualified plans that are maintained by the Employer
which are aggregated with this Plan satisfy the
limitation set forth in subparagraphs E-2, E-3 and
E-4 of this Article III.
(b) For each Eligible Participant who is a Highly Compensated
Employee, "Excess Contributions" shall mean the difference
between:
(i) The sum of the Elective Deferrals and Qualified
Employer Deferral Contributions allocated to the Highly
Compensated Employee for such Plan Year (determined prior to
the application of this subparagraph F-3); and
(ii) The amount determined by multiplying the Highly
Compensated Employees Actual Deferral Percentage (determined
after application of this subparagraph F-3) by his
Compensation.
Notwithstanding the foregoing, in no event shall Excess Contributions
exceed the amount of Elective Deferrals and Qualified Employer Deferral
Contributions made on behalf of such Highly Compensated Employee for
such Plan Year.
4. The income or loss attributable to Excess Contributions
include a pro rata share of income or loss in the Plan Year in which
the Excess Contributions were made,
44
<PAGE> 50
which shall be determined by multiplying the income or loss for the
Plan Year allocable to Elective Deferrals and Qualified Employer
Deferral Contributions by a fraction the numerator of which is the
Excess Contributions of the Eligible Participant for the Plan Year and
the denominator of which is the total balance of the Eligible
Participant's account attributable to Elective Deferrals and Qualified
Employer Deferral Contributions, without adjustment for gain or loss
during the Plan Year.
5. The Excess Contributions shall be reduced, in accordance
with regulations prescribed by the Secretary of the Treasury, by the
amount of Excess Deferrals previously distributed to the Eligible
Participant under subparagraph F-1 of this Article III for his taxable
year ending with or within such Plan Year.
6. For purposes of this Paragraph F:
(a) The Actual Deferral Percentage for any Eligible
Participant who is a Highly Compensated Employee for the Plan
Year and who is eligible to have Elective Deferrals or
Qualified Employer Deferral Contributions allocated to his
account under two or more arrangements described in Section
401(k) of the Code that are maintained by the Employer shall
be determined as if all such Elective Referrals and Qualified
Employer Deferral Contributions were made under a single
arrangement, provided that no such arrangement is part of a
plan that is an employee stock ownership plan of the Employer
as defined in Section 4975(e) of the Code. If any such plan is
an employee stock ownership plan, the Actual Deferral
Percentage shall be determined separately for all employee
stock ownership plans and all non-employee stock ownership
plans. If such an Eligible
45
<PAGE> 51
Participant participates in two or more plans or arrangements
that have different plan years, all such plans or arrangements
ending with or within the same calendar year shall be treated
as a single plan or arrangement.
(b) If the Employer maintains this Plan in addition
to one or more qualified plans which contain a cash or
deferred arrangement, such plans shall be treated as follows.
In the event that this Plan satisfies the requirements of
Section 401(a)(4) or 410(b) of the Code only if aggregated
with one or more other plans, or if one or more other plans
satisfy the requirements of Section 401(a)(4) or 410(b) of the
Code only if aggregated with this Plan, then subparagraphs
E-2, E-3 and E-4 of this Article III shall be applied by
determining the Actual Deferral Percentage of Eligible
Participants as if all such plans were a single plan. This
Plan may be aggregated with any other qualified plan
maintained by the Employer to determine whether the Actual
Deferral Percentage of Eligible Participants satisfies the
requirements of subparagraphs E-2, E-3 and E-4 of this Article
III, provided that the aggregated plans are treated as one
plan for purposes of Sections 401(a)(4), 401(k), and 410(b) of
the Code. The plans so aggregated must have a plan year that
is the same as the Plan Year and no plan so aggregated is an
employee stock ownership plan (as defined in Section 4975(e)
of the Code).
(c) The determination and treatment of the Actual
Deferral Percentage of any Eligible Participant shall satisfy
such other requirements as may be prescribed by the Secretary
of the Treasury.
46
<PAGE> 52
G. Limitations on Matching Contributions
Effective January 1, 1997, the following limitations shall apply to
Matching Contributions:
1. The Average Contribution Percentage for Eligible
Participants who are Highly Compensated Employees for the Plan Year
shall not exceed the Average Contribution Percentage for Eligible
Participants who were considered Non-Highly Compensated Employees
(whether or not currently Non-Highly Compensated or currently an
Employee) for the prior Plan Year multiplied by 1.25; or
2. The Average Contribution Percentage for Eligible
Participants who are Highly Compensated Employees for the Plan Year
shall not exceed the Average Contribution Percentage for Eligible
Participants who were considered Non-Highly Compensated Employees
(whether or not currently Non-Highly Compensated or currently an
Employee) for the prior Plan Year multiplied by two (2), provided that
the Average Contribution Percentage for Eligible Participants who are
Highly Compensated Employees does not exceed the Average Contribution
Percentage for Eligible Participants who were considered Non-Highly
Compensated Employees by more than two (2) percentage points.
3. Notwithstanding the above, if both the one hundred
twenty-five percent (125%) test set forth in subparagraph G-1 above and
the one hundred twenty-five percent (125%) test set forth in
subparagraph E-2 of this Article III are not satisfied and one or more
Highly Compensated Employees of the Employer are eligible to have
Elective Deferrals and Matching Contributions made on their behalf
under this Plan, the following
47
<PAGE> 53
shall apply. The sum of the Average Actual Deferral Percentage and the
Average Contribution Percentage for Eligible Participants who are
Highly Compensated Employees shall not exceed the greater of:
(a) The sum of:
(i) 1.25 multiplied by the greater of:
(1) The Average Actual Deferral
Percentage for Eligible Participants who are
Non-Highly Compensated Employees, or
(2) The Average Contribution
Percentage for Eligible Participants who
were Non-Highly Compensated Employee in the
prior year; and
(ii) Two (2) plus the lesser of:
(1) Subparagraph G-3(a)(i)(1),
or
(2) Subparagraph G-3(a)(i)(2),
which shall in no event exceed twice the
lesser of subparagraph G-3(a)(i)(1) or
G-3(a)(i)(2); or
(b) The sum of:
(i) 1.25 multiplied by the lesser of:
(1) Subparagraph G-3(a)(i)(1), or
48
<PAGE> 54
(2) Subparagraph G-3(a)(i)(2); and
(ii) Two (2) plus the greater of:
(1) Subparagraph G-3(a)(i)(1), or
(2) Subparagraph G-3(a)(i)(2),
which shall in no event exceed twice the
greater of subparagraph G-3(a)(i)(1) or
G-3(a)(i)(2) above.
In the event that the limitation of this subparagraph G-3 is exceeded,
the Average Actual Deferral Percentage or the Average Contribution
Percentage shall be reduced in accordance with the manner described in
subparagraph F-3(a) or subparagraph H-2 of this Article III.
H. Correcting Excess Aggregate Contributions
1. In the event that the limitation imposed by Paragraph G of
this Article III is not satisfied for any Plan Year, the Plan shall
take such remedial measures as are required under this Paragraph H no
later than the last day of each Plan Year for Eligible Participants
whose Accounts such Excess Aggregate Contributions were allocated for
the preceding Plan Year.
(a) In the event that the limitation imposed by
Paragraph G of this Article III is not satisfied for any Plan
Year, the Employer may, in its sole discretion, make a
Qualified Nonelective Contribution on behalf of each Eligible
Participant who is a Non-Highly Compensated Employee
Participant in order that
49
<PAGE> 55
such limitation be met. Such additional contribution shall be
allocated among the Account for such Eligible Participant in
the proportion that each Eligible Participant's Compensation
bears to the Compensation of all such Non-Highly Compensated
Employee Participants.
(b) In the event that the Employer does not elect to
make an additional contribution under subparagraph H-1(a)
above, the Employer shall determine the Excess Aggregate
Contributions under subparagraph H-2 below and forfeit
Matching Contributions, with income or loss attributable
thereto, if forfeitable under the terms of the Plan no later
than the last day of each Plan Year to Eligible Participants
whose Accounts Matching Contributions were allocated for the
preceding Plan Year. Such forfeitures shall be allocated to
the Employer Matching Contribution Accounts of Non-Highly
Compensated Employee Participants in the proportion that each
such Eligible Participant's Compensation bears to the
Compensation of all such Eligible Participants.
(c) In the event that the Employer does not elect to
make an additional contribution under subparagraph H-1(a)
above or to forfeit Matching Contributions under subparagraph
H-1(b) above, the Employer shall determine the Excess
Aggregate Contributions under subparagraph H-2 below and
distribute such Excess Aggregate Contributions with income or
loss attributable thereto under subparagraph H-3 below no
later than 2-1/2 months following the last day of the Plan
Year for which the Excess Aggregate Contributions were made to
Eligible Participant to whose Accounts Excess Aggregate
Contributions were allocated for the preceding Plan Year. But
in any event, such distribution shall
50
<PAGE> 56
occur no later than the last day of the Plan Year following
the close of the Plan Year in which the Excess Aggregate
Contributions were made. If such excess amounts are
distributed more than two and one-half (2-1/2) months
following the close of the Plan Year in which such excess
amounts arose, a ten percent (10%) excise tax will be imposed
on the Employer with respect to such amounts.
(d) The Employer, in its sole discretion, may satisfy
the limitations set forth in Paragraph G of this Article III
through any combination of subparagraphs H-1(a), H-1(b), and
H-1(c) above.
Any distribution under this subparagraph H-1 may be made without any notice or
consent otherwise required under Article VI. In addition, any such distribution
will not be considered a distribution for purposes of determining whether the
Plan satisfies the minimum distribution requirements of subparagraph B-6 of
Article VI.
2. Excess Aggregate Contributions shall be determined as follows:
(a) The Employer shall rank its Eligible Participants
who are Highly Compensated Employees by Contribution
Percentage in descending order. The Employer shall then reduce
the amount of Matching Contributions and Qualified Employer
Contributions made on behalf of the Highly Compensated
Employees with the highest Contribution Percentage until the
first of the following occurs:
(i) The Plan satisfies the limitations set forth
in Paragraph G of this Article III; or
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<PAGE> 57
(ii) The Contribution Percentage for such Highly
Compensated Employee is reduced to a percentage which equals
the Contribution Percentage of the Highly Compensated Employee
with the next highest Contribution Percentage. The Employer
shall then repeat the application of this subparagraph H-2(a)
until the Plan satisfies the limitation set forth in Paragraph
G of this Article III.
(b) For each Eligible Participant who is a Highly
Compensated Employee, "Excess Aggregate Contributions" shall
mean the difference between:
(i) The sum of the Matching Contributions and
Qualified Employer Contributions allocated to the Highly
Compensated Employee for such Plan Year (determined prior to
the application of this subparagraph H-2); and
(ii) The amount determined by multiplying the
Highly Compensated Employee's Contribution Percentage
(determined after application of this subparagraph H-2) by his
Compensation.
Notwithstanding the foregoing, in no event shall Excess Aggregate Contributions
exceed the amount of Matching Contributions and Qualified Employer Contributions
made on behalf of such Highly Compensated Employee for such Plan Year.
3. The income or loss attributable to Excess Aggregate
Contributions shall include a pro rata share of income or loss in the
Plan Year in which the Excess Aggregate Contributions were made, which
shall be determined by multiplying the income or loss for the Plan Year
allocable to Matching Contributions and Qualified Employer
52
<PAGE> 58
Contributions by a fraction the numerator of which is the Excess
Aggregate Contributions of the Eligible Participant for the Plan Year
and the denominator of which is the total balance of the Eligible
Participant's Account attributable to Matching Contributions and
Qualified Employer Contributions, without adjustment for gain or loss
during the Plan Year.
4. For Plan Years beginning before January 1, 1997, for
purposes of determining the Contribution Percentage of an Eligible
Participant who is a Highly Compensated Employee, the Matching
Contributions, Qualified Employer Contributions, and Compensation of
such Eligible Participant shall include the Matching Contributions,
Qualified Employer Contributions, and Compensation of all eligible
Family Members and such Family Members shall be disregarded in
determining the Contribution Percentage for Eligible Participants who
are Non-Highly Compensated Employees. If an Employee is required to be
treated as a Family Member of more than one family group, all eligible
Employees who are members of those family groups that include that
Employee must be aggregated as one family group.
5. For purposes of determining and correcting Excess Aggregate
Contributions of a Highly Compensated Employee whose Contribution
Percentage is determined under subparagraph H-4 above, the Eligible
Participant's Contribution Percentage is to be reduced as specified in
subparagraph H-2 of this Article III and the Excess Aggregate
Contributions for the family group shall be allocated among the Family
Members in proportion to the Matching Contributions and Qualified
Employer Contributions of each Family Member that are combined to
determine the Contribution Percentage.
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<PAGE> 59
6. The determination and treatment of the Contribution
Percentage of any Eligible Participant shall satisfy such other
requirements as may be prescribed by the Secretary of the Treasury.
7. Amounts forfeited by Highly Compensated Employees under
subparagraph H-1(b) of this Article III shall be treated as Annual
Additions under Paragraph H of Article IV.
I. Employer Minimum Contribution
1. Notwithstanding anything in this Plan to the contrary, and
subject to the limitations set forth in subparagraphs 2 and 3 below, in
any Plan Year in which the Plan is a Top-Heavy Plan, the Employer shall
contribute an amount so as to provide allocations for each Non-Key
Employee Participant who is employed on the last day of the Plan Year
(including such Non-Key Employee Participant who has not accrued a Year
of Service for the Plan Year) of Employer contributions (excluding
Elective Deferrals and Matching Contributions which are used to satisfy
the nondiscrimination requirements under Paragraph G of this Article
III) under this Plan which, together with any other contributions
allocated to the Non-Key Employee Participant under any other defined
contribution plans maintained by the Employer, equals three percent
(3%) of the Participant's Total Compensation, (excluding, effective
January 1, 1997, Total Compensation in excess of $150,000, adjusted
annually by such amount established by the Secretary of the Treasury in
accordance with Section 401(a)(17) of the Code.
2. The percentage minimum contribution required under
subparagraph I-1 above shall in no event exceed the percentage at which
contributions are made (or
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<PAGE> 60
required to be made) under the Plan for the Plan Year for the Key
Employee for whom such percentage is the highest for the Plan Year. In
determining the highest rate of contribution applicable to a Key
Employee, amounts elected to be deferred under a qualified Section
401(k) arrangement shall be counted for purposes of Section 416 of the
Code.
3. No minimum contribution will be required for a Participant
under this Plan for any Plan Year if the Company maintains another
qualified plan under which a minimum benefit or contribution is being
accrued or made for such Participant in accordance with Section 416(c)
of the Code.
J. Maximum Contribution
Employer contributions to the Plan shall not exceed the amount which
the Employer estimates will be deductible under Section 404(a)(3), or, if
applicable, Section 404(a)(7) of the Code, or any successor or similar statutory
provisions hereafter enacted.
55
<PAGE> 61
ARTICLE IV
ALLOCATIONS TO PARTICIPANTS' ACCOUNTS
A. Accounts
For purposes of allocating Employer contributions made pursuant to
Article III and forfeitures, the Committee shall establish and maintain, where
appropriate, separate accounts for each Participant, including a Salary Deferral
Account, an Employer Matching Contribution Account, and an Employer Supplemental
Contribution Account. Since these individual accounts are maintained only for
accounting purposes, a segregation of the Trust assets within each account is
not required. Also, in the case of a Participant who becomes subject to the
provisions of Paragraph B of Article V, the Committee shall establish and
maintain the separate account referred to therein.
B. Valuation of Accounts
1. The Trustee shall determine the fair market value of the
assets of the Trust on a daily basis in accordance with rules
established by the Committee. Each day shall be deemed a valuation
date. As of any valuation date, and before allocating Employer
contributions for the Plan Year, the Committee shall allocate the
increment of Trust earnings to (or, as the case may be, charge the
losses against) the respective accounts of the Participants in
proportion to the balances of such accounts as of the most recent
valuation date.
2. Notwithstanding the foregoing, segregated accounts held in
accordance with Paragraph I of this Article IV or Paragraph E of
Article VI shall be valued separately
56
<PAGE> 62
on each valuation date, and the increment of Trust earnings shall be
allocated to (or, as the case may be, charge the losses against) each
such account on a segregated basis.
C. Allocation of Employer Minimum Contributions
In any Plan Year in which the Plan is a Top-Heavy Plan, Employer
Minimum Contributions, if any, shall be allocated to the Employer Supplemental
Contribution Accounts of Participants in amounts specified in Paragraph I of
Article III.
D. Allocation of Salary Deferral Contributions
Salary Deferral Contributions shall be allocated to the Salary Deferral
Accounts of Participants in amounts equal to the Salary Deferral Contribution
contributed on their behalf pursuant to Paragraph B of Article III.
E. Allocation of Employer Matching Contributions
In the event the Plan is a Top-Heavy Plan, the following provisions of
this Paragraph E shall apply only to allocations in excess of those made
pursuant to Paragraph C of this Article IV.
1. The Employer Matching Contribution, reduced by any
previously outstanding forfeitures, for any Plan Year shall be
allocated among the Employer Matching Contribution Accounts of
Participants in amounts equal to the Employer Matching Contribution
contributed on their behalf pursuant to Paragraph C of Article III. No
Employer Matching Contribution shall be allocated to a Participant's
Account which relates to a Salary Deferral Contribution that exceeds
the maximum amount set forth in
57
<PAGE> 63
subparagraph E-1 of Article III or that is an Excess Contribution
distributed to a Highly Compensated Employee under subparagraph F-2 of
Article III.
2. A Participant for purposes of this Paragraph E shall
include all individuals on whose behalf the Employer has made a Salary
Deferral Contribution for the Plan Year pursuant to Paragraph B of
Article III.
F. Allocation of Employer Supplemental Contributions and
Forfeitures
In the event the Plan is a Top-Heavy Plan, the following provisions of
this Paragraph F shall apply only to allocations in excess of those made
pursuant to Paragraph C of this Article IV.
1. The Employer Supplemental Contributions for any Plan Year
shall be allocated among the accounts of Participants in the proportion
that each Participant's Compensation bears to the Compensation of all
Participants.
2. Subject to subparagraph F-3 below, a Participant for
purposes of this Paragraph F shall include all individuals:
(a) Who are Participants of the Plan on the last day
of the Plan Year and who have completed at least 1,000 Hours
of Service during the Plan Year; and
(b) Whose participation terminated during the Plan
Year by death, by reason of Total Disability, or by Normal
Retirement.
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<PAGE> 64
3. Effective January 1, 1997, subject to the rules set forth
in subparagraph F-4 below, if the number of Participants receiving an
allocation of Employer Supplemental Contributions under this Paragraph
F is less than the number of Participants required to receive a benefit
for the purpose of satisfying the minimum coverage requirements using
the ratio percentage tests set forth in Section 410(b)(1)(A) or
410(b)(1)(B) of the Code, a Participant for purposes of this Paragraph
F shall include the minimum number of individuals, selected one at a
time after having ranked such individuals in descending order of Hours
of Service during the Plan Year, taken from all other individuals:
(a) Who are Participants of the Plan on the last day
of the Plan Year and who have completed fewer than 1,000 Hours
of Service during the Plan Year; and
(b) Who were Participants whose employment ceased
after they completed more than 500 Hours of Service during the
Plan Year, provided, however, that the Plan fails to satisfy
the minimum coverage requirements using the ratio percentage
tests set forth in Section 410(b)(1)(A) or 410(b)(1)(B) of the
Code after the inclusion of those Participants described in
subparagraph F-3(a) above.
In any Plan Year in which the Plan is a Top-Heavy Plan, if a Participant
receives an allocation to his Employer Supplemental Contribution Account for the
Plan Year in an amount greater than the minimum allocation requirement set forth
in Paragraph C of this Article IV, then each Non-Key Employee Participant
receiving an allocation to his Employer Supplemental
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<PAGE> 65
Contribution Account for the Plan Year in an amount not greater than the minimum
allocation requirement of said Paragraph C shall be treated as not benefiting
under the Plan for purposes of determining whether the minimum coverage
requirements using the ratio percentage tests set forth in Section 410(b)(1)(A)
or 410(b)(1)(B) of the Code have been satisfied.
4. For purposes of subparagraph F-3 above, the following rules
shall apply:
(a) In the event that two or more individuals have
completed the same number of Hours of Service during the Plan
Year and such individuals are eligible to be included under
subparagraph F-3(a) or F-3(b) above, then such individuals are
to be ranked in order of ascending Compensation, and the
individual having the least Compensation shall be included as
a Participant for purposes of this Paragraph F. Should the
Plan fail to satisfy the minimum coverage requirements using
the ratio percentage tests set forth in Section 410(b)(1)(A)
or 410(b)(1)(B) of the Code after the inclusion of such
Participant as described in the sentence above, the individual
having the next higher Compensation shall be included as a
Participant.
(b) If two or more individuals have completed the
same number of Hours of Service and have received the same
Compensation during the Plan Year, then all such individuals
shall be included as Participants for purposes of this
Paragraph F.
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G. Special Provision for Forfeitures of Subchapter S
Corporation's Contributions
In allocating forfeitures under this Article IV, any forfeitures which
are attributable to Employer contributions for a Plan Year in which a Fiscal
Year of the Employer began before January 1, 1984, and during which Plan Year
the Employer is or was an electing small business corporation (as that term is
defined in Section 1371(b) of the Code), shall not be allocated to or directly
or indirectly inure to the benefit of any Participant who is or was a
shareholder-employee (as defined in Section 1379(d) of the Code as in effect the
day before the date of enactment of the Subchapter S Revision Act of 1982) for
such Plan Year. Any amount forfeited by a Participant in a Plan Year that cannot
be allocated in such year to a shareholder-employee by reason of this limitation
shall be allocated as a forfeiture in such year to Participants to whom the
limitation does not apply.
H. Allocation Limitations
1. Notwithstanding anything to the contrary contained in this
Plan, the Annual Additions to a Participant's Account for any Plan Year
shall not exceed the lesser of the Defined Contribution Dollar
Limitation (currently 630,000) for the Plan Year or twenty-five percent
(25%) of the Participant's Total Compensation for the Plan Year. The
percentage limitation of the preceding sentence shall not apply to any
contribution for medical benefits (within the meaning of Section
419A(f)(2) of the Code) after separation from service which is
otherwise treated as an Annual Addition, or to any amount otherwise
treated as an Annual Addition under Section 415(l)(2) of the Code. For
purposes of this Paragraph H, the term:
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<PAGE> 67
(a) "Annual Additions" means for any Plan Year the
sum of the following amounts credited to a Participant's
accounts in all qualified defined contribution plans
maintained by an Employer: (i) Employer contributions, (ii)
Employee Contributions, and (iii) forfeitures. Solely for
purposes of this subparagraph 1(a), the Total Compensation for
a totally disabled (within the meaning of Section 22(e) of the
Code) member of a profit sharing plan maintained by an
Employer is the compensation which the member would have
received for the year if the member had been paid at the rate
of compensation paid immediately before becoming permanently
and totally disabled; provided such imputed compensation may
be taken into account only if the member is not a Highly
Compensated Employee and only if contributions to the profit
sharing plan are nonforfeitable when made. In addition amounts
allocated, after March 31, 1984, to an individual medical
account, as defined in Section 415(1)(2) of the Code, which
are part of a pension or annuity plan maintained by an
Employer, and amounts derived from contributions paid or
accrued after December 31, 1985, in taxable years ending after
such date, which are attributable to post-retirement medical
benefits allocated to the separate account of a key employee,
as defined in Section 419A(d)(3) of the Code, under a welfare
benefit fund, as defined in Section 419(e) of the Code,
maintained by an Employer, shall also be treated as Annual
Additions;
(b) "Annual Benefit" means the Participant's annual
benefit payable in the form of a straight life annuity under
all qualified defined benefit plans maintained by an Employer,
excluding any benefits attributable to the
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<PAGE> 68
Participant's contributions or rollover contributions, if any,
to the plans or to any assets transferred from a qualified
plan that was not maintained by an Employer. No actuarial
adjustment to the benefit is required for (i) the value of a
qualified joint and survivor annuity, (ii) the value of
benefits which are not directly related to retirement benefits
(such as a qualified disability benefit, pre-retirement death
benefit, or post-retirement medical benefit), and (iii) the
value of post-retirement cost-of-living increases made in
accordance with regulations;
(c) "Defined Benefit Dollar Limitation" means the
dollar limitation set forth in Section 415(b)(1) of the Code
($98,064 for the Plan Year that ends in 1989), as adjusted by
the Secretary of the Treasury under Section 415(d) of the Code
to reflect increases in the cost-of-living, in such manner as
the Secretary shall prescribe;
(d) "Defined Contribution Dollar Limitation" means
$30,000 or, if greater, twenty-five percent (25%) of the
Defined Benefit Dollar Limitation in effect for the Plan Year;
(e) "Employee Contributions" means contributions to
the Plan by a Participant during the Plan Year, without regard
to any rollover contributions (as defined in Sections
402(a)(5), 403(a)(4), 403(b)(8), and 408(d)(3) of the Code),
and without regard to any employee contributions to a
simplified employee pension which are excludable from gross
income under Section 408(k)(6) of the Code;
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<PAGE> 69
(f) "Employer" includes a corporation which is a
member of a controlled group of corporations or a trade or
business which is under common control as defined in Section
414(b) or (c) of the Code (as modified by Section 415(h)); a
service organization which is a member of an affiliated
service group which includes an Employer adopting this Plan,
as defined in Section 414(m) of the Code; a leasing
organization with respect to which an Employer adopting this
Plan is a "recipient" within the meaning of Section 414(n) of
the Code; and any other entity required to be aggregated with
the Employer pursuant to regulations under Section 414(o) of
the Code; and
(g) "Projected Annual Benefit" means the Annual
Benefit a Participant would receive, assuming the Participant
continued his employment and continued receiving his current
Total Compensation in each subsequent Plan Year until the
later of: (i) the Participant's Normal Retirement Age or (ii)
the Participant's current age, and further assuming that all
relevant factors used to determine benefits under the plan for
the current Plan Year remained constant for all future years.
2. If a Participant of this Plan also is or has been a
participant in a defined benefit plan, as defined in Section 414(j) of
the Code, or a welfare benefit fund, as defined in Section 419(e) of
the Code, to which contributions have been made by the Employer, then
in addition to the limitation contained in subparagraph 1, the sum of
the defined benefit plan fraction and the defined contribution plan
fraction for any Plan Year shall not exceed 1.0. For purposes of this
subparagraph 2:
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<PAGE> 70
(a) The defined benefit plan fraction for any Plan
Year is a fraction, the numerator being the Projected Annual
Benefit of the Participant under all defined benefit plans
maintained by the Employer (determined as of the close of the
Plan Year) and the denominator being the lesser of:
(i) The product of 1.25 (1.0 in the event
this Plan is a Top-Heavy Plan) multiplied by the Defined
Benefit Dollar Limitation, or
(ii) The product of 1.4 multiplied by an
amount which is 100% of the Participant's average Total
Compensation for the three (3) consecutive Plan Years in which
his Total Compensation was the highest.
Notwithstanding the above, the transition rules under Section 415(e) of
the Code are hereby incorporated by reference for Participants who were
members as of the first day of the first Plan Year beginning after
December 31, 1986, in one or more defined benefit plans maintained by
the Employer which were in existence on May 6, 1986.
(b) The defined contribution plan fraction for any
Plan Year is a fraction, the numerator being the sum of the
Annual Additions to the accounts of the Participant in all
defined contribution plans, attributable to the Participant's
nondeductible employee contributions to all defined benefit
plans (whether or not terminated), individual medical accounts
as defined in Section 415(l)(2) of the Code, and welfare
benefit funds maintained by the Employer as of the end of the
Plan Year under consideration, and the denominator being the
sum of the lesser of the following amounts determined for such
Plan Year and for each prior year of service with the
Employer:
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<PAGE> 71
(i) The product of 1.25 (1.0 in the event
this Plan is a Top-Heavy Plan) multiplied by the Defined
Contribution Dollar Limitation, or
(ii) The product of 1.4 multiplied by an
amount equal to 25% of the Participant's Total Compensation.
Notwithstanding the above, the transition rules under Section 415(e) of
the Code are hereby incorporated by reference for Participants who were
members as of the first day of the first Plan Year beginning after
December 31, 1986, in one or more defined contribution plans maintained
by the Employer which were in existence on May 6, 1986.
3. For purposes of the limitations contained in subparagraphs
1 and 2 of this Paragraph H, all defined contribution plans of the
Employer (whether or not terminated) shall be treated as one defined
contribution plan. Similarly, all defined benefit plans of the Employer
(whether or not terminated) shall be treated as one defined benefit
plan for these purposes.
4. Notwithstanding anything to the contrary contained in this
Paragraph H, in the event this Plan is a Top-Heavy Plan but would not
be a Top-Heavy Plan if "90 percent" were substituted for "60 percent"
each place it appears in Paragraph AR of Article I, and, further, if
the minimum contribution percentage in Paragraph C of this Article IV
is at least four percent (4%) (or seven and one-half percent (7-1/2%)
if the Non-Key Employee is covered under this Plan and a top-heavy
defined benefit plan of the Employer), then the special provisions for
Top-Heavy Plans contained in subparagraphs H-2(a)(i) and (b)(i) shall
not apply.
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<PAGE> 72
5. If the Annual Additions to a Participant's Account would
exceed the limitations described in subparagraphs 1 and 2 of this
Paragraph H, the following rules shall apply:
(a) If the Employer maintains both defined benefit
and defined contribution plans, any adjustment necessary to
meet the limitations of this Paragraph H shall be made by
first reducing the Annual Additions under the defined
contribution plan(s);
(b) No Participant may make a contribution to this
Plan with respect to a Plan Year if the contribution would
cause the Annual Additions to the Participant's Account with
respect to such Plan Year to exceed the limitations set forth
in subparagraphs 1 and 2 of this Paragraph H. To determine
whether a contribution to this Plan is permitted, the
Participant's provisional Employee contributions to this Plan
with respect to a Plan Year shall be aggregated with: (i) his
prior contributions to this Plan with respect to such Plan
Year, and his prior contributions to any other defined
contribution plans maintained by an Employer to the extent
such contributions are included in the Annual Additions to
such plans for such Plan Year; (ii) Employer contributions and
forfeitures already allocated to the Participant's Account in
this Plan and in any other defined contribution plan
maintained by an Employer with respect to such Plan Year; and
(iii) amounts treated as Annual Additions for the Plan Year by
reason of Section 415(l)(1) or Section 419A(d)(2) of the Code;
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<PAGE> 73
(c) Except as provided in subparagraph 6 of this
Paragraph H, and after taking into account the reductions
required in subparagraph 5(a), the Employer contributions to
this Plan on behalf of a Participant shall be reduced to the
extent necessary to prevent the Annual Additions to any
Participant's Account from exceeding the limitations set forth
in subparagraphs 1 and 2 of this Paragraph H. To determine
whether Employer contributions to this Plan shall be reduced,
Employer contributions shall be aggregated with all items
referred to in subparagraph 5(b). Reduction of Employer
contributions under this subparagraph 5(c) shall not affect
the amount allocated to the Account of any Participant, except
for a Participant on whose behalf the Employer contribution
was reduced.
6. If, due to a reasonable error in calculating a
Participant's Total Compensation for a Plan Year, or due to the
allocation of forfeitures, or due to such other facts and circumstances
as may justify the availability of this special rule, as determined by
the Internal Revenue Service, the Annual Additions to the Participant's
Account under this Plan and under any other defined contribution plan
maintained by an Employer exceed the limitations set forth in
subparagraphs 1 and 2 of this Paragraph H, then the aggregate of the
Annual Additions to this Plan and the Annual Additions to any other
defined contribution plan referred to in subparagraph 3 of this
Paragraph H shall be reduced, until the applicable limitation is
satisfied, by reducing the aggregate amount in the following order of
priority:
(a) Refund of any Employee contributions to this
Plan, which would be included in the Annual Additions,
together with earnings thereon;
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<PAGE> 74
(b) Refund of any Employee contributions to any
other defined contribution plan, which Employee contributions
would be aggregated with the Annual Additions to this Plan,
together with earnings thereon, pursuant to subparagraph 3 of
this Paragraph H;
(c) Refund of any Salary Deferral Contributions
to this Plan, which Salary Deferral Contributions would be
included in the Annual Additions, together with earnings
thereon;
(d) Refund of any Salary Deferral Contributions
to any other defined contribution plan, which Salary Deferral
Contributions would be aggregated with the Annual Additions to
this Plan, together with earnings thereon, pursuant to
subparagraph 3 of this Paragraph H.
Amounts refunded pursuant to subparagraphs H-6(c) and H-6(d) above shall be
disregarded for purposes of the dollar limit contained in subparagraph B-1 of
Article III; the limitations contained in Paragraph E of Article III; or the
limitations contained in Paragraph G of Article III.
7. If, after the reductions provided in subparagraph 6,
there remains an excess amount which cannot be allocated to the
Participant, it shall be held in a suspense account. The amounts in the
suspense account (except any portion attributable to Salary Deferral
Contributions) shall be allocated and reallocated to the accounts of
Participants in the next Plan Year (and in each succeeding year, as
necessary) in accordance with Paragraph F of this Article IV and in
accordance with the limitations described in subparagraphs 1 and 2 of
this Paragraph H, but only after allocation of the amounts from
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<PAGE> 75
the portion attributable to Salary Deferral Contributions. The portion
attributable to Salary Deferral Contributions shall be credited to a
separate suspense account for each Participant and shall serve to
reduce Employer contributions to the Plan on behalf of the Participant
in the next Plan Year and in succeeding Plan Years, as necessary. The
amounts in the separate suspense account shall be allocated to the
Participant's Account in the next Plan Year and in succeeding Plan
Years in accordance with the limitations of subparagraphs 1 and 2 of
this Paragraph H. However, if at the end of any succeeding Plan Year
the Participant is not covered by the Plan, the excess shall reduce the
Employer's contribution for the next Plan Year and shall be allocated
and reallocated to the accounts of Participants in the next Plan Year
(and each succeeding year as necessary) in accordance with Paragraph F
of this Article IV and in accordance with the limitations described in
subparagraphs 1 and 2 of this Paragraph H.
(a) Excess amounts, while retained in a suspense
account, shall not participate in the allocation of investment
gains and losses under Paragraph B of Article IV until
reapplied to the Participants' accounts and shall not be
distributed to Participants. In the event of termination of
the Plan, the suspense account shall revert to the Employer to
the extent that it may not then be allocated to any
Participant's Account;
(b) Notwithstanding the foregoing, the Employer
shall not knowingly contribute any amount that would cause an
allocation to the suspense account as of the date the
contribution is allocated.
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<PAGE> 76
8. The Employer elects to use the Plan Year as the
limitation year for purposes of Section 415 of the Code.
I. Transfers From Other Plans
1. Transfers From Other Qualified Plans. A Participant
who has had distributed to him his entire interest in a plan meeting
the requirements of Section 401(a) of the Code (the "Other Plan") may,
in accordance with procedures approved by the Committee, transfer the
distribution received from the Other Plan to the Trustee, provided the
following conditions are met:
(a) The transfer occurs on or before the
sixtieth (60th) day after he receives the distribution from
the Other Plan;
(b) The distribution from the Other Plan
qualifies as a qualified total distribution within the meaning
of Section 402(a)(5)(E)(i) of the Code; and
(c) The amount transferred does not exceed the
total distribution he received from the Other Plan less the
amount, if any, considered contributed by him in accordance
with Section 402(a)(5)(B) of the Code.
Notwithstanding any other provision hereof, there may be transferred
directly from the trustee of the Other Plan to the Trustee, subject to the
approval of the Company and Trustee that such transfer will not adversely affect
the qualified status of the Plan, all or any of the assets, including voluntary
contributions, if any, held (whether by trustee, custodian or otherwise) on
behalf of any Other Plan which is maintained for the benefit of any Participants
of this Plan. If the distribution is transferred from the trustee of the Other
Plan, or from the Employee, to the
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<PAGE> 77
Employer, the Employer shall pay the transferred distribution to the Trustee on
the earliest date on which such transferred distribution can reasonably be
segregated from the Employer's general assets, but in any event, within thirty
(30) days of receipt of the distribution by the Employer. Amounts transferred
pursuant to this Paragraph 1, and any gains or losses allocable thereto, shall
be accounted for separately from amounts otherwise allocable to the Eligible
Employee under the Plan.
2. Transfers From Individual Retirement Accounts. A
Participant who receives a distribution from an individual retirement
account described in Section 408(a) of the Code or an individual
retirement annuity described in Section 408(b) of the Code which
constitutes the entire amount of such account or annuity (including
earnings thereon), and no portion of which is attributable to any
source other than a lump sum distribution from a qualified employees'
trust described in subparagraph l-1, may, in accordance with procedures
approved by the Committee, transfer the entire amount of such
distribution to the Trustee, within sixty (60) days after receiving the
distribution. If the Participant transfers the distribution to the
Employer, rather than to the Trustee, the Employer shall pay the
transferred distribution to the Trustee on the earliest date on which
such transferred distribution can reasonably be segregated from the
Employer's general assets, but in any event, within thirty (30) days of
receipt of the distribution by the Employer.
3. Administration. The Committee shall develop such
procedures, including procedures for obtaining information from a
Participant desiring to make such a transfer, as it deems necessary or
desirable to enable it to determine that the proposed transfer will
meet the requirements of this Paragraph I. If such requirements are
met, the amount
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<PAGE> 78
transferred shall be deposited in the Trust Fund and shall be credited
to a Rollover Account. The Rollover Account shall be one hundred
percent (100%) vested in the Participant and shall share in the
allocation of gains or losses, as the case may be, in accordance with
Paragraph B hereof, but shall not share in any other allocations. Upon
termination of employment, the total amount of the Participant's
Rollover Account shall be distributed in accordance with Article VI.
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ARTICLE V
VESTING OF EMPLOYER CONTRIBUTIONS
A. Vesting
1. The Participant shall vest in his Salary Deferral
Account, Employer Matching Contribution Account, and Employer
Supplemental Contribution Account in accordance with this Article V.
(a) The Salary Deferral Account of a Participant
shall be fully vested and nonforfeitable at all times, and
shall not be subject to divestment for cause.
(b) The Employer Matching Contribution Account
and Employer Supplemental Contribution Account of a
Participant shall be vested in him upon attainment of Normal
Retirement Age, or on earlier termination of employment by
reason of Total Disability, or by death. Any amount thereafter
credited to a Participant's Employer Matching Contribution
Account or Employer Supplemental Contribution Account
attributable to Employer contributions for the Plan Year of
termination under one of the reasons enumerated in the
preceding sentence shall also be completely vested in him at
the time of such contribution.
2. In the event this Plan is a Top-Heavy Plan, then
(except as provided in subparagraph 1), a Participant's Employer
Matching Contribution Account and Employer Supplemental Contribution
Account shall vest in accordance with the following schedule:
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<PAGE> 80
<TABLE>
<CAPTION>
Completed Vested
Year of Service Percentage
--------------- ----------
<S> <C>
Less than 2 0 %
2 20
3 40
4 60
5 80
6 or more 100
</TABLE>
3. Except as provided in subparagraphs 1 and 2, a
Participant's Employer Matching Contribution Account and Employer
Supplemental Contribution Account shall vest in accordance with the
following schedule:
<TABLE>
<CAPTION>
Completed Vested
Year of Service Percentage
--------------- ----------
<S> <C>
Less than 3 0 %
3 25
4 50
5 or more 100
</TABLE>
4. If a Participant who has completed three (3) Years of
Service at any time and at least one (1) Hour of Service on or after
the first day of the first Plan Year beginning after December 31, 1988
elects, during the period commencing on the date the amendment is
adopted and ending sixty (60) days after the later of (i) the day the
Plan amendment is adopted, (ii) the day the Plan amendment becomes
effective, or (iii) the day the Participant is issued a written notice
of the Plan amendment, to have his Employer Matching Contribution
Account and Employer Supplemental Contribution Account vest under the
terms of the vesting schedule previously in effect, then,
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<PAGE> 81
notwithstanding the provisions of the vesting schedules above, his
account shall vest in accordance with the schedule included in the Plan
which he elects.
5. In determining the Years of Service under the Plan
for purposes of determining a Participant's vested percentage under
subparagraphs 2 and 3 above, all of a Participant's Years of Service
with the Employer shall be taken into account, except as provided in
subsections (a) and (b) of this subparagraph 5.
(a) If, at the time of a One-Year Break in
Service, a Participant does not have any vested right under
subparagraph 2 or 3 above, Years of Service before such
One-Year Break in Service shall not thereafter be taken into
account if the number of consecutive One-Year Breaks in
Service equals or exceeds either five (5) or the aggregate
number of Years of Service before such Breaks in Service,
whichever is greater. The aggregate number of Years of Service
before such Breaks in Service shall be deemed not to include
any Years of Service not required to be taken into account
hereunder by reason of any prior application of this
subparagraph;
(b) If a Participant has five consecutive
One-Year Breaks in Service, Years of Service thereafter shall
not be taken into account in determining the vested portion of
his Employer Contribution Account derived from Employer
contributions for periods before such Breaks in Service.
6. Amounts vested pursuant to this Paragraph shall not
be subject to divestment for cause.
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B. Termination of Employment; Forfeitures
1. Upon termination of employment, the Participant's
Account balance, determined as of the valuation date coincident with or
immediately preceding the date of termination, shall be divided into
two accounts: a Distribution Account and a Reserve Account. The
Distribution Account shall be credited with the amount of the
Participant's vested interest in the Plan. The remainder of the
Participant's Account balance shall be credited to his Reserve Account.
2. The balance allocated to the Participant's
Distribution Account shall be subject to distribution in accordance
with Article VI.
3. If the Participant received a distribution from his
Distribution Account due to his termination of participation in the
Plan prior to incurring five (5) consecutive One-Year Breaks in
Service, his Reserve Account shall be forfeited (as described below) as
of the date of distribution, provided that the Participant (i)
voluntarily elected to receive such distribution or (ii) effective
January 1, 1998, received a distribution of his entire vested Account
balance and the portion of such distribution attributable to Employer
contributions did not exceed $5,000. A Participant who has no vested
right in his Account balance shall be deemed to have received a
distribution of his entire vested Account balance as of the date he
terminated participation in the Plan.
(a) In the event that the Participant received a
distribution of his entire vested Account balance, his entire
Reserve Account shall be forfeited.
(b) If the Participant voluntarily elected to
receive a distribution of less than his entire vested Account
balance, the portion of his Reserve Account which
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<PAGE> 83
shall be forfeited shall be determined as follows: the
Participant's total Account multiplied by a fraction, the
numerator of which is the amount of the distribution and the
denominator of which is the Participant's total vested Account
immediately prior to such distribution, minus the amount of
the distribution.
4. Notwithstanding the foregoing, the Participant's
entire Account shall be restored if: (i) the Participant resumes
covered employment under the Plan prior to incurring five (5)
consecutive One-Year Breaks in Service, (ii) the Participant received a
distribution which was less than his entire Account balance, and (iii)
the Participant repays the full amount of the distribution no later
than five (5) years after the first date he is subsequently reemployed
by the Employer or before incurring five (5) consecutive One-Year
Breaks in Service commencing after the distribution, if earlier. The
amount to be restored shall equal the individual's Account derived from
Employer contributions (both distributed and forfeited) as of the date
of distribution, unadjusted for any subsequent gains or losses, as well
as all optional forms of benefits and subsidies relating to such
benefit. Acceptable sources for such restoration include income to the
Plan, forfeitures, or Employer contributions. Rules regarding the order
of sources from which restoration is made shall be determined by the
Committee and applied in a uniform and nondiscriminatory manner. A
Participant's Reserve Account shall be restored no later than the end
of the Plan Year following the Plan Year in which repayment occurs.
5. In the event that the Participant terminated
employment and has not received a distribution or a portion of his
Reserve Account is not forfeited under subparagraph B-3(b) of this
Article V, his Reserve Account shall be forfeited according to the
following rules:
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<PAGE> 84
(a) If a Participant is not reemployed prior to
incurring five (5) consecutive One-Year Breaks in Service, the
balance of his Reserve Account shall be forfeited.
(b) If the Participant is reemployed prior to
incurring five (5) consecutive One-Year Breaks in Service, the
balance of his Reserve Account (not including amounts actually
forfeited), together with any gains or losses thereon, shall
be maintained as a part of his regular Employer Contribution
Account and shall be commingled with and subsequently credited
with any contributions, together with any investment gains or
losses thereon, to which the Participant is thereafter
entitled.
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<PAGE> 85
ARTICLE VI
DISTRIBUTION OF BENEFITS
A. Methods of Distribution
1. The distribution of benefits to which a Participant
may become entitled shall be made in accordance with this Article VI.
Effective for distributions made after December 31, 1992, a Participant
or Beneficiary who is entitled to receive an Eligible Rollover
Distribution may direct the Committee to pay all or a portion of such
distribution directly to an Eligible Retirement Plan, in lieu of paying
such amount to the Participant or Beneficiary, pursuant to Paragraph K
of this Article VI. Notwithstanding any Plan provision to the contrary,
all Plan distributions shall comply with the requirements of Section
401(a)(9) of the Code and the regulations thereunder, including the
incidental death benefit distribution rules in Section 1.401(a)(9)-2.
(a) The benefits provided by the Plan shall be
distributed under whichever of the following methods the Participant
shall elect:
(i) The purchase of a non-transferable,
conventional fixed or variable annuity contract,
providing payments at least annually, of such type
and from such insurance company approved by the
Committee and which satisfies the requirements of
Sections 401(a)(9), 401(a)(11) and 417 of the Code.
The Participant may elect the purchase of an annuity
contract as provided in this subparagraph A-1(a)(i)
if, and only if, the Plan is, with respect to the
Participant, an offset plan or a direct or indirect
transferee of a defined benefit plan, a money
purchase pension plan (including a target
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<PAGE> 86
benefit plan), or a stock bonus or profit sharing
plan which otherwise would be required to provide a
life annuity form of payment to the Participant. This
Plan shall be considered to be an offset plan if it
is used to offset benefits in a plan which is subject
to the survivor annuity requirements with respect to
the Participant whose benefits are offset. If the
Plan is a transferee plan with respect to the
Participant, all subsequent Plan distributions made
on behalf of such Participant shall be subject to the
survivor annuity requirements set forth in
subparagraph A-1(b). Notwithstanding the preceding
sentence, if the amount transferred is separately
accounted for and gains, losses, withdrawals,
contributions, forfeitures, and other credits or
charges are allocated on a reasonable basis between
such transferred amount and other assets in the
Participant's Account, the amount utilized to
purchase the annuity shall be equal to the amount of
the Participant's Account attributable to the
transferred amount;
(ii) A single distribution of the entire
vested balance then standing in the Participant's
Account in cash or in kind;
(iii) Cash payments in monthly,
quarterly, semiannual or annual installments of
substantially equal designated amounts over a period
of years certain.
An election to receive a Plan distribution under any method
set forth in this subparagraph A-1(a) for an Annuity Starting
Date which occurs on or after the Participant's Normal
Retirement Age shall apply to all subsequent distributions
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<PAGE> 87
made from the Participant's Account. Except with respect to
the payment of a qualified joint and survivor annuity pursuant
to subparagraph A-1(b) below, the Participant shall in all
cases elect a distribution method which requires that the
present value of the payments to be made to the Participant
exceed fifty percent (50%) of the present value of the total
payments to be made to the Participant and his Beneficiary,
determined as of the date such payments commence; and payments
under such distribution method shall comply with Treasury
Regulation Section 1.401(a)(9)-2 Q&A-6(b).
(b) If at any time the Participant elects or has
elected that his benefits be paid through the purchase of an
annuity, the Committee shall direct the Trustee to purchase an
annuity contract in the form of a qualified joint and survivor
annuity for all distributions to the Participant.
(i) The term "qualified joint and
survivor annuity" means an annuity that commences
immediately for the life of the Participant if he
does not have an Eligible Spouse or, if he has an
Eligible Spouse, an annuity that commences
immediately, which is at least as valuable as any
other alternate form of benefit payable under the
Plan, for the life of the Participant with a survivor
annuity for the life of his Eligible Spouse. Upon the
election of the Participant, which may be made at any
time and any number of times, the survivor annuity
shall be fifty percent (50%) or one hundred percent
(100%) of the amount of the annuity payable during
the joint lives of the Participant and his Eligible
Spouse, both of which shall be actuarially
equivalent; provided that in the event no election is
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made, the survivor annuity shall be fifty percent
(50%) of the amount payable during the Participant's
and his Eligible Spouse's joint lives. In determining
the Participant's interest subject to the qualified
joint and survivor annuity requirement, any security
interest held by the Plan by reason of a loan
outstanding to the Participant shall reduce the
Participant's interest if the security interest is
treated as payment in satisfaction of the Plan loan
to the Participant.
(ii) Notwithstanding the foregoing, a
Participant may elect to waive the qualified joint
and survivor annuity and thereby receive an alternate
form of distribution. Such waiver must be made within
the ninety (90) day period ending on the
Participant's Annuity Starting Date with respect to
such benefit. A Participant may subsequently revoke
an election to waive a qualified joint and survivor
annuity and elect again to waive the qualified joint
and survivor annuity at any time and any number of
times prior to such Annuity Starting Date. All such
elections and revocations shall be in writing. Any
election to waive a qualified joint and survivor
annuity (1) must specify the alternate form of
distribution elected, (2) must be accompanied by the
designation of a specific nonspouse beneficiary
(including any class of beneficiaries or any
contingent beneficiaries) who will receive the
benefit upon the Participant's death, if applicable,
and (3) must be accompanied by a Spousal Consent, to
the extent required under Paragraph AQ of Article I.
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2. If a Participant dies before the Annuity Starting
Date with respect to such benefits, the portion of his vested Account
balance which is not currently being distributed in the form of a
qualified joint and survivor annuity shall be distributed as provided
in this subparagraph A-2.
(a) If the Participant is unmarried on the date
of his death, his entire interest (reduced by any security
interest held by the Plan by reason of a loan outstanding to
the Participant) shall be distributed to his Beneficiary in a
single distribution or in installments at the time set forth
in Paragraph C of this Article VI.
(b) Except as provided in subparagraph A-2(c)
below, if the Participant is married on the date of his death,
his entire interest (reduced by any security interest held by
the Plan by reason of a loan outstanding to the Participant)
shall be distributed to his Beneficiary in a single
distribution or in installments at the time set forth in
Paragraph C of this Article VI.
(c) If the Participant is married on the date of
his death and the Plan is, with respect to the Participant, an
offset plan or a direct or indirect transferee (in a transfer
after December 31, 1984) of a defined benefit plan, a money
purchase pension plan (including a target benefit plan), or a
stock bonus or profit sharing plan which otherwise would be
required to provide for a life annuity form of payment to the
Participant, then fifty percent (50%) of the Participant's
vested interest as of the date of his death (or fifty percent
(50%) of the amount of the Participant's Account attributable
to the transferred amount, if such transferred
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amount is separately accounted for and gains, losses,
withdrawals, contributions, forfeitures, and other credits or
charges are allocated on a reasonable basis between the
transferred amount and other assets in the Participant's
Account) shall be applied toward the purchase of an annuity
for the life of his Eligible Spouse (a "qualified
pre-retirement survivor annuity") unless otherwise elected as
provided below. This Plan shall be considered to be an offset
plan if it is used to offset benefits in a plan which is
subject to the survivor annuity requirements with respect to
the Participant whose benefits are offset. In determining the
Participant's interest, any security interest held by the Plan
by reason of a loan outstanding to the Participant shall
reduce the Participant's interest if the security interest is
treated as payment in satisfaction of the Plan loan to the
Participant. The portion of the Participant's vested interest
not applied to the purchase of the qualified pre-retirement
survivor annuity shall be distributed to the Participant's
Beneficiary as provided in subparagraph A-2.
(i) Within the applicable notice
period, each Participant shall be furnished with a
written "notice of the qualified preretirement
survivor annuity" in such terms and in such manner as
would be comparable to the "general notice of
distribution" provided pursuant to subparagraph B-1
of this Article VI. This notice must be accompanied
by a general description of the eligibility
conditions, relative values, and other material
features of each method of distribution under
subparagraph A-1(a) of this Article VI. The
"applicable notice period" means, with respect to
each Participant, whichever of the following periods
ends last: (1) the period beginning
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with the first day of the Plan Year in which the
Participant attains age 32 and ending with the close
of the Plan Year preceding the Plan Year in which the
Participant attains age 35; (2) the period commencing
one year before and ending one year after the
individual becomes a Participant; or (3) the period
commencing one year before and ending one year after
the annuity requirement of subparagraph A-1(a)(i) of
this Article VI first applies to such Participant. In
addition, the applicable notice period for a
Participant who separates from service before
attaining age 35 shall be the period beginning one
year before and ending one year after the
Participant's separation from service. Such notice
shall be given to the Participant in person, by
mailing, by posting, or by placing it in an Employer
publication which is distributed in such a manner as
to be reasonably available to such Participant. If
the explanation is to be posted, it shall be posted
at the location within the Participant's principal
place of employment which is customarily used for
employer notices to employees with regard to
labor-management relations matters.
(ii) A Participant may elect to waive a
qualified pre-retirement survivor annuity, revoke
such election, and elect again to waive the qualified
pre-retirement survivor annuity at any time and any
number of times during the applicable election
period. All such elections and revocations shall be
in writing. Any election to waive a qualified
pre-retirement survivor annuity must be accompanied
by (1) the designation of a specific nonspouse
beneficiary (including any class of
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beneficiaries or any contingent beneficiaries) who
will receive the benefit upon the Participant's
death, if applicable, and (2) a Spousal Consent to
the extent required under Paragraph AQ of Article I.
The "applicable election period" for the waiver of
the qualified pre-retirement survivor annuity shall
commence once the Participant receives a written
explanation of such annuity as set forth in
subparagraph A-2(c)(i) above or on the first day of
the Plan Year in which the Participant attains age
35, whichever occurs earlier. Any waiver of the
qualified pre-retirement survivor annuity made prior
to the first day of the Plan Year in which the
Participant attained age 35 shall become invalid as
of such date and a new waiver must be issued in order
for a waiver of a qualified pre-retirement survivor
annuity to be effective.
(iii) Except as provided in subparagraph
(iv) below, the qualified pre-retirement survivor
annuity benefit shall only apply to a Participant if
he is credited with at least one Hour of Service with
the Employer on or after August 23, 1984.
(iv) Any living Participant not
receiving benefits on August 23, 1984, who would
otherwise not receive the benefits prescribed above
because he is not credited with at least one Hour of
Service on or after that date, shall have the right
to elect the qualified pre-retirement survivor
annuity to apply if he was credited with at least one
Hour of Service under this Plan in a Plan Year
beginning on or after January 1, 1976, and he had
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at least ten (10) years of vesting service at the
time of separation from service.
(v) If a Participant dies with an
effective waiver of the qualified pre-retirement
survivor annuity in force or the Eligible Spouse so
elects after the Participant's death, his account
shall be distributed in the manner specified for
unmarried Participants in subparagraph A-2(a) above.
B. Time of Distribution to Participant
1. The Committee must provide the Participant with a
"general notice of distribution" no less than thirty (30) and no more
than ninety (90) days before the Participant's Annuity Starting Date.
Such notice must be in writing and must set forth the following
information: (i) an explanation of the eligibility requirements for,
the material features of, and the relative values of the alternate
forms of benefits available under subparagraph A-1 of this Article VI,
and (ii) the Participant's right to defer receipt of a Plan
distribution under subparagraphs B-3 and B-4 of this Article VI. If the
Plan is a transferee or offset plan with respect to the Participant as
set forth in subparagraph A-1(a)(i) of this Article VI, the general
notice also shall include (a) the terms and conditions of a qualified
joint and survivor annuity; (b) the Participant's right to make, and
the effect of, an election to waive the qualified joint and survivor
annuity; (c) the rights of the Participant's Eligible Spouse; and (d)
the right to make, and the effect of, a revocation of an election to
waive a qualified joint and survivor annuity. Such notice shall be
given to the Participant in person, by mailing, by posting, or by
placing it in an
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Employer publication which is distributed in such a manner as to be
reasonably available to such Participant. If the notice is to be
posted, it shall be posted at the location within the Participant's
principal place of employment which is customarily used for employer
notices to employees with regard to labor-management relation matters.
2. Upon receipt of the general notice of distribution, a
Participant may consent to receive a distribution of his vested Account
as soon as practicable after his termination of service. A
Participant's vested Account shall be distributed in the manner set
forth in subparagraph A-1 this Article VI. If at any time the
Participant elects or has elected that his benefits be paid through the
purchase of an annuity, the Participant's consent to receive such
distribution prior to his Normal Retirement Age must be accompanied by
the written consent of the Participant's Eligible Spouse, if married,
which is comparable to the Spousal Consent requirements in Paragraph AQ
of Article I, unless the distribution is to be made in the form of a
qualified joint and survivor annuity.
3. Subject to the maximum deferral requirements of
subparagraphs B-5 and B-6 of this Article VI, a Participant may elect
to defer receipt of a Plan distribution, provided that such election is
in writing, describes the form of benefit payment, indicates the date
the distribution is to commence, and is signed by the Participant. To
the extent not inconsistent with subparagraph B-4 below, in the event
that the Participant does not elect to defer receipt of his
distribution, payment of the vested balance in the Participant's
Account shall begin no later than the 60th day after the latest of the
close of the Plan Year in which:
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(a) The Participant attains the earlier of age
sixty-five (65) or Normal Retirement Age;
(b) Occurs the tenth (10th) anniversary of the
year in which the Participant entered the Plan; or
(c) The Participant terminates service with the
Employer.
4. Effective January 1, 1998, in the event that the
Participant has terminated service and the Participant (and the
Eligible Spouse, if applicable) neither consents to receive a Plan
distribution nor elects to defer receipt of a Plan distribution, the
Participant's vested Account shall be distributed in the normal benefit
form as soon as practicable thereafter, but in no event before the date
the Participant attains Normal Retirement Age, if such vested Account
exceeds $5,000 (or, if the Participant's vested Account balance
exceeded $5,000 prior to such distribution, is less than or equal to
$5,000 for distributions made after the initial distribution date). For
purposes of this subparagraph, "normal benefit form" shall mean a
single distribution or, if the Plan is a transferee or offset plan with
respect to the Participant as set forth is subparagraph A-1(a)(i) of
this Article VI, a qualified joint and survivor annuity as set forth in
subparagraph A-1(a)(ii) and A-1(b) of this Article VI, respectively.
Notwithstanding the foregoing, the Committee may, upon the
Participant's termination of service, distribute an annuity contract to
the Participant which provides that payments thereunder shall not
commence until a later date if such annuity contract satisfies the
requirements of Sections 401(a)(11) and 417 of the Code.
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5. If the form of distribution is other than a single
distribution, then the Participant's entire interest shall be paid over
a period not extending beyond the life (or the life expectancy) of the
Participant, or the lives (or the joint life and last survivor
expectancy) of the Participant and his Beneficiary. For purposes of
this subparagraph, a Participant may elect (other than in the case of a
life annuity) to have the life expectancy of either he or his spouse,
or both, redetermined; provided, however, that if a timely election is
not made, such redetermination shall not be made. A Participant's
election to redetermine life expectancy shall be made no later than the
time distributions are required to commence under subparagraph B-6
below, shall be irrevocable, shall specify the frequency with which
redeterminations are to be made (not more frequently than annually),
and shall require that such redeterminations be made from that date
forward.
6. Effective January 1, 1997, notwithstanding anything
to the contrary contained in the Plan, distribution of the vested
balance in the Participant's Account, or the first installment of such
distribution, shall be made no later than April 1st of the calendar
year following the calendar year in which the Participant attains age
70-1/2 or terminates employment, whichever occurs later; however, the
delay until termination of employment does not apply to Employees who
were five-percent (5%) owners (as defined in Section 416 of the Code)
at any time during the Plan Year ending with or within the calendar
year in which such owner attains age 66-1/2 or any subsequent Plan
Year; provided, however, that once distributions have begun to a five
percent (5%) owner, such distributions must continue even if the
Participant ceases to be a five percent (5%) owner in a subsequent
year.
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C. Time of Distribution to Beneficiary
1. A Participant's Beneficiary may consent to receive a
distribution of the Participant's vested Account balance which shall
commence within ninety (90) days (or within such longer period as is
reasonable based on the particular facts and circumstances) after the
Participant's death, to be distributed in the manner set forth in
subparagraph A-2 of this Article VI. If the Beneficiary is the
Participant's Eligible Spouse, such consent must be comparable to the
Spousal Consent requirements in subparagraph AQ of Article I.
2. A Beneficiary may elect to defer such distribution
beyond the time specified in subparagraph 1 above, provided that such
election is in writing, describes the form of benefit payment to be
received, indicates the date distributions are to commence, is signed
by the Beneficiary, and satisfies the requirements of subparagraph C-4
of this Article VI.
3. In the event that the Beneficiary neither consents to
receive a Plan distribution nor elects to defer receipt of a Plan
distribution, the Beneficiary shall receive a Plan distribution in the
normal benefit form within ninety (90) days (or within such longer
period as is reasonable based on the particular facts and
circumstances) after the Participant's death. For purposes of this
subparagraph, "normal benefit form" shall mean a single distribution
and, to the extent required by subparagraph A-2(c) of this Article VI,
a qualified pre-retirement survivor annuity. Notwithstanding the
foregoing but subject to subparagraph C-4 below, effective January 1,
1998, if the Beneficiary is the Participant's Eligible Spouse and the
Plan is a transferee or offset plan with respect to the Participant
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as set forth in subparagraph A-1(a)(i) of this Article VI, the
Beneficiary shall not receive a Plan distribution before the date the
Participant attained or would have attained Normal Retirement Age if
the Participant's vested Account balance exceeds $5,000 at the time of
distribution.
4. Notwithstanding any provision of this Article VI to
the contrary, any distribution to a Participant's Beneficiary must
comply with the following requirements:
(a) If distributions to a Participant have begun
and the Participant dies before his entire interest has been
distributed to him, the remaining portion shall be distributed
at least as rapidly as under the distribution method being
utilized on the date of his death.
(b) Except as provided in subparagraph C-4(c)
below, in no event shall distributions be made later than
December 31 of the calendar year which contains the fifth
anniversary of the Participant's death unless the Participants
designated Beneficiary elects to receive payments in
substantially equal installments at least annually for a
period not exceeding the Beneficiary's life expectancy, in
which case the first installment must be made by December 31
of the calendar year immediately following the calendar year
of the Participant's death. Any such election shall be made
prior to the date the distribution is scheduled to commence.
(c) An Eligible Spouse who elects to receive
installment payments as set forth in subparagraph C-4(b)
above, over such Eligible Spouse s life expectancy (which may
be redetermined no more frequently than annually) may defer
commencement of payments until December 31 of the calendar
year the
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deceased Participant would have attained age 70-1/2. Such an
election shall be made by the earlier of (1) the date the
distribution is required to commence under the preceding
sentence, or (2) December 31 of the calendar year which
contains the fifth anniversary of the Participant's death. An
Eligible Spouse who elects to have her life expectancy
redetermined must do so no later than the time distributions
are required to commence under this subparagraph, at which
time the election will be irrevocable and shall apply to all
subsequent years; provided, however, that if no election is
made by the time distribution is required to commence, life
expectancy may not be redetermined. If the Eligible Spouse
elects to defer such distribution in accordance with this
subparagraph and the Eligible Spouse dies leaving an unpaid
balance, the balance shall be distributed no later than
December 31 of the calendar year which contains the fifth
anniversary of the Eligible Spouse's death to the Beneficiary
designated by the Participant or, in the absence of such
designation, to the estate of the Eligible Spouse.
D. Small Account Balances
Notwithstanding anything to the contrary in Paragraphs A, B and C of
this Article VI, effective January 1, 1998, if the Participant has terminated
service or has died with a vested Account balance of $5,000 or less on the date
distributions commence, the entire vested Account balance shall be distributed
in a single sum distribution as soon as practicable to the Participant, or, in
the event of his death, to his Beneficiary. No distribution may be made under
the preceding sentence after the Participant's Annuity Starting Date unless the
Participant and his Eligible Spouse consent thereto in a manner which is
comparable to the Spousal Consent requirements in subparagraph AQ of Article I.
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E. Investment of Deferred Distributions
1. If a distribution to a Participant or to a
Beneficiary is to be deferred and the Account is to be distributed in
the form of cash, the amount distributable shall be invested as part of
the general assets of the Trust and shall share in the gains and losses
of the Trust.
2. If a distribution to a Participant or to a
Beneficiary is to be deferred and the Account is to be distributed in
kind, the Committee shall direct the Trustee to segregate, as a
segregated account of the Trust, the property to be distributed
(including securities or other property). Such property shall
thereafter be held for distribution in the manner selected by the
Participant pursuant to subparagraph A-1(a)(ii) or (iii) or by the
Beneficiary pursuant to subparagraph A-2(a) or (b) of this Article VI.
Such segregated accounts shall continue as part of the Trust and shall
be subject to all its provisions, except that such accounts shall share
in the allocations of Trust income or loss, as provided in Paragraph B
of Article IV, on a segregated basis.
F. Nonliability
Any payment to any Participant, or to his legal representative or
Beneficiary, in accordance with the provisions of the Plan, shall to the extent
thereof be in full satisfaction of all claims hereunder against the Trustee, the
Committee and the Employer, any of whom may require such Participant, legal
representative or Beneficiary, as a condition precedent to such payment, to
execute a receipt therefor in such form as shall be determined by the Trustee,
the Committee, or the Employer, as the case may be. The Employer does not
guarantee the Trust, the Participants, former Participants or their
Beneficiaries against loss of or depreciation in value
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of any right or benefit that any of them may acquire under the terms of this
agreement. All benefits payable hereunder shall be paid or provided for solely
from the Trust, and the Employer does not assume any liability or responsibility
therefor.
G. Missing Persons
1. Each Participant and each Beneficiary shall file, or
cause to be filed, with the Committee through the Employer from time to
time in writing, his mailing address and each change of mailing
address. Any communication, statement or notice addressed to a
Participant or his Beneficiary at his last mailing address filed with
the Committee, or if no address is filed with the Committee, then at
his last mailing address as shown on the Employer's records, will be
binding on the Participant and his Beneficiary for all purposes of the
Plan.
2. Neither the Committee nor the Trustee shall be
required to search for or locate a Participant or his Beneficiary other
than by mailing the notices set forth in this Paragraph G. If the
Committee sends the notice required by this Paragraph G to a
Participant or his Beneficiary stating that he is entitled to a
distribution and also includes in such notice the provisions of this
Paragraph, and the Participant or his Beneficiary fails to claim his
benefits under the Plan or make his whereabouts known to the Committee
within three (3) calendar years after notification, the benefits under
the Plan of the Participant or his Beneficiary will be disposed of as
follows:
(a) If the whereabouts of the Participant is
unknown but the whereabouts of the Participant's Beneficiary
then is known to the Committee, distribution will be made to
the Beneficiary;
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(b) If the whereabouts of the Participant and
his Beneficiary then is unknown to the Committee, but the
whereabouts of one or more relatives by adoption, blood or
marriage of the Participant is known to the Committee, the
Committee shall direct the Trustee to distribute the
Participant's benefits to any one or more of such relatives
and in such proportion as the Committee in its sole discretion
determines;
(c) If the whereabouts of the Participant, his
Beneficiary and relatives by adoption, blood or marriage of
the Participant then is unknown to the Committee, the amount
of such benefits shall be forfeited, provided that the amount
of such benefits shall be reinstated if a claim is
subsequently made by the Participant or his Beneficiary.
H. Distributions Prior to Termination of Employment
A Participant's Accounts in the Plan shall be subject to distribution
prior to separation from service in accordance with the following:
1. Such distribution shall be made only on account of:
(a) The termination of the Plan without
establishment or maintenance of another defined contribution
plan (other than an employee stock ownership plan as defined
in Section 4975(e)(7) of the Code or a simplified employee
pension plan as defined in Section 408(k) of the Code);
(b) The sale or other disposition by a
corporation of substantially all of its assets (within the
meaning of Section 409(d)(2) of the Code) used by such
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corporation in a trade or business of such corporation with
respect to a Participant who continues employment with the
corporation acquiring such assets;
(c) The sale or other disposition by a
corporation of such corporation's interest in a subsidiary
(within the meaning of Section 409(d)(3) of the Code) with
respect to a Participant who continues employment with such
subsidiary;
(d) The Participants attainment of age 59-1/2;
or
(e) The showing of Financial Hardship by the
Participant as provided in Paragraph I of this Article VI.
Notwithstanding the foregoing, any distribution made pursuant to
subparagraphs H-1(a), H-1(b) and H-1(c) above must be made in the form
of a lump sum and must meet the requirements of Section 401(k)(10) of
the Code.
2. Application for distribution under this Paragraph H
shall be made in writing by the Participant, and shall be made in
accordance with the method of distribution, the notice, and the spousal
consent requirements set forth in subparagraphs A-1(a), A-1(b), B-1,
and B-2 of this Article VI.
3. In the event that the distribution is due to the
Plan's termination, distributions shall be made in accordance with the
following rules:
(a) If the Employer or any other entity within
the same controlled group (within the meaning of Sections
414(b), (c) and (m) of the Code) as the Employer does not
maintain another profit sharing plan, money purchase pension
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plan (including a target benefit plan), or a stock bonus plan
(other than an employee stock ownership plan as defined in
Section 4975(e)(7) of the Code or a simplified employee
pension plan as defined in Section 408(k) of the Code) at the
time the Plan is terminated and if the Plan is a transferee or
an offset plan with respect to the Participant, the Employer
shall purchase an annuity for the Participant which satisfies
the requirements of subparagraph A-1(b) of this Article VI as
soon as practicable after Plan termination. Notwithstanding
the foregoing, if no annuity option is available with respect
to the Participant, he shall receive a single distribution as
soon as practicable after Plan termination.
(b) If the Employer or any other entity within
the same controlled group (within the meaning of Sections
414(b), (c) and (m) of the Code) as the Employer maintains
another profit sharing plan, money purchase pension plan
(including a target benefit plan), or a stock bonus plan
(other than an employee stock ownership plan as defined in
Section 4975(e)(7) of the Code or a simplified employee
pension plan as defined in Section 408(k) of the Code) at the
time the Plan is terminated, the Participant's Account balance
shall be transferred to an account established for such
Participant in such other plan provided that such transfer
does not violate Section 411(d)(6) of the Code and the
regulations thereunder.
(c) If the Participant's Account balance is
invested in property other than cash at the time of Plan
termination, such Account shall be distributed in cash or
in-kind, as directed by the Participant. If no Participant
direction is
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received, such Account shall be distributed in cash unless the
Employer maintains another plan that provides for in-kind
distribution of such property.
(d) Notwithstanding the foregoing, effective
January 1, 1998, the Participant's Account balance shall be
distributed in accordance with Paragraph D of this Article VI
if the Account balance does not exceed $5,000 at the time the
distribution is to be made.
I. Withdrawals on Account of Financial Hardship
1. Withdrawals on account of Financial Hardship shall be
permitted only from the Salary Deferral Account of the Participant and
shall be limited to the amount of the contributions to such Account
(plus earnings on such amounts which were allocated to such Account on
or before the last day of the last Plan Year ending before July 1,
1989, if any). No other amounts attributable to income on such
contributions may be withdrawn on account of such hardship.
2. The Participant must demonstrate to the Committee
that a withdrawal under this Paragraph I is necessary to satisfy a
Financial Hardship. The Participant may demonstrate such need by
certifying to the Committee that the Financial Hardship cannot be
relieved:
(a) Through reimbursement or compensation by
insurance or otherwise;
(b) By reasonable liquidation of the Employees
assets, to the extent such liquidation would not itself cause
an immediate and heavy financial need;
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(c) By cessation of Elective Deferrals or
Employee Contributions under the Plan or other plans
maintained by the Employer or any other employer;
(d) By other distributions or nontaxable loans
from plans maintained by the Employer or any other employer;
or
(e) By borrowing from commercial sources on
reasonable commercial terms. Assets owned by an Employees
spouse or minor children that are reasonably available to the
Employee shall be considered resources of the Employee.
3. In lieu of satisfying subparagraph 1-2 above, a
Participant may receive a distribution not in excess of the amount
necessary to satisfy the expense of a Financial Hardship (including any
amounts necessary to pay any federal, state or local income taxes or
penalties reasonably anticipated to result from the distribution) if
the Participant has obtained all other distributions and all nontaxable
loans currently available under this Plan and all other qualified plans
maintained by the Employer. In order to receive a distribution under
this subparagraph 1-3, the Participant shall not be permitted to make
Elective Deferrals or after-tax employee contributions to any qualified
or nonqualified plan of the Employer (including, but not limited to
stock option and stock purchase plans and a cash or deferred
arrangement that is part of a cafeteria plan within the meaning of
Section 125 of the Code), except for mandatory employee contributions
to a defined benefit plan of the Employer and employee contributions to
health or welfare plans of the Employer, within twelve months after the
financial Hardship withdrawal. In addition, the Participant's Elective
Deferrals made in the calendar year following a withdrawal on
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account of a Financial Hardship under this subparagraph I-3 shall not
exceed $7,627 in 1989 (or such adjusted amount determined by applying
the cost-of-living adjustment factor prescribed by the Secretary of the
Treasury under Section 415(d) of the Code, in accordance with the
manner prescribed by the Secretary), reduced by the Participant's
elective contributions which were made in the calendar year of the
Financial Hardship withdrawal.
4. Application for Financial Hardship withdrawal shall
be made in writing by the Participant, and shall be made in accordance
with the method of distribution, the notice and the spousal consent
requirements set forth in subparagraphs A-1(a), A-1(b), B-1, and B-2 of
this Article VI.
J. Loans to Participants
Upon application of a Participant to the Committee, the Committee shall
direct the Trustee to make loans to the Participant as provided in this
Paragraph J. Solely for purposes of this Paragraph J the term Participant shall
include all Participants and any former Participants who have not received a
distribution of their entire vested Account balance. No loan shall be made to
any Participant if (i) the application of the Participant to the Committee for a
loan is received after December 31, 1993, and (ii) at the time the application
is received by the Committee, the Participant has an outstanding loan balance.
However, Participants covered by Airline Pilots Association (ALPA) collectively
bargained agreement are allowed to take up to two outstanding loans from the
Plan.
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1. A loan to a Participant (when added to the
outstanding balance of all other loans from this Plan and any other
qualified plan maintained by the Employer) shall not be in an amount
that exceeds the lesser of:
(a) $50,000, reduced by the excess, if any, of:
(i) The highest outstanding balance of
loans from the Plan during the one (1) year period
ending on the day before the date such loan is made,
over
(ii) The outstanding balance of loans
from the Plan on the date such loan is made; or
(b) Fifty percent (50%) of the vested balance of
such Participant's Account (excluding any accumulated
deductible employee contributions as defined in Section
72(o)(5)(B) of the Code).
2. A loan requested by a Participant shall be approved
by the Committee if the Committee determines that the loan will not
constitute a taxable distribution from the Plan, the loan is adequately
secured, the Participant has agreed to repay the loan through payroll
deduction, and, if applicable, the spouse of the Participant consents
to the loan. The only other factors which may be taken into
consideration when determining whether or not to approve a loan are
those which would be considered in a normal commercial setting by an
entity in the business of making similar types of loans.
3. Effective for loans granted, modified, or renewed on
or after the last day of the Plan Year which begins on or after January
1, 1989, this loan program shall be
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administered in accordance with the rules set forth in this Article VI
and written procedures established by the Committee. Such written
procedures shall include, but need not be limited to, the following:
(a) The identity of the persons or positions
authorized to administer the Participant loan program;
(b) The procedure for applying for Plan loans;
(c) The basis on which loans will be approved or
denied;
(d) The limitation, if any, on the types and
amounts of loans offered;
(e) The procedure for determining a reasonable
rate of interest to be charged for Plan loans, provided that
such rate (i) shall be selected by the Committee and adjusted
from time-to-time as necessary when any loan is granted,
renewed or otherwise modified and (ii) shall provide the Trust
with a return commensurate with the interest rates charged by
persons in the business of lending money for loans which would
be made under similar circumstances; and
(f) The events constituting default and the
steps that will be taken to preserve Plan assets in the event
of such default.
4. If this Plan is a transferee or offset plan described
in subparagraph A-1(a)(i) of this Article VI with respect to the
Participant, the consent of the Participant's spouse, if any, to the
reduction of the Participant's Account to satisfy the loan obligation
(or any renegotiation, extension, renewal or other revision thereto)
shall be obtained
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within the ninety (90) day period before the making of the loan. The
spouse's consent shall be in writing, shall acknowledge the effect of
the potential reduction of the Participant's Account to satisfy the
loan obligation, and shall be witnessed by a Plan representative or a
notary public. Notwithstanding the foregoing, consent of a
Participant's spouse is not required if, at the time the loan is
secured, the Participant establishes to the satisfaction of a Plan
representative that such written consent may not be obtained because
there is no spouse or the spouse cannot be located. In addition, no
spousal consent is necessary if the Participant has been legally
separated or abandoned within the meaning of local law and the
Participant provides the Plan representative with a court order to that
effect, so long as such court order does not conflict with a qualified
domestic relations order. If the spouse is legally incompetent to
consent, the spouse's legal guardian may consent on her behalf, even if
the legal guardian is the Participant.
5. The term of a loan shall not exceed five (5) years,
and, except as provided by the Secretary of the Treasury, shall require
substantially level amortization of the loan (with payments not less
frequently than quarterly) over its term.
6. If any loan made hereunder to a Participant is not
repaid in accordance with its terms, the loan shall be in default. If
the loan is in default, the Committee shall deduct the total amount
thereof, including interest thereon, from any distribution of Trust
assets to which the Participant or his Beneficiary may be entitled, at
the earliest time the distribution otherwise would be allowed under the
terms of this Plan without regard to the consent requirements set forth
in subparagraph B-2 of this Article VI. If the Participant's account is
not sufficient to pay the remaining balance of any such loan, he shall
be liable for any balance still due, and shall continue to make
payments to the Trustee.
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7. Every loan applicant shall receive a clear statement
of the charges involved in each loan transaction, including the dollar
amount and annual interest rate of the finance charge. The statement
shall be prepared in accordance with the Truth-in-Lending Law (P.L.
90-321).
8. All loans under this Article VI shall be made to the
Participant from his individual Account in the Trust and shall be
charged against such Account. Interest and principal repayments shall
be added to such Account.
9. Notwithstanding the foregoing, no loan shall be made
to a Participant who is an "owner-employee" within the meaning of
Section 4975(d) of the Code.
K. Direct Rollover Distributions to an Eligible Retirement Plan
1. Effective for distributions made after December 31,
1992, a Participant or Beneficiary who is entitled to receive an
Eligible Rollover Distribution may direct the Committee to pay all or a
portion of such distribution directly to an Eligible Retirement Plan,
in lieu of paying such amount to the Participant or Beneficiary.
2. The Committee shall establish reasonable rules and
procedures with respect to elections to make direct rollover
distributions to an Eligible Retirement Plan pursuant to this Paragraph
K.
3. The Committee shall treat the election by a
Participant or Beneficiary to make or not make a direct rollover with
respect to one payment in a series of periodic payments as applicable
to all subsequent payments in the series unless the Participant or
Beneficiary subsequently changes the election.
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4. For purposes of this Paragraph K and subparagraph A-1
of this Article VI, the following definitions shall apply:
(a) "Eligible Rollover Distribution" shall mean
any distribution of all or any portion of the balance to the
credit of the Participant or Beneficiary, except that an
Eligible Rollover Distribution does not include: any
distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for
the life (or life expectancy) of the Participant or
Beneficiary, or the joint lives (or joint life expectancies)
of the Participant or Beneficiary and such Participant's or
Beneficiary's designated beneficiary, or for a specified
period of ten years or more; any distribution to the extent
such distribution is required under Section 401(a)(9) of the
Code; and the portion of any distribution that is not
includable in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to
employer securities).
(b) "Eligible Retirement Plan" shall mean an
individual retirement account described in Section 408(a) of
the Code, an individual retirement annuity described in
Section 408(b) of the Code, an annuity plan described in
Section 403(a) of the Code, or a qualified trust described in
Section 401(a) of the Code, that accepts the Participant's or
Beneficiary's Eligible Rollover Distribution. However, in the
case of an Eligible Rollover Distribution to the surviving
spouse, an Eligible Retirement Plan is an individual
retirement account or individual retirement annuity.
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(c) "Beneficiary" shall include a Participant's
former spouse who is the alternate payee under a qualified
domestic relations order, as defined in Section 414(p) of the
Code, with respect to the interest of the former spouse.
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ARTICLE VII
BENEFICIARIES
A. Designation
Subject to the qualified pre-retirement survivor annuity and qualified
joint and survivor annuity requirements set forth in Article VI, a Participant
shall have the right to designate, on forms provided by the Employer, a
Beneficiary or Beneficiaries to receive the benefits herein provided in the
event of his death (reduced by any security interest held by the Plan by reason
of a loan outstanding to the Participant) and to revoke such designation or to
substitute another Beneficiary or Beneficiaries at any time. Notwithstanding the
preceding sentence, if this Plan is not a transferee or offset plan described in
subparagraph A-1(a)(i) of Article VI with respect to the Participant, a married
Participant's initial designation of a Beneficiary or change in Beneficiary
designation to someone other than or in addition to his Eligible Spouse shall
not be effective unless Spousal Consent is obtained.
B. Absence of Valid Designation of Beneficiaries
If, upon the death of a Participant, former Participant or Beneficiary,
there is no valid designation of Beneficiary on file with the Employer, the
following shall be designated by the Committee as the Beneficiary or
Beneficiaries, in order of priority:
1. The surviving spouse;
2. Surviving children, including adopted children, in
equal shares;
3. Surviving parents, in equal shares;
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4. The Participant's estate;
5. The Beneficiary's estate;
6. The trustee(s) of the trust(s) named as beneficiary
of the residue of the Participant's probate estate;
7. The trustee(s) of the trust(s) named as beneficiary
of the residue of the Beneficiary's probate estate.
The determination of the Committee as to which
persons, if any, qualify within the categories listed
above shall be final and conclusive upon all persons.
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ARTICLE VIII
CONTRIBUTIONS BY PARTICIPANTS
Individual Participants may not make contributions to this
Plan. All contributions must be made by the Employer.
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ARTICLE IX
ESTABLISHMENT OF TRUST; DIRECTED INVESTMENT
A. Trust Agreement
Contributions made by the Employer pursuant to Articles 111 and IV
hereof, and all other assets of this Plan shall be held in trust under a Trust
Agreement. The Employer shall enter into a Trust Agreement with the Trustee for
the administration of the Trust which shall contain the assets of the Plan. The
Trustee shall not be responsible for the administration of this Plan but only
for the Trust established pursuant to this Plan.
B. Trust Agreement Part of Plan
The Trust Agreement shall be deemed to be a part of this Plan, and any
rights or benefits accruing to any person under this Plan shall be subject to
all of the relevant terms and provisions of the Trust Agreement, including any
amendments. In addition to the powers of the Trustee set forth in the Trust
Agreement, the Trustee shall have any powers, express or implied, granted to it
under the Plan. In the event of any conflict between the provisions of the Trust
Agreement and the provisions of the Plan, the provisions of the Plan shall
control, except for the duties and responsibilities of the Trustee, in which
case the Trust Agreement shall control.
C. Participant Directs Investments
This Plan is intended to constitute a plan described in section 404(c)
of the Employee Retirement Income Security Act and Title 29 of Regs.
2550.404c-1. The fiduciaries of the Plan may be relieved of liability for any
losses which are the direct and necessary result of investment instructions
given by the Participant or Beneficiary.
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Each Participant shall have the right to direct the investment of his
own Account, provided the Participant elects to do so in writing. Such
contributions shall be invested in various investment vehicles as directed by
the Participant pursuant to the following provisions of this Plan.
1. The Committee shall establish, from time to time, one or
more separate and distinct investment vehicles. Each Participant shall
have the right to elect the percentage of his contribution which he
wishes to have invested in each vehicle. The Committee, at its
discretion, may make available to the Participants one or more of the
following investment vehicles:
(a) A "Money Market Fund" which has as its primary
objective the preservation of capital and generation of
income, wherein monies contributed from the Participant's
Account shall be invested in a money market certificate or a
money market fund established by a bank, savings and loan
association, or securities brokerage house;
(b) A "Guaranteed Investment Contract" which has as
its primary objective the generation of a high level of income
consistent with the preservation of capital, wherein monies
contributed from the Participant's Account shall be invested
in interest bearing contracts issued by an insurance company
licensed to do business within the state, or such other types
of investments;
(c) An "Equity Fund" which has as its primary
objective capital appreciation, wherein monies contributed
from the Participant's Account shall be
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invested primarily in common stocks and such other securities
or investment opportunities;
(d) A "Balanced Fund" which has as two of its primary
investment objectives the generation of income and capital
appreciation, wherein monies contributed from the
Participant's Account shall be invested primarily in common
stocks and debt securities issued by an investment-grade
domestic United States corporation; and
(e) Such other investment vehicles which the
Committee may select.
2. A Participant may elect to change the investment vehicles
(and/or the percentages to be allocated thereto) in which (i) his
current Account balance and future earnings thereon are to be invested
and (ii) future contributions and earnings thereon are to be invested.
(a) Upon the Committee's receipt of the Participant's
written request for a change in the investment of his current
Account balance and future earnings thereon, the funds shall
be invested in accordance with such election as of the close
of that business day, or as soon as administratively feasible
thereafter.
(b) Upon the Committee's receipt of the Participant's
written request for a change in the investment of his future
contributions and earnings thereon, the funds shall be
invested in accordance with such election as of the close of
that business day, or as soon as administratively feasible
thereafter.
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A Participant's current Account balance and his future contributions
thereto shall continue to be invested in accordance with the
Participant's most recent election until the effective date of the
Participant's investment election change, if any.
3. In the event that the Participant does not make an initial
election to direct such investments, all amounts held for the
Participant shall be invested along with all other funds held in his
Account in the Money Market Fund, or, if none, the fund that the
Committee selects whose characteristics most closely resemble those of
the Money Market Fund.
4. The Committee shall provide each Participant with
information relating to these investment procedures and the investment
vehicles offered at the time the Participant is first eligible to
participate in the Plan. The Committee may establish such rules as it
deems necessary to administer and implement the provisions of this
Paragraph C.
D. Direction to Committee
A Participant shall exercise his rights under this Article by written
instructions to the Committee. The Committee shall transmit the Participant's
directions to the Trustee in such form as the Trustee may require.
E. Duty to Evaluate Investments
Neither the Committee, the Trustee nor any fiduciary under the Plan
shall have any duty to evaluate any investment decision made by the Participant,
including the decision to retain an investment. However, the Committee and the
Trustee shall have the express power to refuse any
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investment direction of the Participant which would be administratively
burdensome or which the Committee or the Trustee believes would constitute a
prohibited transaction as defined in Section 406 and Section 407 of ERISA or
Section 4975 of the Code, or which would generate unrelated business income or
unrelated debt-financed income to the Plan that would be taxable under the Code.
F. Costs of Investments
The Committee shall determine the fair market value of each
Participant's Account as of the valuation date. The valuation shall reflect
income, losses, and market value changes which occurred since the prior
valuation date. The costs of making, retaining and divesting the Participant's
investments shall be charged directly to the Participant's Account. The
Committee shall provide periodic written reports to the Participant which
reflect investment expenses, if any, charged to the Participant's Account.
G. Rules of Committee
The Committee may establish such rules as it deems necessary to carry
out the provisions of this Article.
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ARTICLE X
PLAN FIDUCIARIES AND ADMINISTRATION
A. Named Fiduciaries
The authority to control and manage the operation and administration of
the Plan is vested in the named fiduciaries specified herein. Each named
fiduciary shall be responsible solely for the tasks allocated to it. No
fiduciary shall have any liability for a breach of fiduciary responsibility of
another fiduciary with respect to the Plan and Trust, unless it participates
knowingly in the breach; has actual knowledge of the breach and fails to take
reasonable remedial action to remedy said breach; or, through its negligence in
performing its own specific fiduciary responsibilities, which give rise to its
status as a fiduciary, it has caused another fiduciary to commit a breach of
fiduciary responsibility.
B. Fiduciary Standard
Each named fiduciary and every other fiduciary under the Plan shall
discharge its duties with respect to the Plan solely in the interests of the
Participants and Beneficiaries and;
1. For the exclusive purpose of providing benefits to
Participants and their Beneficiaries and defraying reasonable expenses
of administering the Plan;
2. With the care, skill, prudence and diligence, under the
circumstances then prevailing, that a prudent man acting in a like
capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims;
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3. In accordance with the documents and instruments governing
the Plan, insofar as these are consistent with the provisions of Title
I of ERISA.
C. Multiple Duties and Advisors
Any person or group of persons may serve in more than one fiduciary
capacity with respect to the Plan. A named fiduciary, or a fiduciary designated
by a named fiduciary in accordance with the terms of the Plan, may employ one or
more persons to render advice with regard to any responsibilities such fiduciary
has under the Plan.
D. Allocation and Delegation of Fiduciary Duties
Each named fiduciary may allocate its fiduciary duties among its
members or may delegate its responsibilities to persons who are not named
fiduciaries with respect to the specific responsibility delegated. Any such
allocation or delegation shall be in writing and shall be made a permanent part
of the records of the named fiduciary. Such allocation or delegation shall be
reviewed periodically by the named fiduciary and shall be terminable upon such
notice as the named fiduciary, in its sole discretion, deems reasonable and
prudent under the circumstances. An action by the Board of Directors of the
Company or the Administrative Committee allocating or delegating its named
fiduciary responsibilities shall be evidenced by a duly adopted resolution of
the Committee or of the Board of Directors of the Company.
E. Indemnification
Any Employer shall indemnify and hold harmless the named fiduciaries
and any officers or employees of the Employer to which fiduciary
responsibilities have been delegated, from and against any and all liabilities,
claims, demands, costs and expenses, including attorneys' fees,
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which may arise out of an alleged breach in the performance of their fiduciary
duties under the Plan and under ERISA, other than such liabilities, claims,
demands, costs and expenses as may result from the gross negligence or willful
misconduct of such persons. The Company shall have the right, but not the
obligation, to conduct the defense of such persons in any proceeding to which
this Paragraph applies. An Employer may satisfy its obligation under this
Paragraph, in whole or in part, through the purchase of a policy or policies of
insurance; however, no insurer shall have any rights against the Employer
arising out of this Paragraph.
F. Costs and Expenses
The costs and expenses of the named fiduciaries shall be paid from Plan
assets held in the Trust to the extent not paid by the Company. The payment by
the Company of such costs and expenses for a Plan Year shall not be deemed an
election to pay the costs and expenses in any subsequent Plan Year. The Company
may charge to an Employer such expenses advanced by it on behalf of the
Employer.
G. Authority to Amend and Terminate
Subject to Article XI, the Board of Directors of the Company is the
named fiduciary responsible for the amendment and termination of the Plan and
Trust. In addition, the Board of Directors of the Company shall appoint and
replace the members of the Administrative Committee as required.
H. Administrative Committee
The Administrative Committee (or more briefly denoted as "the
Committee") is the named fiduciary with the power and the duty to: (a) interpret
the terms of the Plan; (b) formulate
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rules and regulations necessary to administer the Plan in accordance with its
terms; (c) finally review claims under the claims review procedure; (d)
establish and execute the funding policy of the Plan; (e) invest Plan assets, if
the Company has transferred responsibility for Plan investments to the Committee
pursuant to Article V of the Trust; and (f) annually review the funding policy
and method.
1. The Administrative Committee shall consist of one (1) or
more persons as appointed by the Board of Directors of the Company. The
Board of Directors of the Company shall also appoint any one of the
members of the Committee to act as secretary. The members of the
Committee shall serve at the pleasure of the Board of Directors of the
Company and shall serve as such without compensation.
2. The Committee shall keep minutes of its meetings and
proceedings. Every decision made or action taken by a majority of the
members then in office shall constitute a decision or action of the
Committee, and shall be final, conclusive and binding upon all persons
affected. A Committee decision or action, under or in connection with
the Plan, may be made or taken either at a meeting held pursuant to its
rules, at which a majority of the members then in office are present
and vote in favor thereof, or without a meeting if approved and
evidenced by a writing signed by a majority of the members then in
office. No Committee member shall vote on any question relating solely
to himself. In the event there is only one (1) Committee member, the
foregoing sentence shall not apply.
I. Plan Administration
The Administrative Committee 401(k) Plan shall be the Administrator of
the Plan for purposes of Section 3(16) of ERISA and Section 414(g) of the Code.
In addition, the
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Administrator shall have the power and the duty to perform the following
administrative functions according to the policies, interpretations, rules,
practices and procedures established by the Board of Directors of the Company or
the Committee in accordance with the respective areas of named fiduciary
responsibilities:
1. Apply Plan rules determining eligibility for participation
or benefits;
2. Calculate service and compensation credits for benefits;
3. Prepare employee communications material;
4. Maintain Participants' service and employment records;
5. Prepare reports required by government agencies, which
shall include maintaining records to demonstrate compliance with the
nondiscrimination requirements of Article III of the Plan that indicate
the extent that qualified nonelective contributions and qualified
matching contributions were taken into account to satisfy such
requirements;
6. Calculate benefits;
7. Orient new Participants and advise Participants regarding
their rights and options under the Plan;
8. Collect contributions and apply contributions as provided
in the Plan;
9. Prepare reports concerning Participants' benefits;
10. Process claims; and
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11. Make recommendations to the Board of Directors of the
Company or the Committee on Plan administration.
The Administrator (and those to whom it has delegated its authority) shall have
vested in it under the terms of this Plan full discretionary and final authority
when exercising its duties hereunder.
J. Claims Procedures
1. Filing of Claim. A Participant or Beneficiary who believes
he is entitled to a benefit which he has not received may file a claim
in writing with his Employer. The Employer may require a claimant to
submit additional information, if necessary to process the claim. The
Company or its delegate shall review the claim and render its decision
within ninety (90) days from the date the claim is filed (or the
requested additional information is submitted, if later), unless
special circumstances require an extension of time for processing the
claim. If such an extension is required, written notice of the
extension shall be furnished the claimant within the initial ninety
(90) day period. The notice shall indicate the special circumstances
requiring the extension and the date by which the Company expects to
reach a decision on the claim. In no event shall the extension exceed a
period of ninety (90) days from the end of the initial period.
2. Notice of Claim Denied. If the Company denies a claim, in
whole or in part, it shall provide the claimant with written notice of
the denial within the period specified in subparagraph 1. The notice
shall be written in language calculated to be understood by the
claimant, and shall include the following information:
(a) The specific reason for such denial;
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(b) Specific reference to pertinent Plan provisions
upon which the denial is based;
(c) A description of any additional material or
information which may be needed to clarify or perfect the
request, and an explanation of why such information is
required; and
(d) An explanation of the Plan's review procedure
with respect to the denial of benefits.
3. Review Procedure. Any claimant whose claim has been denied,
in whole or in part, shall follow those review procedures as set forth
herein.
(a) A claimant whose claim has been denied, in whole
or in part, may request a full and fair review of the claim by
the Committee by making written request therefor within sixty
(60) days of receipt of the notification of denial. The
Committee, for good cause shown, may extend the period during
which the request may be filed. The claimant shall be
permitted to examine all documents pertinent to the claim and
shall be permitted to submit issues and comments regarding the
claim to the Committee in writing.
(b) The Committee shall render its decision within
sixty (60) days after receipt of the application for review,
unless special circumstances (such as the need to hold a
hearing) require an extension of time for processing, in which
case the decision shall be rendered as soon as possible but
not later than one hundred and twenty (120) days after receipt
of a request for review. If an
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extension of time is necessary, written notice shall be
furnished the claimant before the extension period commences.
(c) The Committee shall decide whether a hearing
shall be held on the claim. If so, it shall notify the
claimant in writing of the time and place for the hearing.
Unless the claimant agrees to a shorter period, the hearing
shall be scheduled at least fourteen (14) days after the date
of the notice of hearing. The claimant and/or his authorized
representative may appear at any such hearing.
(d) The Committee shall send its decision on review
to the claimant in writing within the time specified in this
section. If the claim is denied, in whole or in part, the
decision shall specify the reasons for the denial in a manner
calculated to be understood by the claimant, referring to the
specific Plan provisions on which the decision is based. The
Committee shall not be restricted in its review to those
provisions of the Plan cited in the original denial of the
claim.
(e) If the Committee does not furnish its decision on
review within the time specified in this subparagraph 3, the
claim shall be deemed denied on review.
K. Agent for Legal Process
The Company shall be the Plan's agent for service of legal process.
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ARTICLE XI
AMENDMENT AND TERMINATION
A. Amendment
To provide for contingencies which may require or make advisable the
clarification, modification or amendment of this Plan, the Board of Directors of
the Company delegates to The Administrative Committee 401(k) Plan the right to
amend this Plan (and such right is delegated to The Administrative Committee
401(k) Plan by all Employers), at any time and from time to time, in whole or in
part, by adopting such amendment in writing. Such power to amend includes the
right, without limitation, to make retroactive amendments referred to in Section
401(b) of the Code. However, such right to amend the Plan shall be subject to
Paragraph C of this Article XI. Further, no amendment of the Plan shall (1)
alter, change or modify the duties, powers or liabilities of the Trustee or an
Investment Manager appointed pursuant to the Trust Agreement without its written
consent; (2) permit any assets of the Trust to be used to pay premiums or
contributions of the Employer under any other plan maintained by the Employer
for the benefit of its employees; or (3) result in increasing any Employer's
contribution to the Plan, unless approved by resolution of the Board of
Directors of the Company.
B. Termination or Complete Discontinuance of Contributions
Although the Employer has established the Plan with the bona fide
intention and expectation that it will be able to make contributions
indefinitely, nevertheless the Employer is not and shall not be under any
obligation or liability whatsoever to continue its contributions or to maintain
the Plan for any given length of time. An Employer may, in its sole and absolute
discretion, discontinue such contributions or terminate the Plan with respect to
its Employees, in
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accordance with the provisions of the Plan, at any time with no liability
whatsoever for such discontinuance or termination. If the Plan is terminated or
partially terminated, or if contributions of an Employer are completely
discontinued, the rights of all affected Participants in their Accounts shall
thereupon become nonforfeitable, notwithstanding any other provisions of the
Plan. However, the Trust shall continue until all Participants' Accounts have
been completely distributed to or for the benefit of the Participants, in
accordance with the Plan.
C. Nonreversion
1. Except as provided in this subparagraph C-1, the assets of
the Plan shall never inure to the benefit of an Employer; such assets
shall be held for the exclusive purpose of providing benefits to
Participants and their Beneficiaries and for defraying the reasonable
administrative expenses of the Plan.
(a) If an Employer contribution is made by virtue of
a mistake of fact, this Paragraph C shall not prohibit the
return of such contribution to the Employer within one (1)
year after the payment of the contribution.
(b) If an Employer contribution is made to the Plan
which does not initially qualify under Section 401(a) of the
Code, or any successor provision thereto, then the
contribution shall be returned to the Employer within one (1)
year after the date of denial of qualification of the Plan,
provided that an application for determination is made by the
time prescribed by law for filing the Employer's return for
the taxable year in which the Plan was adopted, or such later
date as the Secretary of the Treasury may prescribe.
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(c) If a deduction for an Employer contribution is
disallowed under Section 404 of the Code, or any successor
provision thereto, the contribution shall be returned to the
Employer (to the extent disallowed) within one (1) year after
such disallowance.
2. The Company shall have no right to modify or amend the Plan
retroactively in such a manner so as (i) to reduce the Participant's
vested Account balance, (ii) to reduce the benefits of any Participant
or his Beneficiary accrued under the Plan by reason of contributions
made by an Employer prior to the modification or amendment, or (iii) to
eliminate an optional form of benefit with respect to benefits
attributable to service before the amendment, except to the extent
permitted by Section 411(d)(6) of the Code or Section 204(g) of ERISA
and the regulations interpreting these sections.
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ARTICLE XII
MISCELLANEOUS
A. Limitation of Rights; Employment Relationship
Neither the establishment of the Plan and the Trust, nor any
modifications thereof, nor the creation of any fund or account, nor the payment
of any benefits, shall be construed as giving to any Participant or other person
any legal or equitable right against the Employer or the Trustee except as
provided herein; and in no event shall the terms of employment of any Employee
or Participant, express or implied, be modified or in any way be affected
hereby.
B. Transfer of Assets of Employer; Transfer of Assets of Plan
1. If the Employer merges or consolidates with or into a
corporation, or if substantially all of the assets of the Employer are
transferred to another business, the Plan hereby created shall
terminate on the effective date of such merger, consolidation or
transfer. However, if the surviving corporation resulting from such
merger or consolidation, or the business to which the Employer's assets
have been transferred, adopts this Plan, it shall continue and such
corporation or business shall succeed to all rights, powers and duties
of the Employer hereunder. The employment of any Employee who continues
in the employ of such successor corporation or business shall not be
deemed to have been terminated for any purpose hereunder.
2. In no event shall this Plan be merged or consolidated with
any other plan, nor shall there be any transfer of assets or
liabilities from this Plan to any other plan, unless immediately after
such merger, consolidation or transfer, each Participant's
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benefits if such other plan were then to terminate, are at least equal
to or greater than the benefits to which the Participant would have
been entitled, had this Plan been terminated immediately before such
merger, consolidation, or transfer.
C. Spendthrift Provision
1. Except as otherwise provided in subparagraph 2 hereof,
neither the Employer nor the Trustee shall recognize any transfer,
mortgage, pledge, hypothecation, order, or assignment by any
Participant or Beneficiary of all or part of his interest hereunder,
except a transfer pursuant to a "qualified domestic relations order"
within the meaning of Section 414(p) of the Code or Section 303(d) of
the Retirement Equity Act of 1984. Such interest shall not otherwise be
subject in any manner to transfer by operation of law. Such interest
shall be exempt from the claims of creditors or other claimants from
all orders, decrees, levies, garnishments and/or executions and other
legal or equitable processes or proceedings against such Participant or
Beneficiary to the fullest extent permitted by law.
2. If any Employee's participation in the Plan terminates at a
time when he owes money to the Trust, as a result of loans made to him
pursuant to Paragraph J of Article VI, the Committee shall direct
payment to the Trust from the vested portion of his Account, and, if
necessary, the Committee may direct payment from other collateral on
any amount so owing.
3. Pursuant to Income Tax Regulations section 1.401(a)-13(g),
the Committee may, at its discretion, make a lump sum distribution of
the entire vested interest due to an alternate payee under a "qualified
domestic relations order" (as defined
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in Section 414(p) of the Code). The distribution to the alternate payee
may be made prior to the date the participant otherwise becomes
eligible to receive a distribution, provided the distribution is
pursuant to a qualified domestic relations order and satisfies the
requirements of Section 414(p) of the Code.
D. Applicable Law; Severability
The Plan hereby created shall be construed, administered and governed
in all respects in accordance with ERISA and the laws of the State of Arizona,
and the Trust hereby created shall be construed, administered and governed in
all respects in accordance with ERISA and the laws of the State of
Massachusetts; provided, however, that if any provision of this Plan is
susceptible to more than one interpretation, such interpretation shall be given
thereto as is consistent with the Plan being a qualified employees' profit
sharing plan and a qualified cash or deferred arrangement under the provisions
for qualification set forth in the Code. If any provision of this Plan shall be
held by a court of competent jurisdiction to be invalid or unenforceable, the
remaining provisions shall continue in full force and effect.
E. Incorporation of Trust Agreement Provisions
The relevant provisions of the Trust Agreement regarding: (1) the
exclusive benefit of Employees and their Beneficiaries, (2) amendment, (3)
termination, (4) other employers, (5) Massachusetts law, (6) headings, gender
and number, and (7) nonalienation are hereby incorporated into this Plan and are
equally applicable to the Plan and to the Trust, which Plan and Trust together
shall constitute the entire Plan as defined in the Code.
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F. Written Application, Request and Election
Any transaction required to be in writing shall be deemed to be in
writing provided: (i) the Participant has made the appropriate telephonic
request; (ii) the Plan Administrator or its duly authorized representative has
sent a written confirmation of the transaction; and (iii) the Plan Administrator
or its duly authorized representative has received no objection by the
Participant to the written confirmation.
This plan has been executed in several counterparts, each of which
shall be deemed to be an original, and said counterparts shall constitute but
one and the same instrument, which instrument may be sufficiently evidenced by
one counterpart.
Dated as of May 20, 1998
America West Holdings Corporation
COMPANY
By: _________________________________
Stephen Johnson
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